Case Title: State ex rel. Farmers Ins. Exchange v. District Court of Ninth Judicial Dist., County of Teton

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1993-01-08T00:00:00Z

Document:
State ex rel. Farmers Ins. Exchange v. District Court of Ninth Judicial Dist., County of Teton1993 WY 4844 P.2d 1099Case Number: 92-80Decided: 01/08/1993Supreme Court of Wyoming
 
 

STATE of 
Wyoming, ex rel., FARMERS 
INSURANCE EXCHANGE, and Farmers Insurance Exchange, 
individually,

Petitioners,

v.

DISTRICT COURT of the 
NINTH JUDICIAL DISTRICT, COUNTY OF 
TETON, State of 
Wyoming and the Honorable Terry 
Rogers, Judge of the District Court of the Ninth Judicial 
District,

Respondents,

v.

Barbara SHIRLEY and Darol 
Shirley, Intervenors,

(Plaintiffs 
Below).

Appeal from District 
Court, Ninth Judicial District, County of 
Teton, Terry Rogers, 
J.

George E. 
Powers, Jr. of Godfrey & Sundahl, Cheyenne, for petitioners.

D. Terry Rogers, 
Dist. Judge, Jackson, for 
respondents.

William R. Fix 
of Fix & Mulligan, and Robert N. Williams of Meyer & Williams, 
Jackson, for intervenors.

Before MACY, C.J., and 
THOMAS, CARDINE, URBIGKIT and GOLDEN, JJ.

MACY, Chief 
Justice.

[¶1]      Upon issuance of 
a writ of certiorari, we review a partial summary judgment construing the 
uninsured/underinsured provisions of an insurance policy.

[¶2]      We reverse with 
directions.

[¶3]      The petitioners 
state this issue:

I. Does the policy of 
insurance at issue herein provide uninsured or underinsured motorist coverage 
for the bodily injury claims of the insured, where the insured has been injured 
by a third party tortfeasor, who was insured at the time of the loss and whose 
insurer provided bodily injury liability coverage in an amount equal to the 
uninsured/underinsured limits of coverage provided by the insurance policy at 
issue?

[¶4]      In response, the 
respondents and the intervenors state these issues:

I. Is the language 
contained in the subject insurance policy ambiguous?

II. What is the nature of 
the coverage afforded by the subject insurance policy?

III. Should the doctrine 
of reasonable expectations be applied to afford underinsured motorist 
coverage?

[¶5]      The Farmers 
Insurance policy issued to Intervenors Barbara Shirley and Darol Shirley 
contained this provision, which is the centerpiece of this 
controversy:

PART II - UNINSURED 
MOTORIST

Coverage C - Uninsured 
Motorist Coverage (including Underinsured Motorist 
Coverage)

We will pay all sums 
which an insured person is legally 
entitled to recover as damages from 
the owner or operator of an uninsured 
motor vehicle because of bodily 
injury sustained by the insured 
person. The bodily injury must 
be caused by accident and arise out of the ownership, maintenance or use of the 
uninsured motor 
vehicle.

Determination as to 
whether an insured person is legally 
entitled to recover damages or the 
amount of damages shall be made by 
agreement between the insured person 
and us. If no agreement is reached, with the insured person's consent the 
decision may be made by arbitration.

Additional Definitions 
Used In This Part Only

As used in this 
part:

1. Insured person 
means:

a. You or a family member.

b. Any other person while 
occupying your insured 
car.

c. Any person for damages that person is entitled to 
recover because of bodily injury to 
you, a family member, or another 
occupant of your insured 
car.

But, no person shall be 
considered an insured person if the 
person uses a vehicle without having sufficient reason to believe that the use 
is with permission of the owner. 

2. Motor vehicle means a land motor 
vehicle or a trailer but does not mean a vehicle:

a. Operated on rails or 
crawlertreads.

b. Which is a farm type 
tractor, or any equipment designed or modified for use principally off public 
roads while not on public roads.

c. Located for use as a 
residence or premises.

3. Uninsured motor vehicle means a motor vehicle which 
is:

a. Not insured by a bodily injury liability bond or policy 
at the time of the accident.

b. Insured by a bodily injury liability bond or policy 
at the time of the accident which 
provides coverage in amounts less than the limits of Uninsured Motorist Coverage 
shown in the Declarations.

The Declarations 
showed the uninsured motorist coverage limitations to be: $100,000 each person, 
$300,000 each occurrence. The bodily injury limits were in the same 
amounts.

[¶6]      Barbara Shirley 
sustained severe injuries on October 
9, 1989, as the result of an 
automobile accident. On August 17, 
1990, she and her husband, 
Darol Shirley, filed a complaint seeking, among other things, to require Farmers 
Insurance Exchange to pay over to them the $100,000 limits of their policy as 
required by the terms of the uninsured motorist provisions recited above. 
However, on August 3, 
1990, the Shirleys received 
$100,000 as a settlement from State Farm Mutual Automobile Insurance Company, 
the insurer representing the driver who caused Barbara's injuries. The parties 
stipulated that the limits of the Shirleys' policy with Farmers Insurance and 
the limits of the State Farm policy were identical.

