Unpublished Disposition, 865 F.2d 266 (9th Cir. 1987)

MEMORANDUM^* 

In this case we are called upon to construe the uninsured motorist and out-of-state coverage provisions of a policy of automobile insurance issued in California on a car involved in an accident in Washington. For the reasons set forth below, we affirm the decision of the district court.

FACTS

On July 19, 1986, James Vanderveen was driving in rural Washington when his car was struck by another vehicle. With Vanderveen at the time of the accident were Hans Vanderveen and his wife, Wilma. James Vanderveen and his wife, Jacqueline, were and are residents of California, while Hans, Wilma, and the driver of the other car were and are residents of Washington.

At the time of the collision, James and Jacqueline carried a policy of automobile insurance ("policy") issued to them in California by Aetna Casualty and Surety Company ("Aetna" or "appellee"). The policy's limits of $60,000 per accident for uninsured motorists and a total of $300,000 in general third-party liability coverage exceeded those of the automobile insurance carried by the driver of the other vehicle, the limits of which were $50,000 per person/$100,000 per accident. James and Jacqueline settled with the other driver's insurer; Hans and Wilma made no settlement.

On April 10, 1987, the four Vanderveens (collectively, "Vanderveens" or "appellants") filed a declaratory judgment action against Aetna in Washington state court, seeking a ruling that their policy provided them with what would in effect be $300,000 in uninsured motorist coverage under Washington law. Following Aetna's timely removal of the action to federal district court, the parties filed cross-motions for summary judgment. On August 28, 1987, the district court entered summary judgment in favor of Aetna, and the Vanderveens have appealed.

DISCUSSION

Because we are examining the district court's entry of summary judgment on a matter involving the application of state law to the provisions of an insurance policy, we review de novo. See Hydro-Air Equip., Inc. v. Hyatt Corp., 852 F.2d 403, 405 (9th Cir. 1988) (summary judgment); Ortiz v. Bank of America Nat'l Trust & Sav. Ass'n, 852 F.2d 383, 386-87 (9th Cir. 1988) (state law); State Farm Fire & Casualty Co. v. Pickard, 849 F.2d 1220, 1221 (9th Cir. 1988) (insurance policy).

1. Did the district court err by concluding that the insurance policy in question did not provide uninsured motorist coverage to the insureds under the facts of this case?

It is undisputed that there are no genuine issues of material fact presented in this appeal and that California law governs the construction of the policy in question. We must therefore determine whether there was an uninsured motorist involved under the provisions of the policy and California law.

The first sentence to Part C of the policy, entitled "Uninsured Motorists Coverage," reads as follows:

We will pay damages which a covered person is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by a covered person and caused by an accident.

"Covered person" is defined as " [y]ou or any family member" and " [a]ny other person occupying your covered auto." "Uninsured motor vehicle" is defined as a "land motor vehicle"

(1) To which no bodily injury liability bond or policy applies at the time of the accident.

(2) To which a bodily injury liability bond or policy applies at the time of the accident but its limit for bodily injury liability is less than the minimum limit for bodily injury liability specified by the financial responsibility law of the state in which your covered auto is principally garaged.

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(5) Which is an underinsured motor vehicle. An underinsured motor vehicle is a land motor vehicle ... to which a bodily injury liability bond or policy applies; provided its limit for bodily injury liability is less than the limit of liability for this coverage.

As indicated above, the driver of the other vehicle carried bodily injury liability insurance at the time of the accident with coverage in the amounts of $50,000 per person/$100,000 per accident. Obviously, he cannot be deemed to have been uninsured under the definition set forth at subparagraph 1, supra.

