Gillespie v. Nat'l Farmers Union Prop. & Cas. Co.

• Decision Date: 04 October 2016
• Docket Number: No. 20160012.,20160012.
• Citation: 885 N.W.2d 771
• Parties: Samantha GILLESPIE and Tina Taylor, Plaintiffs and Appellants v. NATIONAL FARMERS UNION PROPERTY & CASUALTY COMPANY, Defendant and Appellee.
• Court: North Dakota Supreme Court

885 N.W.2d 771

Samantha GILLESPIE and Tina Taylor, Plaintiffs and Appellants

v.NATIONAL FARMERS UNION PROPERTY & CASUALTY COMPANY, Defendant and Appellee.

No. 20160012.

Supreme Court of North Dakota.

Oct. 4, 2016.

Debra L. Hoffarth, Minot, N.D., for plaintiffs and appellants.

Sean F. Marrin (argued) and Bradley J. Beehler (on brief), Grand Forks, N.D., for defendant and appellee.

VANDE WALLE, Chief Justice.

[¶ 1] Samantha Gillespie and her mother, Tina Taylor, appealed from a summary judgment dismissing their lawsuit against Taylor's motor vehicle insurer, National Farmers Union, for underinsured motor vehicle coverage. We conclude Gillespie and Taylor failed to raise a genuine issue of material fact about whether Gillespie was legally entitled to collect for bodily injury from the owner or operator of an underinsured motor vehicle. We affirm.

I

[¶ 2] Gillespie and Taylor sued Farmers Union for underinsured motor vehicle coverage, alleging Gillespie was insured under her mother's motor vehicle policy with Farmers Union and was driving a motor vehicle owned by another person when Gillespie lost control of the vehicle and it overturned, resulting in significant injuries to her. According to Gillespie and Taylor, the motor vehicle was owned by Angela Ayers, Gillespie's aunt, and insured by GEICO. Ayers died as a result of the accident and another passenger in the motor vehicle sustained significant injuries. Gillespie and Taylor asserted GEICO paid Gillespie $25,000 in no-fault benefits, but denied her request for liability coverage based on a claim that Ayers negligently entrusted the vehicle to Gillespie, an alleged inexperienced driver who received her learner's permit two days before the accident.

[¶ 3] Taylor's policy with Farmers Union had underinsured motor vehicle coverage in the amount of $100,000 per person and $300,000 per incident. Gillespie and Taylor claimed Gillespie has unpaid medical bills from the accident and her injuries and medical expenses exceed GEICO's no-fault benefits. According to Gillespie and Taylor, Ayers' GEICO policy provided liability coverage of $25,000 per person, and they alleged Ayers' vehicle lacked sufficient insurance to provide liability coverage for all parties injured in the accident. They alleged Farmers Union failed to pay Gillespie underinsured motor vehicle benefits required by Taylor's insurance contract with Farmers Union and by North Dakota law. Although Farmers Union's policy says disputes about whether an insured person is legally entitled to recover damages from the owner or operator of an underinsured motor vehicle may be determined by arbitration, the parties have not pursued arbitration in this case.

[¶ 4] The district court granted summary judgment dismissing the action against Farmers Union for underinsured motor vehicle coverage, ruling the limits of all applicable bodily injury liability policies had not been exhausted under N.D.C.C. § 26.1–40–15.6(6)

, which provides that underinsured coverage does not apply to an insured's injuries “[u]ntil the limits of all bodily injury liability policies and bonds that apply have been exhausted by payment of settlements or judgments, or such limits or the remaining part of them have been offered to the insured in writing.” The court explained “exhausted” was ambiguous and followed the “weight of authority” strictly interpreting the word to essentially require complete and total payment of all liability benefits under policy limits before an underinsured motor vehicle claim may lie. The court granted Farmers Union summary judgment on the claim for underinsured motor vehicle coverage.

II

[¶ 5] We review the issues raised in this appeal in the posture of summary judgment, which is a procedural device for promptly resolving an action on the merits without a trial if there are no disputed issues of material fact or inferences that reasonably can be drawn from the undisputed facts, or if the only issues to be resolved are questions of law. Johnson v. Nodak Mut. Ins. Co., 2005 ND 112, ¶ 9, 699 N.W.2d 45

. A party seeking summary judgment must show there are no disputed issues of material fact and the case is appropriate for judgment as a matter of law. Collette v. Clausen, 2003 ND 129, ¶ 6, 667 N.W.2d 617. On appeal, we view the evidence in the light most favorable to the party against whom summary judgment is granted and give that party the benefit of all favorable inferences. Hurt v. Freeland, 1999 ND 12, ¶ 7, 589 N.W.2d 551. However, a party resisting a motion for summary judgment cannot merely rely on the pleadings, briefs, or unsupported and conclusory allegations. Mr. G's Turtle Mountain Lodge, Inc. v. Roland Twp., 2002 ND 140, ¶ 22, 651 N.W.2d 625

. Rather, we have explained:

The resisting party must present competent admissible evidence by affidavit or other comparable means which raises an issue of material fact and must, if appropriate, draw the court's attention to relevant evidence in the record by setting out the page and line in depositions or other comparable documents containing testimony or evidence raising an issue of material fact.

