Westhoff v. American Interinsurance Exchange, 57853

• Decision Date: 16 February 1977
• Docket Number: No. 57853,57853
• Citation: 250 N.W.2d 404
• Parties: Donald A. WESTHOFF, Individually and as Father and Next Friend of James J. Westhoff et al., Appellants, v. AMERICAN INTERINSURANCE EXCHANGE, Appellee, and Auto-Owners (Mutual) Insurance Company, Appellee and Cross-Appellant.
• Court: Iowa Supreme Court

Page 404

250 N.W.2d 404

Donald A. WESTHOFF, Individually and as Father and Next Friend of James J. Westhoff et al., Appellants, v. AMERICAN INTERINSURANCE EXCHANGE, Appellee, and Auto-Owners (Mutual) Insurance Company, Appellee and Cross-Appellant.

No. 57853.

Supreme Court of Iowa.

Feb. 16, 1977.

O'Connor, Thomas, Weight, Hammer, Bertsch & Norby, Dubuque, for appellants.

Fuerste, Carew & Coyle, Dubuque, for appellee, American Interinsurance Exchange.

Berry, Neuman, McMahon, Hellstrom & Bittner, Davenport, for appellee and cross-apellant, Auto-Owners (Mutual) Ins. Co.

Heard before MOORE, C.J., and MASON, REYNOLDSON, HARRIS and McCORMICK, JJ.

MASON, Justice.

Plaintiffs, Donald A. Westhoff, individually and as father and next friend of James J. Westhoff, James J. Westhoff and Ronald J. Westhoff, brought this declaratory judgment action to determine the insurance coverage available to them under the uninsured motorist provisions of policies issued by defendants, American Interinsurance Exchange (hereinafter American) and Auto-Owners (Mutual) Insurance Company (hereinafter Auto-Owners).

Of the three policies of concern herein, one was issued by American and two were issued to Auto-Owners. American had in effect to motorcycle-motor scooter policy insuring Robert Carl Vogt. Auto-Owners had in effect an automobile poicy issued to plaintiff Donald. A. Westoff insuring his 1969 Chevrolet Impala automobile and one issued to Ronald J. Westhoff insuring his 1967 Chevrolet Impala automobile. All three insurance policies contained endorsements providing for coverage for damages to an insured as defined in said policies for bodily injury caused by the owner or operator of an uninsured automobile as required by chapter 516A, The Code.

Plaintiffs' petition asserted they were entitled to recover up to the policy limits on each of the policies concerned for the actual damages sustained by them. Each defendant maintained the 'other insurance' provisions of its policy or policies operated to deny coverage to plaintiffs.

The matter was submitted to the trial court upon the pleadings, exhibits, interrogatories and answers thereto and stipulated facts. The trial court held: (1) the 'other insurance' clauses of the policies operated to deny recovery beyond the limits of the policy with the broadest coverage; (2) plaintiff James J. Westhoff was only entitled to recover on the American policy; and (3) plaintiff Ronald J. Westhoff was entitled to recover up to $10,000 with liability therefor shared pro rata by defendants. From this judgment pliantiffs appeal and defendant Auto-Owners cross-appeals.

The statement of stipulated facts filed by the parties herein in the district court provided in part as follows:

'Come now all of the parties hereto and for the purpose of this action make the following Stipulation of Facts as of August 21, 1972:

'Robert Carl Vogt * * * was the owner of a 1972 Honda Motorcycle * * *, and was the 'named insured' under a motorcycle-motor scooter policy * * * issued to Vogt by * * * (American) * * *;

'Donald A. Westhoff was the owner of a 1969 Chevrolet Impala automobile and was the 'named assured' under an automobile policy * * * issued by * * * (Auto-Owners);

'That each of the aforesaid policies of insurance were in full force and effect;

'Vogt had granted the actual use of his aforesaid motorcycle to Ronald J. Westhoff and James J. Westhoff when the said Ronald J. Westhoff and James J. Westhoff were involved in a motor vehicle accident * * * with an automobile owned by Jo Anne Elliott and operated with her consent by Barbara R. Norpel, causing personal injuries to each of said Westhoffs, and to the knowledge and belief of the parties hereto said automobile was uninsured and there existed no automobile liability insurance protesting Jo Anne Elliott and/or Barbara R. Norpel as a result of said collision;

'Ronald J. Westhoff and James J. Westhoff were the sons of Donald A. Westhoff and all were residents of the same household;

'* * *

'James J. Westhoff was an 'insured' under the American Policy relating to protection afforded for bodily injury caused by an uninsured automobile;

