Derosier v. Pawtucket Mutual Insurance Co.

Derosier v. Pawtucket Mutual Insurance Co. (2001-106); 175 Vt. 76; 819 A.2d 739

2003 VT 6

[Filed 31-Jan-2003]


       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.

                                  2003 VT 6

                                No. 2001-106


  Ronald Derosier	                         Supreme Court

                                                 On Appeal from
       v.	                                 Orleans Superior Court


  Pawtucket Mutual Insurance Company	         November Term, 2001 


  Howard E. Van Benthuysen, J.

  Michael I. Green of O'Neill Crawford & Green, Burlington, for
    Plaintiff-Appellee.

  Stephen Soule of Paul, Frank & Collins, Burlington, for
    Defendant-Appellant.


  PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.

        
       ¶  1.  SKOGLUND, J.   This is a declaratory judgment action concerning
  the level of underinsured motorist (UIM) coverage available to a single
  insured who is among the multiple injured persons with claims against the
  tortfeasor's single-limit policy.  The issue is whether, in such
  situations, Vermont law requires the liability limits of the tortfeasor's
  policy to be compared to the per person or the per accident limits of the
  injured insured's split-limit UM/UIM coverage.  In its summary judgment
  ruling, the superior court concluded that because the tortfeasor's policy
  was subject to multiple claims as the result of the accident, the liability
  limits of the tortfeasor's policy had to be compared with the per accident,
  not the per person, liability limits of the injured insured's UM/UIM
  coverage to determine whether the tortfeasor was underinsured.  We reverse.

       ¶  2.  On July 29, 1999, plaintiff Ronald Derosier and two other
  passengers, Teresa Paul and her son Adam Corbett, were injured in a
  single-car accident caused by the driver's negligence.  As the result of
  the accident, Ms. Paul incurred medical bills in excess of $80,000, and
  plaintiff incurred medical bills in excess of $10,000.  The
  driver/tortfeasor's vehicle was insured under a policy with Champlain
  Casualty Company of Vermont.  The policy carried a liability limit of
  $60,000 per accident, notwithstanding the number of claimants.

       ¶  3.  Champlain Casualty agreed to pay the entire amount to the
  injured claimants according to a distribution agreement to be fashioned by
  them.  The parties arrived at a tentative agreement, whereby Ms. Paul would
  accept $59,000 to settle her claims, while plaintiff would accept the other
  $1000 and pursue an additional recovery from defendant Pawtucket Mutual
  Insurance Company, which had issued an automobile insurance policy to
  plaintiff's mother.  The Pawtucket policy provided UM/UIM coverage up to
  $50,000 for each person making a claim under the policy with respect to a
  single accident, and up to $100,000 for all claims made by more than one
  person injured in a single accident.
   
       ¶  4.  Pawtucket Mutual declined to provide UIM coverage to
  plaintiff on the grounds that the tortfeasor's vehicle was not
  underinsured, given that the $60,000 liability limit in the tortfeasor's
  policy was greater than the $50,000 per person limit on UIM coverage in the
  Pawtucket policy.  Plaintiff brought the instant declaratory judgment
  action and filed a motion for summary judgment.  The superior court granted
  plaintiff's motion, ruling that the tortfeasor's vehicle was underinsured
  because, in a multiple-victim accident, the per accident limits of the
  tortfeasor's and the insured's policies must be compared.

       ¶  5.  On appeal, Pawtucket Mutual argues that the superior court's
  ruling contravenes the terms of the Pawtucket policy and Vermont law.  
  Plaintiff responds by asking this Court to reject an "apples to oranges"
  comparison between the per person limit in the Pawtucket policy and the per
  accident limit in the tortfeasor's policy.

       ¶  6.  We conclude that, under the plain language of 23 V.S.A. §
  941(f) and the unambiguous terms of the Pawtucket policy, the tortfeasor's
  vehicle was not underinsured, and thus plaintiff was not entitled to UIM
  coverage under the Pawtucket policy.  Section 941(f) provides that 

    a motor vehicle is underinsured to the extent that its personal
    injury limits of liability at the time of an accident are less
    than the limits of uninsured motorists coverage applicable to any
    injured party legally entitled to recover damages under said
    uninsured motorist coverage.

       ¶  7.  The "personal injury limits of liability" in the tortfeasor's
  policy are $60,000 per accident, irrespective of the number of claimants. 
  Thus, to determine whether plaintiff is underinsured, we must compare the
  $60,000 limit in the tortfeasor's policy to "the limits of uninsured
  motorists coverage applicable to any injured party legally entitled to
  recover damages under said uninsured motorist coverage."  Id. (emphasis
  added).  Under the Pawtucket policy, the maximum limit of liability for
  UM/UIM coverage is $50,000 for any one person in any one accident and
  $100,000 for more than one person in any one accident.  The policy
  expressly states that the $100,000 per accident limit is subject to the
  $50,000 per person limit.  Further, the policy states that the maximum
  limit is the most that will be paid regardless of the number of insureds,
  claims, or vehicles involved in the accident.
   
