Farmers Ins. Exch. v. Veveiros, A128444

CourtCalifornia Court of Appeals
Writing for the CourtNEEDHAM, J.
PartiesFARMERS INSURANCE EXCHANGE, Plaintiff and Respondent, v. JULIE J. VEVEIROS et al., Defendants and Respondents.
Decision Date25 April 2011
Docket NumberA128444

FARMERS INSURANCE EXCHANGE, Plaintiff and Respondent,
JULIE J. VEVEIROS et al., Defendants and Respondents.



Filed: April 25, 2011


California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Sonoma County Super. Ct. No. SCV244993)

California law prohibits the "stacking," or combination, of uninsured/underinsured motorist coverage (UMC) under separate automobile liability policies, whereas Arizona law permits the stacking of UMC under certain circumstances. In this case, a California resident was fatally injured by a driver in Arizona. May his heirs stack the UMC under his two automobile liability policies, which were issued by a California insurer for vehicles registered and garaged in California?

We conclude that California law governs and that stacking is barred by statute. But even if we were to apply Arizona law, we would reach the same result in light of the policy language at issue. We therefore affirm the summary judgment entered in favor of respondent Farmers Insurance Exchange (Farmers) and against appellants Julie Veveiros, Nicholas Veveiros and Olivia Veveiros.


Steve Veveiros (decedent) lived in Rohnert Park, California with his wife Julie and their two children, Nicholas and Olivia. He owned a 1997 Dodge Grand Caravan and a 2000 Pontiac Bonneville, which he garaged at his home and insured through

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Farmers under two separate policies. Each of these policies (Nos. 95-15871-98-60 and 95-15871-99-15) had UMC with policy limits of $250,000 per person/$500,000 per occurrence. Farmers is a California insurer domiciled in California.

The relevant provisions of decedent's two Farmers policies were identical. Part II describes the scope of UMC and provided, "We will pay all sums which an insured person... is legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle because of bodily injury actually sustained by the insured person including the wrongful death of an insured person...." An "uninsured motor vehicle" is defined to include any motor vehicle "[i]nsured by a bodily injury liability bond or policy at the time of the accident which provides coverage in amounts less than the limits of Uninsured Motorist Coverage shown in the Declarations." A section entitled "Limits of Liability" provided, "The limits of liability [for UMC] shown in the Declarations apply subject to the following: [¶] 1. The limit for 'each person' is the maximum for bodily injury sustained by any person in any one occurrence [$250,000].... [¶] [¶] 2. Subject to the limit for 'each person, ' the limit for 'each occurrence' is the maximum combined amount for bodily injury sustained by two or more persons in any one occurrence [$500,000]. [¶] 3. Subject to the law of the state of the occurrence, we will pay no more than these maximums regardless of the number of vehicles insured, insured persons, claims, claimants, policies or vehicles involved in the occurrence...." (Italics added.)

The policy language also described what would happen in the event that other insurance policies covered a claim made under the UMC provisions: "Other Insurance [¶] 1. We will pay under this coverage only after the limits of liability under any applicable bodily injury liability bonds or policies have been exhausted by payment of judgments or settlements. [¶] 2. The amount of Uninsured Motorist Coverage we will pay under Additional Definitions 3b shall be reduced by the amount of any other bodily injury coverage available to any party held to be liable for the accident.... [¶].... [¶] 5. If any applicable insurance other than this policy is issued to you by us or any other member company of the Farmers Insurance Group of Companies, the total amount payable among all such policies shall not exceed the limits provided by the single policy

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with the highest limits of liability."(Italics added.) Part V, which listed the "Conditions" generally applicable to the policy, included the following paragraph: "6. Two or More Cars Insured. With respect to any accident or occurrence to which this and any other auto policy issued to you by any member company of the Farmers Insurance Group of Companies applies, the total limit of liability under all the policies shall not exceed the highest applicable limit of liability under any one policy."(Italics added.)

