Court Opinion

ID: 9610057
Source: CourtListenerOpinion
Date Created: 2023-08-22 03:36:02.466769+00
Date Added: 2024-06-11T18:02:56.218158
License: Public Domain

JOHNSON, Justice.
This is an automobile insurance case. The primary issue presented is whether an insurance policy, with an underinsured vehicle provision containing limits of $50,000 for each person and $100,000 for each occurrence, covered losses sustained by four occupants of the insured automobile. The insured automobile was involved in an accident with another vehicle insured for liability by a single limit of $100,000. We hold that the underinsured vehicle provision did not provide coverage for the losses sustained. We also hold that the underinsured vehicle provision was not ambiguous, was not void as against public policy, and did not deprive the occupants of the limits of coverage to which they were entitled.
I.
THE BACKGROUND AND PRIOR PROCEEDINGS.
James Dunnigan was seriously injured when his automobile was struck head-on by another automobile driven by Bruce Ray Haynes that had negligently crossed the center line. John G. Buffa, Luke J. Beckley, and Anthony J. Evans were passengers in the Dunnigan automobile. Beckley and Evans were killed as a result of the collision. Buffa was seriously injured.
The Haynes automobile was insured by a bodily injury liability policy that provided for coverage in the single limit amount of $100,000.00. Dunnigan, Buffa and the estates of Evans and Beckley divided the proceeds from this policy equally, with each receiving $25,000.00.
The Dunnigan automobile was insured by a Farmers Insurance Company of Idaho (Farmers) policy. This policy provided coverage of $50,000.00 for each insured person and $100,000.00 for each occurrence involving an insured person or persons legally entitled to recover damages from the owner or operator of a vehicle insured by a bodily injury liability policy providing coverage in amounts less than the limits of the Farmers policy (the underinsured provision). Each occupant of the Dunnigan automobile was an insured under the Farmers policy.
Dunnigan, Buffa, and the estates of Evans and Beckley (the claimants) made demand on Farmers for payment of $100,-*347000.00 under the underinsured provision. Farmers filed a declaratory judgment action seeking a determination of its liability to the claimants. The claimants answered alleging that the underinsured provision was ambiguous and void as against public policy. The claimants counterclaimed for a declaration that Farmers was obligated to pay the claimants $100,000.00.
The trial court granted summary judgment to Farmers, declaring that the Haynes automobile was not underinsured as provided in the Farmers policy, that Farmers had no liability to the claimants, and that the underinsured provision of the Farmers policy was not ambiguous or void as against public policy. The claimants appealed.
II.
FARMERS IS NOT LIABLE TO THE CLAIMANTS.
The claimants assert that Farmers is liable to them because (1) the coverage of the Haynes policy was less than the limits of the underinsured provision of the Farmers policy, (2) the underinsured provision is ambiguous, (3) the underinsured provision is void as against public policy, and (4) the effective limits of the underinsured provision as interpreted by Farmers was $25,-000.00 for each insured person instead of the $50,000.00 for each insured person contained in the underinsured provision. We disagree.
In Nationwide v. Scarlett, 116 Idaho 820, 780 P.2d 142 (1989), this Court considered a case similar to this one. In Scarlett, three occupants of an automobile insured by Nationwide were injured in an accident with another automobile. The Nationwide policy contained an underinsured provision substantially similar to the one in the Farmers policy. The limits of the coverage in the underinsured provision of the Nationwide policy were $100,000.00 for each insured person and $300,000.00 for each occurrence. The limits of the bodily injury liability coverage on the other automobile were also $100,000.00 for each person and $300,000.00 for each occurrence. In Scarlett, this Court held that the other automobile was not an underinsured vehicle within the meaning of the Nationwide policy. Id. at 822, 780 P.2d at 144.
The claimants argue that the Haynes automobile was underinsured since the coverage provided by the Haynes policy was not the same as the limits of the underinsured provision of the Farmers policy. The premise of this argument is that the underinsured provision covers each insured person for damages up to $50,000.00, while the Haynes policy has only $100,-000.00 single limit coverage. The claimants’ argument ignores the fact that the coverage provided by the Haynes policy and by the limits of the underinsured provision of the Farmers policy are identical ($100,000.00) when there are two or more injured occupants of the Dunnigan automobile. The underinsured provision is not ambiguous in this respect.
The claimants also argue that this construction of the underinsured provision makes the provision void as against public policy. This argument ignores the fact that our statutes do not require an automobile insurer to include underinsured vehicle coverage in its policies or even to offer this coverage to its insureds. Underinsured coverage in this state is a matter of contract law, not public policy. Scarlett, 116 Idaho at 822, 780 P.2d at 144; Meckert v. Transamerica Ins. Co., 108 Idaho 597, 701 P.2d 217 (1985); Blackburn v. State Farm Mut. Auto. Ins. Co., 108 Idaho 85, 697 P.2d 425 (1985).
The claimants also argue that since each of the claimants received only $25,-000.00 from the Haynes policy, the coverage provided by the Haynes policy — the effective limits of that policy — were only $25,000.00, instead of the $50,000.00 for each insured person as provided in the Farmers policy. This result is the product of an accident in which more than two occupants of the Dunnigan automobile were injured, not of any misinterpretation by Farmers. The underinsured provision would have paid the claimants only $100,-000.00 if the Haynes automobile had not been insured at all. We are not able to *348understand how the claimants could be entitled to more than $100,000.00 merely because the Haynes policy paid them that amount.
III.
CONCLUSION.
We affirm the declaratory judgment of the trial court.
We award costs and attorney fees on appeal to Farmers.
BAKES, C.J., and BOYLE and McDEYITT, JJ., concur.