Waters v. The Concord Group Insurance Cos.

Waters v. The Concord Group Insurance Co. (97-462); 169 Vt. 534; 725 A.2d 923

[Filed 14-Jan-1999]

                                 ENTRY ORDER

                       SUPREME COURT DOCKET NO. 97-462

                            SEPTEMBER TERM, 1998


Jerald D. and Allison Waters	}	APPEALED FROM:
                                }
                                }
     v.	                        }	Windsor Superior Court
                                }	
The Concord Group Insurance Co.	}
                                }	DOCKET NO. 88-2-96Wrcv	


       In the above-entitled cause, the Clerk will enter:

       Defendant Concord Group Insurance Companies appeals from a summary
  judgment  determining that plaintiffs Jerald and Allison Waters were
  entitled to recover up to the full per  occurrence limits on their
  insurance policy as well as the policy held by their adult daughter, 
  Jennifer, who suffered severe injuries when she was struck by a motorcycle. 
  Concord Group also  appeals the court's ruling that the Waters were
  entitled to recover for their temporary loss of  consortium with Jennifer.  
  We reverse.


       The material facts are undisputed.  On July 8, 1995, an uninsured
  motorcyclist (FN1) struck eighteen-year-old Jennifer Waters as she stood
  in a store parking lot.  Jennifer's resulting medical  expenses exceeded
  $200,000.  Jennifer had uninsured motorist ("UM") coverage under separate 
  automobile insurance policies issued to her and to the Waters by Concord
  Group.  Both policies  at issue contained a "Split UM Limits Endorsement." 
  Jennifer's policy provided UM coverage  in split limits not to exceed
  $25,000 per person and $50,000 per occurrence.   The Waters' policy 
  provided UM coverage in an amount not to exceed $100,000 per person and
  $300,000 per  occurrence.  The policies' combined maximum UM coverage was
  $125,000 per person, and  $350,000 per occurrence. 


       Following the accident, Concord Group paid Jennifer $125,000, the
  total UM coverage  available under the two policies for bodily injuries
  suffered by one person.  The Waters then filed  this action for declaratory
  judgment, alleging that they were entitled to recover for their loss of 
  consortium with Jennifer up to the per occurrence limits of the policies,
  or $350,000.  The parties  filed cross-motions for summary judgment. 
  Following a hearing, the court granted the Waters'  motion.  The court
  concluded that a policy endorsement which purported to limit UM coverage 
  to the maximum amount available for injury per person, in this case
  $125,000, was ambiguous  and therefore not effective.  The court further
  ruled that the Waters were entitled to recover for  their loss of
  consortium with Jennifer.  This appeal followed.


       Before addressing the substantive issues on appeal, we first consider
  the appropriate  standard of review.  Generally, a trial court's findings
  will not be disturbed unless they are clearly  erroneous.  See V.R.C.P.
  52(a)(2); Gannon v. Quechee Lakes Corp., 162 Vt. 465, 469, 648 A.2d 1378,
  1380 (1994).  Construction of the language in an insurance contract,
  however, is a matter  of law, not a factual determination.  See Imperial
  Cas. & Indem. Co. v. Connecticut, 714 A.2d 1230, 1235 (Conn. 1998). 
  Therefore, this Court must make its own inquiry into the proper legal 
  effect of the terms of the agreement, employing the trial court's valid
  findings of fact.  See  Gannon, 162 Vt. at 469, 648 A.2d  at 1380. 


 

  Concord Group first contends that the court erred in concluding that the
  language of a  policy endorsement relating to UM coverage should be
  disregarded because it contradicted express  provisions of the policies. 
  An understanding of the issue requires a brief description of the terms 
  and structure of the policies at issue. 


       Both policies were comprised of a "Declarations" section, a multi-page
  "Policy Form"  explaining the basic coverage provisions, and endorsements
  which modified the provisions of the  Policy Form.  The Declarations
  section provided policy information particular to the insured, such  as the
  policy period, the applicable coverage, the monetary limits of the
  coverages, the premium  amount, and the endorsements included in the
  policy.  