       ¶  8.  Plaintiff is the only claimant covered under the Pawtucket
  policy.  He is the only "injured party legally entitled to recover damages"
  under that policy's uninsured motorist coverage.  The "limits of uninsured
  motorists coverage applicable" to plaintiff under the policy is $50,000. 
  Therefore, 23 V.S.A. § 941(f) requires us to compare the $60,000 personal
  injury liability limit in the tortfeasor's policy to the $50,000 limit of
  UM/UIM coverage applicable to plaintiff in the Pawtucket policy.  Doing so
  demonstrates that the tortfeasor was not underinsured at the time of the
  accident, and thus plaintiff is not entitled to UIM coverage under the
  Pawtucket policy.  Accordingly, plaintiff cannot recover from the uninsured
  motor vehicle provision of the Pawtucket policy, and the trial court erred
  in so ruling. 

       ¶  9.  Our holding does not require a comparison of "apples to
  oranges," as plaintiff suggests.  Rather, it simply requires the comparison
  of liability limits mandated by § 941(f).  Plaintiff contends that this 
  interpretation will lead to unfair results, and yet he advances a
  construction of § 941(f) that would expose insurers to potential unlimited
  UIM liability based on the number of persons injured in an accident rather
  than on the terms of the applicable insurance policy or the language of the
  governing statute.
   
       ¶  10.  As the Connecticut Supreme Court explained in Doyle v. Metro.
  Prop. & Cas. Ins. Co., 743 A.2d 156, 161 (Conn. 1999), the function of
  split-limit UIM coverage is to provide broader coverage in situations
  involving multiple "claimants," but such coverage cannot "convert an
  otherwise nonunderinsured vehicle into an underinsured vehicle."  In Doyle,
  the tortfeasor had a $100,000 single-limit liability policy, and the
  insured claimant had a policy with split-limit UIM coverage of $100,000 per
  person and $300,000 per accident.  Rejecting claims similar to those made
  by plaintiff here and construing a statute similar to § 941(f), the court
  held that the tortfeasor was not underinsured because the proper comparison
  was between the tortfeasor's liability limit and the per person limit of
  UIM coverage available to the single insured claimant.  Id. at 161-62.

       ¶  11.  Of course, in situations where multiple injured insureds
  covered under a single insurance policy are seeking UIM coverage, comparing
  per accident liability limits would be appropriate.  For example, in
  Botting v. Allstate Ins. Co., 707 A.2d 1319 (Me. 1998), three members of a
  family injured in an automobile accident sought to compare the $300,000 per
  accident limit of their split-limit UIM policy with the tortfeasor's
  $100,000 single-limit policy.  The court held that because all three of the
  insureds had been injured in the accident, the per accident limit, rather
  than the per person limit, of the split-limit policy had to be compared to
  the tortfeasor's policy to determine whether the tortfeasor was
  underinsured.  Id. at 1321; see Day v. Allstate Ins. Co., 721 A.2d 983, 985
  (Me. 1998) (reaching same result where couple injured in car accident
  sought UIM coverage under same policy).  Similarly, in Allstate Ins. Co. v.
  Sanders, 644 N.E.2d 884 (Ind. Ct. App. 1994), two injured brothers sought
  UIM coverage under a $100,000 per accident single-limit policy.  The
  tortfeasor had split-limit liability coverage of $50,000 per person and
  $100,000 per accident.  Construing a statute similar to § 941(f), the court
  held that the tortfeasor was not underinsured because the per accident
  limit of the tortfeasor's policy was not less than the single limit stated
  in the policy insuring the brothers.  Id. at 887.
   
       ¶  12.  Our case, however, presents a single injured insured claiming
  UIM coverage.  Hence, comparing per accident liability limits would not be
  consistent with either § 941(f) or the insured's policy.  Nevertheless,
  notwithstanding the plain language of the statute and the unambiguous terms
  of the insurance policy, (FN1) plaintiff suggests that UIM coverage should be
  available whenever an insured's  damages exceed the amount actually
  available to the insured under the tortfeasor's policy, and that, in no
  event should an insured receive less that what he would have received had
  the tortfeasor been uninsured rather than underinsured.  These arguments
  are unavailing for the reasons stated in another opinion issued today,
  Colwell v. Allstate Ins. Co., Nos. 2000-053 & 2000-410 (Vt. Jan. 31, 2003).

       Reversed and remanded.



                                       FOR THE COURT:


                                       _______________________________________
                                       Associate Justice


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                                  Footnotes


FN1.  Plaintiff does not dispute that the split-limit UM/UIM-coverage
  endorsement submitted below by Pawtucket Mutual is the relevant and
  applicable provision in the Pawtucket policy.