     11-4500-cv
     Ins. Co. of the State of Pa. v. Johnson

                          UNITED STATES COURT OF APPEALS
                              FOR THE SECOND CIRCUIT

                                     SUMMARY ORDER
     RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED
     ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
     PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
     DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
     ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST
     SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

 1            At a stated term of the United States Court of Appeals
 2       for the Second Circuit, held at the Daniel Patrick Moynihan
 3       United States Courthouse, 500 Pearl Street, in the City of
 4       New York, on the 9th day of November, two thousand twelve.
 5
 6       PRESENT: DENNIS JACOBS,
 7                              Chief Judge,
 8                ROSEMARY S. POOLER,
 9                PETER W. HALL,
10                              Circuit Judges.
11
12       - - - - - - - - - - - - - - - - - - - -X
13       INSURANCE COMPANY OF THE STATE OF
14       PENNSYLVANIA,
15                Plaintiff-Appellant,
16
17                    -v.-                                               11-4500-cv
18
19       KERRIE A. JOHNSON, administrator of
20       the estate of MICHAEL W. JOHNSON,
21                Defendant-Appellee.
22       - - - - - - - - - - - - - - - - - - - -X
23
24       FOR APPELLANT:                        Patrick Peter Fredette,
25                                             Cincinnati, Ohio (Martha M.
26                                             Smyrski, Montpelier, Vermont; F.
27                                             Brian Joslin, Montpelier,
28                                             Vermont; Timothy J. Puin,
29                                             Cincinnati, Ohio, on the brief).

                                                  1
 1   FOR APPELLEE:              Kelley B. Stewart, Fort
 2                              Lauderdale, Florida (John F.
 3                              Campbell, Quechee, Vermont,
 4                              Walter Gordon Campbell, Jr.,
 5                              Fort Lauderdale, Florida, on the
 6                              brief).
 7
 8        Appeal from a judgment of the United States District
 9   Court for the District of Vermont (Sessions, J.).
10
11        UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
12   AND DECREED that the judgment of the district court be
13   AFFIRMED.
14
15        The Insurance Company of the State of Pennsylvania (the
16   “Company”) appeals from the district court’s grant of
17   summary judgment in favor of Kerrie A. Johnson, whose
18   husband was a Vermont State Police officer who was killed by
19   a motorist who was fleeing from police. She seeks recovery
20   under the underinsured motorist coverage of an insurance
21   policy issued by the Company to the deceased’s employer, the
22   State of Vermont (“the State”). By Order of October 20,
23   2011, the district court certified a final judgment in this
24   case pursuant to Federal Rule of Civil Procedure 54(b).
25   Since this is an interlocutory appeal, we decide only the
26   issues before us. We assume the parties’ familiarity with
27   the underlying facts, the procedural history, and the issues
28   presented for review.
29
30        The Court reviews de novo a decision on a motion for
31   summary judgment. Mario v. P & C Food Markets, Inc., 313
32   F.3d 758, 763 (2d Cir. 2002).
33
34        1. One question is whether the State directed that the
35   underinsured motorist (“UIM”) coverage be lower than the
36   policy limits, which would otherwise apply by virtue of Vt.
37   Stat. Ann. tit. 23, § 941. The district court concluded
38   that, under Lecours v. Nationwide Mut. Ins. Co., 657 A.2d
39   177 (Vt. 1995), insurers have a duty to notify the insured
40   of the availability of UIM coverage. It is not necessary to
41   determine whether Lecours creates such a duty because, at
42   the very least, Lecours requires “the insurer to show that
43   the insured made a knowing rejection of higher [UIM]
44   coverage.” Id. at 179. Here, the State could not have made

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 1   a “knowing rejection” of the higher UIM coverage because the
 2   state official who purchased the insurance testified [i]
 3   that he believed that section 941 applied only to “primary
 4   auto policies” and not to excess policies like the ones at
 5   issue here, (Duchac Dep. 78, June 25, 2007), and [ii] that
 6   he was not “even thinking about UIM [coverage] . . . at any
 7   time when [he] read the policy after [he] got it,” (id. at
 8   79). The State therefore did not make a “knowing rejection”
 9   of higher UIM coverage.
10
11        2. The Company next argues that section 941 does not
12   apply to a policy purchased by the State because, generally,
13   “statute[s] . . . will not apply to the State to the
14   detriment of sovereign rights or interests unless such an
15   intent clearly appears from the statutory language.”
16   (Appellant’s Br. 31.) However, section 941 is not
17   “detrimental” to the State’s interests. Increasing the
18   amount of UIM coverage benefits the State and its employees.
19
20        3. The Company argues that the Vermont Tort Claims Act
21   (“VTCA”), which limits the State’s tort liability to
22   $250,000 per person per occurrence, Vt. Stat. Ann. tit. 12,
23   § 5601 (2003), is a basis to infer that section 941 requires
24   only $250,000 in UIM coverage for policies purchased by the
25   State. As the district court held, this argument is
26   contradicted by the text of section 941, which requires UIM
27   coverage up to the “limits of liability coverage,” not up to
28   the possible exposure that the insured faces. Further, we
29   see no relevance of the VTCA because, although the
30   underlying accident involved a tort, the State was not the
31   tortfeasor, and the State is not liable.
32
33        4. The Company argues that Sgt. Johnson was not an
34   “insured” and did not die in an “occurrence.” We disagree.
35   Sgt. Johnson was clearly an “insured” because the policy
36   defines “insured” as, inter alia, any State employee. The
37   incident that caused Sgt. Johnson’s death was an
38   “occurrence” because Daley, the underinsured motorist, did
39   not intend to harm Johnson. In deciding whether a claim
40   involved an “occurrence” under similarly worded policies,
41   Vermont courts look only to whether the tortfeasor intended
42   to harm the victim. Compare Landry v. Dairyland Ins. Co.,
43   701 A.2d 1035, 1035-36 (Vt. 1997), with Otterman v. Union
44   Mut. Fire Ins. Co., 298 A.2d 547, 642 (Vt. 1972). The

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 1   Company’s suggestion that we infer intent because Daley was
 2   driving so recklessly is unsupported by Vermont law. See,
 3   e.g., Espinet v. Horvath, 597 A.2d 307, 309 (Vt. 1991)
 4   (“[W]e reject the trial court’s rationale that defendant’s
 5   intent can be inferred as a matter of law because he engaged
 6   in an inherently dangerous activity.”); cf. Nationwide Mut.
 7   Fire Ins. Co. v. Lajoie, 661 A.2d 85, 86 (Vt. 1995)
 8   (distinguishing Espinet as “inapposite to the circumstances
 9   here,” involving sexual abuse).
10
11        For the foregoing reasons, and finding no merit in the
12   Company’s other arguments, we hereby AFFIRM the judgment of
13   the district court.
14
15
16                              FOR THE COURT:
17                              CATHERINE O’HAGAN WOLFE, CLERK
18




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