Monroe v. Agency, DA 09-0242.

• Decision Date: 09 June 2010
• Docket Number: No. DA 09-0242.,DA 09-0242.
• Parties: Eleanor MONROE, Individually and as the Personal Representative of the Estate of Hugh Monroe, Plaintiff and Appellant,v.COGSWELL AGENCY and Safeco Insurance Company of Illinois, Defendants and Appellees.
• Court: Montana Supreme Court

356 Mont. 417

234 P.3d 79

2010 MT 134

Eleanor MONROE, Individually and as the Personal Representative of the Estate of Hugh Monroe, Plaintiff and Appellant,v.COGSWELL AGENCY and Safeco Insurance Company of Illinois, Defendants and Appellees.

No. DA 09-0242.

Supreme Court of Montana.

Argued and Submitted Jan. 20, 2010.

Decided June 9, 2010.

COPYRIGHT MATERIAL OMITTED

For Appellant: Thomas A. Marra (argued); Marra, Sexe, Evenson & Bell, P.C.; Great Falls, Montana.

For Appellees: Richard E. Gillespie (argued); Keller, Reynolds, Drake, Johnson & Gillespie, P.C.; Helena, Montana (Attorneys for Cogswell Agency), Carey Matovich (argued); Eric E. Holm; Matovich & Keller, P.C.; Billings, Montana (Attorneys for Safeco Insurance Company).

For Amicus Montana Trial Lawyers Association: Lawrence A. Anderson, P.C. (argued); Attorney at Law; Great Falls, Montana, Amy Eddy; Bottomly & Eddy Trial Attorneys, PLLP; Kalispell, Montana.

Justice W. WILLIAM LEAPHART delivered the Opinion of the Court.

¶ 1 Appellant Eleanor Monroe (Monroe) appeals from the decision of the Eighth Judicial District Court, Cascade County, denying her underinsured motor vehicle coverage and granting summary judgment in favor Safeco Insurance Company (Safeco) and Cogswell Agency (Cogswell). We affirm in part, reverse in part and remand for further proceedings.

¶ 2 We consider the following issues on appeal:

¶ 3 1. Whether the District Court erred in granting summary judgment in favor of Safeco.

¶ 4 2. Whether the District Court erred in granting summary judgment in favor of Cogswell.

¶ 5 3. Whether the District Court erred in granting summary judgment on the issue of whether Cogswell acted as Safeco's agent.

FACTUAL AND PROCEDURAL BACKGROUND

¶ 6 On November 19, 2003, Eleanor and Hugh Monroe (the Monroes) were traveling as passengers in Hugh Monroe's 2003 Dodge Durango. Their daughter-in-law, Laura Monroe (Laura) was driving the vehicle and lost control. In the ensuing accident all three sustained serious injuries. Hugh Monroe suffered the worst injuries and has since died.

¶ 7 At the time of the accident the Monroes were named insureds on two Safeco policies which provide coverage for their six vehicles. Under the Monroes' two policies bodily injury liability was limited to $100,000 each person and $300,000 each occurrence while property damage liability was limited at $50,000 each occurrence. In addition, medical payments under the policy were limited to $5,000. Finally, uninsured motorist coverage (UM) and underinsured motorist coverage (UIM) were limited to $100,000 each person and $300,000 each accident. Laura and her husband Hughie also carried a Safeco policy for their two vehicles. Laura and Hughie's policy had the same coverage as the Monroes.

¶ 8 Following the accident, the Monroes recovered $5,000 of medical payment benefits for each of the six vehicles they owned and $5,000 of medical payment benefits for each of the two vehicles covered under Laura and Hughie's policy. Safeco also paid an additional $100,000 to each of the Monroes under both their own policy and Laura and Hughie's policy. In total, Safeco paid out $480,000 to the Monroes. Nevertheless, on April 13, 2004, Monroe, on behalf of herself and in her capacity as the personal representative of the estate of Hugh Monroe, filed a complaint for declaratory judgment claiming an entitlement to coverage under the UIM provisions of the insurance policies. In addition, Monroe claimed that Cogswell, which had helped them secure the Safeco policies at issue here, was negligent due to the agency's failure to obtain sufficient coverages.

¶ 9 On Safeco's motion, the District Court granted summary judgment in Safeco's favor and certified that judgment as final pursuant to M.R. Civ. P. 54(b). Monroe filed a notice of appeal which we dismissed without prejudice on December 7, 2006. Subsequently, the District Court granted Safeco's motion for summary judgment on the grounds that Cogswell was not its agent. The District Court also granted Cogswell's summary judgment motion on the grounds that it had no duty to advise the Monroes or to produce adequate coverage. Monroe appeals.

¶ 10 Additional facts are set forth below where relevant.

