Gloe v. Union Ins. Co.

Decision Date02 March 2005
Docket NumberNo. 23144.,23144.
Citation694 N.W.2d 252,2005 SD 30
PartiesMichael GLOE, Plaintiff and Appellee, v. UNION INSURANCE COMPANY, Defendant and Appellant.
CourtSouth Dakota Supreme Court

Nancy J. Turbak, Watertown, SD, for plaintiff and appellee.

Paul H. Linde of Schaffer Law Office, Sioux Falls, SD, for defendant and appellant.

GILBERTSON, Chief Justice.

[¶ 1.] Michael Gloe's parents were struck and killed by an automobile driven by Donald Huber. Gloe did not reside in his parents' household, nor was he physically present at or injured as a result of the accident. Gloe and his two siblings received a total of $125,000 for the wrongful death claims arising from their father's death and $125,000 for their mother's death from two insurers who provided liability coverage for the accident. Gloe sought underinsurance benefits under his parents' Union policy. The trial court entered a declaratory judgment in favor of Gloe, holding Gloe was legally entitled to recover wrongful death damages from the operator and the owner of an underinsured motor vehicle because of the death of his parents. The trial court concluded Union was obligated to pay Gloe for his damages subject to the applicable limit of the underinsured motorist coverage. The trial court held Union's UIM limit of liability was to be determined by subtracting the amount of liability insurance proceeds received by Gloe after allocation among all wrongful death beneficiaries, rather than the entire amount paid by the liability carriers on behalf of the tortfeasor. Reversed.

FACTS AND PROCEDURE

[¶ 2.] For purposes of the declaratory action, Gloe and Union stipulated and agreed to the following facts: On September 1, 2001, pedestrians Larry and Verna Mae Gloe were struck and killed by a van driven by Donald Huber in Watertown, South Dakota. Each of the three surviving adult children, Scott Gloe,1 Karen Nelson,2 and Michael Gloe, asserted wrongful death claims against the van driver for the deaths of Larry and Verna Mae. In exchange for the release of all claims against Huber and the owner of the van3 arising from the deaths, two liability insurers4 together paid a total of $125,000 to the personal representative of Larry and $125,000 to the personal representative of Verna Mae for the wrongful death claims filed by their personal representative.5 The settlements exhausted the liability coverage available under the two policies. The three adult children were the statutory beneficiaries entitled to those wrongful death proceeds. Each child received $41,583 for the death of their father and $40,611 for the death of their mother. The estates released the tortfeasor as a part of the settlement.

[¶ 3.] Gloe brought this claim for underinsured motorist (UIM) benefits against Union, his parents' insurance carrier. This action was brought in Gloe's individual capacity, rather than by the personal representative of his parents' estates on behalf of the statutory beneficiaries.6 The Union policy provided UIM coverage with limits of $100,000 per person and $300,000 per occurrence. Gloe conceded that the $41,583 he received for the wrongful death of his father and the $40,611 he received for the wrongful death of his mother were proper liability coverage amounts to setoff from the $100,000 UIM per person limit.

[¶ 4.] Union denied Gloe's claim maintaining that no UIM benefits were available to Gloe under his parents' insurance contract, as a single $100,000 per person limit applied to Larry's death, and another $100,000 per person limit applied to Verna Mae's death. Union further argued that both SDCL 58-11-9.5 and the contract language allowed Union to setoff the entire $125,000 of liability proceeds paid on behalf of the tortfeasor to Verna Mae's personal representative against the single $100,000 per person UIM coverage limit available as a result of her death. Union argued the same single per person limit and setoff applied to the coverage for Larry's death. Under Union's approach, UIM coverage would be exhausted and no payment would result.

