No. 90-081 IN THE SUPREME COURT OF THE STATE OF MONTANA 1990

KAREN ROWE, individually, and as Guardian of JOSHUA ROWE and KARRY ROWE; and WILLIAM BOURRET, the Personal Representative of the Estate of BARRY R. ROWE, Deceased, Plaintiffs and Appellants,

THE TRAVELERS INDEMNITY COMPANY, a Connecticut Corporation and JOHN DOE AND RICHARD ROE, INC., a Montana Corporation, Defendants and Respondents.

APPEAL FROM: District Court of the Eighth Judicial District, In and for the County of Cascade, The Honorable Leif B. Erickson, Judge presiding.

COUNSEL OF RECORD: For Appellants: Joseph R. Marra and David A. Hopkins;Marra, Wenz, Johnson & Hopkins, P.C., Great Falls,Montana For Respondents: William Conklin and Allen P. Lanning; Conklin, Nybo, LeVeque & Murphy, P.C., Great Falls,Montana Judith Bartram; Jardine, Stephenson, Blewett & Weaver, Great Falls, Montana (for John Doe and Richard Roe, Inc.)

Filed: Submitted on Briefs: September 20, 1990

db Decided: October 24, 1990Justice John Conway Harrison delivered the Opinion of the Court.

This is an appeal from the Eighth Judicial District, Cascade County. Plaintiffs, the personal representative of the deceased, Barry R. Rowe, his widow, Karen Rowe, and their two children, sought a declaratory ruling that they were entitled to recover uninsured motorist benefits under two umbrella policies issued by Travelers Indemnity Company. The parties filed cross-motions for summary judgment. The District Court denied the plaintiffs' summary judgment motion and granted summary judgmenttoTravelers. From this decision,plaintiffs appeal. We affirm. The sole issue is whether the District Court erred in ruling that an umbrella policy does not constitute an automobile or motor vehicle policy which must include uninsured motorist coverage.

I. On December 9, 1985,Barry R. Rowe was fatally injured in an automobile collisionwith an alleged uninsuredmotorist. Rowewas insured by a primary general liability insurance policy and two umbrella policies, all issued by Travelers. The policies insured Rowels business, Page-Werner, and Rowe and his two partners individually. Theprimarypolicy contained singleliability limits of $500,000 and provided $50,000 in uninsured motorist coverage. The other twopolicies, a Catastrophic Umbrella Policy (CUP), and a Personal Liability Umbrella of Security Policy (PLUS),had total liability limits of $3,000,000and did notprovide uninsuredmotorist coverage. The CUP policy excluded coverage for obligations imposed by the uninsured motorist law. The PLUS policy did not specifically exclude suchcoverage. However, Travelersrefused to extend uninsured motorist coveragebeyond the $50,000 ithad an obligation to pay under the primary automobile liability policy. Plaintiffs brought this action, claiming that Montana's uninsured motorist statute, 5 33-23-201, MCA, required Travelers to supply uninsured motorist coverage under each of the umbrella policies.

11. While this is a case of first impression in Montana, several other jurisdictions have addressed the issue of whether their uninsured motorist statutesmandate issuance of uninsured motorist coverage in umbrella policies. These cases have been resolved on either of two grounds: (1)the type of uninsured motorist statute;

