Huebner v. MSI Ins. Co.

• Decision Date: 20 October 1993
• Docket Number: No. 92-1341,92-1341
• Citation: 506 N.W.2d 438
• Parties: Donna HUEBNER, Individually and as Executrix of the Estate of Larry Huebner, Deceased, and Monte Huebner, An Individual, Appellants, v. MSI INSURANCE COMPANY, Appellee.
• Court: Iowa Supreme Court

Page 438

506 N.W.2d 438

Donna HUEBNER, Individually and as Executrix of the Estate of Larry Huebner, Deceased, and Monte Huebner, An Individual, Appellants, v. MSI INSURANCE COMPANY, Appellee.

No. 92-1341.

Supreme Court of Iowa.

Oct. 20, 1993.

Steve Hamilton of Hamilton Law Firm, P.C., Storm Lake, for appellants.

Hugh Cain, Philip H. Dorff, Jr. and Anne L. Clark of Hopkins & Huebner, P.C., Des Moines, for appellee.

Considered by McGIVERIN, C.J., and LARSON, CARTER, SNELL, and TERNUS, JJ.

CARTER, Justice.

This is an appeal by a parent and personal representative of a deceased parent on potential claims for injury to a child under rule 8 of the Iowa Rules of Civil Procedure and the child, individually, challenging the district court's denial of underinsured motorist coverage in favor of the child. The basis for all claims is the substantial permanent injuries sustained by the minor plaintiff, Monte Huebner, as a result of being struck by an automobile while walking his dog.

The available liability insurance coverage to be applied against the claims of the various plaintiffs for Monte's injuries was inadequate. The sole issue on appeal is whether insurance coverage afforded to Monte's father through an endorsement to his employer's business auto policy extended uninsured motorist coverage in favor of the injured child. The district court answered this question in the negative and sustained the motion for summary judgment filed by the defendant, MSI Insurance Company (MSI).

Larry Huebner was employed as a salesman for Albert City Elevator Co. (ALCECO). His employment contract, entitled "Truck Salesman Agreement," had been in effect since August 1, 1981. There are two terms of the agreement that are most relevant. First, Larry Huebner was to provide his own truck for delivery purposes. He alone would be liable for costs of purchasing and maintaining the truck. Second, ALCECO would provide liability insurance under its own liability coverage to cover the vehicle.

MSI issued a business auto policy to ALCECO. Larry Huebner's truck was listed on the policy's schedule of covered automobiles and the policy states that he was the registered owner of that truck.

A policy endorsement entitled "Additional Interest--Automobile" was also issued. This endorsement states:

It is agreed such insurance as is afforded by the policy for Automobile Bodily Injury Liability, Automobile Property Damage Liability, and Automobile Medical Payments Liability and such additional coverages as indicated by a premium charge in the schedule shall also apply with respect to each interest hereinafter named as an insured, but only with respect to those automobiles designated in the schedule, as being owned by such additional interests.

The only name appearing on the endorsement as an "interest hereinafter named" is that of Larry Huebner.

Several sections of the primary MSI policy are relevant to the present dispute. First, the underinsured motorist coverage, for which a premium was paid for Larry Huebner's truck, provides that the company will pay sums "the insured is legally entitled to recover as damages from the owner or driver of an uninsured [or underinsured] motor vehicle." With respect to who is insured under that coverage, the primary policy provides:

D. WHO IS INSURED

1. You or any family member.

2. Anyone else occupying a covered auto or a temporary substitute for a covered auto. The covered auto must be out of service because of its breakdown, repair, servicing, loss or destruction.

3. Anyone for damages he is entitled to recover because of bodily injury sustained by another insured.

Another relevant section is found in the "Words and Phrases" section of the main policy. It defines "you" and "your" as the named insured in Item 1 of the declarations. ALCECO is the named insured in Item 1 of the declarations. The final relevant section is the definition of "family member" found in the uninsured and underinsured endorsement. This states that "family member" is defined as "a person related to you by blood, marriage or adoption who is a resident of your household, including a ward or foster child."

Monte Huebner, the natural son of both Larry and Donna Huebner, was fourteen years old and living at home with his parents at the time of the accident. On June 26, 1986, Monte was struck by a Ford pickup truck while walking his dog on County Road N-14 in Buena Vista County. The driver did not stop. As a result of the accident, Monte suffered injuries including but not limited to significant leg fractures and an amputated arm.

Subsequent investigation disclosed the identity of the driver who had struck Monte. That person was insured for liability claims in the sum of $100,000. The limits of that policy were paid to the plaintiffs in a settlement of their claims against the hit-and-run driver. They are now seeking additional underinsured motorist coverage under MSI's policy for damages exceeding $100,000.

When coverage was denied, the plaintiffs commenced the present action, seeking a determination that Monte was afforded underinsured motorist coverage under MSI's primary policy or the additional interest endorsement in favor of Larry. The district court reviewed the coverage provisions at issue and determined that no policy clause extended such coverage in favor of the injured child. Consequently, it sustained MSI's motion for summary judgment. The plaintiffs have appealed.

I. Coverage Arguments Under the Primary Policy.

The Huebners propose a two-step analysis to support a finding that Monte Huebner is protected under the MSI insurance policy. The first step is to find that Larry Huebner is named in some manner under the policy. Once this has been shown, the second step is to show Larry Huebner qualifies as "you" under the policy; thus, Monte Huebner should also be covered as a family member.

In countering plaintiffs' suggestion concerning the "you or any family member" language, MSI refers to the definition of "you" or "your" in the policy. This definition states that "you" means the person or organization named on the declaration page as "named insured." MSI then points out that the named insured on the declarations page is ALCECO. Since neither Larry Huebner nor Monte Huebner are identified as the named insured, MSI argues that neither of them qualifies as "you" under the underinsured endorsement. MSI goes on to state that, since ALCECO has no family members because they are a corporation, the only party covered under "you or any family member" can be ALCECO.

Support for MSI's contentions on this interpretation issue is found in Rodriguez v. Continental Casualty Co., 551 So.2d 45 (La.App. 1st Cir.1989), and Meyer v. American Economy Insurance Co., 103 Or.App. 160, 796 P.2d 1223, rev. denied, 310 Or. 547, 800 P.2d 789 (1990). Both cases involved very similar definitions of who is insured, and both had a category of "you or any family member." Both cases defined "you" as the named insured in the declarations, and both courts found that "you" referred only to the named insured/employer. Both courts stated that there was no ambiguity under which the employees could recover uninsured benefits.

Plaintiffs claim support for their interpretation of the "you or any family member" language is found in Decker v. CNA Insurance Co., 66...