[¶ 5.] The trial court entered a declaratory judgment in favor of Gloe, holding Gloe was an insured under the policy language, and was legally entitled to recover wrongful death damages from the operator of the underinsured motor vehicle due to the deaths of his parents. The trial court concluded Union was obligated to pay Gloe for his damages subject to the applicable per person UIM limit of $100,000. The trial court also held Union's limit of liability was to be determined by subtracting the amount of liability proceeds received by Gloe, rather than by subtracting the total amount of liability insurance paid on behalf of the tortfeasor for each death.

[¶ 6.] Union appealed two issues:

1. Whether the trial court erred when it determined that under South Dakota statutes UIM benefits were available after the amount paid by the liability insurance carriers on behalf of the tortfeasor exceeded the limits of Union's underinsured motorist coverage.
2. Whether the trial court erred when it held UIM benefits were available to Michael Gloe under the language of Union's policy.
STANDARD OF REVIEW

[¶ 7.] Under SDCL 21-24-13, a declaratory judgment is reviewed by this Court as we would any other judgment or order. Nelson v. Farmers Mut. Ins. Co. of Nebraska, 2004 SD 86, ¶ 5, 684 N.W.2d 74, 76 (citing SDCL 21-24-13; Parks v. Cooper, 2004 SD 27, ¶ 20, 676 N.W.2d 823, 828-29). The trial court's interpretation and application of relevant statutes are reviewed under the de novo standard, and given no deference by this Court. Westfield Ins. Co., Inc. v. Rowe, 2001 SD 87, ¶ 4, 631 N.W.2d 175, 176 (citing Maryott v. First Nat'l, Bank of Eden, 2001 SD 43, ¶ 17, 624 N.W.2d 96, 102).

[¶ 8.] We use statutory construction to discover the true intent of the legislature in enacting the law, which is ascertained primarily from the language used in the statute. State v. Myrl & Roy's Paving, Inc., 2004 SD 98, ¶ 6, 686 N.W.2d 651, 653-54 (citing Martinmaas v. Engelmann, 2000 SD 85, ¶ 49, 612 N.W.2d 600, 611). We confine ourselves to the language used by the legislature in order to determine what the legislature said, rather than what the courts think it should have said. Id. In doing so, we must attempt to give words their plain meaning and effect, and read statutes as a whole, as well as enactments relating to the same subject. State v. I-90 Truck Haven Service, Inc., 2003 SD 51, ¶ 3, 662 N.W.2d 288, 290 (citing Martinmaas, 2000 SD 85, ¶ 49, 612 N.W.2d at 611).

[¶ 9.] In addition, "[w]hen interpreting insurance contracts, we have uniformly held them reviewable as a matter of law under the de novo standard." Opperman v. Heritage Mut. Ins. Co., 1997 SD 85, ¶ 3, 566 N.W.2d 487, 489 (citing DeSmet Ins. Co. v. Gibson, 1996 SD 102, ¶ 5, 552 N.W.2d 98, 99) (citations omitted). "This includes determining whether an insurance contract is ambiguous." Id. (citing Rogers v. Allied Mut. Ins. Co., 520 N.W.2d 614, 616 (S.D.1994)).

ANALYSIS AND DECISION

[¶ 10.] 1. Whether the trial court erred when it determined that under South Dakota statutes UIM benefits were available after the amount paid by liability insurance carriers on behalf of the tortfeasor exceeded the limits of Union's underinsured motorist coverage.

[¶ 11.] Under SDCL 58-11-9.4, automobile insurance providers are required to furnish UIM coverage in their policies. Nelson, 2004 SD 86, ¶ 8, 684 N.W.2d 74, 77. SDCL 58-11-9.4 provides in relevant part:

the coverage required by this section may not exceed the limits of one hundred thousand dollars because of bodily injury to or death of one person in any one accident and, subject to the limit for one person, three hundred thousand dollars because of bodily injury to or death of two or more persons in any one accident, unless additional coverage is requested by the insured.