[¶7]      Farmers Insurance 
filed a motion for a partial summary judgment, seeking a ruling that it had no 
obligation under the uninsured motorist provision of its policy to pay 
additional sums as damages to the Shirleys. The district court denied that 
motion but granted a summary judgment in favor of the Shirleys to the effect 
that Farmers Insurance was obligated to pay for Barbara's total damages up to 
the "coverage amount limitation provided by the policy for `uninsured motorist 
coverage (including underinsured motorist coverage)' in the amount of 
$100,000.00." Farmers Insurance sought a W.R.C.P. 54(b) certification of the 
order granting summary judgment, but the district court refused to make that 
certification.

[¶8]      Farmers Insurance 
sought extraordinary relief here, and by an order dated May 11, 
1992, we stayed further 
proceedings in this case and issued an Alternative Writ of Mandamus. By an order 
entered on June 16, 
1992, this Court issued a 
Writ of Certiorari, directing that the record in this matter be forwarded to 
this Court; stayed the proceedings in the district court; and stayed further 
implementation of the Alternative Writ of Mandamus.

[¶9]      We employ our 
usual standards in evaluating this summary judgment order. 
St. Paul Fire and Marine 
Insurance Co. v. Albany 
County 
School 
District No. 1, 763 P.2d 1255, 
1257-58 (Wyo. 1988). The standards we 
apply in construing insurance contracts have been conveniently summarized as 
follows:

Basic tenets stated in 
McKay v. Equitable Life Assurance Society of the 
United 
States, [421 P.2d 166, 168 
(Wyo. 1966)], and applied in 
controversies involving insurance policies in the State of 
Wyoming 
are:

1. "[T]he words used will 
be given their common and ordinary meaning. . . . Neither will the language be 
`tortured' in order to create an ambiguity."

2. "The intention of the 
parties is the primary consideration and is to be ascertained, if possible, from 
the language employed in the policy, viewed in the light of what the parties 
must reasonably have intended."

3. "Such [insurance 
policy] contracts should not be so strictly construed as to thwart the general 
object of the insurance." 

". . . [T]he parties have 
the right to employ whatever lawful terms they wish and courts will not rewrite 
them."

4. "Absent ambiguity, 
there is no room for construction and the policy will be enforced according to 
its terms."

5. ". . . [W]here such 
[insurance policy] contracts are so drawn as to be ambiguous and uncertain and 
to require construction, the contract will be construed liberally in favor of 
the insured and strictly against the insurer. Also, if the contract is fairly 
susceptible of two constructions, the one favorable to the insured will be 
adopted."

Commercial Union 
Insurance Company v. Stamper, 732 P.2d 534, 539 
(Wyo. 1987) (citations 
omitted). See also Northern Improvement Company v. Wyoming State Highway 
Commission, 802 P.2d 889 (Wyo. 
1990).

[¶10]   If an insurance contract's language 
is plain and unequivocal, we apply our usual rule that interpretation of the 
contract is a question for the court to resolve as a matter of law. Ricci v. New 
Hampshire Insurance Company, 721 P.2d 1081, 1085 
(Wyo. 1986). A primary 
objective of interpreting an insurance contract is to ascertain the parties' 
objectives and to ascribe the plain, ordinary, and customary meaning to each 
term used in order to effectuate the parties' intent. Northern Improvement 
Company, 802 P.2d  at 892; Worthington v. State, 598 P.2d 796, 
806 (Wyo. 
1979).

[¶11]   We perceive no ambiguity in the 
insurance contract at issue. The policy is clear on its face that the insured 
person is protected in the event that he sustains bodily injury damages caused 
by an accident involving an uninsured or underinsured motorist. The tort-feasor 
in this instance was insured with policy limits of $100,000. The motorist was 
not "uninsured," and, since the tort-feasor's policy limits were the same as 
those in the Shirleys' policy, the motorist was not "underinsured." Thus, 
Farmers Insurance has no contractual obligation to the Shirleys under the 
policy's uninsured motorist provision and is entitled to judgment as a matter of 
law.

[¶12]   The respondents and the intervenors 
ask that we employ the doctrine of "reasonable expectations." We have previously 
held that the doctrine is not applicable when the insurance contract is not 
ambiguous. St. Paul Fire and Marine 
Insurance Co., 763 P.2d  at 1262-63.

[¶13]   Our holding gives full force and 
effect to the insurance contract itself, as well as to the intendment of such 
insurance policy provisions. Wyo. Stat. §§ 31-10-101 to 
-104 (1989); 8C JOHN ALAN APPLEMAN & JEAN APPLEMAN, INSURANCE LAW AND 
PRACTICE, Preface & §§ 5066-5067.65, esp. § 5067.45 
(1981).

[¶14]   The district court's order is 
reversed with directions that a partial summary judgment be entered in favor of 
Farmers Insurance consistent with this opinion. The Alternative Writ of Mandamus 
is dissolved, and the matter is remanded to the district court for further 
proceedings.

URBIGKIT, J., concurs in the 
result only.