Court Opinion

ID: 9515325
Source: CourtListenerOpinion
Date Created: 2023-08-06 22:55:44.396782+00
Date Added: 2024-06-11T09:06:28.046230
License: Public Domain

MEIERHENRY, Justice
(dissenting).
[¶ 47.] I respectfully dissent.

Statutory Provisions

[¶ 48.] The language of SDCL 58 — 11— 9.5 does not allow an insurance carrier to aggregate the total amount paid to third parties by or on behalf of the tortfeasor as an offset for amounts owed to its own individual insured. The language of the statute is as follows:
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.

Id.

[¶ 49.] The first sentence of the statute requires the insurance company to pay its own insured, in this case Michael Gloe, uncompensated damages for the death of his parents. The second sentence then limits the coverage “to the underinsured motorist coverage limits on the vehicle of the party recovering.” Here, the limit is $100,000 for the damages sustained by each insured, and $300,000 for the damages resulting from each accident. The statute further allows the recovery to be reduced by “the amount paid by the liability insurer of the party recovered against.” It is the application of this last clause of the statute where I disagree with the majority opinion. This clause relates to the general subject of the statute defining the duty of the insurance company to its own insured. The public policy embodied in this legislation is that if a person is injured by an insured motorist but is not fully compensated for his injuries, his own insurance company will pay him up to $100,000. It would be contrary to public policy for us to allow the insurance company to avoid its agreement by reducing the amount it owes to its own insured with money that the tortfeasor’s company paid to other individuals.
[¶ 50.] The trial court correctly applied the statute by allowing Union to reduce the amount it owed to Michael Gloe only by the amount the insured motorist’s company had paid to Michael Gloe. Aggregat*265ing all sums paid by the insured motorist’s company was not allowed. Therefore, only those amounts paid by the tortfeasor’s insurance company to Michael Gloe individually, i.e. $41,583 for father’s death and $40,611 for mother’s death, were allowed as a setoff against the $100,000 coverage for each corresponding death claim.11

Insurance Policy Provisions

[¶ 51.] The statute defines the relationship between the insurance company and its insured. The language of the insurance policy does also. The insurance policy includes an endorsement specific to the South Dakota law. The policy language limits its liability to $100,000 “for each person for Underinsured Motorists Coverage ... for damages for care, loss of services or death, arising out of ‘bodily injury’ sustained by any one person in any one accident” and $300,000 for one accident. The policy clarifies further that “[t]his is the most [it] will pay regardless of the number of: 1. ‘Insureds’; 2. Claims made; 3. Vehicles or premiums shown in the Declarations; or 4. Vehicles involved in the accident.” In this case, only one insured claims under the policy. No amount has been paid to anyone under Union’s policy.
[¶ 52.] Union’s policy also provides for a setoff against the liability limits. It provides: “The limit of liability shall be reduced by all sums paid because of “bodily injury” [i.e. death] by or on behalf of persons or organizations who may be legally responsible.” The majority relies heavily on this portion of the contract to conclude that sums paid to third parties by those legally responsible can be aggregated as a setoff to what it owes its own insured. Yet the language of the contract does not say this. Much like the statutory language, it does not specify to whom the sums must be paid before the offset can be taken. Since the contract is between the company and the insureds, the logical interpretation is that the sums must be paid to the company’s insured before it can be offset.
[¶ 53.] In this case, the injured insured parties were the.deceased Gloes’ children individually. However, only Michael made a claim under his parent’s policy. The injured parties and only persons legally entitled to recover for the deaths in this case were the children. Neither the decedents nor their estates received anything from the wrongful death claim. Michael received only a portion of the proceeds. Logically, only what he has received should offset his claim, not the entire amount paid in the wrongful death settlement. Although the other siblings may have been insureds under the policy, they have not made claims to Union. Consequently, the amounts they received have no bearing on Michael Gloe’s individual claim under this policy. Had the other siblings made claims under this policy, it would be appropriate to aggregate the sums paid to all of them as a setoff against the $300,000 per accident limit.12 Such is not the case before us.

*266
Conclusion

[¶ 54.] The underlying policy of the un-derinsurance law is to provide an injured person up to $100,000 for uncompensated damages. The Gloes paid premiums for this coverage. To allow Union to offset its only claim with money paid to third parties by or on behalf of the tortfeasor is contrary to public policy and the language of Union’s policy and effectively leaves the insured without the coverage purchased.
[¶ 55.] I would affirm the trial court.
[¶ 56.] SABERS, Justice, joins this dissent.

. The trial court determined that Michael Gloe was to receive two per person $100,000 limits, one for each deceased parent. Union Mutual does not raise on appeal the issue of whether Michael is entitled to make a claim for each death or whether he is limited to one claim for both.

. This interpretation would not necessarily overrule Rogers as the majority claims. See Supra ¶ 42. Rogers did not involve a wrongful death claim, the unique nature of which has given rise to this dispute, and is therefore easily distinguishable from the case at hand. Additionally, this interpretation of the statutes eliminates the majority's concern that timing the claim can defeat the setoff. Since there are three injured wrongful death beneficiaries, there is still $100,000 available to each after their claims are aggregated and setoff against the $300,000 per accident limit. For this reason, there is no danger that the timing of the claims will result in increased recovery. *266Whether the claims are made individually and independently, or all at the same time, each injured wrongful death beneficiary would have $100,000 available, subject to a setoff of the amount each insured beneficiary has already received.