This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2000).
STATE OF MINNESOTA
IN COURT OF APPEALS
Mutual Service Casualty Insurance Company,
Illinois Farmers Insurance Company,
United Services Automobile Association,
Hennepin County District Court
File No. PI00006128
Judith L. Emmings, John W. Carey, Sieben, Grose, Von Holtum & Carey, Ltd., 117 South Park Street, Box 549, Fairfax, MN 55332 (for appellant)
Jack D. Moore, Moore, Warner & Kruger, Two Pine Tree Drive, St. Paul, MN 55112 (for respondent Mutual Service Casualty Insurance Company)
Terrance W. Votel, Roger Kramer, Votel, Anderson & McEachron, 444 Cedar Street, Suite 1250, St. Paul, MN 55101 (for respondent Illinois Farmers Insurance Company)
Considered and decided by Kalitowski, Presiding Judge, Lansing, Judge, and Hanson, Judge.
On appeal from summary judgment, this court’s sole function is to determine whether there are any genuine issues of material fact and whether the district court erred in its application of the law. Perfetti v. Fidelity & Cas. Co. of N.Y., 486 N.W.2d 440, 442 (Minn. App. 1992). Because the parties stipulated the facts for purposes of summary judgment, this court need only review whether the district court erred in its application of the law. When reviewing questions of law, “this court need not accord deference to the trial court’s determination.” Id. (citation omitted).
Appellant contends that the district court erred by granting respondents’ motion for summary judgment. Appellant argues that due to the application of the law of comparative fault he will not receive the full $100,000 UIM limit from the host policy, United Services Automobile Association. Thus, he contends the full $100,000 is not available to him and he should be allowed to recover from his own insurers up to his $100,000 UIM limit. We disagree.
Minn. Stat. § 65B.49, subd. 3a(5) (2000), provides:
If at the time of the accident the injured person is occupying a motor vehicle, the limit of liability for uninsured and underinsured motorist coverages available to the injured person is the limit specified for that motor vehicle. However, if the injured person is occupying a motor vehicle of which the injured person is not an insured, the injured person may be entitled to excess insurance protection afforded by a policy in which the injured party is otherwise insured. The excess insurance protection is limited to the extent of covered damages sustained, and further is available only to the extent by which the limit of liability for like coverage applicable to any one motor vehicle listed on the automobile insurance policy of which the injured person is an insured exceeds the limit of liability of the coverage available to the injured person from the occupied motor vehicle.
In analyzing this statute in Schons v. State Farm Mut. Auto. Ins. Co., 621 N.W.2d 743, 748 (Minn. 2001), the supreme court stated that the goal of subdivision 3a(5) was to connect a passenger’s recoverable UIM benefits to the host vehicle’s policy “unless the passenger’s preselected level of UIM coverage exceeds the host vehicle’s UIM limits.” This court has interpreted the language “limit of liability of the coverage available” in the same way. See La Fave v. State Farm Mut. Auto Ins. Co., 510 N.W.2d 16, 19 (Minn. App. 1993) (stating that because the passenger’s policy does not exceed the limit of available coverage provided by the host policy, the passenger is not entitled to excess coverage). Moreover, the La Fave court specifically determined that the phrase “the coverage available to the injured person” does not mean the amount received by the person. Id.
Finally, the court in Davis v. Am. Family Mut. Ins. Co., 521 N.W.2d 366 (Minn. App. 1994), explained the holding of an unpublished opinion of this court in a case with similar facts to those presented here. The Davis court stated:
This court affirmed denial of excess benefits under subdivision 3a(5) because Dilworth’s UM limits did not exceed the (like) coverage limit of the policy covering the vehicle involved in the accident.
Id. at 370.
We recognize that this interpretation of the statute can lead to an unfair result where, as here, appellant may not be able to receive the full limit of the host policy’s UIM coverage as a result of comparative fault principles. But in light of the interpretation of the statutory language at issue here by the courts in Schons, La Fave, and Davis, we are compelled to conclude that because appellant’s preselected level of UIM coverage did not exceed the host vehicle’s UIM limits, the district court properly granted respondent’s motion for summary judgment.
For three reasons I respectfully dissent. First, I do not believe the majority correctly applies Minn. Stat. § 65B.49, subd. 3a(5) (2000). The excess protection provided by subdivision 3a(5) was designed to allow policyholders the opportunity to pre-select their level of protection for automobile accidents. Theodore J. Smetak et al., Minnesota Motor Vehicle Insurance Manual 419 (3d ed. 2000); see also Schons v. State Farm Mut. Auto. Ins. Co., 621 N.W.2d 743, 748 (Minn. 2001). Interpreting the statute to apply only to a comparison of limits rather than a comparison of available protection would defeat that purpose.
