Cunningham v. Western Cas. & Sur. Co.

• Decision Date: 23 June 1976
• Docket Number: No. 11740,11740
• Citation: 90 S.D. 530,243 N.W.2d 172
• Parties: Liane CUNNINGHAM et al., Plaintiffs and Respondents, v. WESTERN CASUALTY & SURETY COMPANY, a Corporation, Defendant and Appellant.
• Court: South Dakota Supreme Court

Page 172

243 N.W.2d 172

90 S.D. 530

Liane CUNNINGHAM et al., Plaintiffs and Respondents, v. WESTERN CASUALTY & SURETY COMPANY, a Corporation, Defendant and Appellant.

No. 11740.

Supreme Court of South Dakota.

Argued March 16, 1976.

Decided June 23, 1976.

T. F. Martin of McCann, Martin & Mickelson, Brookings, for plaintiffs and respondents.

Timothy J. Nimick of Woods, Fuller, Shultz & Smith, Sioux Falls, for defendant and appellant.

DUNN, Chief Justice.

This declaratory judgment action on an insurance policy was commenced May 6, 1974. It deals with the question of whether or not insured parties covered by uninsured motorist coverage as to two different cars but by one insurance policy can recover damages up to the total limit arrived at by allowing claims under each uninsured motorist provision. The lower court found that such stacking or pyramiding was appropriate. We disagree.

In August of 1973, Alease B. Pittenger and her husband Kenneth Pittenger were involved in an automobile accident with an uninsured motorist in the state of Arizona; the accident resulted in the death of Alease Pittenger and injury to Kenneth Pittenger. At the time of the accident, Kenneth Pittenger had in full force and effect an insurance policy, No. H 414 29 30, with defendant. That policy, in section III, included protection against uninsured motorist accidents and specifically covered two different vehicles--a 1973 Chevrolet 1/2 ton pickup and a 1969 Rambler four-door sedan--owned by Kenneth Pittenger. Separate premiums, equal in amount, were paid for uninsured motorist coverage for each vehicle.

Following the initiation of this action in Brookings County, Kenneth Pittenger died from causes unrelated to the accident in question. Liane Cummingham and Ronald Pittenger as co-executors of the estates of Kenneth and Alease Pittenger were substituted as plaintiffs. The case was submitted to the court on a stipulation of facts. It was agreed that damages to Alease Pittenger would be in the sum of $25,000 and damages to Kenneth Pittenger would be in the sum of $5,000, which damages are exclusive of damages to personal property involved in the accident and exclusive of doctor, medical and funeral bills.

The policy in question provides coverage of $15,000 per person and $30,000 per accident as to uninsured motorist coverage. Plaintiffs contend that since the one policy covered two vehicles and since separate premiums were charged for uninsured motorist coverage on each vehicle 'stacking' of coverage is in order and the effective limit of the uninsured motorist coverage is $30,000 per person and $60,000 per accident. Defendant insurance company asserts that stacking is prohibited by the specific terms of the policy and that its liability is limited to $15,000 per person and $30,000 per accident.

This is a case of first impression in South Dakota. In Westphal v. Amco Insurance Co., 1973, 87 S.D. 404, 209 N.W.2d 555, this court held that an 'other insurance' provision did not preclude a person from collecting from his own insurance policy if his total damages exceeded the policy limits for the automobile in which he was riding when his injuries occurred. This is an entirely different situation from the case at bar where plaintiffs are attempting to stack the uninsured motorist limits of one vehicle onto the limits of the vehicle in which their decedents were actually riding when the accident occurred.

While the holding in Westphal is sound and is followed by the majority of jurisdictions, we do not believe that it should be extended to the facts of this case. Defendant is not seeking to avoid paying the amounts required by SDCL 58--11--9. That statute as it was then in effect stated:

'No policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto in limits for bodily injury or death set forth in § 32--35--70, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles and hit-and-run motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom.'

And SDCL 32--35--70 provided in pertinent part:

'* * * fifteen thousand dollars because of bodily injury to or death of one person in any one accident and, subject to said limit for one person, thirty thousand dollars because of bodily injury to or death of two or more persons in any one accident, and ten thousand dollars because of injury to or destruction of property of others in any one accident.'

Defendant acknowledged its liability for the amount required by the statute and sought to limit its liability to that amount in clear and unambiguous terms in the policy.

