IN THE COURT OF APPEALS OF IOWA

No. 18-0692

Filed June 5, 2019

LESTER DUNIGAN,

Plaintiff-Appellant,

vs.

LIBERTY MUTUAL INSURANCE COMPANY d/b/a LIBERTY MUTUAL FIRE 

INSURANCE COMPANY,

Defendant-Appellee.

________________________________________________________________

Appeal from the Iowa District Court for Polk County, Paul D. Scott, Judge.

Lester Dunigan appeals the adverse summary judgment ruling on his claim 

for underinsured motorist insurance coverage against Liberty Mutual Insurance 

Company. AFFIRMED. 

Zachary C. Priebe and Jeff Carter of Jeff Carter Law Offices, P.C., Des 

Moines, for appellant.

Benjamin T. Erickson and Andrew D. Hall of Grefe & Sidney. P.L.C., Des 

Moines, for appellee.

Heard by Vogel, C.J., and Mullins and Bower, JJ.
2

MULLINS, Judge.

Lester Dunigan appeals the adverse summary judgment ruling on his claim 

for underinsured motorist coverage against Liberty Mutual Insurance Company

(Liberty Mutual). He argues the district court erred by applying Illinois law to the 

insurance policy, contending the plain language of the policy requires the 

application of Iowa law. Further, he argues Liberty Mutual failed to obtain a written 

declination of underinsured motorist coverage as required by Iowa Code section 

516A.1 (2014), which results in underinsured motorist coverage being read into his 

policy. 

I. Background Facts and Proceedings

On October 8, 1997, Lester Dunigan and his wife Ella completed and signed 

an application for motor vehicle insurance covering multiple vehicles with Liberty 

Mutual. The application provided the insurance would commence at 12:01 a.m. 

on October 9. Dunigan’s address on the application was in Rock Island, Illinois,

and the application indicated that he provided an Illinois driver’s license. The 

insurance coverage’s liability limit for uninsured motorists was $20,000 to $40,000

with no coverage for underinsured motorists, as indicated by a line through the 

designated box. The application also included a provision that stated, “I reject 

uninsured and underinsured motorists coverage equal to my bodily injury liability 

limits and instead select the limits indicated on my option form.” The box next to 

the line was not checked, but Dunigan’s signature appears on the signature line 

immediately below the provision. 

On a separate page noted as “3 of 5” and titled “Uninsured Motorists 

Property Damage Coverage,” two options were provided “[i]f you do not have 
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Collision Coverage.” Option 1 allowed for the election of coverage on specific 

vehicles. Option 2 was the rejection of coverage for all vehicles. Neither option 

was selected on the form. The form also included the following paragraph:

I am aware, unless I indicate otherwise to Liberty Mutual in 

writing, that my coverage choices of Uninsured Motorists Coverage, 

Underinsured Motorists Coverage, and Uninsured Motor Vehicle 

Property Damage coverage shall apply throughout the policy period, 

regardless of any changes such as the replacement or addition of 

vehicles or drivers, and to all renewals, amendments, replacements 

or reinstatements of this policy.

Dunigan signed his name on the signature line below the paragraph. A fourth form, 

noted “Dunigan” and “4 of 5” at the top, provided:

We recommend that you maintain UNINSURED MOTORISTS 

COVERAGE limits equal to your bodily injury limits. . . .

Please be aware that any summary of coverage on these 

pages is necessarily general in nature. Your policy contains 

specific definitions, exclusions, terms, and conditions. In case 

of any conflict, your policy language will control the resolution of any 

coverage questions. If you have any questions about this coverage 

or its cost, please contact your local Liberty Mutual Sales Office 

before completing this form.

Listed below are the available single and separate limits of 

UNINSURED and UNDERINSURED MOTORISTS COVERAGE and 

the applicable premium for each. Please check the box next to the 

limits you wish to select.

The form allowed Dunigan the option to either: (1) “elect Uninsured Motorists 

Bodily Injury Coverage at the minimum financial responsibility limits required by 

Illinois law. ($20,000 per person and $40,000 per accident)” or (2) “elect an 

Uninsured Motorists Bodily Injury Coverage limit and Underinsured Motorists 

Bodily Injury Coverage limit equal to or lower than the liability limit of my policy.”

The second option included a note: “The charges for all Limits below include both 

Uninsured Motorists Bodily Injury Coverage and Underinsured Motorists Bodily 

Injury Coverage.” The first option was marked on the form. There were no initials 
4

or signature on the page. The record provides that the insurance policy was 

renewed yearly, including on October 9, 2014. 

On February 9, 2015, Dunigan was involved in a traffic accident at the 

intersection of 19th Street and College Avenue in Des Moines. Dunigan was 

driving north on 19th Street, a one-way street. A driver heading east on College 

Avenue stopped at the stop sign at the intersection with 19th Street and continued 

through the intersection but failed to yield to Dunigan as he proceeded through the 

intersection. There was no stop sign for traffic heading north on 19th Street at the 

intersection. The driver hit Dunigan on the driver’s side. The police report 

identified that both vehicles sustained minor damage and the other driver took 

complete responsibility for the accident. The accident form listed Rock Island, 

Illinois as both Dunigan’s home and vehicle registration address. Dunigan’s 

driver’s license was listed as an Illinois license. 

Following the accident, Dunigan settled his claim against the other driver 

for the liability policy limits of the other driver’s auto insurance policy. Dunigan filed 

suit against Liberty Mutual in February 2017 to recover under the uninsured and 

underinsured motorist benefits provisions of his insurance policy. He claimed his 

sustained damages exceeded the liability limits of the other driver’s insurance

policy. In November, Liberty Mutual moved for summary judgment. It claimed 

Illinois law applied and under Illinois law, because Dunigan elected to carry only 

the statutory minimum amount of uninsured motorist insurance coverage, it was 

not contractually obligated to provide underinsured motorist coverage. Further, it 

was not required to ask for or obtain a rejection each time the policy came up for 

renewal. Dunigan resisted the motion, arguing that Iowa law applied and, under 
5

Iowa Code section 516A.1, underinsured coverage must be read into his policy 

because Liberty Mutual failed to obtain his written rejection of the coverage.

The court heard the motion in January 2018 and filed its ruling in April. The 

court identified that the only issue before it was “whether Illinois law or Iowa law 

governs the insurance policy at issue.” The district court found there was no 

choice-of-law provision in the insurance policy, therefore it applied the “most 

significant relationship” test to determine which state’s laws governed the policy. 

See Gabe’s Constr. Co. v. United Capitol Ins. Co., 539 N.W.2d 144, 146 (Iowa 

1995); see also Restatement (Second) of Conflict of Laws § 188(1)–(2) (Am. Law

Inst. 1971). The district court concluded, even when viewing the facts in the light 

most favorable to Dunigan, Illinois law controlled the policy. It found that under 

Illinois law, Dunigan properly rejected underinsured motorist coverage when he 

applied for the initial insurance policy, continued to reject the coverage when 

renewing the policy, and consequently, he did not have underinsured motorist 

coverage at the time of the accident. Based upon its findings, the court granted 

Liberty Mutual’s motion for summary judgment. Dunigan appeals.

II. Standard of Review

“We review grants of summary judgment for correction of errors at law.” 

United Suppliers, Inc. v. Hanson, 876 N.W.2d 765, 772 (Iowa 2016). Further, “the 

interpretation of an insurance policy is a matter of law,” and consequently, our 

review “is for errors at law.” Greenfield v. Cincinnati Ins. Co., 737 N.W.2d 112, 

117 (Iowa 2007).

