Court Opinion

ID: 9514719
Source: CourtListenerOpinion
Date Created: 2023-08-06 22:51:23.490981+00
Date Added: 2024-06-11T09:06:20.392020
License: Public Domain

AMUNDSON, Justice
(dissenting).
[¶ 22.] I respectfully dissent.
[¶ 23.] The essential issue on this appeal is the interpretation of SDCL 58-11-9.5 to determine whether Nickerson is entitled to recover UIM proceeds under her own $100,000 UIM policy with American States after having already received $50,000 from the tortfeasor and $50,000 from the primary UIM insurer. This statute provides,
Subject to the terms and conditions of such underinsured motorist coverage, the insurance company agrees to pay its own insured for uncompensated damages as its insured may recover on account of bodily injury or death arising out of - an automobile accident because the judgment recovered against the owner of the other vehicle exceeds the policy limits thereon. Coverage shall be limited to the underinsured motorist coverage limits on the vehicle of the party recovering less the amount paid by the liability insurer of the party recovered against.
SDCL 58-11-9.5 (1996).
[¶ 24.] Under our rules of statutory interpretation, “ ‘[w]e interpret statutes in accord with legislative intent.’ ” Welsh v. Centerville Township, 1999 SD 73, ¶ 7, 595 N.W.2d 622, 624 (quotation omitted). To determine a statute’s intent, we must review the statute as a whole, as well as any enactments relating to the same subject. See Kayser v. South Dakota State Elec. Comm’n, 512 N.W.2d 746, 747 (S.D.1994) (citations omitted); Meyerink v. Northwestern Pub. Serv. Co., 391 N.W.2d 180, 183 (S.D.1986).
[¶25.] The majority opinion interprets SDCL 58-11-9.5 to provide that “all monies received from the tortfeasor and the UIM primary carrier are deducted from the excess UIM carrier’s policy limits to calculate the amount owed to the insured.” (Emphasis added). In making this interpretation, the majority ignores our settled rules of statutory interpretation by focusing in on only one sentence of SDCL 58-11-9.5, that “the insurance company agrees to pay its own insured for uncompensated damages,” and ignores the remainder of the statute. A thorough reading of the entire statute reflects that the statute also provides that UIM “[coverage shall be limited to the underinsured motorist coverage limits on the vehicle of the party recovering less the amount paid by the liability insurer of the party recovered against. ” See SDCL 58-11-9.5. The statute specifically deducts monies received from the liability insurer only and does not mention a deduction for monies received from another UIM carrier as the majority so holds.
[¶26.] In Farmland Insurance Co. of Des Moines v. Heitmann, 498 N.W.2d 620, 625 (S.D.1993), we held that SDCL 58-11-9.5 “clearly limits the insured’s UIM recovery to the difference between the UIM policy limits less the amount paid by the liability insurer of the tortfeasor.” (Em*474phasis added). See also Great West Cas. Co. v. Hovaldt, 1999 SD 150, ¶ 11, 603 N.W.2d 198, 201 (noting that “UIM recovery is confined to ‘the difference between the UIM policy limits less the amount paid by the liability insurer of the tortfeasor’ ”). In the present case, the liability insurer (Prudential), which was Bruce’s insurer, paid only $50,000 to Nickerson. The statute clearly and unambiguously provides that .the only setoff to be taken by a UIM insurer is for the amount paid by the tort-feasor’s liability insurer; therefore, only the $50,000 recovered by Nickerson from the tort-feasor (Bruce) is subject to setoff and only the primary insurer, American States, is entitled to that setoff.
[¶ 27.] The majority holds that since Nickerson has already recovered $50,000 from the tortfeasor and $50,000 from Dakota Fire, a total amount equal to her $100,000 UIM policy limit, recovery from her own UIM insurer would amount to “stacking and result in double recovery.” In support of its position, the majority cites Elrod v. General Casualty Co. of Wisconsin, 1997 SD 90, 566 N.W.2d 482, Union Insurance Co. v. Stanage, 454 N.W.2d 736 (S.D.1990) and Winters v. Northwestern National Casualty Co., 838 F.Supp. 440 (D.S.D.1993). These cases are all distinguishable from the present case and any reliance upon them by the majority is misplaced.