       The applicable endorsements listed at the bottom of the Declarations
  page of Jennifer's  Policy were described as: "FORMS: PP0309 PP0499 PP0496*
  PP0172* CI0018*." The  endorsement forms applicable to the Waters' policy
  were listed at the end of the second  Declarations page as follows: "FORMS:
  PP0309 PP0499 PP0496* PP0305 PP0172* CI0018*  PP0303." Page ten of the
  Policy Form contained the following statement at the top of the page: 

 	
       The Personal Auto Policy form included herewith is amended by the 
  following endorsements when shown in the declarations:


       In addition, both policies stated at the bottom of the cover page of
  the Policy Form, in uppercase  letters, as follows: "THESE POLICY
  PROVISIONS WITH THE DECLARATIONS PAGE AND  ENDORSEMENTS, IF ANY, ISSUED TO
  FORM A PART THEREOF, COMPLETE THIS  POLICY."


       Explanation of UM coverage commenced with Part C of the Policy Form,
  which stated in  relevant part:


     LIMIT OF LIABILITY
     The limit of liability shown in the Declarations for this coverage is 
     our maximum limit of liability for all damages resulting from any one 
     accident.  This is the most we will pay regardless of the number of:


     1.  "Insureds";
     2.  Claims made . . . .   
 

       This was followed in the endorsements section with a provision which
  stated as follows: 


                               PP 04 99 01 87
                 SPLIT UNINSURED MOTORIST LIMITS -- VERMONT


     The first paragraph of the Limit of Liability provision in the 
     Uninsured Motorists Coverage Endorsement is replaced by the following:


     LIMIT OF LIABILITY

 
     The limit of bodily injury liability shown in the Schedule or in the 
     Declarations for each person for Uninsured Motorist Coverage is our 
     maximum limit of liability for all damages, including damages for care, 
     loss of services or death, arising out of "bodily injury" sustained by 
     any one person in any one accident.  Subject to this limit for each 
     person, the limit of bodily injury liability shown in the Schedule or 
     in the Declarations for each accident for Uninsured Motorists Coverage 
     is our maximum limit of liability for all damages arising for "bodily 
     injury" resulting from any one accident. . . . Our maximum limit is the 
     most we will pay regardless of the number of:



 

     1.  "Insureds";
     2.  Claims made . . . .


       The effect of the foregoing endorsement was thus to limit UM coverage
  to damages arising  out of physical injury to each injured person, which in
  this case limited recovery to $125,000.  The trial court concluded,
  however, that the endorsement contradicted the initial statement of UM 
  coverage in the Policy Form, rendering it ambiguous, and that a reasonable
  insured would not  have understood that the endorsement controlled.  The
  court further ruled that the restrictive  language of Endorsement PP 04 99
  01 87 did not effectively modify the policies' UM coverage  because it was
  not clear whether "FORM PP0499" listed on the Declarations page was the
  same  as "Endorsement PP 04 99 01 87" found in the policies. 


       The first issue on appeal is whether the trial court properly
  disregarded the restrictive  endorsement because it allegedly contradicted
  the express provisions of the policies.  Proper  insurance contract
  interpretation requires that the policy provisions be read together and
  viewed  as an integrated whole.  See Suchoski v. Redshaw, 163 Vt. 620, 622,
  660 A.2d 290, 292 (1995)  (mem.).  An insurance policy must be interpreted
  according to its terms and the evident intent of  the parties as expressed
  in the policy language.  See Cooperative Fire Ins. Ass'n of Vt. v. Gray, 
  157 Vt. 380, 383, 599 A.2d 360, 362 (1991).  Any disputed terms are to be
  given their plain,  ordinary and popular meaning.  See City of Burlington
  v. Nat'l Union Fire Ins. Co., 163 Vt. 124,  127-28, 655 A.2d 719, 721
  (1994).  The court is further bound to enforce the contract as written  and
  not to rewrite it on behalf of one or both of the parties.  See Medlar v.
  Aetna Ins. Co., 127  Vt. 337, 347, 248 A.2d 740, 747 (1968). 


       As noted, information concerning UM coverage appeared in two separate
  places in the  policy.  The first appearance was on page five of the
  policies under the section entitled PART C  -- UNINSURED MOTORISTS
  COVERAGE.  Part C referred only to a single "LIMIT OF  LIABILITY," but did
  not address split limits -- UM or otherwise.  The subsequent endorsement 
  on page ten entitled SPLIT UNINSURED MOTORIST LIMITS -- VERMONT explained
  the  per person and per occurrence UM coverage limits.  Furthermore, the
  endorsement explicitly  stated that the split limits endorsement
  "replace[d]" the first paragraph of the Limit of Liability  provision on
  page five.  The top of page ten also instructed the policy holder as to the
  effect of  the endorsement:  "The Personal Auto Policy form included
  herewith is amended by the  following endorsements when shown in the
  declarations."  Therefore, the split UM limits  endorsement on page ten
  clearly replaced the Limit of Liability language on page five.  
  Accordingly, we are not persuaded that the provisions were ambiguous or
  contradictory. See Suchoski, 163 Vt. at 622, 660 A.2d  at 292 (insurance
  contract must be interpreted by looking  at its provisions together and
  viewing them in their entirety).  Accordingly, we conclude that the 
  endorsement was effective and controlling.


