Dickau v. Vt. Mut. Ins. Co.

Decision Date31 December 2014
Docket NumberDocket No. Ken–13–545.
PartiesJames M. DICKAU v. VERMONT MUTUAL INSURANCE CO.
CourtMaine Supreme Court

Steven D. Silin, Esq., and Robert H. Furbish, Esq. (orally), Berman & Simmons, P.A., Lewiston, for appellant James M. Dickau.

James D. Poliquin, Esq. (orally), Norman, Hanson, & DeTroy, LLC, Portland, for appellee Vermont Mutual Insurance Company.

Panel: SAUFLEY, C.J., and ALEXANDER, SILVER, MEAD, GORMAN, JABAR, and HJELM, JJ.

Majority: SAUFLEY, C.J., and MEAD, GORMAN, and HJELM, JJ.

Dissent: ALEXANDER, SILVER, and JABAR, JJ.

Opinion

GORMAN, J.

[¶ 1] James M. Dickau appeals from a summary judgment entered on stipulated facts by the Superior Court (Kennebec County, Nivison, J. ) in favor of Vermont Mutual Insurance Company on Dickau's complaint seeking uninsured motorist coverage. Dickau contends that, contrary to the Superior Court's decision, he is entitled to uninsured motorist coverage on his umbrella policy with Vermont Mutual pursuant to the policy language or, in the alternative, by operation of law. We affirm the judgment.

I. BACKGROUND

[¶ 2] The parties stipulated to the following material facts. In June of 2011, Dickau was riding his motorcycle in Maine when he was struck by a vehicle driven by Irida L. Macomber. The accident was caused by Macomber. Dickau suffered more than $250,000 in damages. At the time of the accident, Dickau was covered by two insurance policies: (1) a Dairyland Insurance Company policy insuring his motorcycle and providing $250,000 in uninsured motorist coverage, and (2) a Vermont Mutual personal umbrella policy providing liability coverage above any qualifying minimum primary insurance for up to $1 million per occurrence. Macomber had $100,000 in liability insurance coverage through Travelers Commercial Insurance Company. Dickau settled his claim against Macomber for her Travelers policy limit of $100,000.

Dickau also settled his claim for uninsured motorist benefits with Dairyland for $150,000 (Dairyland's $250,000 uninsured motorist coverage maximum minus the $100,000 from Travelers).

[¶ 3] In May of 2012, Dickau commenced the present litigation seeking a declaratory judgment that his umbrella policy with Vermont Mutual provides for uninsured motorist coverage (Count I), and that, even if the policy does not, Vermont Mutual was nevertheless required to provide up to $1 million in uninsured motorist coverage pursuant to statute (Count II), as offset by the Travelers and Dairyland settlements.1 The parties stipulated to the facts, and each moved for summary judgment.

[¶ 4] By decision dated November 12, 2013, the court granted Vermont Mutual's motion for summary judgment and denied Dickau's. Dickau appeals.

II. DISCUSSION

[¶ 5] Uninsured motorist (UM) coverage is a type of insurance that allows an injured person to recover, from his own insurer, damages caused by a party who is uninsured or underinsured.2 24–A M.R.S. § 2902 (2014). In this way, UM coverage represents an exception to the basic premise underlying insurance law, and tort law in general, that an injured person's damages are paid by or on behalf of the at-fault party. Beal v. Allstate Ins. Co., 2010 ME 20, ¶ 34, 989 A.2d 733 ; 9 Steven Plitt et al., Couch on Insurance 3d § 122:2 (2008 Rev. ed.); 1 Alan I. Widiss & Jeffrey E. Thomas, Uninsured and Underinsured Motorist Insurance [hereinafter UM Insurance ] § 1.1 (3d ed. 2005).

[¶ 6] The vast majority of states have opted to make UM coverage mandatory. Maine first did so in 1967, P.L. 1967, ch. 93, § 1 (effective Jan. 1, 1968), and is now among the forty-eight states3 that require insurers to provide uninsured motorist coverage in certain circumstances:

A policy insuring against liability arising out of the ownership, maintenance or use of any motor vehicle may not be delivered or issued for delivery in this State with respect to any such vehicle registered or principally garaged in this State, unless coverage is provided in the policy or supplemental to the policy for the protection of persons insured under the policy who are legally entitled to recover damages from owners or operators of uninsured, underinsured or hit-and-run motor vehicles, for bodily injury, sickness or disease, including death, sustained by an insured person resulting from the ownership, maintenance or use of such uninsured, underinsured or hit-and-run motor vehicle.
24–A M.R.S. § 2902(1).

[¶ 7] Pursuant to 24–A M.R.S. § 2902(2), the amount of UM coverage a policy must provide to an owner or operator of a vehicle registered in Maine dependson the applicability of the Maine Automobile Insurance Cancellation Control Act (the MAICCA), 24–A M.R.S. §§ 2911 –2924 (2014). For policies subject to the MAICCA or to certain assigned risk plans,

the amount of coverage to be so provided may not be less than the amount of coverage for liability for bodily injury or death in the policy offered or sold to a purchaser unless the purchaser expressly rejects such an amount, but in any event may not be less than the minimum limits for bodily injury liability insurance provided for under Title 29–A, section 1605, subsection 1 [i.e., $50,000 per person or $100,000 per accident].

