Birchfield v. Nationwide Ins.
| Decision Date | 09 May 1994 |
| Docket Number | No. 93-731,93-731 |
| Citation | 875 S.W.2d 502,317 Ark. 38 |
| Parties | Steven BIRCHFIELD, Appellant, v. NATIONWIDE INSURANCE, Appellee. |
| Court | Arkansas Supreme Court |
Holly L. Smith, Springdale, for appellant.
Joe Benson, Fayetteville, for appellee.
Steven Birchfield, the appellant, raises two points in his appeal. He first contends that the trial court erred in granting summary judgment in favor of the appellee Nationwide Insurance because the contractual language relied on by the court to deny benefits is ambiguous. Secondly, he argues that the court's decision violates the public policy of the State. We are not persuaded by either point, and we affirm.
On May 21, 1989, Steven Birchfield, a minor, was a passenger in a car driven by Mr. Holliman. Mr. Holliman was involved in an accident with Mr. Stines. Holliman had liability coverage with policy limits of $25,000. Stines's liability coverage set a limit of $100,000. Birchfield sustained injuries in the accident and claimed damages from Holliman and Stines in excess of $250,000. At the time of the accident, Birchfield had underinsured motorist coverage (UIM) under a policy that Nationwide had issued to his mother, Wanda Birchfield. That policy limited underinsurance coverage as follows:
No payment will be made until the limits of all other liability insurance and bonds that apply have been exhausted by payments.
Birchfield filed a lawsuit against the liability companies for the two drivers, Holliman and Stines. He settled the joint lawsuit for $75,000, which was substantially less than the policy limits of $125,000 available from the liability insurance of Holliman and Stines. Following that settlement, Birchfield filed a complaint against his carrier, Nationwide, for the policy limits of his underinsured coverage which totaled $25,000. He claimed that since his injuries resulted in damages of $250,000 and that this amount was greater than the combined policy limits of the tortfeasors, Nationwide should honor his claim. Nationwide refused to do so.
Nationwide then moved for summary judgment and contended that because Birchfield settled with the tortfeasors for less than their policy limits, he was not entitled to UIM benefits. Birchfield responded that the limiting UIM language in the insurance contract was ambiguous and, therefore, a question of fact remained unanswered and summary judgment was not appropriate. In the alternative, he urged that if the policy were construed as Nationwide advocated, it would be void as against public policy. The circuit judge entered an order granting summary judgment.
Birchfield first claims that summary judgment was not proper because the UIM language in the policy, which purports to deny coverage unless the limits of all other liability insurance that apply have been "exhausted by payment," is ambiguous. We do not agree. Birchfield is quite correct that summary judgment is a remedy which should only be granted when there are no genuine issues of fact to litigate and when the case can be decided as a matter of law. Ark.R.Civ.P. 56(c); Forrest City Mach. Works, Inc. v. Mosbacher, 312 Ark. 578, 851 S.W.2d 443 (1993). The burden of sustaining a motion for summary judgment is on the moving party with all doubts and inferences resolved against the moving party. Forrest City Mach. Works, Inc. v. Mosbacher, supra; Lovell v. St. Paul Fire & Marine Ins. Co., 310 Ark. 791, 839 S.W.2d 222 (1992).
Here, however, the plain meaning of the language "exhausted by payments" regarding limits of other liability insurance is that all other available liability insurance must be paid in full before Birchfield is entitled to receive UIM benefits from Nationwide. The language is clear that it is the limits of the liability policies that must be paid and "exhausted." As the trial court stated: "the only logical, reasonable and unambiguous definition of 'exhausted by payments' is the payment of money by the insurer of the liability limits and not the action by the insured in compromising and settling at less than the liability limits...." We hold that there is no genuine issue of material fact remaining as to the meaning of this policy language. Because we conclude that there is no ambiguity in the language, it is unnecessary to resort to rules of construction. Arkansas...
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