“Summary judgment is appropriate when there is no genuine issue of 

material fact and the moving party is entitled to judgment as a matter of law.” 
6

Hanson, 876 N.W.2d at 772. In reviewing a district court’s determination that the 

defendants met their burden under this standard, “we view the evidence in a light 

most favorable to the nonmoving party.” Merriam v. Farm Bureau Ins., 793 N.W.2d 

520, 522 (Iowa 2011) (quoting Langwith v. Am. Nat’l Gen. Ins. Co., 793 N.W.2d 

215, 218 (Iowa 2010)). “In deciding whether there is a genuine issue of material 

fact, the court . . . afford[s] the nonmoving party every legitimate inference the 

record will bear.” Kern v. Palmer Coll. of Chiropractic, 757 N.W.2d 651, 657 (Iowa 

2008) (alteration in original) (quoting Smidt v. Porter, 695 N.W.2d 9, 14 (Iowa 

2005)). 

III. Analysis

A. Applicable Law

Dunigan asserts the district court erred in failing to consider the plain 

language of his insurance policy when determining whether Iowa law applies to his 

insurance policy. He further argues his ties to Iowa and his understanding of the 

insurance policy require the application of Iowa law.

In support of its ruling, the district court cited Gabe’s Construction Company

v. United Capitol Insurance Company, , which stated that we look to “intent of the 

parties or the most significant relationship” when determining “choice-of-law issues 

in insurance policy cases.” 539 N.W.2d at 146. “In the absence of a choice-of-law 

clause in the policy, the rights of the parties are determined by the law of the state 

which ‘has the most significant relationship to the transaction and the parties.’” Id. 

(quoting Restatement (Second) of Conflict of Laws § 188(1)).
7

Dunigan argues that the out-of-state provision in his insurance policy 

operates as a general choice-of-law provision and therefore Iowa law should apply 

to determine Liberty Mutual’s coverage obligations. The provision requires:

If an auto accident to which this policy applies occurs in any 

state or province other than the one in which “your covered auto” is 

principally garaged, we will interpret your policy for that accident as 

follows:

A. If the State or province has:

. . . .

2. A compulsory insurance or similar law requiring a 

nonresident to maintain insurance whenever the nonresident 

uses a vehicle in that state . . ., your policy will provide at least 

the required minimum amounts and types of coverage.

Dunigan contends that Iowa law requires a written rejection of underinsured 

motorist coverage, pursuant to Iowa Code section 516A.1,

1 and given that he 

 

1 Section 516A.1 reads as follows:

No automobile liability or motor vehicle liability insurance policy 

insuring against liability for bodily injury or death arising out of the 

ownership, maintenance, or use of a motor vehicle shall be delivered or 

issued for delivery in this state with respect to any motor vehicle registered 

or principally garaged in this state, unless coverage is provided in such 

policy or supplemental thereto, for the protection of persons insured under 

such policy who are legally entitled to recover damages from the owner or 

operator of an uninsured motor vehicle or a hit-and-run motor vehicle or an 

underinsured motor vehicle because of bodily injury, sickness, or disease, 

including death resulting therefrom, caused by accident and arising out of 

the ownership, maintenance, or use of such uninsured or underinsured 

motor vehicle, or arising out of physical contact of such hit-and-run motor 

vehicle with the person insured or with a motor vehicle which the person 

insured is occupying at the time of the accident. Both the uninsured motor 

vehicle or hit-and-run motor vehicle coverage, and the underinsured motor 

vehicle coverage shall include limits for bodily injury or death at least equal 

to those stated in section 321A.1, subsection 11. The form and provisions 

of such coverage shall be examined and approved by the commissioner of 

insurance.

However, the named insured may reject all of such coverage, or 

reject the uninsured motor vehicle (hit-and-run motor vehicle) coverage, or 

reject the underinsured motor vehicle coverage, by written rejections 

signed by the named insured. If rejection is made on a form or document 

furnished by an insurance company or insurance producer, it shall be on a 

separate sheet of paper which contains only the rejection and information 

directly related to it. Such coverage need not be provided in or 
8

provided no written rejection of the coverage to Liberty Mutual, the coverage must 

be read into his policy. 

The district court determined the out-of-state clause in Dunigan’s insurance 

policy did not constitute a choice-of-law provision. On our review of the record, we 

agree. We find that the provision highlighted by Dunigan does not amount to an 

agreement that the law of Iowa would apply to this case.

