Mena v. Safeco Ins. Co., 04-8022.

• Decision Date: 20 June 2005
• Docket Number: No. 04-8022.,04-8022.
• Parties: Jaimee Lee MENA, Plaintiff-Appellant, v. SAFECO INSURANCE COMPANY and General Insurance Company of America, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

412 F.3d 1159

Jaimee Lee MENA, Plaintiff-Appellant, v. SAFECO INSURANCE COMPANY and General Insurance Company of America, Defendants-Appellees.

No. 04-8022.

United States Court of Appeals, Tenth Circuit.

June 20, 2005.

C. John Cotton, Cotton Law Office, Gillette, WY, for the Plaintiff-Appellant.

Judith Studer, Schwartz, Bon, Walker & Studer, LLC, Casper, WY, for the Defendants-Appellees.

Before KELLY, Circuit Judge, McWILLIAMS, Senior Circuit Judge, and LUCERO, Circuit Judge.

LUCERO, Circuit Judge.

The case before us arises under our diversity jurisdiction. Jaimee Lee Mena, the plaintiff below, filed a complaint against defendants General Insurance Company of America and SAFECO Insurance Company ("Safeco"), arguing that her Safeco automobile insurance policy entitles her to aggregate or "stack" the underinsured motorists coverage under the policy. Mena was insured under a single policy covering three vehicles, and sought a declaratory judgment that would allow her to stack her underinsured motorists coverage for each vehicle to compensate for bodily injuries suffered in an automobile accident. After tendering the underinsured motorists limit for a single vehicle, Safeco denied additional coverage. On cross motions for summary judgment the district court denied Mena's claim of additional coverage and granted summary judgment to the defendants. Having reviewed the policy in accordance with Wyoming law, we agree with the district court and AFFIRM the grant of summary judgment to Safeco.

I

Mena suffered serious injuries in an automobile accident while riding as a passenger in a vehicle operated by her son. She insured the vehicle in which she was riding, along with two other vehicles, under a single policy issued by Safeco. The policy provided coverage for bodily injury, medical payments, automobile damage, and losses involving uninsured and underinsured motorists. Under the policy's terms, Mena was eligible to recover (and has recovered) $25,000 in bodily injury liability. The policy also provides underinsured motorists coverage of $100,000 per person for each of the three covered vehicles. Safeco has tendered $100,000 to Mena as payment pursuant to the underinsured motorists provision, bringing its total payment to $125,000 for the collision.

Mena sued Safeco in state court seeking a declaration that she is entitled to receive up to $300,000 in underinsured motorists coverage, representing $100,000 for each of the three vehicles covered by the policy. She also sought damages and attorney's fees. Following removal to federal court, both sides filed cross motions for summary judgment. The principal issue before the court was whether Mena was entitled to stack the underinsured motorists coverage on each of the three vehicles. After reviewing the policy, the court concluded that the policy unambiguously prohibits stacking underinsured motorists coverage, granted Safeco's motion for partial summary judgment, and dismissed the case with prejudice. Mena appeals.

II

We apply Wyoming law to the question of whether Mena is entitled to stack the underinsured motorists coverage on the three vehicles covered by the policy. Cooperman v. David, 214 F.3d 1162, 1164 (10th Cir.2000) ("a federal court sitting in diversity must ascertain and apply state law to reach the result the Wyoming Supreme Court would reach if faced with the same question."). Our review of Wyoming law and the policy's language leads us to conclude that she is not entitled to stack her underinsured motorists coverage.

A

The Wyoming Supreme Court has longstanding jurisprudence answering whether insureds are entitled to stack uninsured motorists coverage based on public policy gleaned from Wyoming's Uninsured Motor Vehicle Coverage Act, which requires carriers to make available uninsured motorists coverage to their insureds. However, the court has only recently confronted the issue of whether insureds are entitled to stack underinsured motorists coverage, an issue not addressed by Wyoming statute. The supreme court's first foray into the field of uninsured motorists coverage stacking came in Ramsour v. Grange Ins. Assoc., 541 P.2d 35 (Wyo.1975). In Ramsour, the plaintiff was driving a rental car covered by a policy including an uninsured motorists limit when she collided with an uninsured motorist. Ramsour had a separate policy with a different insurance company that also contained uninsured motorists coverage. Although both policies contained "other insurance excess-escape clauses," Ramsour sued both insurers and claimed that she was entitled to payment of the total uninsured motorists limit under both policies. The court began by reviewing Wyoming public policy, which requires by statute all automobile insurance policies to provide insureds the option of purchasing uninsured motorists coverage. Because "a premium has been paid for each of the endorsements and coverage has been issued," id. at 38, and because at least one insurance company would avoid providing such coverage if stacking were forbidden, the court concluded that enforcing the "escape clause" and limiting Ramsour to the limit contained in one policy would be "repugnant" to Wyoming public policy. Id. at 39.¹

