Goodman v. American Cas. Co.

• Decision Date: 13 December 1994
• Citation: 419 Mass. 138,643 N.E.2d 432
• Parties: Trudy Ann GOODMAN v. AMERICAN CASUALTY COMPANY.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 432

643 N.E.2d 432

419 Mass. 138

Trudy Ann GOODMAN v. AMERICAN CASUALTY COMPANY.

Supreme Judicial Court of Massachusetts Middlesex.

Argued Oct. 3, 1994.

Decided Dec. 13, 1994.

Frank C. Corso, Boston, for plaintiff.

Alice Olsen Mann (Karyn T. Hicks, with her), Boston, for defendant.

Before LIACOS, C.J., and WILKINS, LYNCH and GREANEY, JJ.

WILKINS, Justice.

This is the second of three cases decided today in which a household member, having his or her own Massachusetts automobile insurance policy, seeks to recover under the higher underinsurance motorist coverage provided in a spouse's or parent's automobile insurance policy. See Depina v. Safety Ins. Co., 419 Mass. 135, 643 N.E.2d 430 (1994); Smart v. Safety Ins. Co., 419 Mass. 144, 643 N.E.2d 435 (1994). We conclude, as we did in the Depina case, that a household member who has a Massachusetts automobile policy of her own providing underinsured motorist coverage may not recover underinsured motorist benefits under a policy issued to another household member.

On January 23, 1992, the plaintiff was injured when she was struck by an allegedly negligently operated motor vehicle, while she was walking on a public way in Cambridge. The tortfeasor's insurer paid the plaintiff $15,000, the limits of the tortfeasor's coverage, but an amount less than the plaintiff's damages. The plaintiff owned her own vehicle and thus was the named insured on a Massachusetts automobile insurance policy, issued by the Hanover Insurance Company, providing underinsured motorist coverage in the amount of $25,000 for each person. Her rights under that policy are not directly involved here. The plaintiff's husband also owned a motor vehicle, insured by the defendant (American) under a policy, issued to him effective January 14, 1992, providing underinsured motorist coverage of $100,000 for each person.

The plaintiff commenced this action seeking a declaration that American is liable to her as a household member for underinsured motorist coverage under her husband's policy. American denied that it was liable under that policy and additionally asserted a counterclaim seeking a declaration of the rights of the parties and a declaration that no coverage applies for the underinsured motorist claim because the plaintiff failed promptly to notify American of the accident. We allowed American's application for direct review of the plaintiff's appeal from a summary judgment entered in favor of American.

A judge of the Superior Court determined that, because the plaintiff had failed to provide American with prompt notice of her claim, she was not entitled to recover and that, in any event, the plaintiff who had her own Massachusetts automobile insurance policy was not entitled to recover under her husband's policy. We need not reach the issue whether the plaintiff is barred from coverage because of an untimely late notice to American because we conclude that the judge was correct in deciding that the plaintiff did not have underinsured motorist coverage available under her husband's policy. We shall discuss the question, however, whether a late-notified underinsured motorist insurer may deny coverage if it was not prejudiced by the delay.

1. The significant language in the American policy concerning underinsured motorist coverage provides that "[w]e will not pay damages to or for any household member who has a Massachusetts auto policy of his or her own or who is covered by a Massachusetts auto policy of another household member providing similar coverage with higher limits." Because this language in the standard Massachusetts automobile policy is controlled by the Commissioner of Insurance, and not any insurer, we do not construe any ambiguity against the insurer. See Royal-Globe Ins. Co. v. Craven, 411 Mass. 629, 633 n. 6, 585 N.E.2d 315 (1992); Moore v. Metropolitan Property & Liab. Ins. Co., 401 Mass. 1010, 1011, 519 N.E.2d 265 (1988).

The plaintiff argues that, if a household member has her own Massachusetts automobile policy, she is not excluded from underinsured motorist coverage under a policy issued to another household member unless the underinsured motorist coverage of her policy is as high as or higher than the limits for such coverage under the other policy. She asserts that the concluding phrase quoted above, "providing similar coverage with higher limits," modifies the reference to a household member's own automobile policy in addition to the reference to any policy of another household member. We are not persuaded.

The plaintiff's argument is inconsistent with controlling legislation. The 1988 amendment to G.L. c. 175, § 113L (5), made by St.1988, c. 273, § 47, states a public policy against the "stacking" of uninsured and underinsured motorist coverage ("[I]n no event shall the limit of liability for two or more vehicles or two or more policies be added together combined or stacked to determine the limits of insurance coverage available to injured persons"). See Plymouth Rock Assurance Corp. v. McAlpine, 32 Mass.App.Ct. 755, 757-758, 594 N.E.2d 901 (1992). The plaintiff had a Massachusetts automobile insurance policy issued to her as an owner that provided her with underinsured motorist coverage. She is explicitly entitled to that coverage under her policy. It would be contrary to the purpose of the 1988...