An examination of the language contained in the “out of state” 

coverage provision of the instant policy reveals that it was not 

intended to be a choice of law provision. Indeed, the provision 

contains no language mandating that the policy be interpreted 

according to the law of the state where the accident occurred. 

Rather, the plain language of the “out of state” coverage provision 

provides that, in the event an accident occurs in a state that has a 

financial responsibility or compulsory insurance law that requires 

certain minimal amounts and types of coverage, [Liberty Mutual] 

would provide that coverage to its insured.

W. States Ins. Co. v. Zschau, 698 N.E.2d 198, 201 (Ill. App. Ct. 1998). Further, 

we find there is no other choice-of-law provision in Dunigan’s policy. Accordingly, 

as there is no choice-of-law clause in the policy, we must look at which state “has 

the most significant relationship to the transaction and the parties.” Gabe’s Constr., 

539 N.W.2d at 146. We consider: 

(a) the place of contracting,

(b) the place of negotiation of the contract,

(c) the place of performance,

(d) the location of the subject matter of the contract, and

(e) the domicil, residence, nationality, place of incorporation 

and place of business of the parties.

 

supplemental to a renewal policy if the named insured has rejected the 

coverage in connection with a policy previously issued to the named 

insured by the same insurer.
9

Restatement (Second) of Conflict of Laws § 188(2). Further, we must consider 

these contacts “according to their relative importance with respect to the particular 

issue.” Id. Additionally, 

The validity of a contract of fire, surety or casualty insurance and the 

rights created thereby are determined by the local law of the state 

which the parties understood was to be the principal location of the 

insured risk during the term of the policy, unless with respect to the 

particular issue, some other state has a more significant relationship.

Gabe’s Constr., 539 N.W.2d at 146–47 (quoting Restatement (Second) of Conflict 

of Laws § 193). Liability and collision insurance are included in the various types 

of casualty insurance. Restatement (Second) of Conflict of Laws § 193 cmt. a. 

In this matter, the insurance policy was contracted for and made in Illinois. 

The vehicles covered in the policy were all licensed and registered in Illinois at the 

time of the application. The vehicle involved in the accident was licensed and 

registered in Illinois at the time of the accident. Dunigan’s driver’s license is also 

from Illinois.2 Dunigan’s address on the 1997 initial application form, 2014 renewal 

declaration page, and the 2015 accident report are all listed as the same Illinois 

address. Additionally, both the application and renewal forms make reference to 

Illinois. The application includes an option for uninsured motorist coverage at the 

minimum levels “required by Illinois law.” The renewal contains a list of 

“Endorsements-Changes to Your Policy” which includes “Amend of Policy 

Provisions-Illinois.” 

 

2 We note the Illinois driver’s license number listed on the 2015 accident report is the same 

one listed on the initial insurance application from 1997. However, the 2014 insurance 

policy renewal declarations form indicates an Iowa driver’s license number. 
10

Though Dunigan indicated in his brief that two of the vehicles listed in his 

insurance policy were licensed in Iowa at the time of the accident, the record does 

not reflect such information. The 2014 policy renewal declarations page lists the 

vehicles covered by the insurance policy but only provides each vehicle’s make, 

model, and vehicle identification number. It does not provide the state where each 

vehicle is registered and licensed. 

Further, while Dunigan argues that he had resided in Iowa for two years at 

the time of the accident and “Liberty Mutual was well aware of Mr. Dunigan’s 

connection to the state of Iowa,” the record does not reflect such information. 

There is no record of communication between the parties that reflects Dunigan 

provided Liberty Mutual with an Iowa address or which, if any, vehicles were 

primarily garaged in Iowa. There is also nothing in the record that indicates either 

party believed Iowa was to be the “principal location of the insured risk.” Based 

upon our review of the record, we find that Illinois has the most significant 

relationship to the transaction and the parties. Accordingly, the district court was 

correct in applying Illinois law to Dunigan’s insurance policy. 

B. Underinsured Coverage

With some exceptions not applicable to this matter, Illinois law “requires 

liability insurance coverage for all motor vehicles designed to be used on a public 

highway.” Thounsavath v. State Farm Mut. Auto. Ins. Co., 104 N.E.3d 1239, 1244 

(Ill. 2018). Insurance policies must contain specific minimum liability amounts. Id. 

