Wisness v. Nodak Mut. Ins. Co.
Decision Date | 18 October 2011 |
Docket Number | No. 20100401.,20100401. |
Citation | 806 N.W.2d 146,2011 ND 197 |
Parties | Chase WISNESS, Plaintiff and Appellant, v. NODAK MUTUAL INSURANCE COMPANY and Eric Mogen, Defendants and Appellees. |
Court | North Dakota Supreme Court |
OPINION TEXT STARTS HERE
Ariston Edward Johnson (argued), Bismarck, ND, and Dennis Edward Johnson (on brief), Watford City, ND, for plaintiff and appellant.
Scott Kenneth Porsborg (argued), Bismarck, ND, for defendants and appellees.
[¶ 1] Chase Wisness (“Wisness”) appeals the district court summary judgment in favor of Nodak Mutual Insurance Company (“Nodak”) finding the Farm and Ranch Excess Liability Policy did not provide coverage for his claim. Wisness argues the district court erred by finding the insurance policy did not provide underinsured motorist coverage. We affirm.
[¶ 2] On June 1, 2007, Wisness was a passenger in a vehicle driven by an unrelated third party. An accident occurred, and Wisness was injured and is now a paraplegic. At the time of the accident, Milo Wisness, Wisness's father, owned a Nodak Mutual automobile insurance policy with underinsured motorist limits of $500,000. Milo Wisness also owned a Farm and Ranch Excess Liability Policy issued by Nodak. Wisness settled with Nodak for underinsured limits on the automobile policy and reserved the right to pursue a claim under the excess liability policy.
[¶ 3] On February 19, 2010, Wisness sued, alleging that Nodak wrongfully denied his claim under his excess liability policy because the policy provided underinsured motorist coverage, that Nodak used bad faith when denying the claim and that Eric Mogen, Milo Wisness's insurance agent, negligently counseled Milo Wisness about what insurance policy to buy. Nodak and Mogen denied the allegations.
[¶ 4] On May 12, 2010, Wisness moved for partial summary judgment, asking the court to declare coverage existed for his claim. Nodak resisted Wisness's motion and moved for summary judgment in its favor. A hearing on the summary judgment motions was held on September 1, 2010. On October 21, 2010, the district court issued a memorandum opinion granting summary judgment in favor of Nodak, finding the excess liability insurance policy did not provide coverage for Wisness's claim and rejecting Wisness's claim against Mogen. Judgment was entered awarding Nodak its costs and dismissing Wisness's claim with prejudice. Wisness appeals the portion of the district court's judgment determining the excess liability insurance policy did not provide coverage for his claim.
[¶ 5] Wisness argues the district court erred by granting summary judgment in favor of Nodak because coverage existed for his claim. This Court has stated:
Johnson v. Taliaferro, 2011 ND 34, ¶ 8, 793 N.W.2d 804 (quoting Hasper v. Center Mut. Ins. Co., 2006 ND 220, ¶ 5, 723 N.W.2d 409). “Interpretation of an insurance contract is a question of law fully reviewable on appeal.” Grinnell Mut. Reinsurance Co. v. Thies, 2008 ND 164, ¶ 7, 755 N.W.2d 852. In Grinnell Mut. Reinsurance Co., this Court explained:
Id. (quoting State v. North Dakota State Univ., 2005 ND 75, ¶ 12, 694 N.W.2d 225).
[¶ 6] Wisness asserts the plain language of the policy provides coverage for his claim. Nodak argues the policy does not cover the claim because the insuring language in the policy does not provide coverage. “When interpreting an insurance policy, we look first to the insurance contract itself.” Nationwide Mut. Ins. Cos. v. Lagodinski, 2004 ND 147, ¶ 25, 683 N.W.2d 903 (quoting Hanneman v. Cont'l W. Ins. Co., 1998 ND 46, ¶ 27, 575 N.W.2d 445). “Generally, the insuring agreement of an insurance policy should be construed before the exclusions to avoid confusion and error.” 2 Steven Plitt et al., Couch on Insurance 3d § 22:2 (3d ed.2010).
[¶ 7] Wisness asserts the portion of the excess liability policy insuring agreement providing coverage states:
“COVERAGE A. Bodily Injury and Property Damage Liability
1. Insuring Agreement
a. We will pay on behalf of the insured for ‘ultimate net loss' in excess of the ‘retained limit’ because of ‘bodily injury’ or ‘property damage’ to which this insurance applies.”
An “[u]ltimate net loss” is defined in the policy as “the total amount of damages for which the insured is legally liable in payment of ‘bodily injury,’ ‘property damage,’ ‘personal injury,’ or ‘advertising injury.’ ”
[¶ 8] The language “pay on behalf of” and “the amount ... the insured is legally liable in payment” indicate the policy provides only third-party coverage. See Kromer v. Reliance Ins. Co., 450 Pa.Super. 631, 677 A.2d 1224, 1230 (1996), aff'd, 548 Pa. 209, 696 A.2d 152 (1997) () (footnote omitted). “A third-party liability insurance policy provides coverage for the insured's liability to another in which the insurer generally assumes a contractual duty to pay judgments recovered against the insured arising from the insured's negligence.” Kief Farmers Co-op. Elevator Co. v. Farmland Mut. Ins. Co., 534 N.W.2d 28, 32–33 n. 3 (N.D.1995); see also Grinnell Mut. Reinsurance Co., 2008 ND 164, ¶ 14, 755 N.W.2d 852 ( ).
[¶ 9] Wisness's claim is for underinsured motorist coverage to pay damages resulting from the injuries he sustained in an automobile accident. Underinsured motorist coverage “[pays] compensatory damages which an insured is legally entitled to collect for bodily injury, sickness, disease, including death resulting therefrom, of such insured, from the owner or operator of an underinsured motor vehicle arising out of the ownership, maintenance, or use of such underinsured motor vehicle.” N.D.C.C. § 26.1–40–15.3(1). “Underinsured motorist insurance is a first party coverage arrangement that entitles an insured to compensation for injuries from the insurer.” 3 Alan I. Widiss & Jeffrey E. Thomas, Uninsured and Underinsured Motorist Insurance § 32.1 n. 1 (3d ed.2005).
[¶ 10] Wisness collected underinsured motorist benefits from the underlying automobile policy and is currently trying to collect additional underinsured motorist benefits from the excess liability policy. Uninsured and underinsured motorist insurance coverages are controlled by N.D.C.C. §§ 26.1–40–15.1 to 26.1–40–15.7. An excess liability policy is not required to cover the same risks as the underlying uninsured or underinsured policy. N.D.C.C. § 26.1–40–15.7(2) (). As a result, an excess coverage policy must be read on its own to determine if uninsured motorist coverage exists. See Farmers Union Mut. Ins. Co. v. Associated Elec. and Gas Ins. Servs. Ltd., 2007 ND 135, ¶ 17, 737 N.W.2d 253 ; 4 Jeffrey E. Thomas & Aviva Abramovsky, New Appleman on Insurance Law Library Edition § 24.02[2][c] (2011) (...
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