Fortis Benefits Ins. Co. v. Hauer, 20010052.
Decision Date | 05 December 2001 |
Docket Number | No. 20010052.,20010052. |
Citation | 2001 ND 186,636 N.W.2d 200 |
Parties | FORTIS BENEFITS INSURANCE COMPANY, Plaintiff and Appellee, v. Ann M. HAUER, Defendant and Appellant. |
Court | North Dakota Supreme Court |
R. Kent Sellers (argued), Richard N. Bien (on brief), Lathrop & Gage L.C., Kansas City, MO, and Dennis William Lindquist (appeared), Mandan, ND, for plaintiff and appellee.
Arnold V. Fleck, Fleck Law Office, Bismarck, ND, for defendant and appellant.
[¶ 1] Ann Hauer appeals from a summary judgment ordering her to repay disability benefits to Fortis Benefits Insurance Company ("Fortis"). We affirm, concluding the district court correctly determined Hauer's disability benefits received from Social Security and the North Dakota Teachers' Fund for Retirement may be offset against the disability benefits available from Fortis.
[¶ 2] Hauer was employed as a teacher by the Bismarck Public School District. In 1993 she became permanently and totally disabled. In May 1993 Hauer began receiving monthly disability benefits of $1,861 from Fortis under a group policy which provided long-term disability benefits to employees of the School District.
[¶ 3] In February 1994, Hauer began receiving approximately $1,029 per month in Social Security disability benefits. She also received a lump sum payment for Social Security disability benefits retroactive to June 1993. Fortis began offsetting the monthly Social Security benefits against Hauer's monthly benefits under the long-term disability policy, thereby lowering her monthly benefits to $832. Fortis also requested that Hauer repay it for overpayments represented by the Social Security lump sum payment. Hauer repaid that amount to Fortis.
[¶ 4] In April 1995 Hauer began receiving approximately $1,076 per month in disability benefits from the North Dakota Teachers' Fund for Retirement ("Teachers' Fund"). Hauer also received from the Teachers' Fund a lump sum payment of disability benefits retroactive to November 1993. In May 1997 Fortis learned Hauer was receiving disability benefits from the Teachers' Fund. Fortis thereafter discontinued paying benefits to Hauer, claiming Hauer's monthly benefits from Social Security and the Teachers' Fund totally offset her benefits due from Fortis. Based upon Hauer's lump sum payment from the Teachers' Fund, Fortis also requested that Hauer repay $33,213 it claimed it had overpaid her between November 1993 and May 1997.1
[¶ 5] Hauer refused to repay Fortis, and Fortis brought this action seeking to recover the claimed overpayments. Hauer answered and filed a counterclaim alleging Fortis had improperly offset benefits due her under the policy. Fortis moved for summary judgment, and Hauer filed a cross-motion for summary judgment. The district court determined the Fortis disability policy allowed an offset of the disability benefits received from Social Security and the Teachers' Fund. Summary judgment ordering Hauer to repay benefits was entered, and Hauer appealed.2
[¶ 6] Resolution of this appeal turns upon interpretation of the policy provisions allowing offsetting of other disability benefits to reduce the monthly benefits due from Fortis.
[¶ 7] Before considering offsets, Hauer was entitled to collect the "Schedule Amount" of $1,861 monthly in disability benefits under the policy. The policy provided that an "Offset Amount" would be deducted from the monthly "Schedule Amount":
[¶ 8] The policy also allows Fortis to demand repayment if it has overpaid benefits to the insured:
[¶ 9] Fortis argues that Hauer's Social Security disability benefits are to be fully offset under section 1(d) of the offset provisions, and that Hauer's Teachers' Fund disability benefits are fully offset as a "Governmental Plan" under section 1(e). Hauer argues both the Social Security and Teachers' Fund benefits are benefits paid from a "Policyholder-Sponsored Retirement Plan" under section 2 of the offset provisions. Because she paid one-half of the contributions into Social Security and the Teachers' Fund, Hauer argues Fortis may only offset the one-half of those benefits which represent her employer's contributions, but not the one-half which represent her contributions.
[¶ 10] The Fortis policy defines the relevant terms:
[¶ 11] Summary judgment is appropriate if the only issues to be resolved are questions of law. Rask v. Nodak Mut. Ins. Co., 2001 ND 94, ¶ 10, 626 N.W.2d 693; Ziegelmann v. TMG Life Ins. Co., 2000 ND 55, ¶ 5, 607 N.W.2d 898. Interpretation of an insurance policy is a question of law, which is fully reviewable on appeal. Rask, at ¶ 10; Center Mut. Ins. Co. v. Thompson, 2000 ND 192, ¶ 14, 618 N.W.2d 505. We review a trial court's interpretation of an insurance policy by independently examining and construing the policy. Rask, at ¶ 10; DeCoteau v. Nodak Mut. Ins. Co., 2000 ND 3, ¶ 19, 603 N.W.2d 906.
[¶ 12] Our goal when interpreting insurance policies, as when construing other contracts, is to give effect to the mutual intention of the parties as it existed at the time of contracting. N.D.C.C. § 9-07-03; Ziegelmann, 2000 ND 55, ¶ 6, 607 N.W.2d 898. We look for that mutual intention first in the language of the insurance contract itself, and, if the policy language is clear on its face, there is no room for construction. Rask, 2001 ND 94, ¶ 10, 626 N.W.2d 693; DeCoteau, 2000 ND 3, ¶ 19, 603 N.W.2d 906. Although we regard insurance policies as adhesion contracts and resolve ambiguities in favor of the insured, we will not rewrite a contract to impose liability upon an insurer if the policy unambiguously precludes coverage. Ziegelmann, at ¶ 6. When the language of an insurance policy is clear and explicit, the language should not be strained in order to impose liability upon the insurer. Id.; Fisher v. American Family Mut. Ins. Co., 1998 ND 109, ¶ 6, 579 N.W.2d 599.
[¶ 13] The language of the Fortis policy clearly and unambiguously provides that Social Security disability benefits may be fully offset against the Schedule Amount. Section 1(d) of the offset provisions explicitly provides for offset of disability benefits received by the insured from "the United States Social Security Act." Hauer's Social Security disability benefits are clearly and unambiguously covered by that provision.
[¶ 15] We conclude the district court did not err in determining Hauer's Social...
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