[¶ 12.] The purpose of the UIM statutory scheme is to provide protection to insured motorists against underinsured motorists. Farmland Ins. Companies of Des Moines, Iowa v. Heitmann, 498 N.W.2d 620, 624 (S.D.1993) (citing Union Ins. Co. v. Stanage, 454 N.W.2d 736, 739 (S.D.1990)). The UIM statutory scheme reflects a legislative determination that the maximum amount set forth in the statute is sufficient to protect insured motorists from underinsured motorist, as the clear intent of the legislature was to limit the amount recovered under UIM to those maximums absent a request for additional coverage. Id. at 625; Union Ins. Co., 454 N.W.2d at 739.

[¶ 13.] The language of the UIM statutory scheme further limits recovery to the difference between the payments made by the liability carriers of the tortfeasor and the UIM per person and per accident limits. SDCL 58-11-9.5; Nickerson v. American States Ins., 2000 SD 121, ¶ 18, 616 N.W.2d 468, 472-73. The goal of the statutory scheme is to ensure that a recovery is made by an insured who incurs bodily injury of at the very least, an amount equal to the statutory UIM coverage limits. Id. ¶ 15. "[T]he insured who contracts for UIM coverage is contracting for the assurance that he will be able to recover, at a minimum, an amount equal to the UIM coverage." Id. (holding to do "otherwise would be to force the UIM carrier to be contractually liable to indemnify its insured for the coverage amount regardless of the amount recovered from the tortfeasor[.]").

[¶ 14.] We have referred to SDCL 58-11-9.5 as a "difference of the limits" statute. Farmland Ins. Companies of Des Moines, Iowa, 498 N.W.2d at 625. SDCL 58-11-9.5 provides:

Subject to the terms and conditions of such underinsured motorist coverage, the insurance company agrees to pay its own insured for uncompensated damages as its insured may recover on account of bodily injury or death arising out of an automobile accident because the judgment recovered against the owner of the other vehicle exceeds the policy limits thereon. Coverage shall be limited to the
...

To continue reading

Request your trial
26 cases
  • Gloe v. Iowa Mut. Ins. Co.
    • United States
    • South Dakota Supreme Court
    • March 2, 2005
    ...a UIM claim under his parent's auto policy. The set-off calculation was in dispute. We resolved that matter in Gloe v. Union Insurance Company, 2005 SD 30, 694 N.W.2d 252. 5. Karen Nelson also asserted a UIM claim under her auto policy. In Nelson, 2004 SD 86, ¶ 3, 684 N.W.2d at 75-76, Karen......
  • North Star Mut. Ins. Co. v. Peterson
    • United States
    • South Dakota Supreme Court
    • May 7, 2008
    ...standard of review is de novo. We review a declaratory judgment under SDCL 21-24-13 "as we would any other judgment or order." Gloe v. Union Ins. Co., 2005 SD 30, ¶ 7, 694 N.W.2d 252, 256. "When interpreting insurance contracts, we have uniformly held them reviewable as a matter of law unde......
  • Nygaard v. Sioux Valley Hospitals
    • United States
    • South Dakota Supreme Court
    • April 4, 2007
    ...`plain and ordinary meaning.'" Canyon Lake Park, L.L.C., v. Loftus Dental, P.C., 2005 SD 82, ¶ 17, 700 N.W.2d 729, 734 (quoting Gloe v. Union Ins. Co., 2005 SD 30, ¶ 29, 694 N.W.2d 252, 260). Although the price of each hospital service was not listed in the contract itself, "[w]ords [that] ......
  • Dakota, Minn. & Eastern R.R. Corp. v. Rounds
    • United States
    • U.S. District Court — District of South Dakota
    • March 28, 2006
    ...and the court's only function is to declare the meaning of the statute as clearly expressed in the statute." See Gloe v. Union Ins. Co., 694 N.W.2d 252, 260 (S.D.2005); Cutler-Christians v. Christians, 633 N.W.2d 176, 178 (S.D.2001); Hagemann ex rel. Estate of Hagemann v. NJS Engineering, I......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT