Court Opinion

ID: 4182114
Source: CourtListenerOpinion
Date Created: 2017-06-29 15:10:08.283146+00
Date Added: 2024-06-11T09:36:39.090709
License: Public Domain

MAINE	SUPREME	JUDICIAL	COURT	                                          Reporter	of	Decisions	
Decision:	 2017 ME 141 
Docket:	   Cum-16-408	
Argued:	   April	12,	2017	
Decided:	  June	29,	2017	
	
Panel:	    SAUFLEY,	C.J.,	and	ALEXANDER,	MEAD,	GORMAN,	JABAR,	and	HJELM,	JJ.	
Majority:	 SAUFLEY,	C.J.,	and	ALEXANDER,	MEAD,	GORMAN,	and	HJELM,	JJ.	
Dissent:	  JABAR,	J.	
	
                                   	
                       MATTHEW	J.	WALLACE	et	al.	
                                   	
                                  v.	
                                   	
           STATE	FARM	MUTUAL	AUTOMOBILE	INSURANCE	COMPANY	
	
	
MEAD,	J.	

        [¶1]     Matthew	 J.	 Wallace	 and	 Freja	 Folce1	 appeal	 from	 a	 summary	

judgment	entered	by	the	Superior	Court	(Cumberland	County,	Mills,	J.)	in	favor	

of	 State	 Farm	 Mutual	 Automobile	 Insurance	 Company	 on	 their	 complaint	

seeking	 underinsured	 motorist	 (UM)	 payments	 from	 two	 policies	 issued	 by	

State	 Farm.	 	 The	 plaintiffs	 contend	 that	 the	 court	 erred	 in	 finding	 that	 the	

tortfeasor	 who	 injured	 them	 in	 a	 motor	 vehicle	 accident	 was	 not	 an	

underinsured	driver	pursuant	to	Maine’s	UM	statute,	and	therefore	there	was	

no	 gap	 in	 coverage	 requiring	 State	 Farm	 to	 pay	 UM	 benefits.	 	 We	 affirm	 the	

judgment.	

    1
    		Freja	Folce	appears	individually	and	as	next	friend	of	Zoe	Folce.	
2	

                           I.		FACTS	AND	PROCEDURE	

	     [¶2] For	the	purpose	of	deciding	their	respective	motions	for	summary	

judgment,	the	parties	stipulated	to	the	following	facts.		On	September	29,	2011,	

Matthew	Wallace	was	driving	south	on	Route	26	in	Woodstock;	Freja	Folce	and	

her	minor	daughter	Zoe	were	passengers	in	the	vehicle.		Corey	Hill,	who	was	

driving	in	the	opposite	direction	in	a	vehicle	owned	by	his	employer,	Twin	Pines	

Construction,	 Inc.,	 lost	 control	 while	 attempting	 to	 pass	 another	 vehicle,	

crossed	the	centerline,	and	collided	with	Wallace’s	vehicle.		The	accident	was	

caused	by	Hill’s	negligence.	

	     [¶3] Hill	was	acting	in	the	course	and	scope	of	his	employment	when	the	

accident	 occurred.	 	 His	 Twin	 Pines	 vehicle	 was	 insured	 under	 a	 Safety	

Insurance	 Company	 policy	 that	 provided	 liability	 coverage	 of	 $50,000	 per	

person	 and	 $100,000	 per	 accident.	 	 Twin	 Pines	 was	 also	 insured	 under	 an	

excess	policy	issued	by	Alterra	Excess	Surplus	Insurance	Company	providing	

$2,000,000	in	excess	commercial	auto	liability	coverage;	however,	the	Alterra	

policy	required	Twin	Pines	to	maintain	$1,000,000	in	primary	coverage,	and	

provided	that	Alterra	was	liable	only	“to	the	extent	that	it	would	have	been	held	

liable	had	the	insured	complied”	with	that	requirement.		The	policies	issued	to	
                                                                                       3	

Twin	Pines	by	Safety	and	Alterra	were	the	only	policies	providing	coverage	to	

Twin	Pines	and	Hill	for	the	accident.	

