Allstate Ins. Co. v. Fackett

• Decision Date: 30 April 2009
• Docket Number: No. 49884.,49884.
• Citation: 206 P.3d 572
• Parties: ALLSTATE INSURANCE COMPANY, v. Deborah Ann FACKETT, Respondent.
• Court: Nevada Supreme Court

206 P.3d 572

ALLSTATE INSURANCE COMPANY, v. Deborah Ann FACKETT, Respondent.

No. 49884.

Supreme Court of Nevada.

April 30, 2009.

Prince & Keating and Dennis M. Prince and Douglas J. Duesman, Las Vegas, for Appellant.

Rogers, Mastrangelo, Carvalho & Mitchell and Daniel E. Carvalho and Charles A. Michalek, Las Vegas, for Respondent.

BEFORE THE COURT EN BANC.

OPINION

PER CURIAM:

Respondent Deborah Ann Fackett's mother, Barbara Testa, suffered severe injuries when her car collided with Benjamin Bellville's car. Bellville was an underinsured driver, and Testa was insured under her own auto insurance policy. Fackett was insured with appellant Allstate Insurance Company. A few weeks after the accident, Testa died from her injuries. Fackett sued Bellville for the wrongful death of her mother and received his $1,000,000 policy limit. Fackett then made a demand under her Allstate insurance policy (Policy) for uninsured/underinsured motorist (UM) benefits for the death of her mother. Allstate denied coverage because Testa was not an insured person under the Policy. Allstate then filed a declaratory relief action, requesting that the court find that (1) the Policy was valid and enforceable and (2) Testa was not an insured, and therefore Fackett could not recover for Testa's death. Both parties moved for summary judgment. The district court granted Fackett's motion, denied Allstate's motion, and ruled as a matter of law that the Policy's provision requiring that the injured be an insured violated NRS 687B.145(2) because the statute does not require that the bodily injury be sustained by an insured. Therefore, the district court found that Fackett was entitled to UM benefits for Testa's death.

We must determine whether Allstate's UM policy provision, which limits recovery to insureds who suffer bodily injury, is enforceable and whether the district court erred in granting summary judgment in favor of Fackett. Our analysis of the district court's ruling has two prongs.

First, we must determine whether the Policy provision limiting recovery to insureds who suffer bodily injury is ambiguous. We conclude that the Policy is clear and unambiguous and limits recovery to insureds who suffer bodily injury.

Second, we must determine whether the Policy limitations contravene Nevada's UM statutory scheme or public policy. We conclude that neither NRS 687B.145(2) nor public policy requires that UM coverage provide recovery for injury to uninsured third parties. Thus, Allstate's Policy provision limiting recovery to insureds who suffer bodily harm is unambiguous, does not contravene NRS 687B.145(2), and therefore is enforceable.

Accordingly, we reverse.

FACTS AND PROCEDURAL HISTORY

Accident and insurance policy

Barbara Testa, respondent Deborah Fackett's mother, was a fault-free passenger in a vehicle that collided with Benjamin Bellville's vehicle. Testa was severely injured and died a few weeks later from her injuries. She was insured under her own policy and was not insured under Fackett's Allstate policy.

At the time of the accident and Testa's death, Fackett had an insurance policy with Allstate. The UM coverage provided that "[Allstate] will pay damages which an insured person is legally entitled to recover from the owner or operator of an uninsured auto because of bodily injury sustained by an insured person." (Emphasis added.) According to the Policy, insured persons are:

1. [The named insured] and any relative who resides in [the named insured's] household.

2. Any person while in, on, getting into or out of [the named insured's] insured auto with [the named insured's] permission.

3. Any other person who is legally entitled to recover because of bodily injury to [the named insured], a relative who resides in [the named insured's] household, or an occupant of [the named insured's] insured auto with [the named insured's] permission.

The parties agree that Testa was not an insured person under the Policy.

In addition, the Policy defines an uninsured auto as, among other things, "an underinsured motor vehicle which has liability protection in effect and applicable at the time of the accident but less than the applicable damages the insured person is legally entitled to recover."

Fackett asserted a wrongful death claim against Bellville and ultimately settled with Bellville's insurance company for his $1,000,000 policy limit. The district court found that Bellville was insured but "lacked sufficient insurance to cover all claims involved in the accident."