STANDARD OF REVIEW

¶ 11 Summary judgment is proper only when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Newbury v. State Farm Fire & Cas. Ins. Co. of Bloomington, Ill., 2008 MT 156, ¶ 14, 343 Mont. 279, 184 P.3d 1021. We review a district court's summary judgment decision de novo using the same criteria as the district court. Newbury, ¶ 14.

DISCUSSION

¶ 12 1. Whether the District Court erred in granting summary judgment in favor of Safeco.

¶ 13 With respect to Safeco, the controversy here boils down to whether Monroe is entitled to UIM coverage over and above the $480,000 she has already received from Safeco under both her own policies and Laura and Hughie's policy. In granting Safeco's motion for summary judgment the District Court, drawing parallels between our reasoning in Stutzman v. Safeco Ins. Co. of Am., 284 Mont. 372, 945 P.2d 32 (1997) and the case at bar, opined that in this instance “[t]he insuring language is clear, obvious and unambiguous to a person of average intelligence.” The District Court held that the policy language excluding from UIM coverage “any vehicle or equipment ... [o]wned by or furnished for the regular use of you or any family member” clearly and unambiguously barred the Monroes from receiving UIM coverage. The District Court reasoned that since the injuries the Monroes sustained occurred in their own vehicle, Safeco was, as a matter of law, not required to make UIM payments to the Monroes.

¶ 14 On appeal, the parties vigorously dispute this conclusion. Parroting the District Court's ruling, Safeco argues that “[u]nder the contract's usual, common sense language, the Durango [in which the accident occurred] is not an ‘underinsured motor vehicle’ because it was owned by Hugh, who is an insured and is Eleanor's husband (a resident spouse and family member).” Safeco also contends our decision in Stutzman is both applicable to, and dispositive of, the controversy presented here. Monroe counters that an insurance policy, as a contract of adhesion, must be strictly construed with all ambiguities being resolved in favor of the insured. She asserts that the policy language at issue here is ambiguous and that the exclusionary provisions are in conflict with the declarations pages so that “in practically all circumstances, [the] Monroes will recover nothing from the UIM coverage.” She also maintains that our decision in Stutzman is inapplicable and that the insurance contract violates public policy.

¶ 15 It is well established that in construing and analyzing the terms of an insurance policy we look first to the policy's plain language. Stutzman, 284 Mont. at 379, 945 P.2d 32. In doing so we apply the “common sense meaning as viewed from the perspective of a reasonable consumer of insurance products.” Stutzman, 284 Mont. at 376, 945 P.2d 32. We have explained that as with any contract, a court “may not rewrite the contract at issue, but must enforce it as written if its language is clear and explicit.” Stutzman, 284 Mont. at 376, 945 P.2d 32. After construing the language of the policy itself, we next look at whether, in light of our construction, the insurance contract violates public policy. See generally Stutzman, 284 Mont. 372, 945 P.2d 32 (construing the policy language first and then looking to public policy in order to determine if the policy is enforceable). In keeping with this mode of analysis, we turn first to the policy language of the Monroes' insurance contract to determine whether its “common sense meaning” entitles the Monroes to UIM coverage.

¶ 16 In pertinent part, the UIM provisions of both the Monroes' and Laura and Hughie's insurance policies provide that Safeco:

[w]ill pay damages which any insured is legally entitled to recover from the owner or operator of an ... underinsured motor vehicle because of bodily injury:

1. Sustained by an insured; and

2. Caused by an accident.

The policy defines “underinsured motor vehicle” as:

a land motor vehicle or trailer of any type to which a bodily injury liability bond or policy applies at the time of the accident but the amount paid for bodily injury under the bond or policy to an insured is not enough to pay the full amount the insured is legally entitled to recover as damages.

However, “underinsured motor vehicle” does not include any vehicle or equipment:

1. Owned by or furnished for the regular use of you or any family member.

¶ 17 Under these provisions alone, we agree with Safeco that the plain language of the policy, clearly excludes the Monroes' vehicles from the definition of an underinsured motor vehicle. This so called “owned vehicle” exclusion clearly states that an underinsured motor vehicle does not include motor vehicles “[o]wned by or furnished for the regular use of you or any family member.” It is undisputed that the Monroes owned both the Dodge Durango in which the accident happened, and the five other motor vehicles insured under their Safeco policies. As such, all of these vehicles are clearly and unambiguously excluded from the policy definition of an underinsured motor vehicle. Since the Monroes' vehicles are excluded under the plain language of this “owned vehicle” exclusion, Monroe is not entitled to UIM coverage under her own policies. Having concluded that the plain language defeats Monroe's claim to UIM coverage under her own policies, we now turn to the question of whether this insurance contract violates public policy.

¶ 18 With respect to public policy, Monroe first argues that the limiting language in the Safeco policies violates public policy because it creates illusory UIM coverage. Monroe contends that with the “owned vehicle” exclusion, the Monroes would have no underinsured coverage in ...