The definition set out at subparagraph 2 is equally unavailing to the appellants. As it is undisputed that the Vanderveen auto was "principally garaged" in California, it necessarily follows that "the minimum limit for bodily injury liability specified by the financial responsibility law" of California is controlling. California's financial responsibility law specifies minimum limits for bodily injury liability of $15,000 per person/$30,000 per accident, well below the limits of the other vehicle's coverage. See Cal.Veh.Code Sec. 16056(a).¹ 

Finally, with respect to the definition of "underinsured motor vehicle" set forth at subparagraph 5, we note that the wording of the policy provision closely tracks that of the relevant California statute, which specifies that a vehicle is underinsured only if its coverage is in an amount less than that provided by the other vehicle's uninsured motorist policy limits. See Cal.Ins.Code Sec. 11580.2(p) (2).²  In light of this fact, as well as the fact that the Washington vehicle's coverage of $100,000 per accident exceeded not only the policy's uninsured motorist coverage of $60,000 per accident but the statutory minimum of $30,000 as well, the Vanderveens' argument that the other car was somehow underinsured, either under the terms of the policy or California law, must fail. Cf. Wallace v. Farmers Ins. Group, 177 Cal. App. 3d 735, 738, 223 Cal. Rptr. 171, 173 (1986) (where language of policy similar to that found in statute, no ambiguity with respect to issue of "underinsured" motorist).

2. Did the district court err by concluding that the out-of-state coverage provided by the policy in question did not apply to the insured's accident so as to increase the policy's uninsured motorist limits?

The appellants' second argument may be summarized as follows: (1) under Washington law, a vehicle is deemed to be underinsured when that vehicle's insurance coverage is insufficient to meet the costs incurred by the injured party; (2) in such situations, the injured party's own insurance coverage must kick in up to the limits of the injured party's third party liability coverage; (3) because the other vehicle's insurance coverage was allegedly inadequate to compensate the Vanderveens for their damages, the policy's out-of-state coverage provisions must be invoked to increase the policy's uninsured motorist coverage (which includes underinsured motorists; see above) from $60,000 to $300,000, i.e., to the limits of the policy's third party liability coverage, in order to conform to the dictates of Washington law. This argument fails for two reasons.

First, the out-of-state coverage provisions of the policy cannot be deemed to apply to the facts of this case because the appellants were not at fault in the accident that gave rise to this litigation. The "Out of State Coverage" section of the policy is a subsection of Part A, entitled "Liability Coverage." The first sentence of Part A reads as follows: "We will pay damages for bodily injury or property damage for which any covered person becomes legally responsible because of an auto accident" (emphasis added). As it is undisputed that the Vanderveens were not at fault and not legally responsible for the damages suffered in the auto accident, the policy's out-of-state coverage provisions cannot be invoked to impose an increased liability where none would have existed in the first place.

Second, the policy's out-of-state coverage provisions cannot be invoked to provide increased coverage under Washington's uninsured motorist law because that state's law does not apply to vehicles registered and principally garaged in jurisdictions other than Washington. Under Washington law an insured's own uninsured/underinsured motorist coverage limits "shall be in the same amount as the insured's third party liability coverage" whenever the insured becomes involved in an accident with an uninsured or underinsured motorist. Wash.Rev.Code Sec. 48.22.030(3). However, this statute expressly applies only to "motor vehicle [s] registered or principally garaged in [Washington]." Wash.Rev.Code Sec. 48.22.030(2). As already noted, the Vanderveens' auto was registered and principally garaged in California, not in Washington. Accordingly, Washington law cannot apply here. Cf. Sumrall v. McNeese, 476 So. 2d 531, 533 (La.App.1985) (Mississippi resident involved in auto collision in Louisiana sought to apply Louisiana's underinsured motorist law to her own policy of insurance issued in Mississippi on auto garaged in Mississippi; held, Louisiana law inapplicable). See also California Casualty Indem. Exch. v. Pettis, 193 Cal. App. 3d 1597, 1611, 239 Cal. Rptr. 205, 214 (1987) (appellants, California residents injured in Hawaii by uninsured motorists, sought to extend Hawaii's public policy in favor of compensating innocent victims involved in accidents with uninsured motorists to appellants' California insurance policies; held, out-of-state provisions of California policies could not be construed to increase uninsured motorist coverage where appellants not required by Hawaiian law to carry such coverage).

AFFIRMED.