On December 14, 2008, decedent was hit by a car while crossing the street during a visit to Tempe, Arizona. The driver of the car that hit him carried an insurance policy with limits of $25,000 per person. On December 24, 2008, attorney John DeMeo wrote a letter to a Farmers branch claims office in Santa Rosa, California, stating that decedent had been killed while crossing a street in Tempe, on December 14, and that a UMC claim was contemplated under both of decedent's Farmers policies.

Farmers received DeMeo's letter on December 30, 2008. On January 28, 2009, it sent a letter advising him that the UMC coverage under the two policies could not be stacked and requesting that Julie Veveiros "choose which policy she wishes to pursue [under] her Underinsured Motorist Claim." DeMeo responded with a letter dated January 29, 2009, asserting that the coverage was governed by the law of Arizona, where the accident occurred, and that Arizona law did permit stacking. Farmers tendered the policy limits of $250,000 under one of its policies, less $25,000 that was paid to the Veveiroses under the liability policy of the driver who hit decedent. The Veveiroses accepted this money while reserving their right to pursue a UMC claim under the other Farmers policy.

Farmers filed a complaint for declaratory relief seeking a determination that the Veveiroses (Julie, Nicholas and Olivia) could not stack the UMC benefits under the two policies. The Veveiroses filed a cross-complaint for declaratory relief, breach of contract and breach of the covenant of good faith and fair dealing, alleging that stacking was permitted under terms of the policies issued and under Arizona law. Farmers filed a motion for summary judgment, arguing that the case was governed by California law, which statutorily prohibited the stacking of UMC benefits under separate policies. (See

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Ins. Code, § 11580.2, subd. (q).) Farmers argued that it would also prevail under Arizona law, because stacking was expressly prohibited by the policy language. (See Ariz. Rev. Stats., § 20-259.01, subd. (H); Farmers Insurance Company of Arizona v. Voss (Ariz.Ct.App. 1996) 188 Ariz. 297, 298 (Voss).) The Veveiroses filed a motion for summary judgment arguing that Arizona law applied and permitted the stacking of UMC benefits.

The trial court granted summary judgment in favor of Farmers and against the Veveiroses. It agreed with the Veveiroses that the stacking issue was governed by the law of Arizona, rather than the law of California, based on policy language providing that the limits of UMC were "[s]ubject to the law of the state of the occurrence." Though Arizona law did not completely foreclose the stacking of UMC benefits, stacking was not permitted in this case because decedent's policies specifically provided that in the event more than one policy had been issued by Farmers, the total amount of UMC would not exceed the limits of the policy with the highest limits. (See Ariz. Rev. Stats., § 20259.01, subd. (H).) The court also concluded the Veveiroses were not entitled to stack the two policies because Farmers had timely notified them that they could elect to proceed under one of them, and Arizona allows an insurer to preclude stacking upon giving such notice within 30 days after receiving notice of an accident. (See ibid.)

The Veveiroses appeal, arguing that the stacking issue is governed by the law of Arizona, where the accident occurred, and that Arizona law allows stacking under the circumstances of this case. Farmers responds that the claim is governed by California law, which prohibits stacking under any circumstances, and that in any event, stacking would not be permitted under Arizona law.

We agree with Farmers. Unlike the trial court, which determined that Arizona law governed the controversy, we conclude that California law applies. Because this leads to the same result as was reached by the trial court—namely, that stacking is not permitted—we affirm the order granting summary judgment.

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A. Standard of Review

Summary judgment is proper if the moving papers establish that there is no triable issue of material fact and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c); Jambazian v. Borden (1994) 25 Cal.App.4th 836, 843-844.) On appeal, our review of an order granting summary judgment is de novo. (City of Oakland v. Hassey (2008) 163 Cal.App.4th 1477, 1486.) Absent a factual issue concerning the meaning of policy language, the interpretation of an insurance contract is a question of law subject to our independent or de novo review. (Gin v. Pennsylvania Life Ins. Co. (2005) 134 Cal.App.4th 939, 943; Miller v. American Home Assurance Co. (1996)...

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