Progressive Nw. Ins. Co. v. Lautenschlager
| Decision Date | 07 June 2021 |
| Docket Number | Docket No. 48018 |
| Citation | 168 Idaho 841,488 P.3d 509 |
| Court | Idaho Supreme Court |
| Parties | PROGRESSIVE NORTHWEST INSURANCE COMPANY, foreign corporation doing business in the State of Idaho, Plaintiff-Respondent, v. Dean Michael LAUTENSCHLAGER and Laura Lee Lautenschlager, husband and wife, and the marital community comprised thereof, Defendants-Appellants. |
Crary, Clark & Domanico, PS, Spokane, for Appellants. Aaron Crary argued.
Kirkpatrick & Startzel, PS, Spokane, for Respondent. Paul L. Kirkpatrick argued.
This case concerns the scope of coverage under a combined single limit auto insurance policy where both policyholders were injured in the same accident with an underinsured motorist and one policyholder (the passenger) had a claim against the other for his partial responsibility for the collision.
Progressive Northwest Insurance Company ("Progressive") insured Dean and Laura Lautenschlager with a combined single limit policy of $500,000, which provided liability coverage, in addition to underinsured and uninsured motorist coverage. The Lautenschlagers were subsequently injured in a collision between their motorcycle, driven by Dean, and a van, driven by an underinsured motorist. Both Dean and Laura individually recovered the policy limits of $15,000 per-person from the underinsured motorist. In addition, Laura recovered a $375,000 settlement from Progressive due to Dean's partial responsibility for the collision. Progressive then instituted this action seeking a declaration that Progressive was only responsible for an additional $95,000 in underinsured motorist benefits under the policy following the various settlements. The district court granted summary judgment in Progressive's favor, concluding that the offset provisions in the Lautenschlagers’ policy did not violate Idaho public policy and that the remaining coverage from Progressive was limited to $95,000. That is to say, $500,000 less the $375,000 already paid by Progressive and the $30,000 paid by the van driver's insurer leaves a remaining $95,000 in coverage under the policy.
The Lautenschlagers appeal the district court's grant of summary judgment, arguing that the offset provisions of their insurance policy are void on public policy grounds and that the policy is ambiguous with respect to the amount of coverage offered. We affirm the district court.
The facts in this matter are undisputed. Dean and Laura Lautenschlager are a married couple that split their time between two homes: one in Lewiston, Idaho, and the other in Fountain Hills, Arizona. In April of 2016, the Lautenschlagers purchased a motorcycle insurance policy ("the policy") from Progressive, effective from April 29, 2016, to April 29, 2017. The Lautenschlagers owned several motorcycles covered by the policy, including a 2006 Harley Davidson which was involved in the accident at the core of this litigation.
With respect to that motorcycle, the policy's declarations page listed the following coverages: $500,000 in combined single limit coverage for liability to others for a premium of $107; $500,000 in combined single limit coverage for uninsured motorists for a premium of $151; and $500,000 in combined single limit coverage for underinsured motorists ("UIM coverage") for a premium of $71. Pertinent to this matter, Part I of the policy described the coverage, exclusions, and limits with respect to liability to others coverage and Part III detailed the same with respect to the UIM coverage.
Part I of the policy provides:
In February 2017, the Lautenschlagers sustained injuries when their 2006 Harley Davidson motorcycle, driven by Dean, collided with a minivan, driven by Glenda Mike. The Lautenschlagers had been following Mike on a rural, two-lane road in Fort McDowell, Arizona, when Mike slowed down without signaling. Dean interpreted Mike's deceleration as an invitation to pass; however, as he was overtaking Mike's van, she turned directly in front of the Lautenschlagers’ motorcycle. The ensuing collision left the Lautenschlagers with substantial injuries and medical expenses in excess of $500,000.
