687 N.W.2d 226 (N.D. 2004), 20030374, Nodak Mut. Ins. Co. v. Wamsley

Docket Nº:20030374.
Citation:687 N.W.2d 226, 2004 ND 174
Opinion Judge:Kapsner, Justice.
Party Name:NODAK MUTUAL INSURANCE COMPANY, Plaintiff and Appellee v. Corey WAMSLEY, Jeff Wamsley, Joe Wamsley, Craig Wamsley, Kimberly Kinev and Jamie Pfau, Defendants and Appellants.
Attorney:Duane H. Ilvedson (argued) and Telly Jerome Meier (on brief), Nilles, Ilvedson, Stroup, Plambeck & Selbo, Ltd., Fargo, N.D., for plaintiff and appellee., Anne G. Biby (argued), Hash & O'Brien, Kalispell, MT, and Gerald A. Kuhn, Law Office of Gerald A. Kuhn, PC, Napoleon, N.D., for defendants and ...
Judge Panel:[
Case Date:September 13, 2004
Court:Supreme Court of North Dakota

Page 226

687 N.W.2d 226 (N.D. 2004)

2004 ND 174

NODAK MUTUAL INSURANCE COMPANY, Plaintiff and Appellee

v.

Corey WAMSLEY, Jeff Wamsley, Joe Wamsley, Craig Wamsley, Kimberly Kinev and Jamie Pfau, Defendants and Appellants.

No. 20030374.

Supreme Court of North Dakota

September 13, 2004

Page 227

[Copyrighted Material Omitted]

Page 228

Duane H. Ilvedson (argued) and Telly Jerome Meier (on brief), Nilles, Ilvedson, Stroup, Plambeck & Selbo, Ltd., Fargo, N.D., for plaintiff and appellee.

Anne G. Biby (argued), Hash & O'Brien, Kalispell, MT, and Gerald A. Kuhn, Law Office of Gerald A. Kuhn, PC, Napoleon, N.D., for defendants and appellants.

KAPSNER, Justice.

[¶ 1] Corey Wamsley, Jeff Wamsley, Joe Wamsley, Craig Wamsley, Kimberly Kinev, and Jamie Pfau ("Wamsley heirs") appealed from a declaratory judgment entered in an action brought by Nodak Mutual Insurance Company ("Nodak") to determine Nodak's obligations under insurance policies. We conclude the district court properly ruled this case is governed by North Dakota law and we affirm.

I

[¶ 2] While riding in their Chrysler in Montana, Alan and Sharon Wamsley, the Wamsley heirs' parents, were involved in a collision when a vehicle operated by Lester Stanton crossed the median and struck the Wamsleys' vehicle, which was then struck by a motor home. Stanton and the Wamsleys were killed in the collision. Stanton's insurer paid its policy limits of $25,000 per person to the Wamsleys' estate.

[¶ 3] At the time of the accident in Montana, the Wamsleys owned three vehicles and each was insured by a policy issued by Nodak: a Chrysler (policy number AU-217749), an Oldsmobile (policy PAND 000318684), and a Dodge pickup (policy number PAND 000405922). Each policy provided underinsured motorist coverage ("UIM") of $100,000 per person, per accident. Nodak paid $200,000 to the co-personal representatives of the Estate of Alan and Sharon Wamsley under the Chrysler policy and secured a partial release of UIM claims.

[¶ 4] On May 22, 2003, Nodak's attorney, Duane Ilvedson, recommended Nodak "bring a Declaratory Judgment action in North Dakota" and "took over further handling of the file." Between June 4 and June 18, 2003, Nodak served a summons and complaint dated June 4, 2003, upon each of the Wamsley heirs for a judgment declaring, among other things, "that the underinsured motorist coverages of Policy No. PAND 000318684 and Policy No. PAND 000405922 do not apply to the August 8, 2002, accident and cannot be stacked." The Wamsley heirs sued Stanton's estate and Nodak in Montana district court on June 23, 2003. On June 25, 2003, Nodak filed in North Dakota district court the summonses and complaints it had served on the Wamsley heirs.

[¶ 5] On July 9, 2003, the Wamsley heirs filed a motion to dismiss for forum non conveniens and for failure to state a claim upon which relief may be granted. The Wamsley heirs' attorney, Anne Biby, supported the motion with her affidavit and documentary exhibits averring, among other things: (1) in a December 19, 2002, letter to Kirk Holmes of Nodak, Biby requested payment of $200,000 for UIM coverage on one of the Wamsley policies, while reserving the "right to assert a 'stacking' claim for underinsured coverage amounts for the other two vehicles as well," advising that a case involving the issue of stacking UIM coverage was pending before the Montana Supreme Court, and making a settlement offer; (2) on April 18, 2003, the Montana Supreme Court struck down Montana's anti-stacking

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statute, Biby sent Nodak a copy of the decision, and Biby demanded "the entire $600,000.00 in underinsured motorist coverage for the three Wamsley vehicles insured with NoDak," (3) in a telephone conversation on May 20, 2003, Holmes assured Biby that Nodak "was looking into the matter;" (4) Nodak filed this action, which "it concealed [] from this law firm until after it had served the Wamsley heirs;" and (5) on June 23, 2003, Biby's "law firm filed a Complaint in Montana against the tortfeasor's estate and against Nodak Mutual." In their brief in support of the motion to dismiss, the Wamsley heirs asserted Montana law should be applied. Nodak responded that the matter is governed by North Dakota law, and that North Dakota law and the policies' provisions prohibit stacking. The trial court denied the Wamsley heirs' motion to dismiss, noting "[t]he only real issue is whether Nodak will be required to provide additional coverage" and finding "North Dakota has more significant cont[]acts and interest in the issue presented in this case."