       The next issue is whether the court correctly concluded that the
  endorsement was  ineffective because it did not appear in the policy
  precisely as it was described on the Declarations  pages.  As noted, the UM
  endorsement listed on the Declarations page was described as  "PP0499." 
  The endorsement in the polices was numbered "PP 04 99 01 87."  Thus, the 
  Declarations listing omitted the last four digits of the actual
  endorsement, which referred to the  month and year the endorsement was
  added to the Concord Groups's auto policy. 


       Our rules for resolving ambiguity in the construction of insurance
  contracts are well settled.  Ambiguity arises only "where a writing in and
  of itself supports a different interpretation from  that which appears when
  it is read in light of the surrounding circumstances, and both 
  interpretations are reasonable."  Webb v. U.S. Fidelity & Guar. Co., 158
  Vt. 137, 139, 605 A.2d 1344, 1346 (1992) (citation omitted).  Any
  ambiguity in policy language should be resolved in  favor of the insured. 
  See Sanders v. St. Paul Mercury Ins. Co., 148 Vt. 496, 500, 536 A.2d 914, 
  916 (1987).  Although ambiguities are to be strictly construed in favor of
  the insured, the insurer  is not to be deprived of unambiguous provisions
  included in a policy for 


 

  its benefit.  See Suchoski, 163 Vt. at 622, 660 A.2d  at 292.  With these
  rules in mind, we  examine the claim of ambiguity. 


       It is not uncommon in insurance agreements for two or more clauses or
  phrases in different  parts of a policy to vary slightly.  See, e.g.,
  Sanders, 148 Vt. at 501, 536 A.2d  at 917. In  Sanders, the plaintiff, who
  was injured by an uninsured motorist, argued that variations in policy 
  language in the applicable UM provisions created ambiguity.  In affirming
  the trial court's  summary judgment in favor of the defendant insurer, we
  stated:


     In the present case the argument for ambiguity is the variance between 
     two parallel provisions of the policy, each dealing with the limits of 
     liability.  We would apply the variance in language to plaintiff's 
     benefit if she had provided the predicate for doing so by pointing out 
     some reason why Part C could not be interpreted definitively without 
     reference to some other contract provision.  Plaintiff has not provided 
     such a reason, and we do not perceive one.


  Id.    

  Here, the Waters rest their assertion of ambiguity principally on the
  code-digit variance  between the number listed on the Declarations page and
  the number on the endorsement in the  Policy Form.  Apart from their
  assertion of ambiguity, however, the Waters offer no reasonable 
  alternative interpretation for the meaning of the endorsement form code
  listed in the Declarations.  The first six numbers of each endorsement
  applicable to the Policies are listed as endorsement  forms in the
  Declarations.  Our review of the Policy-Form endorsements reveals that each
  is  adequately numbered and clearly labeled.  Moreover, the Waters selected
  and paid for particular  insurance coverage for themselves, Jennifer and
  their automobiles, consistent with the  endorsements listed in the
  Declarations.  Thus, we are not persuaded that the contract was  ambiguous
  on this basis.


       The final issue on appeal is whether the Waters, or any parents, have
  a legal right of  recovery for temporary loss of consortium with an adult
  child.  Because we hold that the Split UM  Limits Endorsement effectively
  restricted the maximum amount recoverable for bodily injury  under the
  policies, including damages for care and loss of services, we need not
  reach that issue.


       Reversed.


BY THE COURT:


_______________________________________
Jeffrey L. Amestoy, Chief Justice

_______________________________________
James L. Morse, Associate Justice

_______________________________________
Denise R. Johnson, Associate Justice

_______________________________________
Marilyn S. Skoglund, Associate Justice

_______________________________________
M. Kathleen Manley, Superior Judge
Specially Assigned

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                                  Footnotes


FN1.  Both driver and owner of the motorcycle were uninsured.