After the settlement, Fackett's attorney informed Allstate of his representation and requested a copy of Fackett's policy that was in effect at the time of the accident. Allstate then informed Fackett's attorney, in writing, that Testa was not an insured person under the Policy, and therefore UM benefits were not available to Fackett.

Fackett then made a formal demand for her UM Policy limits. She argued that NRS 687B.145 entitled her to recover any damages for which she is legally entitled to recover from the other driver. Because she was legally entitled to recover from Bellville for the wrongful death of her mother, Fackett reasoned that she was entitled to recover UM benefits as well. Allstate did not reconsider its earlier denial of the claim.

District court proceedings

Allstate filed a declaratory relief action seeking an order declaring that the Policy was valid and enforceable, and that Testa was not an insured person under the Policy, and therefore Fackett was not entitled to UM benefits for Testa's death. Allstate moved for summary judgment on its claim for declaratory relief.

Fackett filed an opposition and a countermotion for summary judgment. Fackett argued that she was entitled to summary judgment because (1) the UM statute must be construed broadly and strictly in favor of the insured, and (2) the Policy was void and unenforceable because it violated public policy by restricting coverage to injuries suffered by insureds.¹

The district court granted Fackett's summary judgment motion and denied Allstate's motion. The district court found that states having UM statutes and public policies similar to Nevada allowed recovery in similar cases. As a result, the district court concluded that (1) NRS 687B.145 must be strictly construed in favor of the insured, (2) the statute does not require that the insured suffer physical bodily injury, and (3) the Policy's requirement that the injured be an insured contravenes the statute.² Therefore, the district court found that Fackett was entitled to UM benefits for Testa's death.

DISCUSSION

Allstate argues that the district court erred in granting Fackett summary judgment because the Policy language restricting recovery to injured insureds is consistent with Nevada's public policy and the plain language of the UM statute. Therefore, the limitation of recovery to insureds who are injured in an auto accident with an uninsured/underinsured motorist is enforceable. Fackett, however, argues that this court must strictly construe the UM statute in favor of the insured. This would require that UM coverage include any legal claims that an insured person has against an uninsured/underinsured driver, even when the person injured in the auto accident was not covered under the policy in question. We agree with Allstate's position because the Policy is unambiguous, it comports with the plain language of Nevada's UM statutory scheme, and is enforceable.

Standard of review

"This court reviews a district court's grant of summary judgment de novo." Wood v. Safeway, Inc., 121 Nev. 724, 729, 121 P.3d 1026, 1029 (2005). Summary judgment is appropriate when there is no genuine issue of material fact and, viewing all evidence and inferences from the evidence in a light most favorable to the nonmoving party, the moving party is entitled to a judgment as a matter of law. Id.; NRCP 56(c). In this case, the parties agree that there are no disputed material facts and only dispute whether Fackett is entitled to judgment as a matter of law under the applicable statutory and contractual provisions.

The Policy provision requiring that an insured sustain bodily injury or death

Allstate argues that the express terms of the Policy's UM provision require that an insured sustain injury or death and therefore do not provide coverage for Fackett's mother.³ We agree because the Policy is unambiguous and limits recovery to injured insureds.

When a contract is unambiguous and neither party is entitled to relief from the contract, summary judgment based on the contractual language is proper. Chwialkowski v. Sachs, 108 Nev. 404, 406-07, 834 P.2d 405, 406 (1992). When there are no disputed material facts, this court reviews construction of an insurance policy as purely a question of law and construes any ambiguities in an insurance policy in favor of the insured. Estate of Delmue v. Allstate Ins. Co., 113 Nev. 414, 417, 936 P.2d 326, 328 (1997).

At the time of the accident, Fackett's Policy stated, "[Allstate] will pay damages which an insured person is legally entitled to recover from the owner or operator of an uninsured auto because of bodily injury sustained by an insured person." (Emphasis added.) This language is unambiguous and clearly states that any injury for which the insured will receive UM benefits must be a bodily injury suffered by the insured. Thus, we conclude Fackett was not entitled to UM benefits for the death of her mother because Fackett, the insured, did not suffer any bodily injury.

NRS 687B.145(2) does not entitle insureds to recover UM benefits for injuries to uninsured third parties

Allstate argues that the plain language of NRS 687B.145(2) only applies to bodily injury suffered by the insured. Fackett, on the other hand, argues that this court must strictly construe the UM statute in favor of recovery by insureds. Under this construction, Fackett reasons that the statutory scheme applies to bodily injury...