Gates v. Eller

• Decision Date: 24 April 2001
• Docket Number: No. 94,123.,94,123.
• Citation: 2001 OK 38,22 P.3d 1215
• Parties: Edith Victoria GATES and Sherry I. Gates, Appellants, Edith Victoria Gates, as mother and next friend of Kasey Gates, a minor, Plaintiff, v. Christa Dian ELLER, Defendant, Prudential Property and Casualty Insurance Company, Appellee.
• Court: Oklahoma Supreme Court

22 P.3d 1215

2001 OK 38

Edith Victoria GATES and Sherry I. Gates, Appellants, Edith Victoria Gates, as mother and next friend of Kasey Gates, a minor, Plaintiff, v. Christa Dian ELLER, Defendant, Prudential Property and Casualty Insurance Company, Appellee.

No. 94,123.

Supreme Court of Oklahoma.

April 24, 2001.

Robert C. Smith, Jr., Michael S. Peters, Oklahoma City, OK, for appellants.

Gerald E. Durbin, II, Frances J. Stanton, Oklahoma City, OK, for appellee. BOUDREAU, Justice:

¶ 1 This is an appeal from an order granting summary judgment in favor of the uninsured motorist insurer. The dispositive question is: Did the motor vehicle operated by the tortfeasor, for which there was an effective automobile liability insurance policy in an amount greater than the damages claimed, become an uninsured motor vehicle under 36 O.S.Supp.1994, § 3636 when the plaintiffs did not timely commence an action against the tortfeasor? We answer in the negative and, accordingly affirm the trial court's summary judgment.

I. BACKGROUND

¶ 2 On November 19, 1994, the automobile driven by Christa Dian Eller (Eller) collided with the automobile driven by Edith Victoria Gates. At the time of the collision, Pauline J. Gates, Sherry I. Gates, and Kasey Gates, a minor, were passengers in the Gates automobile. Eller had liability insurance in the amount of $25,000.00 per person and $50,000.00 per accident. Pauline J. Gates owned the automobile driven by Edith which was covered by a liability insurance policy, with uninsured motorist coverage, issued by Prudential Property and Casualty Insurance Company (Prudential).

¶ 3 On January 27, 1995, the driver and passengers of the Gates automobile filed an action against Eller, the alleged tortfeasor, and Prudential, the uninsured motorist insurer. Pauline J. Gates subsequently dismissed her claims against Eller and Prudential, with prejudice. On November 29, 1995, the remaining three plaintiffs also dismissed their claims against both defendants, without prejudice. The remaining three plaintiffs later filed a second action against Eller and Prudential on December 3, 1996.

¶ 4 Eller responded to the second action with a motion to dismiss. The trial court dismissed the claims of Edith and Sherry Gates against Eller as untimely filed,¹ but did not dismiss the minor plaintiff's claim against Eller. The minor plaintiff secured a judgment against Eller in the amount of $538.00, plus interest and costs.²

¶ 5 Prudential moved for summary judgment against Edith and Sherry Gates (plaintiffs). In its motion, Prudential represented that the plaintiffs concede their damages did not exceed the liability limits of the tortfeasor's insurance policy. Accordingly, Prudential argued it was entitled to judgment on plaintiffs' uninsured motorist claims because plaintiffs could not establish the uninsured status of the tortfeasor's motor vehicle, a precondition to recovery.

¶ 6 In opposing summary judgment, plaintiffs did not contest Prudential's representation of the facts.³ Plaintiffs asserted that the proceeds under the tortfeasor's liability insurance were unavailable because the statute of limitations had expired on their tort claims against the tortfeasor. They argued that since the liability of the tortfeasor has been adjudicated in the judgment secured by the minor plaintiff and since the proceeds of the tortfeasor's liability insurance are unavailable, they have a right to recover under the provisions of the uninsured motorist insurance.

¶ 7 The trial court granted summary judgment in favor of Prudential. Plaintiffs appealed. The Court of Civil Appeals reversed the judgment, finding the undisputed facts establish that the plaintiffs are entitled to recover under the uninsured motorist coverage because the tortfeasor's liability coverage is no longer available as the statute of limitation has expired. This Court granted Prudential's petition for certiorari review.

II. STANDARD OF REVIEW

¶ 8 A summary judgment disposes solely of issues of law and therefore, it is reviewable by a de novo standard.⁴ In a de novo review, we have plenary, independent and non-deferential authority to determine whether the trial court erred in its application of the law and whether there is any genuine issue of material fact.⁵

III. CONTENTIONS

¶ 9 On certiorari, Prudential contends it has no liability to plaintiffs, as a matter of law, because the undisputed facts reveal that the vehicle operated by the tortfeasor was not an uninsured motor vehicle. In response, plaintiffs contend that the tortfeasor's motor vehicle became uninsured when they (plaintiffs) failed to timely file a tort action against the tortfeasor. According to plaintiffs, the proceeds under the tortfeasor's liability insurance were no longer available to them at that point and therefore they have a right to recover uninsured motorist benefits from Prudential.

