Smart v. Safety Ins. Co.

• Decision Date: 13 December 1994
• Parties: Teresa SMART, administratrix, 1 v. SAFETY INSURANCE COMPANY.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 435

643 N.E.2d 435

419 Mass. 144

Teresa SMART, administratrix, ¹ v. SAFETY INSURANCE COMPANY.

Supreme Judicial Court of Massachusetts Hampden.

Argued Oct. 3, 1994.

Decided Dec. 13, 1994.

David Wilensky, Springfield, for plaintiff.

Alice Olsen Mann (Karyn T. Hicks with her), Boston, for defendant.

Before LIACOS, C.J., and WILKINS, LYNCH and GREANEY, JJ.

WILKINS, Justice.

This is the third of three cases that we decide today concerning the right of a household member who has a Massachusetts automobile liability policy, covering a vehicle owned by him or her, to recover underinsured motorist benefits under a Massachusetts automobile insurance policy issued to another household member that provides higher underinsured motorist coverage than whatever underinsured motorist coverage is provided under his or her own policy. See Depina v. Safety Ins. Co., 419 Mass. 135, 643 N.E.2d 430 (1994); Goodman v. American Casualty Co., 419 Mass. 138, 643 N.E.2d 432 (1994).

On July 16, 1990, John W. Brick, Jr. (Brick), the plaintiff's son and household member, was killed in a motor vehicle accident while a passenger in an automobile owned and operated by another. The driver had bodily injury limits of $10,000 for one person and $20,000 for each accident. Two other passengers were also killed in the accident. The driver's insurer paid each estate one-third of the $20,000 coverage. At the time of the accident, Brick owned a motor vehicle and was the named insured on a Massachusetts automobile insurance policy that stated (a) bodily injury coverage of $20,000 for one person and $40,000 for each accident and (b) uninsured and underinsured motorist coverage of $10,000 for one person and $20,000 for each accident. No premium charge was stated for the underinsured motorist coverage. Underinsured motorist coverage was not a required, that is compulsory, coverage. Brick could have elected no such coverage, but, on his application for insurance, he checked underinsured motorist coverage of "$10,000 each person/$20,000 each accident."

The plaintiff as an individual had her own standard Massachusetts automobile insurance policy, issued by the defendant insurer (Safety), effective March 2, 1990, with respect to another vehicle, which provided limits of $100,000 for each person and $300,000 for each accident for bodily injury and for both uninsured and underinsured motorist coverage. It is on this policy that the plaintiff, as administratrix of Brick's estate, relies in seeking to recover underinsured motorist benefits. ² Safety denied coverage and, by counterclaim, sought a declaration that it was not liable to pay underinsured motorist benefits under the policy issued to the plaintiff. On cross motions for summary judgment, a Superior Court judge ruled in favor of Safety and entered a judgment declaring that Safety had no obligation to provide underinsured motorist coverage under the plaintiff's policy in effect at the time of the action. We allowed the plaintiff's application for direct appellate review.

In the two other underinsured motorist cases decided today, we held that a person who had his or her own Massachusetts automobile policy in effect at the time of an accident could not properly look to the policy issued to another household member under which there was higher underinsured motorist coverage than that provided in his or her own policy. In the circumstances of those cases, the injured person could properly look only to his or her policy for underinsured motorist benefits.

This case is different from the two other cases decided today in two interrelated respects that the plaintiff argues, taken collectively, are significant. First, in the other two cases, the injured person seeking to recover under a household member's policy unquestionably had purchased underinsured motorist coverage for himself or herself in excess of the then compulsory limits for motor vehicle liability coverage. In short, it was clear that each such person did have meaningful underinsured motorist coverage available under his or her own policy. Here, the policy issued to the plaintiff's decedent (Brick) did not provide underinsured motorist coverage with limits in excess of compulsory liability limits, and, therefore, the plaintiff argues, Brick had no underinsured motorist coverage under his policy. The theory is that, because every motor vehicle that is insured will have liability coverage at or above the level of compulsory limits, the purported provision to Brick of underinsured motorist coverage under his policy at the same limits as compulsory limits actually provided no such coverage, and thus he had no underinsured motorist coverage provided under his policy. ³

The second difference in this case, essential to the plaintiff's argument, is that the relevant policy language is slightly different from that in the other two cases. For reasons that are not apparent, the 1990 Massachusetts automobile insurance policy, under which the plaintiff claims underinsured motorist coverage, had language in its underinsured motorist section different from that in the earlier two cases. The relevant provision in the 1990 standard form policy is that: "We will not pay damages to or for any household member who has a Massachusetts auto policy of his or her own providing similar coverage " (emphasis added). The emphasized words do not appear in the policy language considered in the two cases previously decided today and are apparently unique to standard form policies issued in 1990. ⁴ The additional words provide the plaintiff an argument that could not have been made by the claimants in the two other cases decided today, namely that Brick's Massachusetts automobile policy was not one providing similar (i.e. underinsured motorist) coverage, because it provided no such coverage in any meaningful sense, and hence a claim by his estate under the policy issued to his mother for underinsured motorist coverage is not foreclosed.

As a practical matter, Brick had very limited underinsured motorist coverage available under his policy. For accidents occurring in 1990, all insured Massachusetts motor vehicles had liability coverage for accidents occurring upon the ways of the Commonwealth with limits of at least $10,000 for each person, and $20,000 for each accident (see G.L. c. 90, § 34A, as amended through St.1979, c. 611, §§ 1, 2), and consequently Brick could not turn to his underinsured motorist coverage with respect to an injury or death caused by the operator of a Massachusetts motor vehicle (see Alguila v. Safety Ins. Co., 416 Mass. 494, 498, 624 N.E.2d 79 [1993] ). It is possible, however, that a tortfeasor's out-of-State vehicle might have had liability coverage with limits less than the limits of Brick's underinsured motorist coverage ($10,000/$20,000), and in such a situation Brick's underinsured motorist coverage would be of some value to him. We shall not pause to decide what circumstances, if any, might make underinsured motorist coverage significant when a tortfeasor's insurer becomes insolvent....