Manning v. Fireman's Fund American Ins. Companies

Decision Date06 March 1986
Citation489 N.E.2d 700,397 Mass. 38
PartiesJohn F. MANNING v. FIREMAN'S FUND AMERICAN INSURANCE COMPANIES.
CourtUnited States State Supreme Judicial Court of Massachusetts Supreme Court

Frederic N. Halstrom, Boston, for the plaintiff.

Edward W. Waystack, Boston, for the defendant.

Before HENNESSEY, C.J., and LIACOS, ABRAMS, LYNCH and O'CONNOR, JJ.

LYNCH, Justice.

The issue presented in this case is whether, under a standard Massachusetts automobile insurance policy providing underinsured motorist coverage, an automobile accident victim may recover underinsured motorist benefits under the tortfeasor's policy, where the victim has already recovered the limit of benefits available under the tortfeasor's bodily injury coverage, as well as under the victim's own underinsured motorist coverage. In October, 1982, the plaintiff, an accident victim, commenced this action for declaratory relief pursuant to G.L. c. 231A, seeking a favorable interpretation of the tortfeasor's policy. After the parties submitted a statement of agreed facts, a judge in the Superior Court reported the case to the Appeals Court, without decision, in accordance with Mass.R.Civ.P. 64, 365 Mass. 831 (1974), and G.L. c. 231, § 111. This court granted the plaintiff's application for direct appellate review.

The parties are in agreement as to the following facts. In November, 1981, the plaintiff, John F. Manning, was seriously injured when the automobile he was driving was struck by another automobile registered to Conceptual Design Corp. (the tortfeasor). The tortfeasor's automobile was covered by a Massachusetts automobile insurance policy issued by the defendant, Fireman's Fund American Insurance Companies (Fireman's). In July, 1982, Fireman's paid Manning $100,000, the maximum benefits provided under the tortfeasor's "bodily injury to others" and "optional bodily injury to others" coverage. In addition, Manning's insurer, Peerless Insurance Company (Peerless), paid Manning $20,000, the maximum underinsured motorist benefit available under his policy. For purposes of this appeal the parties do not dispute Manning's claim that his damages exceeded the $120,000 he has collected to date from Fireman's and Peerless. Part 7 of the tortfeasor's Fireman's policy, "Bodily Injury Caused By An Underinsured Auto," however, also provides for a maximum of $100,000 in underinsured motorist benefits. Manning made a claim for this $100,000, and Fireman's denied liability. In doing so, Fireman's cited part 7, third par., item 3, of its policy, maintaining that the clause "[did] not apply to Mr. Manning under the facts of this accident." That clause provides in relevant part: "We will pay damages to or for: ... 3. Anyone else for damages he or she is entitled to recover because of injury to a person covered under this Part." Manning contends that, as a victim who has exhausted his own underinsured motorist coverage, as well as the limits of the bodily injury coverage available under the tortfeasor's policy, he is entitled to benefits under the tortfeasor's underinsured motorist coverage. He claims that the fair meaning of the language used in part 7 of the tortfeasor's policy so provides, and that, in any event, the language and intent of G.L. c. 175, § 113L, as appearing in St.1980, c. 532, effective January 1, 1981 (making underinsured motorist coverage mandatory), compels this result. We disagree.

Part 7 provides in pertinent part: 1

"Sometimes an owner or operator of an auto legally responsible for an accident is underinsured. Under this Part, we will pay damages for bodily injury to people injured or killed as a result of certain accidents caused by someone who does not have enough insurance.

"We will only pay if the injured person is legally entitled to recover from the owner or operator of the underinsured auto. We consider an auto to be underinsured if the insurance covering the auto or operator is not sufficient to pay for the damages sustained by the injured person.

"We will pay damages to or for:

"1. You or any household member.

"2. Anyone occupying your auto with your consent at the time of the accident.

"3. Anyone else for damages he or she is entitled to recover because of injury to a person covered under this Part."

We must construe the words of the policy according to "the fair meaning of the language used, as applied to the subject matter," Bilodeau v. Lumbermens Mut. Casualty Co., 392 Mass. 537, 541, 467 N.E.2d 137 (1984), quoting Save-Mor Supermarkets, Inc. v. Skelly Detective Serv., Inc., 359 Mass. 221, 226, 268 N.E.2d 666 (1971), as long as the statutory language or legislative policy of G.L. c. 175, § 113L, is not contravened. Cardin v. Royal Ins. Co., 394 Mass. 450, 453-454, 476 N.E.2d 200 (1985), and cases cited. This is true whether the language of a standard Massachusetts automobile insurance policy is considered ambiguous, Bilodeau v. Lumbermens Mut. Casualty Co., supra, or explicit. Cardin v. Royal Ins. Co., supra. Manning argues that, since he has suffered bodily injury as a result of an automobile accident caused by Fireman's insured, and since his damages exceed the bodily injury limits of the Fireman's policy, he comes within the "plain meaning" of part 7, first par. and third par., item 3.

The interpretation relied upon by Manning is not a reasonable one. Underinsured motorist protection "is limited personal accident insurance chiefly for the benefit of the named insured" (emphasis added). Cardin v. Royal Ins. Co., supra at 452, 476 N.E.2d 200, quoting Motorists Mut. Ins. Co. v. Bittler, 14 Ohio Misc. 23, 32-33, 235 N.E.2d 745 (1968). See 12A G.J. Couch, Insurance § 45:649 at 202, § 45:620 at 17 (2d rev. ed. 1981). To read underinsurance provisions in the manner urged by Manning would effectively convert a form of coverage which is distinct from automobile liability insurance, see Cardin, supra, to additional liability coverage. See Couch,supra, § 45:620 at 17-18 (underinsurance coverage is ...

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