Condition 5. 'Coverage K: The limit of liability for coverage K stated in the declarations as applicable to 'each person' is the limit of The Western's liability for all damages because of bodily injury sustained by one person as the result of any one accident and, subject to the above provisions respecting each person, the limit of liability stated in the declarations as applicable to 'each accident' is the total limit of The Western's liability for all damages because of bodily injury sustained by two or more persons as the result of any one accident.'

While it is true that the decedents paid a separate premium for the uninsured motorist coverage on each vehicle, there is an increased risk because both vehicles could be traveling the highways at the same time. Further, we see nothing in SDCL 58--11--9 which requires the stacking of the policy coverages for two separate vehicles. The insureds got exactly what the policy said they would. The accident happened while they were driving the Rambler, and they can receive the policy limits that apply to the Rambler. Had both the Pittenger vehicles been involved in accidents involving uninsured drivers, the policy would allow recovery up to the limits on each vehicle. In Allstate Insurance Company v. McHugh, 1973, 124 N.J.Super. 105, 304 A.2d 777, the court considered a case with facts almost identical to those presented here. The court stated:

'It is conceivable that Frank McHugh could be operating one vehicle with multiple passengers therein, his wife operating the second vehicle with multiple passengers therein. All the passengers in Both vehicles are covered under Coverage S. This increased risk provides sufficient consideration and justification for charging a separate premium at the same rate for additional cars on the same policy.' (emphasis theirs) 304 A.2d at 778.

Although there is a split of authority, appeal courts in other states have not allowed this type of stacking in the following cases: Holland v. Hawkeye Security Insurance Company, 1975, Iowa, 230 N.W.2d 517; Weschester Fire Insurance Company v. Tucker, 1974, Tex., 512 S.W.2d 679; Allstate Insurance Company v. McHugh, supra; Castle v. United Pacific Insurance Group, 1968, 252 Or. 44, 448 P.2d 357; Otto v. Allstate Insurance Company, 1971, 2 Ill.App.3d 58, 275 N.E.2d 766; Doerpinghaus v. Allstate Insurance Company, 1971, 124 Ga.App. 627, 185 S.E.2d 615; and Morrison Assurance Company, Inc. v. Polak, 1969, Fla., 230 So.2d 6. It is interesting to note that the Texas Supreme Court before deciding Tucker, supra, had previously held that stacking of uninsured motorist policies was allowed where an 'other insurance' provision was involved. However, in Tucker, the court held that stacking coverage on two separate vehicles would not be permitted.

We do not believe that the Westphal decision needs further expansion by this court. Nor can we see where a different result is required by SDCL 58--11--9. We think that the insurance policy should be interpreted as it is written with the applicable limits being $15,000/$30,000 for the vehicle involved in the accident.

Reversed.

WOLLMAN and COLER, JJ., concur.

WINANS, J., dissents.

WINANS, Justice (dissenting).

Although this is a case of first impression for this court, it is not the first time we have been called upon to construe the provisions of our uninsured motorist law as found in SDCL 58--11--9. In Westphal v. Amco Insurance Co., 1973, 87 S.D. 404, 209 N.W.2d 555, we found that SDCL 58--11--9 requires a minimum uninsured motorist coverage to be offered with each policy and that the insurer could not escape the mandate of the statute with an 'other insurance' provision. We recognized that stacking of applicable uninsured motorist coverages was permissible to achieve the required minimum coverage. In my opinion the majority opinion today undermines what this court recognized as proper in Westphal because the effect of the decision is to allow the insurer to limit its liability to less than the minimum required by statute.

In Westphal, supra, this court allowed the passenger in a car struck by an uninsured motorist to recover from his own insurer, even though he was also covered by the driver's uninsured motorist provision. We held that the limitation provided in the 'other insurance' clause of the policy was invalid as an attempt to avoid the minimum uninsured motorist coverage mandated by statute. We adopted as our own the rule in Safeco Ins. Co. of America v. Jones, 1971, 286 Ala. 606, 614, 243 So.2d 736, 742, as set out in Blakeslee v. Farm Bureau Mutual Ins. Co. of Mich., 1971, 388 Mich. 464, 201 N.W.2d 786, when we said "We hold that our statute sets a minimum amount for recovery, but it does not place a limit on the total amount of recovery so long as that amount does not exceed the amount of actual loss; that where the loss exceeds the limits of one policy, the insured may proceed under other available...