or (2) the type of insurance. See, e.g., Bartee v. R.T.C. Transportation, Inc. (Kan. 1989), 781 P.2d 1084; Cohn v. Pacific Employers Insurance Co. (Conn. 1990), 569 A.2d 544. The courts basing their decisions on the type of uninsured motorist statute havediscernedtwodiffering policy considerations and legislative intent underlying such statutes, depending on the jurisdiction. "Minimum liability" statutes requirethatmotorists maintain a minimum level of liability insurance and, therefore, a minimum level of uninsured coverage. Thepolicy in such states isto ensure that injured motorists can recover the same amount as would have been available from an insured motorist who maintained the minimum statutory limit of bodily injury liability coverage. Continental Insurance Co. v. Howe (Fla. App. 3 Dist. 1986), 488 So.2d 917, 919. "Full recovery" statutes,on the otherhand, require insurers to issue uninsured motorist coverage equal to the amount of bodily injury liability insurance that thepolicyprovides. For example, if the insurance policy has limits of $50,000/$100,000 for bodily injury liability, the insurer must also provide $50,000/$100,000 in uninsured motorist coverage. The policy underlying these statutes is to I'allow full recovery under the terms of any applicable policies when a person is injured by an uninsured m~torist.~~ Continental, 488 So.2d at 919-20. Most jurisdictions which have llfullrecoveryI1 uninsured motorist statutes have concluded that since an umbrella policy includes liability coverage for motor vehicle accidents, an umbrella policy must offer an equivalent amount of uninsured motorist benefits to the insured in order topermit full recovery. See Chicago InsuranceCo. v. Dominguez (Fla.App. 1982), 420 So.2d 882; Bartee v. R.T.C. Transportation, Inc. (Kan. 1989), 781 P.2d 1084; Southern American Insurance Co. v. Dobson (La. 1983), 441 So.2d 1185;Cincinnati Insurance Co. v. Siemens (OhioApp. 1984), 474 N.E.2d 655. But see United Services Automobile Asslnv. Wilkinson (N.H. 1989), 569 A.2d 749 (holding that uninsuredmotorist statute does not apply to umbrella policies, even though statutewas vvfull recovery" type). Montana's uninsured motorist statute provides Ivminimum liabilityvv insurance: (1) No automobile liability or motor vehicle liabilitypolicy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance, or use of a motor vehicle shall be delivered or issued fordelivery in this state

# . . .unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in 61-6-103 

# . .

# . fortheprotection of persons insured thereunderwho are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefrom. Section 33-23-201(1), MCA (1985). Theminimum amounts ofuninsured coveragewhich must be provided pursuant to 5 61-6-103,MCA, are $25,000 for one person and $50,000 for two persons. Montana has

no requirement that uninsured coverage must equal the policy's coverage for bodily injury liability unless the limits are not specified in the policy. See 5 33-23-203, MCA. In this case,however; bothparties agreethatthedistinction between vvminimumliabilityvvand Ivfull recoveryvvstatutes is meaningless. Rather, their argument involves whether an umbrella policy is within the realm of insurance contemplated by the uninsured motorist statute. Plaintiffs argue that thewords vv[n]oautomobile liability or motor vehicle liabilitypolicy" in the uninsured motorist statutedo not exclude umbrella insurance policies; therefore, umbrella policiesmust include uninsured motorist coverage because they also provide I1motorvehicle liability1!insurance. Travelers contends that umbrella policies are fundamentally different from automobile liability policies since umbrella policies are intended solely to provide excess liability protection for claims against the insured by third parties. Because of this difference, an umbrella policy is not a I1motor vehicle liability policyf1Idesigned to be controlled by the uninsured motor vehicle statute. Courts have discussed theunique nature of umbrella policies, which area continuation of an underlyingprimary policy. Thompson

v. Grange Insurance Assln. (Wash. App. 1983), 660 P.2d 307, 311. Umbrella policies I1provideat a modest cost broad coverage for catastrophic losses, and excess coverage over and above any type of primary coverage. 

# . . .I1 United Services AutomobileAssln,569 A.2d at 753. While the excess coverage of an umbrella or catastrophe policy protects an insured and his business against liability from third parties, theuninsured motorist protection of the underlying primary policy does not involve liability claims against the insured from third parties. Matarasso v. Continental Casualty Co. (App. Div. 1981), 440 N.Y.S.2d 40, 41. However, we need go no further than our own statutes to determine whether an excess or umbrella policy is a "motorvehicle liability policy" as contemplated by the uninsured motoriststatute. A I1motorvehicle liabilitypolicy11' is defined as:

an owner's or operator's policy of liability insurance, certified as provided in 61-6-133 or 61-6-134asproof of financial responsibility and issued, except as otherwise provided in 61-6-134, by an insurance carrier duly authorized to transact business in this state, to or for the benefit of the person named therein as insured. Section 61-6-103(I), MCA (1985). The "motor vehicle liability policy1'must "designateby explicit description or by appropriate reference all motor vehicles with respect to which coverage is thereby tobe granted." Section 61-6-103(2)(a), MCA (1985). With respect to excess coverage, the statuteprovides: (8)Any policy which grants the coverage required for a motor vehicle liability policy may also grant any lawful coverage in excess of or in addition to the coverage specified for a motor vehicle liability policy and such excess or additional coverage shall not be subject to the provisions of this part. With respect to a policy which grants such excess or additional coverage the term ''motorvehicle liability shall apply only to that part of the coveraqewhich is requiredby this section. Section 61-6-103(8), MCA (1985) (emphasisadded)