Laura asserted claims against both Mike and Dean in Arizona to recover against them for their proportional fault for the collision.2 Dean only asserted a claim against Mike. On July 11, 2017, Mike's insurance company settled with the Lautenschlagers for Mike's policy limits of $15,000 per person, or $30,000 total. On August 21, 2019, Progressive settled with Laura for $375,000 for Dean's proportionate fault for the collision. The Lautenschlagers subsequently made a claim against Progressive for UIM benefits under Part III of the policy.
Progressive then filed this action in Nez Perce County district court, seeking a declaration that (1) its total liability under the policy with respect to the collision was $500,000 and (2) the offsets in the policy comported with Idaho law. In other words, Progressive sought to have the district court declare that its remaining liability for the incident was $95,000, which is equal to the policy limit minus the amounts recovered from Mike and the amount paid to Laura.3 Progressive and the Lautenschlagers filed cross motions for summary judgment. Following oral argument, the district court issued an order granting Progressive's motion for summary judgment and denying the Lautenschlagers’ motion for summary judgment. The district court ruled that the total available coverage for the accident was $500,000, the offsets for UIM coverage did not violate Idaho public policy, and, after applying the offsets, the total remaining coverage under the policy was $95,000. Subsequently, the district court entered a final judgment granting Progressive's claim for declaratory relief.
The Lautenschlagers timely appealed.
1. Is the Lautenschlagers’ policy ambiguous with respect to the amount of coverage provided?
2. Do the offset provisions in the Lautenschlagers’ policy violate Idaho public policy?
3. Are the Lautenschlagers entitled to attorney's fees on appeal?
"On appeal from the grant of a motion for summary judgment, this Court employs the same standard as used by the district court originally ruling on the motion." Hoyle v. Utica Mut. Ins. Co. , 137 Idaho 367, 371, 48 P.3d 1256, 1260 (2002). On review, summary judgment is appropriate if "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." I.R.C.P. 56(a). "[I]f the evidence reveals no disputed issues of material fact, only a question of law remains, and this Court exercises free review." Eastman v. Farmers Ins. Co. , 164 Idaho 10, 13, 423 P.3d 431, 434 (2018).
"Whether an insurance contract violates public policy presents a question of law for this Court to resolve." Id. at 14, 423 P.3d at 435 (citing Quiring v. Quiring , 130 Idaho 560, 566, 944 P.2d 695, 701 (1997) ). In addition, "[t]he question of whether a policy is ambiguous is a question of law over which this Court exercises free review." McFarland v. Liberty Ins. Corp. , 164 Idaho 611, 615, 434 P.3d 215, 219 (2019) (citation and internal quotations omitted). As neither party disputes the material facts, this case presents pure questions of law for this Court to resolve.
The Lautenschlagers challenge three aspects of their policy. First, they contend that an offset provision allowing UIM coverage to be reduced by amounts paid by any responsible party is void as against public policy. Similarly, they argue a separate offset in the policy allowing UIM coverage to be reduced by amounts paid to third parties under the policy's liability to others section is void against public policy. Finally, they argue that the policy clearly provides $500,000 in both UIM coverage and liability to other's coverage, or is ambiguous in that regard and must be construed in their favor.
The district court granted summary judgment in favor of Progressive, ruling that the policy unambiguously provided $500,000 in total coverage and the offset provisions did not violate public policy. We affirm the district court on the ground that the policy clearly provides a maximum of $500,000 in total coverage, and decline to address whether the offsets violate public policy because, under the unique facts of this case, operation of the offsets would not alter the outcome.
The threshold issue in this matter is whether the policy is ambiguous as to the amount of coverage provided. If the policy provides $500,000 in coverage for all claims stemming from one incident, our analysis would be at an end because the total amount of coverage minus the amounts paid to Laura and the undisputed offset for Mike's insurance is equal to $95,000. If the provision is ambiguous, however, further discussion of the offsets would be necessary to ascertain how much UIM coverage remains available to the Lautenschlagers. We hold that the policy unambiguously provides $500,000 in coverage and affirm the district court on that ground.
This Court construes insurance contracts...
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