Union Ins. Co. v. Stanage

• Decision Date: 18 April 1990
• Docket Number: No. 16742,16742
• Citation: 454 N.W.2d 736
• Parties: UNION INSURANCE COMPANY, Plaintiff and Appellee, v. John C. STANAGE, as guardian of the person and estate of Susan K. Stanage, Defendant and Appellant.
• Court: South Dakota Supreme Court

Page 736

454 N.W.2d 736

UNION INSURANCE COMPANY, Plaintiff and Appellee, v. John C. STANAGE, as guardian of the person and estate of Susan K. Stanage, Defendant and Appellant.

No. 16742.

Supreme Court of South Dakota.

Argued Jan. 9, 1990.

Decided April 18, 1990.

Douglas M. Deibert of Cadwell, Sanford & Deibert, Sioux Falls, for plaintiff and appellee.

Thomas J. Deadrick of Zimmer & Duncan, Parker, for defendant and appellant; Dennis L. Duncan of Zimmer & Duncan, Parker, on the brief.

WUEST, Chief Justice.

John C. Stanage (Stanage) appeals from a circuit court judgment which holds that Stanage is not entitled to aggregate or "stack" multiple uninsured motorist coverages for the purposes of determining his recovery under two policies of auto insurance issued to him by Union Insurance Company (Union). We affirm.

On May 24, 1986, Stanage's daughter, Susan K. Stanage (Susan), was seriously injured when a motorcycle on which she was a passenger collided with a parked car. Susan sustained damages in excess of $220,000 as a result of this accident. The owner and driver of the motorcycle who was the party at fault with respect to this accident was uninsured at the time of the accident. Susan, however, was a "covered person" at that time under two policies of auto insurance purchased by Stanage from Union. One of these policies covered three vehicles owned by Stanage, while the other policy covered only one vehicle. ¹ Each policy contained uninsured motorist protection of $100,000 per person and medical payments coverage of $5000 per person.

Following the accident, Union paid Stanage $105,000 and claimed that it had fulfilled its duties and responsibilities under the two policies and under South Dakota law. Stanage informed Union that he was entitled to recover more than $105,000 from Union as a result of this accident. Consequently, Union brought this action against Stanage seeking a judgment declaring the rights of the parties under the two policies of insurance. In this action, Stanage claimed that since he paid premiums for uninsured motorist coverage on several different vehicles, then he should be allowed to recover Union's limit of liability for such coverage on each vehicle. He also claimed that at a minimum, he should be allowed to recover Union's limit of liability for uninsured motorist coverage under each policy. The same arguments were made with respect to the medical payments coverage provided in each policy.

Having heard arguments from each party with respect to this matter, the circuit court subsequently rendered a judgment in favor of Union. In rendering this judgment, the circuit court held Stanage was not entitled to aggregate or "stack" his multiple uninsured motorist coverages and the medical payments coverages for the purposes of determining his recovery against Union under the two policies of auto insurance. Stanage now appeals from this judgment. On appeal, Stanage raises essentially two issues. The first issue regards whether Stanage should be allowed to stack his uninsured motorist coverages provided within one policy. The second issue regards whether Stanage should be allowed to stack his uninsured motorist coverages provided in the two policies issued to him by Union. The same issues are raised with respect to the medical payments coverages provided in each policy.

We first address the issue of whether Stanage should be allowed to stack his uninsured motorist coverages provided within one policy. As previously noted, one of the policies held by Stanage covered three of Stanage's vehicles. Union's limit of liability for uninsured motorist coverage under this policy was $100,000 per person and $300,000 per accident. Stanage argues that he should be allowed to collect Union's limit of liability for each vehicle. We disagree. In resolving this issue, we direct our attention to SDCL 58-11-9 which was the only statute in effect at the time of the accident dealing with the provisions of uninsured motorist coverage. ² This statute provides:

No policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle may be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto in limits for bodily injury or death equal to the coverage provided by such policy for bodily injury and death, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles and hit-and-run motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom. However, the coverage required by this section may not exceed the limits of one hundred thousand dollars because of bodily injury to or death of one person in any one accident and, subject to the limit for one person, three hundred thousand dollars because of bodily injury to or death of two or more persons in any one accident, unless additional coverage is requested by the insured. Any policy insuring government owned vehicles may not be required to provide uninsured motorist coverage. (Emphasis added).

Here, Union provided Stanage with the maximum amount of uninsured motorist coverage that it was entitled to provide him under the statute, absent a request by Stanage for additional coverage (i.e., $100,000 per person and $300,000 per accident). Union then limited its liability to that amount in clear and unambiguous terms in the policy. Written into the policy of insurance is a "limit of liability" clause which provides:

The limit of liability shown in the Declarations for "each person" for Uninsured Motorist Coverage ($100,000) is our maximum limit of liability for all damages for bodily injury sustained by any one person in any one accident ... This is the most we will pay regardless of the:

. . . . .

(3) Vehicles or premiums shown in the Declarations.

As Union provided Stanage with the maximum amount of uninsured motorist coverage as set forth by the statute, it was clearly entitled to limit its liability to that amount. Union did clearly limit its liability to that amount in the policy itself. Therefore, we must give effect to this limitation, and we therefore hold that the trial court did not err in refusing to allow Stanage to stack his uninsured motorist coverages within the single policy.

Stanage argues that his payment of premiums for uninsured motorist coverage on each vehicle should be deemed a request for additional coverage. We find no merit in this argument. By the terms of the policy, Stanage specifically agreed and recognized that Union would not pay more than the limit of liability for uninsured motorist coverage noted on the declarations for damages sustained by any one person in any one accident ($100,000). This is clearly evidenced by the "limit of liability" clause set forth in the policy. Hence, Stanage's contention that his payment of additional premiums should be deemed a request for additional coverage thus entitling him to recover more than Union's limit of liability is contrary to the clear wording of the contract of insurance. Therefore, we reject this argument.

We also find no merit in Stanage's contention that since he paid separate premiums for uninsured motorist coverage on each vehicle, then he should be entitled to recover Union's limit of liability on each vehicle. The same argument was presented to this court in Cunningham v. Western Cas., 90 S.D. 530, 243 N.W.2d 172 (1976). In Cunningham, we rejected this argument, stating:

While it is true that the [insureds] paid a separate premium for the uninsured motorist coverage on each vehicle, there is an increased risk because both vehicles could be traveling the highways at the same time.

Cunningham, supra, 90 S.D. at 533, 243 N.W.2d at 173-174. The same reasoning applies in the present case. Premiums for uninsured motorist coverage are charged on each vehicle merely to cover the increased risk. For the foregoing reasons, we uphold the trial court's determination that Stanage is not entitled to stack his uninsured motorist coverages provided within one policy.

Stanage's next contention on appeal is that, at a minimum, he should be allowed to stack his uninsured motorist coverages provided in the two policies of insurance issued to him by Union. As support for this argument, Stanage cites Westphal v. Amco Ins. Co., 87 S.D. 404, 209 N.W.2d 555 (1973). In Westphal, this Court held that an "other insurance" provision did not preclude a person from collecting from his own insurance policy if his total damages exceeded the policy limits for the automobile...