Case Title: Webb v. US Fidelity & Guaranty Co.

Citation: 

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 1991-10-01T00:00:00Z

Document:
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, 111 State Street, Montpelier, Vermont 05602 of any errors in order
 that corrections may be made before this opinion goes to press.


                                 No. 89-629


 Herbert Webb                                 Supreme Court

                                              On Appeal from
      v.                                      Franklin Superior Court

 United States Fidelity &                     October Term, 1991
 Guaranty Company


 Richard W. Norton, J.

 Jesse D. Bugbee of Kissane, Yarnell & Cronin, St. Albans, for plaintiff-
   appellant

 Allan R. Keyes of Ryan Smith & Carbine, Ltd., Rutland, for defendant-
   appellee


 PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.


      ALLEN, C.J.   Plaintiff appeals from a judgment awarding him $30,000
 under the uninsured-underinsured (UM) motorist coverage (Part C) of his
 insurance policy issued by defendant (USF&G).  USF&G cross-appeals from the
 award of prejudgment interest.
      The plaintiff was injured in a motor vehicle accident and received the
 policy limit of $20,000 from the liability carrier for the operator of the
 other vehicle involved.  He claimed that his damages exceeded $70,000 and
 that he was therefore entitled to the policy limit of $50,000 under Part C
 of his policy with USF&G.  The policy contained a clause entitling USF&G to
 offset any amount the plaintiff recovered from any other source responsible
 for plaintiff's injuries.  The issue to be resolved on plaintiff's appeal is
 whether the offset is made against the total amount of the plaintiff's
 damages or against the limit of coverage under Part C of the policy.  In its
 cross-appeal, USF&G argues that the award of prejudgment interest from the
 date of the accident was error.  We affirm the decision on the offset issue
 and reverse in part on the question of prejudgment interest.
                                  I.
      The policy language in question is in Part C, which is entitled
 "Uninsured Motorists Coverage."  It begins with an "Insuring Agreement,"
 which states in relevant part:
         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: . . .
         (FN1)

 Part C also contains a section entitled "Limit of Liability," which states
 in part:
         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.

 The Limit of Liability section contains an "offset-reduction" clause that
 states in relevant part:
         Any amounts otherwise payable for damages under this
         coverage shall be reduced by all sums:

           1. Paid because of the bodily injury by or on behalf
         of persons or organizations who may be legally
         responsible.

      The trial court rendered judgment in USF&G's favor, concluding that
         David Desorcie was 'underinsured' to the extent of
         $30,000.00, the difference between the $50,000.00 UM
         policy with USF&G and the $20,000.00 Desorcie liability
         policy; that Plaintiff shall recover of Defendant
         $30,000.00, plus prejudgment interest thereon computed
         at a rate of 12 percent per annum from [the date of the
         accident] to the date hereof; . . . .

      Plaintiff relies on a case construing nearly identical language,
 Mulliss v. American Protection Ins. Co.,