[¶ 6] Nodak moved for summary judgment, which the trial court granted, stating it had already determined North Dakota law applied, the defendants conceded "North Dakota law does not allow stacking of underinsured motorist coverage," and concluding "that Nodak Mutual is not obligated to pay stacked underinsured motorist benefits." Judgment was entered providing that the UIM coverages of the policies on the Wamsley vehicles not involved in the accident "do not apply to the August 8, 2002 accident and cannot be stacked," and the maximum amount of UIM coverage for the deaths of Alan and Sharon Wamsley was the $100,000 for each already paid by Nodak under the policy on the Wamsley vehicle involved in the accident. The Wamsley heirs appealed, contending that Montana law should apply in the resolution of this litigation.

II

[¶ 7] While it might be argued this appeal is premature, we do not agree. Section 32-23-06, N.D.C.C., provides:

"The court may refuse to render or enter a declaratory judgment or decree where such judgment or decree, if rendered or entered, would not terminate the uncertainty or controversy giving rise to the proceeding. However, the court shall render or enter a declaratory judgment or decree in an action brought by or against an insurance company to determine liability of the insurance company to the insured to defend, or duty to defend, although the insured's liability for the loss may not have been determined."

Under the first sentence of N.D.C.C. § 32-23-06, "the trial court's decision to grant or deny a request for a declaratory judgment is discretionary. The trial court's decision will not be set aside unless the court has abused its discretion." Blackburn, Nickels & Smith, Inc. v. National Farmers Union Prop. & Cas. Co., 452 N.W.2d 319, 322 (N.D.1990). The second sentence, however, requires the trial court to render a declaratory judgment to determine coverage and duty to defend. Id. at 323. A declaratory judgment in such a case must be issued even though there has not been a judgment determining the insured's liability, id. at 323, thus resulting in the prospect of piecemeal litigation. Here, Nodak is not seeking to determine if it has any responsibility to defend or if the policies cover underinsured motorists, and the second sentence of N.D.C.C. § 32-23-06 is, therefore, inapplicable. We are unable to conclude that the trial court abused its discretion under the first sentence of N.D.C.C. § 32-23-06. Midwest Med. Ins. Co. v. Doe, 1999 ND 17, ¶ 7, 589 N.W.2d 581,

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where we concluded an insurer's request for declaratory relief was premature and inappropriate, does not require a similar conclusion here. That case involved a conceded duty to defend and unresolved factual issues bearing on the issue of indemnity. Here, the underlying tort issues do not affect the insurance issue, and there are no unresolved fact issues precluding resolution of the legal question about whether the policies involved can be stacked.

III

[¶ 8] We have recently addressed our review in an appeal from a summary judgment:

Summary judgment is a procedural device for promptly disposing of a lawsuit without a trial if there are no genuine issues of material fact or inferences which can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. Tarnavsky v. McKenzie County Grazing Ass'n, 2003 ND 117, ¶ 7, 665 N.W.2d 18. "Whether summary judgment was properly granted is 'a question of law which we review de novo on the entire record.' " Iglehart v. Iglehart, 2003 ND 154, ¶ 9, 670 N.W.2d 343 (quoting Wahl v. Country Mut. Ins. Co., 2002 ND 42, ¶ 6, 640 N.W.2d 689). On appeal, this Court decides if the information available to the trial court precluded the existence of a genuine issue of material fact and entitled the moving party to summary judgment as a matter of law. Keator v. Gale, 1997 ND 46, ¶ 7, 561 N.W.2d 286.

Zuger v. State, 2004 ND 16, ¶ 7, 673 N.W.2d 615.

IV

[¶ 9] This case presents a choice-of-law issue. Under North Dakota law, coverages under the policies may not be stacked. Under Montana law as declared by the Montana Supreme Court, the coverages may be stacked. "When an accident occurs in a state other than that in which the policy was issued, the difficulty in determining the right to stack uninsured/underinsured motorist benefits escalates considerably." 12 Lee R. Russ and Thomas F. Segalla, Couch on Insurance 3d § 169:22, at 169-51 (1998). "The trend in resolving choice of law issues is to apply the law of the state with the most significant relationship to the dispute." 4 Eric Mills Holmes, Holmes' Appleman on Insurance 2d § 21.11, at 325 (1998).

[¶ 10] " 'In general, it is fitting that the state whose interests are most deeply affected should have its local law applied.' " Apollo Sprinkler Co. v. Fire Sprinkler Suppliers & Design, Inc., 382 N.W.2d 386, 390 (N.D.1986) (quoting Restatement (Second) of Conflict of Laws § 6, comment f (1971)). However, not all issues arising out of a given claim need to be decided by the same state's law. 4 Holmes, supra, § 21.2, at 231. "[D]ifferent states' law may be applied to different aspects of the controversy." Id. § 21.1, at 226. Thus, the determination of which state's law should be applied in a case may depend on what issue is being considered. See, e.g., ...

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