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Nationwide Mutual Insurance Co. v. Kuentzler

June 14, 2007


The opinion of the court was delivered by: William W. Caldwell United States District Judge


I. Introduction

Invoking our diversity jurisdiction, plaintiff, Nationwide Mutual Insurance Company, filed this suit against defendant, Elwood C. Kuentzler, administrator of the estate of Shawn M. Keuntzler. Nationwide wants a declaration that it has no obligation to provide coverage to the estate under the underinsured motorist (UIM) coverage in two policies it issued to Elwood C. Kuentzler and his wife, Judith Kuentzler. Plaintiff also wants to enjoin the estate from seeking to recover UIM benefits under the policies. Defendant has filed a counterclaim seeking the opposite relief, a declaration that Nationwide must pay UIM benefits under the policies and an injunction against Nationwide's denying recovery under the UIM coverages.

We are considering the parties' cross-motions for summary judgment. The motions contest three issues: (1) whether the decedent, Shawn M. Kuentzler was "regularly liv[ing]" in his parent's household in York, Pennsylvania, at the time of his death, as required by the policy language; (2) whether the listing of Shawn M. Kuentzler on one of the policies as one of the "Insured Drivers" means that his estate is entitled to UIM coverage under that policy regardless of his residency at the time of his death; and (3) whether Nationwide is estopped from denying UIM coverage because it paid first-party benefits for accidental death and funeral expenses under the policy that named him as an insured driver. A yes answer to the first or third issues means there is coverage under both policies. A yes answer on the second issue means there is coverage only for that policy. Of course, a no answer on all three means there is no coverage under either policy.

We examine the motions under the well established standard. See Andreoli v. Gates, 482 F.3d 641, 647 (3d Cir. 2007).

II. Background.

The parties have submitted cross-statements of material fact (SMF). Based on those submissions and the underlying record, the following is the undisputed background to this litigation. We will sometimes borrow the parties' language.

The decedent, Shawn M. Kuentzler, was the son of Elwood C. Kuentzler and Judith Kuentzler. On or about April 4, 2005, Shawn Kuentzler, was a passenger in an automobile owned by Christopher A. Neuman being operated by Neuman in Kenton, Ohio. The car became involved in an accident, and Shawn Kuentzler sustained serious injuries, resulting in his death. At the time, Shawn was thirty-one years old, (doc. 40-10), and living with his fiancee, their daughter, and his fiancee's son in Defiance, Ohio. (Doc. 40. Pl.'s SMF, ¶ 107). Neuman was insured by Progressive Insurance Company. (Doc. 37 and 40, ¶¶ 5-7). Progressive has tendered its $15,000 policy limit for liability coverage. (Doc. 1, Compl. ¶ 12; doc 4, Answer, ¶ 12).

A. The Nationwide Policies

Elwood C. Kuentzler, and Judith Kuentzler have two personal automobile policies with Nationwide. One policy, "No. 529," insures a 1994 Ford Mustang, the other policy, "No. 530," a 2002 Ford Explorer. Both policies have the following provisions. On the "Declarations" page, it states: "These declarations are a part of the policy . . . Your policy provides the coverages and limits shown in the schedule of coverages." The schedule of coverages is also on the declaration page. In pertinent part, the coverages are "comprehensive," "collision," "property damage liability," "bodily injury liability," stacked "underinsured motorists bodily injury," and "first party benefits" electing "option 5." The UIM coverage was $250,000 per person and $500,000 per accident. Each coverage had a corresponding premium amount.

On the declaration page, both policies list Elwood and Judith Kuentzler as "Policyholder (Named Insured)." Both policies also list Elwood and Judith on the declaration page as "Insured Drivers," but No. 530 also lists Shawn as an "Insured Driver." Shawn's listing as an "insured driver" increased the premiums paid for comprehensive, collision, property-damage liability, and bodily-injury liability coverages. The premium for UIM coverage was not affected. (Doc. 47-5, Aff. of Jacob Strevig, ¶¶ 8-12).

After the declaration page, both policies contain the following provisions pertinent to the parties' disputes in this case.

Insuring Agreement

For the policyholder's payment of premiums and fees in amounts we require and subject to all the terms and conditions of this policy, we agree to provide the coverages the policyholder has selected. These selections are shown in the enclosed Declarations, which are a part of this policy contract.


This policy uses certain common words for easy reading. They are defined as follows:

1. "POLICYHOLDER" means the first person named in the Declarations. The policyholder is the named insured under this policy but does not include the policyholder's spouse. . . .

2. "YOU" and "YOUR" mean:

a) the policyholder and spouse, if resident of the same household, when the policyholder is a person; . . . .

3. "RELATIVE" means one who regularly lives in your household and who is related to you by blood, marriage or adoption (including a ward or foster child). A relative may live temporarily outside your household.

4. "INSURED" means one who is described as entitled to protection under each coverage.

6. "YOUR AUTO" means the vehicle(s) described in the Declarations. (Doc. 40-2, p. 5 of 40; policy No. 530, p. D1; doc. 40-3, p. 5 of 36; policy No. 529, p. D1).

Underinsured Motorists

Coverage Agreement


We will pay compensatory damages, including derivative claims, which are due by law to you or a relative from the owner or driver of an underinsured motor vehicle because of bodily injury suffered by you or a relative. Damages must result from an accident arising out of the:

1. ownership;

2. maintenance; or

3. use; of the underinsured motor vehicle.


We will also pay compensatory damages, including derivative claims, which are due by law to other persons who suffer bodily injury while occupying:

1. Your auto.

2. A motor vehicle you do not own, while it is used as a temporary substitute for your auto. Your auto ...

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