Subdivision 3a(5) creates an exception to the general rule that an injured person is restricted to the underinsured motorist (UIM) benefits for the car that the injured person is occupying. Minn. Stat. § 65B.49, subd. 3a(5). In creating the exception, the legislature balanced the passenger's right to pre-select the level of UIM benefits with the competing goal of preventing stacking. See id., subd. 3a(6) (2000) ("[I]n no event shall the limit of liability for uninsured or underinsured motorist coverages * * * be added together to determine the limit of insurance coverage available to an injured person for any one accident."). To honor the policyholder's right to pre-select a level of protection without permitting stacking, the legislature included the word available in the last sentence of subdivision 3a(5). By inserting the word "available," the legislature formulated a comparison not merely between the injured passenger's UIM policy limit and the UIM limit of the occupied vehicle's policy, but between the injured passenger's UIM policy limits and the UIM coverage available to the injured person from the occupied motor vehicle. Thus, excess protection is limited to the extent of covered damages sustained and the extent to which the excess coverage exceeds the underinsured limit of the coverage available to the injured person from the occupied motor vehicle. Id. subd. 3a(5) (emphasis added).
"[C]overage available to the injured person from the occupied motor vehicle" does not, as the majority concludes, equate to the occupied vehicle's UIM policy limits. If that is what the legislature meant, that is what the legislature would have said. Under the majority's interpretation, even though the injured person pays the premium for a pre-selected UIM coverage amount, it may not be attained because the occupied vehicle's UIM limit might be depleted or exhausted by other injured occupants or the occupied vehicle's UIM limit might have an enforceable exclusion to coverage that would reduce or eliminate the available coverage. See Smetak, supra, at 419.
Jason Drentlaw's claims have not yet been fully determined, but summary judgment at this point, based only on the comparison of UIM limits, would prevent him from realizing his $100,000 pre-selected UIM coverage amount if the full $100,000 is not available to him from the UIM policy on the occupied vehicle. Drentlaw contends that the full $100,000 may not be available because of the Myers exclusion. See Myers v. State Farm. Mut. Auto. Ins. Co., 336 N.W.2d 288, 291 (Minn. 1983) (establishing that policy exclusion that prevents the occupied motor vehicle from being considered an "underinsured motor vehicle" for purposes of occupied vehicle's UIM policy is valid). Thus, the pure limits comparison may prevent Drentlaw from access to the full $100,000 in UIM coverage.
Second, the Schons holding does not stand for the principle that the availability of the UIM coverage on the occupied vehicle is irrelevant. Schons states that "it is undisputed that $50,000 of UIM benefits was available to Schons from [the occupied car's] policy." Indeed, Schons had already accepted $50,000 in UIM benefits from the occupied vehicle's UIM policy and was attempting to recover more than her pre-selected $50,000 UIM level. Id at 745. Thus, in Schons, the occupied vehicle's UIM policy limits, the injured person's UIM policy limits, and the occupied vehicle's UIM policy limits available to the injured person were all $50,000. The references in Schons to policy limits is only an efficient reference to the identical limits of coverage and available coverage. The court's syllabus states its holding: the injured passenger is not entitled to UIM benefits from her own insurer when her UIM limits "do not exceed the limit of underinsured motorist benefits available from the host driver's policy." Id. at 744 (emphasis added).
Third, and finally, neither LaFave v. State Farm Mut. Auto. Ins. Co., 510 N.W.2d 16 (Minn. App. 1993) nor Davis v. American Family Mut. Ins. Co., 521 N.W.2d 366 (Minn. App. 1994) is dispositive on this issue. In Schons the supreme court stated that Davis did not directly address the issue they were deciding. Schons, 621 N.W.2d at 746. LaFave is not dispositive because the language that the majority relies on in LaFave is an alternative basis for the holding. Id. at 19 (concluding that LaFave is an insured under the occupied vehicle's policy and thus not entitled to excess coverage).
For these reasons I would reverse the summary judgment to await a final determination on liability and damages. Any final determination should, however, be subject to protections for the excess insurer, including notice of litigation proceedings, the opportunity to participate in liability and damages determinations, and a credit for coverage available from the occupied vehicle after a final determination on liability and damages has been made. And in the event of a settlement between the injured person and the occupied vehicle's UIM carrier, the excess insurer would be entitled to notice of the settlement, see Smetak, supra, at 420, and to a final determination of liability and damages to establish whether the injured person's UIM claim exceeds the coverage available from the occupied vehicle.