Nash v. American Nat. Property & Cas. Co.

• Decision Date: 04 April 2007
• Docket Number: No. CA 06-611.,CA 06-611.
• Citation: 254 S.W.3d 758,98 Ark. App. 258
• Parties: Grant NASH, Appellant, v. AMERICAN NATIONAL PROPERTY & CASUALTY CO., Appellees.
• Court: Arkansas Court of Appeals

254 S.W.3d 758

98 Ark. App. 258

Grant NASH, Appellant, v. AMERICAN NATIONAL PROPERTY & CASUALTY CO., Appellees.

No. CA 06-611.

Court of Appeals of Arkansas.

April 4, 2007.

Jeff Slaton, Springdale, AR, for appellant.

Huckabay, Munson, Rowlett & Moore, P.A., by: Beverly A. Rowlett, Little Rock, AR, for appellee.

JOHN B. ROBBINS, Judge.

This appeal arises out of the grant of summary judgment to an insurance company regarding an insurance claim. Appellant Grant Nash was a passenger in a car driven by Karim Nimroozi and insured by appellee American National Property and Casualty Company. Nash was injured in a vehicular accident that occurred on March 25, 2002. American paid $50,000 in liability coverage to Nash for injuries he sustained, but this did not fully compensate Nash. Nash sought additional benefits pursuant to the underinsured motorist coverage in the policy. American denied coverage, relying on a reduction clause that offset any underinsured coverage by any payments made pursuant to liability coverage. Nash claimed that the clause was ambiguous at best, and furthermore, that Ark.Code Ann. § 23-89-209 prevented any reduction clause from taking effect. Both parties moved for summary judgment, asking the trial court to rule in their respective favors as a matter of law. The trial judge agreed with American, and she entered judgment accordingly. This appeal followed.

In reviewing summary-judgment cases, we determine whether the trial court's grant of summary judgment was appropriate based on whether the evidence presented by the moving party left a material question of fact unanswered. Norris v. State Farm Fire & Cas. Co., 341 Ark. 360, 16 S.W.3d 242 (2000). The moving party always bears the burden of sustaining a motion for summary judgment. Youngman v. State Farm Mut. Auto. Ins. Co., 334 Ark. 73, 971 S.W.2d 248 (1998). In a case such as this one where there are no disputed facts, our review must focus on the trial court's application of the law to those undisputed facts. See id.

First, Nash argues that the trial court erred in finding that the insurance contract language was unambiguous and that it precluded recovery for underinsured motorist coverage. On this part of Nash's argument, there are no material questions of fact but only the matter of construing the insurance policy and determining if the provisions regarding coverage are ambiguous. The question of whether there is an ambiguity in an insurance contract is initially decided by the court. Shelter Mut. Ins. Co. v. Williams, 69 Ark.App. 35, 9 S.W.3d 545 (2000). The language in an insurance policy is to be construed in its plain, ordinary, popular sense, and once it is determined that coverage exists, it then must be determined whether the exclusionary language within the policy eliminates the coverage. Norris v. State Farm Fire & Cas. Co., 341 Ark. 360, 16 S.W.3d 242 (2000). Exclusionary endorsements must adhere to the general requirements that the insurance terms must be expressed in clear and unambiguous language. Id.; see also Nationwide Mut. Ins. Co. v. Worthey, 314 Ark. 185, 861 S.W.2d 307 (1993). In order to be ambiguous, a term in an insurance policy must be susceptible to more than one reasonable construction. Insurance Co. of North Am. v. Forrest City Country Club, 36 Ark.App. 124, 819 S.W.2d 296 (1991). If the language is ambiguous, we will construe the policy liberally in favor of the insured and strictly against the insurer. Elam v. First Unum Life Ins. Co., 346 Ark. 291, 57 S.W.3d 165 (2001). Policy language is ambiguous if there is doubt or uncertainty as to its meaning and it is fairly susceptible to more than one reasonable interpretation. Id.

The issue in this case is whether the terms of this policy allow for a reduction in underinsured coverage by liability coverage payments regarding the injuries suffered by passenger Nash. The relevant policy language reads that with regard to underinsured motorist claims, "Any amounts payable will be reduced by.... (2) any payment made under the Liability Coverage ... of the policy[.]" The policy provided for $50,000 in liability coverage, which was paid to Nash. The policy provided for $50,000 in underinsured motorist coverage. American argued, and the trial court agreed, that the only reasonable interpretation was that the two figures were offset entirely, rendering nothing available for the underinsured motorist claim. In other words, "any amounts payable" in that section meant the amount payable pursuant to the underinsured coverage purchased. Appellant Nash asserts that the policy can also be read to mean that "any amounts payable" is the amount of damage claimed by Nash, which exceeded $50,000 and left a remaining amount owed under the policy.

The intent of the parties is to be determined from the whole context of the agreement, and the court must consider the instrument in its entirety, not merely disjointed or particular parts of it. Continental Cas. Co. v. Davidson, 250 Ark. 35, 463 S.W.2d 652 (1971); Fowler v. Unionaid Life Ins. Co., 180 Ark. 140, 20 S.W.2d 611 (1929). If there is no ambiguity, and only one reasonable interpretation is possible, it is the duty of the courts to give effect to the plain wording of the policy. See Western World Ins. Co. v. Branch, 332 Ark. 427, 965 S.W.2d 760 (1998).

In order to decide this issue, reference to additional language in the policy is required to give context. This text comes from Part IV of the policy, titled "Uninsured Motorist and Underinsured Motorist Coverages," specifically the subsection for "Coverage UIM-Underinsured Motorist Coverage" setting forth the "Limits of Liability Used in Coverage UIM Only." The relevant language notes that the "limits of liability shown in the Declarations apply" subject to certain restrictions, but that "Any amounts payable will be reduced by ... any payment made under the Liability Coverage[.]" The only reasonable interpretation is that the amount payable is the limit of UIM coverage purchased by...