'James J. Westhoff was an 'assured' under the Donald A. Westhoff Auto-Owners Policy and was an 'insured' under the Ronald J. Westhoff Auto-Owners Policy; both relating to protection afforded for bodily injury caused by an uninsured automobile;

'Ronald J. Westhoff was an 'insured' under the American Policy relating to protection afforded for bodily injury caused by an uninsured automobile;

'Ronald J. Westhoff was an 'assured' under the Donald A. Westhoff Auto-Owners Policy and was an 'insured' under the Ronald J. Westhoff Auto-Owners Policy; both relating to protection afforded for bodily injury caused by an uninsured automobile;

'James J. Westhoff did not own an automobile;

'It is further stipulated and agreed that the Court may make its Decree in this action as if the liability of Jo Anne Elliott or Barbara R. Norpel to the plaintiffs and the total sums which the plaintiffs were legally entitled to recover as damages from the owner or operator of an uninsured automobile had been established.'

Under the heading 'CONDITIONS' the policy issued by American to Vogt provides in pertinent part:

'6. Other Insurance: * * *.

'With respect to bodily injury to an insured while occupying or through being struck by an uninsured automobile, if such insured is a named insured under other similar insurance available to him, then the damages shall be deemed not to exceed the higher of the applicable limits of liability of this insurance and such other insurance, and the company shall not be liable under this endorsement for a greater proportion of the applicable limit of liability of this endorsement than such limit bears to the sum of the applicable limits of liability of this insurance and such other insurance.'

The Auto-Owners policy issued to Donald A. Westhoff contains a paragraph virtually identical to the American provision set forth above and further provides:

'Subject to the foregoing paragraph, if the assured has other similar insurance available to him against a loss covered by Coverage D (uninsured motorist provisions), the Company shall not be liable under this coverage for a greater proportion of such loss than the applicable limit of liability hereunder bears to the total applicable limits of liability of all valid and collectible insurance against such loss.'

The Auto-Owners policy issued to Ronald J. Westhoff contains the following provisions under 'CONDITIONS':

'With respect to bodily injury under Coverage D (uninsured motorist provisions) if the insured has other similar insurance available to him, then the damages shall be deemed not to exceed the higher of the applicable limits of liability of this insurance and such other insurance, and the Company shall not be liable under this coverage for a greater proportion of such loss than the applicable limit of liability hereunder bears to the total applicable limits of liability of all valid and collectible insurance against such loss.

'Except as stated above, the insurance afforded by this policy is primary insurance. When this insurance is primary and the insured has other insurance which is stated to be applicable to the loss on an excess or contingent basis, the amount of the Company's liability under this policy shall not be reduced by the existence of such other insurance.

'When both this insurance and other insurance apply to the loss on the same basis, whether primary, excess or contingent, the Company shall not be liable under this policy for greater proportion of the loss than that stated in the applicable contribution provision below:

'(a) Contribution by Equal Shares. If all of such other valid and collectible insurance provides for contribution by equal shares, the Company shall not be liable for a greater proportion of such loss than would be payable if each insurer contributes an equal share until the share of each insurer equals the lowest applicable limit of liability under any one policy or the full amount of the loss is paid, and with respect to any amount of loss not so paid the remaining insurers then continue to contribute equal shares of the remaining amount of the loss until each such insurer has paid its limit in full or the full amount of the loss is paid.

'(b) Contribution of Limits. If any such other insurance does not provide for contribution by equal shares, the Company shall not be liable for a greater proportion of such loss than the applicable limit of liability under this policy for such loss bears to the total applicable limit of liability of all valid and collectible insurance against such loss.' (Emphasis in original).

In addition to the above provisions, the Auto-Owners policies contained the following, commonly referred to as an 'escape' clause, with but slight variation in the policy issued to Donald A. Westhoff:

'This coverage (uninsured motorist) shall not apply: (a) to bodily injury of an insured sustained while in, upon, entering or alighting from any automobile not owned by the insured if the owner has insurance similar to that afforded by this coverage and such insurance is available to the insured; * * *.'

All three policies contained policy limits of $10,000 per person and $20,000 per accident.

The trial court held James J. Westhoff, not a 'named insured' under any policy, was entitled to recover on the American policy to the extent of the policy limits. As to Ronald J. Westhoff the court, relying upon Union Ins. Co. (Mutual) v. Iowa Hardware Mut. Ins. Co., 175 N.W.2d 413 (Iowa 1970), concluded the pro rata clause contained in the American policy and the 'escape' clause in the Auto-Owners policy were mutually repugnant and therefore required a pro rata sharing of liability by defendants. In addition, the court rejected plaintiffs' contention they were entitled to recover up to the policy limits of...