At the time Dunigan submitted his insurance application and at the time of the 2014 

policy renewal, the minimum liability coverage limit was 
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not less than $20,000 because of bodily injury to or death of any one 

person in any one motor vehicle accident and, subject to said limit 

for one person, to a limit of not less than $40,000 because of bodily 

injury to or death of 2 or more persons in any one motor vehicle 

accident.

Alshwaiyat v. Am. Serv. Ins. Co., 986 N.E.2d 182, 188 (Ill. App. Ct. 2013) (quoting 

625 Ill. Comp. Stat. 5/7–203 (2008)).3

However, “a driver covered by such mandatory liability insurance is not 

similarly protected against damages caused by other drivers who may not possess 

similar insurance.” Id. Therefore, Illinois law “specifically requires that all policies 

of liability insurance must also provide [uninsured motorist] insurance,” which 

“must provide coverage limits that are, at a minimum, equal to the abovereferenced statutory minimums contained in the Financial Responsibility Law.” Id. 

While there is a statutory minimum amount of uninsured motorist coverage 

required in each policy, “there is nothing to preclude a motorist from obtaining a 

policy of insurance providing liability coverage in excess of the minimum amounts 

required.” Id.

“If the limits for the insured’s liability coverage exceed the minimum 

amounts required by law, the uninsured motorist provisions must provide the same 

higher coverage amounts unless the excess amount is specifically rejected by the 

insured.” Thounsavath, 104 N.E.3d at 1244. Insureds and insurance applicants 

can reject the additional uninsured motorist coverage by making a written request 

for their coverage to be less than their bodily injury liability limits or providing a 

 

3 We note that as of January 1, 2015, the minimum bodily injury liability limits increased to 

$25,000 person and $50,000 per accident, thus increasing the statutory minimum amount 

of uninsured motorist coverage. 625 Ill. Comp. Stat. 5/7-203 (2015). However, the 

increase applies only to policies issued or renewed on or after January 1, 2015. Id. 
12

written rejection of coverage in excess of the minimum statutory requirements. 

See 215 Ill. Comp. Stat. 5/143a-2(2) (2015).

In order to reject additional uninsured motorist coverage, the rejection must 

meet certain statutory requirements. At the time Dunigan submitted his insurance 

application, Illinois law required “every application for motor vehicle coverage must 

contain a space for indicating the rejection of additional uninsured motorist 

coverage.” 215 Ill. Comp. Stat. 5/143a-2(2) (1997). Further, the rejection of the 

additional coverage was not effective “unless the applicant signs or initials the 

indication of rejection.” Id. Once an insured either elects to purchase uninsured 

motorist coverage limits less than their bodily injury liability coverage or rejects

limits greater than required by statute, the insurance company is not required to 

provide that coverage in “any renewal, reinstatement, reissuance, substitute, 

amended, replacement or supplementary policy” unless the insured makes a 

written request. Id. The initial application, including copies of the original 

application, “indicating the applicant’s selection of uninsured motorist coverage 

limits [constituted] sufficient evidence of the applicant’s selection of uninsured 

motorist coverage limits and shall be binding on all persons insured under the 

policy.” Id. § 5/143a-2(3).

By the time of the 2014 renewal of Dunigan’s insurance and the 2015 

accident, Illinois had revised the statute enumerating the requirements for rejecting 

additional uninsured motorist coverage. Illinois law now requires motor vehicle 

insurance policies to include uninsured motorist coverage in an “amount equal to 

the insured’s bodily injury liability limits unless specifically rejected by the insured 

as provided in paragraph (2).” 215 Ill. Comp. Stat. 5/143a-2(1) (2015). Paragraph 
13

two requires insureds and insurance applicants to submit a “written request for 

limits of uninsured motorist coverage which are less than bodily injury liability limits 

or a written rejection of limits in excess of those required by law.” Id. § 5/143a2(2). The law no longer requires insurance applications to include a space to 

indicate the rejection or additional coverage or a signature or initialization of the 

rejection. Compare 215 Ill. Comp. Stat. Ann. 5/143a-2(2) (1997), with 215 Ill. 