¶ 10 In pressing their argument, plaintiffs rely on Burch v. Allstate Insurance Co.⁶ In Burch, we answered a federal certified question as to whether an uninsured motorist insurer is liable for the entire amount of an injured insured's claim where the insured failed to timely sue the uninsured tortfeasor.⁷Burch held that an uninsured motorist insurer is directly and primarily liable for the entire loss of its injured insured from the first dollar up to the policy limits except where the insured affirmatively destroys the insurer's subrogation right.⁸ Plaintiffs contend that insomuch as they did not affirmatively destroy Prudential's subrogation right, Prudential became obligated to them for their entire loss when the tortfeasor's liability insurance became unavailable.

IV. AN INSURED SEEKING TO RECOVER UNINSURED MOTORIST INSURANCE BENEFITS MUST ESTABLISH THE UNINSURED STATUS OF THE TORTFEASOR'S MOTOR VEHICLE.

¶ 11 The purpose of our uninsured motorist statute⁹ is to assure insurance coverage for the protection of the insured from the effects of personal injury caused by a motorist who either carries no insurance or has inadequate coverage.¹⁰ Accordingly, the statute provides that bodily injury damages covered by uninsured motorist insurance must arise out of the ownership, maintenance or use of an uninsured motor vehicle.¹¹ While the statute does not precisely define the term uninsured motor vehicle, the term obviously includes a motor vehicle without liability insurance. It also encompasses a motor vehicle with liability insurance: 1) where the liability insurer is unable to make payment because of insolvency; and 2) where the liability limits are less than the amount of the claim (underinsured).¹² Under our statutory scheme, the uninsured motorist insurer's obligation to its insured is identical regardless of the underlying reason for the classification of the vehicle as uninsured.¹³

¶ 12 Our uninsured motorist statute imposes upon an injured insured seeking to recover uninsured motorist insurance benefits the burden of proving the uninsured status of the tortfeasor's motor vehicle.¹⁴ Our holding in Burch did not diminish this burden in any respect. To the contrary, Burch observed that an injured insured must demonstrate that the preconditions for loss under the uninsured motorist coverage exist before he or she can recover under the primary uninsured motorist coverage.¹⁵

V. THE FAILURE OF THE INSURED TO COMMENCE AN ACTION AGAINST THE TORTFEASOR WITHIN THE STATUTE OF LIMITATION DOES NOT CREATE AN UNINSURED STATUS.

¶ 13 Plaintiffs rely upon Burch and Uptegraft v. Home Insurance Company¹⁶ for their argument that the tortfeasor's insured motor vehicle becomes uninsured if the insured fails to commence an action against the tortfeasor within the statute of limitation. Plaintiffs contend that because the tortfeasor's liability insurance is now unavailable, they have a right to recover uninsured motorist benefits from Prudential.

¶ 14 In Uptegraft, we answered a federal certified question as to whether the uninsured motorist insurer is discharged from liability under its policy where the injured insured fails to timely sue the uninsured motorist tortfeasor.¹⁷ The insurer in Uptegraft argued that the failure of the insured to timely commence a tort action destroyed its subrogation right and accordingly should discharge it from liability to the insured. Uptegraft rejected that argument¹⁸ and held that failure of the injured insured to timely commence an action against the uninsured tortfeasor does not ipso facto discharge the uninsured motorist insurer from liability.¹⁹ Burch reaffirmed this holding in Uptegraft.²⁰

¶ 15 Plaintiffs misconstrue Uptegraft and Burch when they offer them as support for their argument that the tortfeasor's insured motor vehicle becomes uninsured when the insured fails to commence an action against the tortfeasor within the statute of limitation. Uptegraft and Burch stand for the proposition that an insured who passively permits the tort statute of limitation to expire does not discharge the uninsured motorist insurer from liability. They do not support plaintiffs' proposition that the same passive act on the part of the insured creates an uninsured status where an insured status previously existed. Stated otherwise, an insured motor vehicle does not become an uninsured motor vehicle simply because the insured allows the statute of limitation to expire causing the tortfeasor's liability insurance to become unavailable.

VI. CONCLUSION

¶ 16 An insured seeking to recover uninsured motorist insurance benefits must establish the uninsured status of the tortfeasor's motor vehicle. An insured does not establish an uninsured status by simply failing to commence an action against the tortfeasor within the statute of limitation. Accordingly, the trial court correctly granted summary judgment to Prudential.

CERTIORARI PREVIOUSLY GRANTED; OPINION OF THE COURT OF CIVIL APPEALS VACATED; TRIAL COURT'S SUMMARY JUDGMENT AFFIRMED.

¶ 17 ALL JUSTICES CONCUR.

1. The dismissal...