In summary judgment proceedings, neither the trial court nor the appellate court has any obligation, duty, or responsibility to search the record for evidence opposing the motion for summary judgment. The opposing party must also explain the connection between the factual assertions and the legal theories in the case, and cannot leave to the court the chore of divining what facts are relevant or why facts are relevant, let alone material, to the claim for relief.

Id. (quoting Anderson v. Meyer Broad. Co., 2001 ND 125, ¶ 14, 630 N.W.2d 46

).

[¶ 6] Summary judgment is appropriate when a party fails to establish the existence of a factual dispute on an essential element of that party's claim on which the party will bear the burden of proof at trial. Mr. G's Turtle Mountain Lodge, 2002 ND 140, ¶ 23, 651 N.W.2d 625

. When no pertinent evidence on an essential element is presented to the district court in opposition to a motion for summary judgment, it is presumed no such evidence exists. Id. The nonmoving party cannot rely on speculation and must present enough evidence for a reasonable trier of fact to find for that party. Iglehart v. Iglehart, 2003 ND 154, ¶ 10, 670 N.W.2d 343. Issues of fact may become issues of law if reasonable persons could reach only one conclusion from the facts. Saltsman v. Sharp, 2011 ND 172, ¶ 5, 803 N.W.2d 553. Whether a district court properly granted summary judgment is a question of law that we review de novo on the entire record. Johnson, 2005 ND 112, ¶ 9, 699 N.W.2d 45.

III

[¶ 7] Gillespie and Taylor argue the district court should have determined the liability coverage in GEICO's policy was exhausted and should have required Farmers Union to provide Gillespie with underinsured motor vehicle coverage. They argue Ayers' vehicle meets the definition of an underinsured motor vehicle and the severity and number of injured parties involved in the accident exhausted liability coverage for Ayers' vehicle and triggered Farmers Union's underinsured coverage. They claim Farmers Union is obligated to provide Gillespie with underinsured motor vehicle coverage because GEICO has unequivocally said it will not make any further payments to her. They argue GEICO's liability policy should be considered exhausted because recovery from GEICO was pursued until no further options existed.

[¶ 8] “Underinsured motorist insurance is a first party coverage arrangement that entitles an insured to compensation for injuries from the [insured's] insurer.” Wisness v. Nodak Mut. Ins. Co., 2011 ND 197, ¶ 9, 806 N.W.2d 146

(quoting 3 Alan I. Widiss & Jeffrey E. Thomas, Uninsured & Underinsured Motorist Insurance § 32.1 n. 1 (3d 2005)). The minimum requirements for underinsured motorist coverage are governed by N.D.C.C. §§ 26.1–40–15.1 to 26.1–40–15.7, but an insurer's policy may provide an insured with greater coverage under N.D.C.C. § 26.1–40–15.7(5). Hiltner v. Owners Ins. Co.,

2016 ND 45, ¶ 5, 876 N.W.2d 460.

[¶ 9] The relevant underinsured provisions in Taylor's policy with Farmers Union and the underinsured provisions in N.D.C.C. ch. 26.1–40 contain nearly identical language. To trigger underinsured motorist coverage under N.D.C.C. ch. 26.1–40, a tortfeasor's motor vehicle must meet the definition of an underinsured motor vehicle in N.D.C.C. § 26.1–40–15.1(2)

. DeCoteau v. Nodak Mut. Ins. Co., 2000 ND 3, ¶ 16, 603 N.W.2d 906. Under both Farmers Union's policy and N.D.C.C. ch. 26.1–40, an “underinsured motor vehicle” is a motor vehicle with bodily injury liability insurance in effect at the time of an accident, but the liability limit of that policy: (1) is less than the applicable limit for underinsured coverage under Farmers Union's policy; or (2) has been reduced by payments to other persons injured in the accident to an amount less than the limit for underinsured coverage under Farmers Union's policy. See N.D.C.C. § 26.1–40–15.1(2).

[¶ 10] Taylor's Farmers Union's policy provided underinsured motor vehicle coverage in the amount of $100,000 per person and $300,000 per accident. Although Ayers' GEICO policy is not in this record, the parties agree the liability limit in that policy was $25,000 per person. Ayers' motor vehicle is an underinsured motor vehicle under the language of Farmers Union's policy and N.D.C.C. § 26.1–40–15.1(2)

.

[¶ 11] Under N.D.C.C. § 26.1–40–15.3(1)

, “[u]nderinsured motorist coverage must pay compensatory damages which an insured is legally entitled to collect for bodily injury ... of such insured, from the owner or operator of an underinsured motor vehicle arising out of the...