In Commercial Union Ins. Co. v. Stamper, 732 P.2d 534 (Wyo.1987), the court confronted a related question, which it articulated as: "whether an insured, under a single automobile insurance policy encompassing several vehicles may `stack' or `pyramid' uninsured-motorists ... provisions for recovery of injury and medical expenses sustained in an accident involving one of the covered vehicles." Id. at 534-35 (emphasis in original). The plaintiff had a single policy covering three vehicles, each with the same limit of uninsured motorists coverage. Reviewing the same uninsured motorists statute at issue in Ramsour, the court concluded that Stamper's coverage for a single vehicle under the policy "met the statutory requirement as a minimum coverage, and there is no stated statutory public policy requiring aggregating...." Id. at 537. The court held that Ramsour was not controlling because Ramsour involved "aggregation of benefits found in separate insurance policies, whereas this case involves a single insurance policy." Id. at 538. Because public policy did not require uninsured motorists "benefits in one policy to be aggregated in all cases where an insured has an unfortunate automobile accident with an uninsured motorist," the court turned "to the language of the insurance policy itself to establish the existence of any limitations of liability." Id. Reading Ramsour and Commercial Union together, it appears that the Wyoming Supreme Court treats inter-policy stacking quite differently from intra-policy stacking, and holds that public policy considerations informing rules governing the former do not necessarily establish rules applicable to the latter.

Wyoming's uninsured motorists jurisprudence guided the state supreme court when it confronted, for the first time, a case involving stacking of underinsured motorists provisions in Aaron v. State Farm Mut. Auto. Ins. Co., 34 P.3d 929 (Wyo.2001). In Aaron, plaintiffs "were the holders of five separate policies of motor vehicle insurance," they "paid a separate premium for [underinsured motorists] coverage in each of the policies," and they argued "that the policies could be `stacked' as they were entitled to personal insurance protection provided by each of the five policies." Id. at 930-31. For the first time the court defined "stacking," which it described as "the phenomenon of insureds or claimants against them adding all available policies together to create a greater pool in order to satisfy their actual loss." Id. at 931 n. 1, quoting 12 Lee R. Russ & Thomas F. Segalla, Couch on Insurance 3D, § 169:4 (1998). Proceeding with that definition, the court first concluded that there was no "public policy that would prohibit the aggregation of coverage by an insured who has purchased multiple insurance policies," and, after reviewing Ramsour and Commercial Union, determined that "this court has generally approved the `stacking' of multiple insurance coverages...." Id. at 932.

Based on these principles, the court established the rule that courts should deny "aggregation of uninsured or underinsured motorist coverage from separate policies for which separate premiums have been paid" only if the policies contain anti-stacking provisions detailed "clearly and unambiguously in terms that a lay-insured of ordinary intelligence could easily comprehend." Id. The court announced a presumption that "the payment of additional separate premiums ... was intended to purchase additional `stackable' coverage commensurate with the insured's damages." Id. at 933. Therefore, Aaron created a rule that where a plaintiff has paid separate premiums for separate policies containing underinsured motorists limits, underinsured motorists coverage will be stacked unless the policies contain clear and unambiguous anti-stacking provisions.

Contrary to the conclusion of the court below, the Aaron rule is inapplicable to this case. By its terms, the rule applies to inter-policy stacking cases, and the Wyoming Supreme Court has determined that rules applying to inter-policy stacking do not necessarily extend to intra-policy stacking. See id. at 933 n. 5 ("in our decision in Commercial Union the court was careful to emphasize that the insured was attempting to stack multiple forms of coverage within a single insurance policy."). Additionally, the rule applies only in cases involving "separate policies for which separate premiums have been paid." Id. at 932 (emphasis added).

In this case, the record reveals that Mena pays a single premium for a single Safeco policy. The declaration sheet shows a charge for a "total premium for all vehicles" of $975.30. Under Wyoming law, it does not alter the analysis that the declaration sheet breaks down the total premium by...