24–A M.R.S. § 2902(2) ; see 29–A M.R.S. § 1605(1) (2014). Thus, although an insured may elect to reject UM coverage equal to the full amount of coverage provided for bodily injury by his or her automobile liability policy in favor of only the statutory minimums, the insured may only do so by signing a form provided by the insurer that contains specific language to that effect. 24–A M.R.S. § 2902(2). For policies not subject to the MAICCA, UM coverage is required only according to the statutory minimums: [T]he amount of coverage so provided may not be less than the minimum limits for bodily injury liability insurance provided for under Title 29–A, section 1605, subsection 1.” 24–A M.R.S. § 2902(2) ; see 24–A M.R.S. § 2913 (2014).

[¶ 8] Given this statutory mandate, most insurers expressly include the required UM coverage in their policies and then account for that coverage in the premiums charged. 9 Steven Plitt et al., Couch on Insurance § 122:2; 1 Widiss & Thomas, UM Insurance § 2.7. When the policy is silent as to UM coverage, or when the premiums the insurer charges do not appear to account for any UM coverage, UM coverage is nevertheless deemed to be a part of the policy according to section 2902, absent the insured's express waiver. See 1 Widiss & Thomas, UM Insurance § 2.7.

[¶ 9] Dickau's appeal requires us to examine the scope of the policies to which the UM statute applies and, for the first time, to consider whether the UM statute's requirements apply to umbrella policies.

[¶ 10] An umbrella policy is one of two forms of excess insurance coverage, the other being so-called “true excess” policies. 4 Rowland H. Long, The Law of Liability Insurance § 22.03 (2005). A true excess policy “provides coverage above a single primary policy for specific risks,” and “is purchased by the insured to protect against large losses or an accumulation of small losses.” Id. In short, a true excess policy effectively extends the policy limit for an underlying primary policy covering precisely the same losses.

[¶ 11] An umbrella policy, in contrast, “provides coverage over more than one primary policy,” such as homeowners' insurance, automobile insurance, boat insurance, aircraft insurance, general liability insurance, and the like.4 Id. As with true excess policies, umbrella policies are “parasitic” in that they require that the insured maintain and exhaust an underlying primary policy. Peerless Indem. Ins. Co. v. Frost, 723 F.3d 12, 18 (1st Cir.2013) ; see 15 Lee R. Russ & Thomas F. Segalia, Couch on Insurance 3d § 220:32 (2005 & Supp. 2009). The secondary nature of umbrella coverage, covering only catastrophic losses, is reflected in its premiums, which are ordinarily quite low. Globe Indem. Co. v. Jordan, 634 A.2d 1279, 1284 (Me.1993) ; Apodaca v. Allstate Ins. Co., 255 P.3d 1099, 1103 (Colo.2011) ; Trinity Universal Ins. Co. v. Metzger, 360 So.2d 960, 962 (Ala.1978).

[¶ 12] Because parties are free to contract as they please, an umbrella policy could include UM coverage. See, e.g., Apodaca, 255 P.3d at 1107 (“To date, the General Assembly has left this option to the marketplace.”). Thus, Dickau first argues that his policy with Vermont Mutual includes UM coverage up to his $1 million policy limit. Dickau argues in the alternative that, if the policy does not include such coverage, UM coverage is deemed included in his umbrella policy by operation of section 2902, again up to his $1 million policy limit. We therefore analyze whether Dickau's Vermont Mutual policy provides UM coverage either pursuant to its terms or by operation of statute.

A. Policy Language

[¶ 13] We interpret an insurance policy de novo. If the language of the policy is unambiguous, we apply its plain meaning. Langevin v. Allstate Ins. Co., 2013 ME 55, ¶ 9, 66 A.3d 585. If the language of the policy is ambiguous, we construe it against the insurer and liberally in favor of the insured, id., but in that case, “summary judgment may not be granted because an unresolved factual issue, i.e., the intent of the parties, remains for the trier of fact,” Me. Mut. Fire Ins. Co. v. Grant, 674 A.2d 503, 505 (Me.1996) (quotation marks omitted).

[¶ 14] Dickau's policy with Vermont Mutual states that it is a “Personal Umbrella Liability Policy” with a $1 million limit. On the introductory page, it states: “Remember, this is a liability policy. It covers your legal liability for claims made against you by someone else. It does not cover damages to your own property, your car, your house, or your valuables.” The umbrella policy requires that Dickau maintain certain “MINIMUM PRIMARY INSURANCE REQUIREMENTS” with regard to automobiles, homes, rental properties, residential employees, watercraft, and recreational vehicles, and states that it “does not...

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