Comp. Stat. Ann. 5/143a-2(2) (2015). “If the insured’s uninsured motorist 

coverage limit exceeds the minimum liability limit required by the Financial 

Responsibility Law, the policy must also include underinsured motorist coverage 

in an amount equal to the uninsured motorist coverage.” Thounsavath, 104 N.E.3d 

at 1244–45 (citing 215 ILCS 5/143a–2(4) (2012)). “In contrast to the uninsured 

motorist provision, the underinsured motorist provision does not include a right of 

rejection.” Id. at 1245.

Here, Dunigan and Liberty Mutual contracted for liability insurance in the 

amounts of $100,000 per person and $300,000 per accident. This exceeded the 

minimum statutory limits. “Pursuant to section 143a of the Insurance Code, 

[Liberty Mutual] was required to include uninsured motorist coverage in those 

amounts in [Dunigan’s] policies unless [Dunigan] specifically rejected the higher 

coverage amounts.” Id. at 1247–48. At the time Dunigan submitted his insurance 

application in 1997, the application contained a section that stated, “I reject 

uninsured and underinsured motorists coverage equal to my bodily injury liability 

limits and instead select the limits indicated on my option form.” Dunigan signed 

on the signature line directly below this statement. On page three of the 

application, Dunigan signed underneath a paragraph that stated:
14

I am aware, unless I indicate otherwise to Liberty Mutual in writing, 

that my coverage choices of Uninsured Motorists Coverage, 

Underinsured Motorists Coverage, and Uninsured Motor Vehicle 

Property Damage coverage shall apply throughout the policy period, 

regardless of any changes such as the replacement or addition of 

vehicles or drivers, and to all renewals, amendments, replacements 

or reinstatements of this policy. 

On page four, option one is selected. This option stated, “I elect Uninsured 

Motorists Bodily Injury Coverage at the minimum financial responsibility limits 

required by Illinois law. ($20,000 per person and $40,000 per accident.).” 

We find the selected options and Dunigan’s signatures meet the 

requirements to reject additional uninsured motorist coverage above Dunigan’s 

selected bodily injury liability limits and reject a limit in excess of what Illinois law 

required at that time. As such, the original policy delivered to Dunigan did not 

provide uninsured motorist coverage above the statutory minimum. Accordingly, 

because Dunigan’s uninsured motorist coverage did not exceed the statutory 

minimum required by law, underinsured motorist coverage was not required to be 

included in the policy at the time of the application. The application clearly provided 

no underinsured motorist coverage was included in the policy.

At the time of the 2014 insurance renewal and the 2015 accident, Dunigan’s 

coverage for liability, medical payments, and uninsured motorists remained the 

same as it was on the 1997 application. The statutory minimum amount of 

coverage also remained the same. Since Dunigan “elected to purchase limits of 

uninsured motorist coverage which are less than bodily injury liability limits or to 

reject limits in excess of those required by law,” Liberty Mutual was not required to 

provide in any renewal “coverage in excess of that elected by the insured in 

connection with a policy previously issued to such insured by the same insurer 
15

unless [Dunigan] subsequently [made] a written request for such coverage.” 215 

Ill. Comp. Stat. 5/143a-2(2) (2014). There is no such written request by Dunigan 

in the record. Again, because Dunigan’s motorist coverage did not exceed the 

statutory minimum required by law at the time of the renewal or the accident, 

underinsured motorist coverage was not required to be included in the policy.4 

Therefore, Dunigan did not have underinsured motorist coverage at the time of the 

accident and cannot recover such benefits under his policy. Accordingly, we affirm 

the district court’s grant of Liberty Mutual’s motion for summary judgment.

AFFIRMED.

 

4 Dunigan’s renewal form states: “Where no premium is shown, you have not purchased 

the indicated coverage for that vehicle.” There is no premium listed for underinsured 

coverage on the renewal form.