# . The statutory definition of "motor vehicle liability policyI1 does not include excess insurance, such as an umbrella policy. Thus, an umbrella policy could not constitute a "motor vehicle liability policy1'as envisioned by the uninsured motorist statute.

'section 33-23-204(2)

### , MCA, enacted in 1987, specifically refers to Title 61, Chapter 6 of the Code in defining I1motor vehicle liability policy.I1A majority of courts which have addressed this issue have concluded that umbrella policies are not ''motorvehicle liability policies1'asdefinedby theiruninsured motorist statutoryschemes, similar to Montana's. See OIHanlon

### v. Hartford Accident and IndemnityCo. (3dCir. 1981), 639 F.2d 1019 (interpreting Delaware law); TrinityUniversal Ins. Co. v. Metzger (Ala. 1978), 360 So.2d 960; Furlough v. Transamerica Insurance Co. (Cal. App. 2 Dist. 1988), 249 Gal-Rptr. 703;Cohnv. Pacific Employers Ins. Co. (Conn. 1990), 569 A.2d 544; Continental Insurance Co. v. Howe (Fla. App. 3 Dist. 1986), 488 So.2d 917, rehlq denied 494 So.2d 1151 (interpretingRhode Island law);Cincinnati InsuranceCo. v. Miller (Ill.App. 1 Dist. 1989), 546 N.E.2d 700, rehlqdenied 550 N.E.2d 554;United ServicesAutomobileAssln 

### v. Wilkinson (N.H. 1989)

## , 569 A.2d 749; Matarasso v. Continental Casualty Co. (App. Div. 1981), 440 N.Y.S.2d 40; Moser v. Liberty Mutual Insurance Co. (Okla. 1986), 731 P.2d 406; MacKenzie v. Empire Insurance Co. (Wash. 1989), 782 P.2d 1063. As we have stated previously, the purpose of the uninsured motorist statute, for those who elect such coverage, is to recompense innocent persons injured through the negligence of motorists who, because they are uninsured and not financially responsible, cannot be made to respond in damages. See Guiberson

v. Hartford Casualty Insurance, Inc. (1985), 217 Mont. 279, 289, 704 P.2d 68, 74; see also HoraceMann Insurancev. Hampton (1989), 235 Mont. 354, 357, 767P.2d 343,344 (stating purpose of MandatoryLiability ProtectionAct).- However,reading §§ 33-23-201and 61-6-103,MCA, together,the statutes clearly apply only to primary automobile insurance, not to a commercial umbrella policy issued toprotect the insured from liability to third parties. If the legislature desires uninsured motorist coverage to equal liability coverage from any source, it may amend the statute accordingly. When no genuine issue exists as to any material fact, the moving party is entitled to summary judgment as a matter of law. Rule 56(c), M.R.Civ.P.; Blaskovich v. Noreast Development Corp.

(Mont. 1990), 790 P.2d 977, 978, 47 St.Rep. 740, 742. The party asserting summary judgment.hastheburden of demonstratingthat no genuine issue of material fact exists. Once this is established, the burden shifts to the other party to show otherwise. Rule 56(e), M.R.Civ.P. We hold that Montana's uninsured motorist statute does not require an insurer to provide uninsured motorist coverage in an excess or umbrella policy. Since a genuine issue of material facthas not been demonstrated, the District Court did not err in denying summary judgment to plaintiffs and granting defendant'smotion for summary judgment. Our ruling does not mean that an insurer may not offer additional uninsured motorist coverageaspart of a primary policy

or umbrella policy. Affirmed.

# . .

We concur: