Merkel v. Nationwide Ins. Co., 95-636

• Citation: 166 Vt. 311,693 A.2d 706
• Decision Date: 21 March 1997
• Docket Number: No. 95-636,95-636
• Court: United States State Supreme Court of Vermont
• Parties: George MERKEL v. NATIONWIDE INSURANCE COMPANY.

Page 706

693 A.2d 706 166 Vt. 311 George MERKEL
v.
NATIONWIDE INSURANCE COMPANY. No. 95-636. Supreme Court of Vermont. March 21, 1997.

James A. Dumont and Jon M. Groveman, Law Clerk, of Keiner & Dumont, P.C., Middlebury, for plaintiff-appellant.

Allan R. Keyes and John A. Serafino of Ryan Smith & Carbine, Ltd., Rutland, for defendant-appellee.

Before ALLEN, C.J., and GIBSON, DOOLEY, MORSE and JOHNSON, JJ.

DOOLEY, Justice.

Plaintiff George Merkel sought a declaration that defendant Nationwide Insurance Company was liable under the underinsured motorist provision of its policy, following plaintiff's 1988 accident with an underinsured driver. The Addison Superior Court granted

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defendant's summary judgment motion, and plaintiff appealed. He argues that: (1) defendant failed to obtain an effective election to set the underinsured motorist coverage limit at $20,000 per person, so it automatically remained at the liability limit of $100,000 per person; and (2) even if defendant obtained an effective election at the purchase of the policy, it failed to obtain a new reduced-coverage election at the policy's renewal. We affirm.

In 1984 plaintiff purchased a liability policy from defendant, with liability limits of $100,000 per person/$300,000 per accident. Plaintiff elected coverage of $20,000 per person/$40,000 per accident on a form referring to "uninsured" motorist coverage. At the time of purchase, the policy's definition of "uninsured motorists coverage" did not include underinsured motorists. However, a rider sent by defendant to plaintiff in 1985 or 1986 defined an uninsured motor vehicle as

a motor vehicle with respect to the ownership, maintenance, or use of which either no auto liability bond or insurance policy applies at the time of the accident, or with respect to which the sum of the limits of liability under all auto liability bonds and insurance policies applicable to the accident is less than the limits of this coverage.

After issuance of the policy in 1984, defendant sent plaintiff annual declarations indicating the same uninsured motorist coverage limits, and he remitted his premium payments without questioning these limits or seeking to change them.

In 1988, following several policy renewals, plaintiff was in an accident with a vehicle covered by a liability insurance policy with a $20,000-per-person/ $40,000-per-accident liability limit, the same limit as for uninsured motorist coverage in plaintiff's policy. Plaintiff assessed his total losses from the accident at $75,000, recovered $20,000 from the other motorist in the accident, and sought the difference of $55,000 from defendant. Defendant denied plaintiff's claim because the other driver was not underinsured within the definition of the policy. Plaintiff brought the present action, claiming that the form he signed in 1984 related to uninsured motorist coverage but did not mention or relate to underinsured motorist coverage, which he never elected to reduce below his own liability coverage limits, and that he never agreed to reduce underinsured motorist coverage at the renewals of the policy.

Defendant moved for summary judgment on grounds that under the language of the policy and under 23 V.S.A. § 941 plaintiff's election to purchase coverage at a lower liability limit applied to both uninsured and underinsured motorist coverage and continued at each policy renewal. The court agreed and granted defendant's motion. This appeal followed.

Under 23 V.S.A. § 941(a), no liability policy may issue or be delivered in Vermont "unless coverage is provided therein ... for the protection of persons insured thereunder who are legally entitled to recover damages, from owners or operators of uninsured, underinsured or hit-and-run motor vehicles...." 23 V.S.A. § 941(c) states:

(c) Unless the policyholder otherwise directs, the coverages under (a) and (b) of this section for new or renewed policies shall be identical to those provided in the policy selected by the person obtaining said policy but shall be not less than the minimum limits of coverage required under the provisions of section 801 of this title.

Plaintiff argues first that these provisions create "separate and distinct" categories of coverage for uninsured and underinsured motorists and that to be valid, waivers of the statutory limits in § 941(c) had to be separate for uninsured and underinsured coverages. Thus, plaintiff argues that his election to reduce his uninsured motorist coverage to $20,000 per person had no effect on his underinsured motorist coverage, which remained at the limit of his liability coverage, $100,000 per person.

This is a question of statutory construction. Our goal in interpreting a statute is to discern and implement the intent of the Legislature. See Lane v. Town of Grafton, 166 Vt. 148, ----, 689 A.2d 455, 456 (1997). We consider the purpose of the statute and look to "the...