[¶ 28.] In Elrod, an automobile owned and driven by Susan Thompson and occupied by Eugene Elrod, collided with Sheldon Haas. See 566 N.W.2d 482. Thompson and Elrod, who were injured in the collision, settled with Haas’ liability insurer. Thompson was insured by General Casualty with UIM limits of $100,000 and $300,-000. Elrod had UIM coverage with DeS-met Insurance Company with policy limits of $100,000 and $300,000. Both Elrod and Thompson initiated an action against “their” respective insurers to determine UIM benefits owed. The issue before this Court on appeal was whether the insurance companies share the liability pro rata or whether one insurer is determined to be the primary insurer and the other an excess insurer. Before addressing the sole disputed issue, the majority noted:
We initially note that all of the parties involved in this action agree that DeS-met has no UIM liability to Thompson. If General Casualty is determined to be the primary insurer for Elrod and DeS-met is determined to be Elrod’s secondary UIM insurer, then DeSmet would have no UIM liability to Elrod because the maximum coverage to Elrod would be covered by General Casualty’s UIM policy limits. The only dispute involved here is General Casualty’s contention that DeSmet should share General Casualty’s UIM liability to Elrod on a pro rata basis.
See id. at 484 (noting SDCL 58-11-9.5 limits UIM coverage to “ ‘the difference between the UIM policy limits less the amount paid by the liability insurer of the tortfeasor’ ”). Both the majority and American States contend that our initial discussion in Elrod should apply in this case to remove American States’ exposure as an excess UIM carrier. While the facts in Elrod are similar to the present case, Elrod is distinguishable. In, Elrod, the parties agreed that DeSmet had no UIM liability to Thompson and the case involved an “other insurance” clause in both policies which provided that if other applicable similar insurance policies apply, the insurer will only pay their proportionate share of the loss. Id. at 483-84. No such agreement exists in this case, nor is there any contention that an “other insurance” clause in any of the policies affects the determination of UIM coverage.
[¶ 29.] In Stanage, we addressed an insured attempting recovery from two of his own uninsured motorist policies. See 454 N.W.2d at 740. We disallowed Stanage to stack coverages from his own two policies. Such is not the case before us on this appeal. In the present case, we are not faced with the situation of an insured attempting to “stack” his own insurance poli*475cies to obtain double recovery. Instead, we are faced with the question of whether an insured, Nickerson, who has an additional $100,000 in UIM coverage, can recover from her UIM insurer after recovering $50,000 from the tort-feasor and $50,000 from the operator of the vehicle’s insurer.
[¶ 30.] Finally, in Winters, Raymond Winters and Harold Speck sustained injuries in a motor vehicle accident in which Speck was a passenger in his own pickup driven by Winters. See 838 F.Supp. 440. Winters and Speck each received the $100,000 per person limit from the two tort-feasor’s insurance carrier; thereby each recovering a total of $200,000. The two then sought to recover UIM benefits under their individual insurance policies, which carried a $300,000 UIM policy limit. The district court applied SDCL 58-11-9.5 and ultimately awarded Winters and Speck $100,000; the difference between the. $300,000 UIM policy limit and the $200,000 recovered from the tort-feasors. In discussing its decision, the court noted:
[E]ach plaintiff has $300,000 underin-sured motorist coverage, which when reduced by the $200,000 recovered, leaves each plaintiff with $100,000 in UIM coverage. To aggregate each plaintiffs recovery with the other and preclude un-derinsured status not only would be contrary to the weight of legal authority on this issue, but also would be directly opposed to the legislative intent of UIM coverage in providing an insured with maximum coverage.
Id. at 443. The Winters case is distinguishable from the present ease because in Winters, the district court was faced only with a recovery from a tort-feasor for an amount less than the insured’s UIM policy amount. Here, in addition to a recovery from the tort-feasor, we are faced with UIM benefits of not just the tortfeasor, but UIM benefits of Breitag and Nicker-son.
[¶ 31.] The purpose of the UIM statute “ ‘is to provide the same insurance protection to the insured party who is injured by the uninsured or unknown motorist that would have been available to him had he been injured as a result of the negligence of a motorist covered by the minimum amount of liability insurance.’ ” Kremer v. American Family Mut. Ins. Co., 501 N.W.2d 765, 768 (S.D.1993) (quoting Clark v. Regent Ins. Co., 270 N.W.2d 26, 29 (S.D.1978)). “Insureds generally are allowed to receive recovery under more than one coverage as long as they do not receive more than the amount of their loss[J” Couch on Insurance 3d § 169:6 (1998) (citing Saxe v. State Farm Mut. Auto. Ins. Co., 955 S.W.2d 188 (Ky.Ct.App. 1997)). The Connecticut Superior Court once noted,
[t]he present case is not one of double payment, but rather one of implementation of public policy which underlies the uninsured motorist statute; viz., that “every insured is entitled to recover for the damages he or she would have been able to recover if the [under]insured motorist had maintained a policy of [adequate] liability insurance.”
Loika v. Aetna Cas. & Sur. Co., 44 Conn. Supp. 59, 667 A.2d 1308, 1314 (1995) (quoting Rydingsword v. Liberty Mut. Ins. Co., 224 Conn. 8, 615 A.2d 1032, 1037 (1992) (further quotations omitted)). A review of the record reflects Nickerson’s damages claim exceeds the $100,000 UIM limit in Nickerson’s policy. Allowing Nickerson to recover under both the primary and excess UIM carriers would not result in a double recovery; nor would it result in Nickerson recovering “more than the amount of her loss.”
[¶ 32.] While the majority would contend that allowing Nickerson to recover benefits from her “excess” insurer after having already recovered from the “primary” insurer constitutes a form of stacking, this appearance is solely the result of “excess policies havfing] an element of ‘stacking’ inherent in their very nature.” Couch on Insurance 3d § 169:8. Allowing Nickerson to recover from both the “primary” and *476the “excess” insurers is not the type of “stacking” that this Court has continually abhorred. The common stacking scenario entails a single insured attempting to stack coverages from more than one of the insured’s own policies for a single loss. See Stanage, 454 N.W.2d 736; Cunningham v. Western Cas. & Sur. Co., 90 S.D. 530, 243 N.W.2d 172 (1976). On the contrary, Nickerson requests recovery of benefits under only one policy from only one insurer; a situation which is clearly not a common stacking scenario. Nickerson entered a contract with American States for UIM coverage by paying a fixed premium. In return for paying her premium, American States has a contractual obligation to pay her UIM benefits upon submission by Nickerson of a valid claim. Nickerson paid her premium and submitted a claim to American States for her UIM coverage. Additionally, we have often stated that “[w]here the liability insurance of the tort-feasor exceeds UIM limits, there is no UIM recovery.” Farmland, 498 N.W.2d at 625. The tort-feasor’s liability insurance of $50,000 clearly does not exceed Nickerson’s UIM policy limits of $100,000. Because the proceeds from the tortfeasor do not exceed Nickerson’s UIM policy limits and recovery from both the “excess” and “primary” insurers does not constitute double recovery or stacking, Nickerson should be entitled to recover UIM benefits under her policy with American for any damages that she can prove were sustained over and above what she has already recovered.
[¶ 33.] I would reverse and remand to allow Nickerson the opportunity to recover UIM benefits from her insurer by proving that she sustained damages over and above what she has already recovered from the tortfeasor and the primary insurer.