	     [¶4] The	plaintiffs	were	insured	under	a	State	Farm	policy	covering	their	

vehicle;	 that	 policy	 provided	 UM	 coverage	 of	 $100,000	 per	 person	 and	

$300,000	per	accident.		Wallace	was	also	insured	under	a	separate	State	Farm	

policy	covering	a	different	vehicle	with	the	same	UM	coverage	limits.	

	     [¶5] In	 August	 2013,	 the	 plaintiffs	 filed	 complaints,	 which	 were	 later	

consolidated,	 against	 Twin	 Pines,	 Hill,	 and	 State	 Farm.	 	 After	 the	 plaintiffs	

settled	 with	 Twin	 Pines,	 Alterra	 paid	 its	 excess	 policy	 limits—$1,000,000	 to	

Wallace	 and	 $1,000,000	 to	 Freja	 Folce.	 	 Safety	 also	 paid	 its	 policy	 limits—

$50,000	to	Freja	Folce	and	$50,000	for	the	benefit	of	Zoe.		All	claims	against	

defendants	other	than	State	Farm	were	then	dismissed	with	prejudice.	

	     [¶6] The	 plaintiffs	 and	 State	 Farm	 agreed	 for	 purposes	 of	 summary	

judgment	that	the	plaintiffs’	aggregate	damages	exceeded	$100,000—the	per	

accident	limit	of	Safety’s	primary	policy—which	would	entitle	the	plaintiffs	to	

UM	 benefits	 under	 the	 State	 Farm	 policies	 if	 State	 Farm	 were	 liable	 to	 pay	

UM	 benefits.	 	 The	 parties	 agreed	 to	 resolve	 the	 legal	 issue	 of	 State	 Farm’s	

liability	by	summary	judgment.	
4	

	     [¶7] In	 May	 2016,	 State	 Farm	 moved	 for	 summary	 judgment	 and	 the	

plaintiffs	moved	for	partial	summary	judgment.		By	order	dated	August	8,	2016,	

the	court	denied	the	plaintiffs’	motion	and	entered	summary	judgment	for	State	

Farm	upon	finding	that	“Defendant	Hill	was	not	an	underinsured	driver”	at	the	

time	 of	 the	 accident	 and	 therefore	 “State	 Farm	 is	 not	 required	 to	 pay.”	 	 The	

plaintiffs	appealed.	

                                    II.		DISCUSSION	

	     [¶8] Using	the	stipulated	facts,	we	review	the	court’s	entry	of	summary	

judgment	 for	 State	 Farm	 de	 novo	 as	 a	 question	 of	 law.	 	 Estate	 of	 Barron	 v.	

Shapiro	&	Morley,	LLC,	2017 ME 51,	¶	12,	157 A.3d 769.	

	     [¶9] Regarding	the	insurance	coverage	for	the	plaintiffs’	damages,	the	

first	$100,000	has	been	paid	by	the	Safety	primary	policy,	and	damages	in	the	

$1-3	million	range	have	been	paid	by	the	Alterra	excess	policy.		The	question	

we	must	resolve	is	whether	the	intermediate	range	from	$100,000	to	the	limits	

of	State	Farm’s	UM	liability	represents	a	gap	in	coverage,	meaning	that	Hill	was	

an	underinsured	driver,	or	whether	the	$2.1	million	in	payments	by	Safety	and	

Alterra,	significantly	exceeding	State	Farm’s	maximum	UM	liability,	means	that,	

as	the	trial	court	found,	“Hill	was	not	an	underinsured	driver.”	
                                                                                            5	

	      [¶10] The	plaintiffs	argue	that	for	the	first	$1	million	in	damages	Hill	was	

underinsured,	because	the	amount	of	their	State	Farm	UM	coverage	exceeded	

the	amount	of	his	Safety	primary	liability	coverage.		See	24-A	M.R.S.	§	2902(1)	

(2016)	 (“‘[U]nderinsured	 motor	 vehicle’	 means	 a	 motor	 vehicle	 for	 which	

coverage	 is	 provided,	 but	 in	 amounts	 .	 .	 .	 less	 than	 the	 limits	 of	 the	 injured	

party’s	uninsured	vehicle	coverage.”).		They	assert	that	that	fact	is	not	altered	

by	Alterra’s	excess	coverage,	which	did	not	begin	until	their	damages	exceeded	

$1	million,	and	so	“for	any	damages	of	$1,000,000	or	less,	[Alterra’s]	payments	

to	 Plaintiffs	 cannot	 be	 in	 any	 sense	 an	 offset	 from	 State	 Farm’s	 uninsured	

motorist	coverage	amount.”	

	      [¶11] State	Farm’s	position	is	straightforward:	the	plaintiffs’	maximum	

UM	coverage	is	less	than	the	$2.1	million	that	they	received	from	Twin	Pines’s	

liability	 insurers;	 therefore,	 there	 is	 no	 underinsured	 motorist	 gap	 that	

State	 Farm	 is	 responsible	 to	 cover.	 	 That	 position,	 adopted	 by	 the	 Superior	

Court,	is	supported	by	our	decisions.	

	      [¶12] In	construing	24-A	M.R.S.	§	2902	(2016),	we	have	said	that	“[t]he	

goal	 of	 the	 UM	 statute	 was	 to	 provide	 an	 injured	 insured	 the	 same	 recovery	

which	would	have	been	available	had	the	tortfeasor	been	insured	to	the	same	

extent	as	the	injured	party.		The	statute	does	not	support	double	recovery	or	a	
6	

windfall	 to	 the	 plaintiff.”	 	 Tibbetts	 v.	 Dairyland	 Ins.	 Co.,	 2010 ME 61,	 ¶	 12,	

999 A.2d 930  (citation	 and	 quotation	 marks	 omitted);	 see	 Dickau	 v.	 Vt.	 Mut.	

Ins.	 Co.,	 2014 ME 158,	 ¶	 43,	 107 A.3d 621;	 Farthing	 v.	 Allstate	 Ins.	 Co.,	

2010 ME 131,	¶	6,	10 A.3d 667.		“There	is	no	Maine	authority	to	support	the	

contention	that	an	insured	injured	by	a	single	tortfeasor	may	recover	a	total	

that	is	greater	than	the	insured’s	UM	coverage	limit.”		Farthing,	2010 ME 131,	

¶	6,	10 A.3d 667 (alteration	and	quotation	marks	omitted).		Accordingly,	“we	

have	.	.	.	characterized	UM	insurance	as	gap	coverage”	that	“fills	the	gap	left	by	

an	underinsured	tortfeasor.”		 Tibbetts,	2010 ME 61,	¶¶	17,	21,	999 A.2d 930 

(quotation	marks	omitted).	

	      [¶13] The	 UM	 statute	 provides	 that	 “[i]n	 the	 event	 of	 payment	 to	 any	

person	under	uninsured	vehicle	coverage	.	.	.	to	the	extent	of	such	payment	the	

insurer	shall	be	entitled	to	the	proceeds	of	any	settlement	or	recovery	from	any	

person	legally	responsible	for	the	bodily	injury	as	to	which	such	payment	was	

made.”	 	 24-A	 M.R.S.	 §	 2902(4)	 (emphasis	 added).	 	 In	 Tibbetts,	 we	 noted	 that	

section	2902(4)	“explicitly	requires”	offsetting	a	tortfeasor’s	payment	from	a	

damages	award,	and	concluded	that	the	offset	applied	in	that	case	even	though	

the	payor	was	an	excess	insurer,	saying	that	“[i]n	keeping	with	[the	goal	of	the	

UM	statute]	any	compensatory	payments	received	by	the	plaintiff	reduce	the	
                                                                                                      7	

gap	in	coverage,	and	are	offset	against	the	judgment.”		Tibbetts,	2010 ME 61,	

¶¶	11,	12,	999 A.2d 930 (emphasis	added).		Here,	the	$2	million	paid	by	Alterra	

is	a	“compensatory	payment[]	received	by	the	plaintiff[s],”	id.	¶	12,	and	so	that	

payment	must	be	offset.	

	       [¶14] In	 Farthing,	 the	 plaintiff	 contended	 that	 $20,000	 paid	 by	 the	

tortfeasor’s	 insurer	 “reduced	 the	 total	 damages	 she	 could	 recover,	 not	 the	

amount	she	could	recover	under	her	UM	coverage,”	which	had	a	$100,000	per	

person	limit.		2010 ME 131,	¶¶	2-3,	10 A.3d 667.		We	applied	the	formula	set	

out	in	Tibbetts2	and	concluded	that	

        [a]pplying	the	Tibbetts	formula	to	these	facts,	if	[the	tortfeasor]	had	
        been	 insured	 to	 the	 amount	 of	 [the	 plaintiff’s]	 UM	 coverage,	 [the	
        plaintiff]	 would	 have	 recovered	 $100,000	 from	 [the	 tortfeasor’s]	
        insurer,	given	[the	plaintiff’s]	damages.		The	amount	actually	paid	
        by	 [the	 tortfeasor],	 $20,000,	 is	 subtracted	 from	 that	 amount,	
        leaving	$80,000	as	the	coverage	gap	that	Allstate	was	responsible	
        to,	 and	 did,	 pay.	 	 Accordingly,	 [the	 plaintiff]	 in	 fact	 recovered	
        $100,000,	just	as	she	would	have	had	[the	tortfeasor’s]	insurance	
        been	 equal	 to	 [the	 plaintiff’s]	 UM	 coverage.	 	 That	 result	 is	
        consistent	with	the	goal	of	the	UM	statute,	in	that	it	provides	[the	
        plaintiff]	 as	 the	 injured	 insured	 the	 same	 recovery	 which	 would	

    2
     		In	Tibbetts,	we	explained	that	a	gap	in	coverage	for	which	the	injured	insured’s	UM	carrier	is	
responsible,	and	the	required	offset	of	payments	by	the	tortfeasor,	is	determined	by	“initially	ask[ing]	
what	amount	the	injured	party	would	recover	if	the	tortfeasor	were	insured	to	the	amount	of	the	
injured	party’s	UM	coverage.		If	damages	are	less	than	the	total	policy	limits	.	.	.	the	injured	party	
would	recover	his	damages	in	full.		If	damages	exceed	the	total	limits,	he	would	recover	that	total	
limit.		After	determining	this	recovery	amount,	the	court	then	subtracts	the	amounts	already	paid	by	
the	tortfeasor	or	by	insurers	in	settlement,	and	thereby	determines	the	coverage	gap.”		Tibbetts	v.	
Dairyland	Ins.	Co.,	2010 ME 61,	¶	18,	999 A.2d 930.	
   			
8	

       have	 been	 available	 had	 the	 tortfeasor	 been	 insured	 to	 the	 same	
       extent.	
       	
Id.	¶	8	(quotation	marks	omitted).		Here,	the	plaintiffs	have	recovered	far	more	

from	 the	 tortfeasor’s	 insurers	 than	 the	 maximum	 amount	 of	 UM	 coverage	

provided	 by	 the	 State	 Farm	 policies.	 	 Accordingly,	 they	 have	 surpassed	 “the	

same	 recovery	 which	 would	 have	 been	 available	 had	 the	 tortfeasor	 been	

insured	to	the	same	extent.”		Id.	(quotation	marks	omitted).	

	     [¶15] We	recently	reaffirmed	the	Farthing	process:	

       When	the	total	damages	are	greater	than	the	amount	of	UM/UIM	
       coverage	 .	 .	 .	 [section	 2902(4)]	 mandates	 that	 insurers	 offset	 the	
       amount	of	coverage	available	in	the	UM/UIM	policy,	rather	than	the	
       amount	 of	 damages	 incurred,	 by	 the	 amount	 actually	 paid	 by	 the	
       tortfeasor.		We	have	explained	that	the	reason	for	doing	so	is	that	
       the	goal	of	the	UM	statute	is	to	provide	an	injured	insured	the	same	
       recovery	that	would	have	been	available	had	the	tortfeasor	been	
       insured	to	the	same	extent	as	the	injured	party.		Thus,	it	was	proper	
       to	offset	the	amount	of	available	coverage	with	the	other	motorist’s	
       payment	.	.	.	.	
       	
Graf	 v.	 State	 Farm	 Mut.	 Auto.	 Ins.	 Co.,	 2016 ME 153,	 ¶	 17,	 149 A.3d 529 

(emphasis	 added)	 (alterations,	 original	 emphases,	 citations,	 and	 quotation	

marks	omitted).		Here,	offsetting	the	amount	of	UM	coverage	available	to	the	

plaintiffs	with	Twin	Pines’	$2.1	million	payment	yields	the	trial	court’s	result—

“There	is	no	gap	in	coverage	and	defendant	State	Farm	is	not	required	to	pay.”	
                                                                                      9	

	     The	entry	is:	

                    Judgment	affirmed.	

                    	     	      	      	      	     	

JABAR,	J.,	dissenting.	

	     [¶16]	 	 I	 respectfully	 dissent	 because	 the	 plain	 language	 of	 Maine’s	

UM	statute,	and	our	jurisprudence	interpreting	it,	require	that	the	plaintiffs	be	

afforded	 the	 same	 recovery	 that	 they	 would	 have	 been	 entitled	 to	 had	 the	

Twin	Pines	vehicle	been	insured	to	the	same	extent	as	Wallace’s	UM	coverage.	

	     [¶17]	 	 The	 automobile	 accident	 at	 the	 heart	 of	 this	 case	 produced	

disastrous	 consequences.	 	 The	 plaintiffs,	 Wallace	 and	 Folce,	 allege	 in	 their	

pleadings	that,	as	a	result	of	the	accident,	they	both	suffered	brain	injuries	and	

numerous	lacerations.		In	addition,	Wallace	alleges	to	have	suffered	a	crushed	

right	 humerus,	 pulmonary	 contusions,	 and	 fractures	 to	 his	 radius,	 ulna,	 ribs,	

and	both	femurs.		According	to	her	complaint,	Folce	lost	the	use	of	her	left	eye.	

	     [¶18]		As	the	Court	detailed,	at	the	time	of	the	accident,	the	Twin	Pines	

vehicle	was	covered	by	a	Safety	Insurance	Company	liability	policy	with	limits	

of	 $50,000	 per	 person	 and	 $100,000	 per	 accident.	 	 The	 automobile	 was	 also	

covered	by	an	Alterra	excess	policy	with	limits	of	$2,000,000.		Under	the	terms	

of	the	Alterra	excess	policy,	Twin	Pines	was	required	to	maintain	a	minimum	of	
10	

$1,000,000	 of	 primary	 liability	 coverage,	 and	 if	 it	 failed	 to	 maintain	 this	

coverage	level,	Alterra	was	“liable	only	to	the	extent	that	[Alterra]	would	have	

been	 held	 liable	 had	 [Twin	 Pines]	 complied”	 with	 the	 minimum	 limits	

provision.	 	 Since	 Twin	 Pines	 failed	 to	 comply	 with	 its	 obligation	 to	 maintain	

$1,000,000	of	underlying	liability	insurance,	Alterra	was	only	responsible	for	

damages	in	excess	of	$1,000,000.		In	effect,	the	Alterra	excess	policy	contained	

a	$1,000,000	deductible	provision.3		Wallace	and	Folce,	on	the	other	hand,	were	

covered	 under	 two	 different	 State	 Farm	 policies,	 each	 providing	 for	

UM	coverage	in	the	amount	of	$100,000	per	person	and	$300,000	per	accident.	

	       [¶19]	 	 Alterra	 settled	 with	 Wallace	 and	 Folce	 for	 its	 $2,000,000	 policy	

limits,	 with	 each	 receiving	 $1,000,000.	 	 Presumably,	 Alterra	 believed	 that	

Wallace	and	Folce’s	damages	totaled	at	least	$3,000,000	because,	by	the	terms	

of	 its	 policy,	 Alterra	 was	 liable	 only	 for	 damages	 exceeding	 the	 deductible	

amount	 of	 $1,000,000.	 	 Twin	 Pines’	 primary	 insurer,	 Safety	 Insurance	

Company,	also	settled	with	Wallace	and	Folce	for	its	policy	limits	of	$50,000	per	

person.	 	 Therefore,	 because	 Twin	 Pines	 did	 not	 maintain	 $1,000,000	 of	

underlying	 insurance	 as	 was	 required	 pursuant	 to	 the	 Alterra	 excess	 policy,	

    3
    		The	Alterra	policy	provides	that	Alterra	“shall	only	be	liable	under	this	Policy	in	the	event	of	
reduction	 or	 exhaustion	 of	 all	 the	 limits	 of	 the	 Underlying	 Insurance	 and	 any	 other	 valid	 and	
collectable	insurance	by	payment	in	connection	with	claim(s).”	
                                                                                       11	

Wallace	 and	 Folce’s	 recovery	 was	 limited	 to	 $2,100,000:	 $50,000	 each	 from	

Safety	and	$1,000,000	each	from	Alterra.	

	     [¶20]		The	plaintiffs	now	seek	to	recover	under	the	UM	provisions	of	the	

State	Farm	policies.		Pursuant	to	24-A	M.R.S.	§	2902(1)	(2016),	an	underinsured	

vehicle	 is	 defined	 as	 “a	 motor	 vehicle	 for	 which	 coverage	 is	 provided,	 but	 in	

amounts	 .	 .	 .	 less	 than	 the	 limits	 of	 the	 injured	 party’s	 uninsured	 vehicle	

coverage.”		As	the	Court	correctly	indicates,	we	have	consistently	noted	that	the	

purpose	 of	 the	 statute	 is	 to	 provide	 the	 injured	 party	 the	 same	 recovery	 that	

would	have	been	available	had	the	tortfeasor	been	insured	to	the	same	extent	as	

the	injured	party.		See	Farthing	v.	Allstate	Ins.	Co.,	2010 ME 131,	¶	6,	10 A.3d 667;	

Jipson	v.	Liberty	Mut.	Fire	Ins.	Co.,	2008 ME 57,	¶	8,	942 A.2d 1213;	Tibbetts	v.	

Me.	 Bonding	 &	 Cas.	 Co.,	 618 A.2d 731,	 734	 (Me.	 1992).	 	 Although	 the	 Court	

correctly	 sets	 out	 the	 operative	 principles	 outlined	 in	 the	 aforementioned	

cases,	it	misapplies	those	principles	to	the	facts	this	case.	

	     [¶21]	 	 The	 facts	 of	 this	 case	 are	 unique	 because	 of	 the	 $1,000,000	

deductible	 contained	 in	 the	 Alterra	 excess	 policy,	 and	 this	 Court	 has	 never	

applied	the	UM	statute	under	like	circumstances.		The	leading	cases	applying	

and	enunciating	the	purpose	of	the	UM	statute	have	not	dealt	squarely	with	a	

situation	where	an	excess	policy	is	subject	to	a	$1,000,000	deductible.		All	of	
12	

the	 cases	 cited	 by	 the	 Court	 deal	 with	 relatively	 straightforward	 setoffs	 of	

UM	policy	limits	by	amounts	the	injured	party	received	from	the	tortfeasor	or	

his	insurance	carrier	under	policies	without	deductibles.		See	Graf	v.	State	Farm	

Mut.	 Aut.	 Ins.	 Co.,	 2016 ME 153,	 ¶¶	 17-18,	 149 A.3d 529  (reducing	 plaintiff’s	

available	UM	coverage	by	amounts	she	received	from	the	tortfeasor’s	insurer);	

Tibbetts	v.	Dairyland	Ins.	Co.,	2010 ME 61,	¶¶	11-12,	999 A.2d 930 (applying	

funds	received	by	the	plaintiff	in	a	pre-trial	settlement	to	reduce	the	verdict	he	

obtained	 on	 his	 UM	 claims);	 Jipson,	 2008 ME 57,	 ¶¶	 2,	 11,	 942 A.2d 1213 

(reducing	plaintiff’s	maximum	recovery	from	his	UM	insurer	by	amounts	the	

plaintiff	received	from	the	tortfeasor’s	insurer).	

	     [¶22]		The	facts	of	this	case	demonstrate	that	the	plaintiffs	did	not	receive	

the	“same	recovery”	that	they	would	have	been	entitled	to	had	the	Twin	Pines	

vehicle	 been	 insured	 to	 the	 “same	 extent”	 as	 Wallace’s	 UM	 coverage.	 	 See	

Farthing,	2010 ME 131,	¶	6,	10 A.3d 667 (quotation	marks	omitted).		The	math	

is	simple.		If	the	Twin	Pines	vehicle	were	insured	to	the	“same	extent”	as	the	

plaintiffs’	 UM	 coverage—i.e.,	 $100,000	 per	 person,	 $300,000	 per	 accident—

rather	than	the	$50,000	per	person	limits	of	the	Safety	policy,	then	Wallace	and	

Folce	would	have	each	recovered	$1,100,000	($100,000	from	the	Safety	policy	

and	 $1,000,000	 from	 the	 Alterra	 excess	 policy).	 	 However,	 since	 the	 Safety	
                                                                                       13	

policy	 limits	 were	 only	 $50,000	 per	 person,	 Wallace	 and	 Folce	 recovered	

$1,050,000	 ($50,000	 from	 the	 Safety	 policy	 and	 $1,000,000	 from	 the	 Alterra	

excess	policy).		Therefore,	a	$50,000	per	plaintiff	gap	exists	between	Wallace	

and	Folce’s	actual	recovery	and	the	recovery	to	which	they	would	have	been	

entitled	had	Twin	Pines	maintained	primary	coverage	in	the	same	amount	as	

the	 State	 Farm	 UM	 policy	 limits.	 	 Together,	 the	 Safety	 policy	 and	 the	 Alterra	

excess	policy	created	a	donut	hole,	affording	an	injured	individual	coverage	for	

the	first	$50,000	in	damages	followed	by	no	coverage	for	the	next	$950,000	in	

damages,	followed	by	coverage	for	damages	in	excess	of	$1,000,000.	

	     [¶23]		The	Court	concludes	that	because	“the	plaintiffs	have	recovered	

far	 more	 from	 the	 tortfeasor’s	 insurers	 than	 the	 maximum	 amount	 of	

UM	coverage	provided	by	the	State	Farm	policies,”	Wallace	and	Folce	cannot	

prevail	on	their	UM	claims.		Court’s	Opinion	¶	14.		Simply	looking	at	the	total	

Wallace	 and	 Folce	 received	 is	 not	 the	 proper	 analysis	 to	 apply	 here.	 	 Such	 a	

simplistic	 approach	 falls	 short	 of	 promoting	 the	 aims	 of	 the	 statute	 and	 is	

ill-suited	given	the	unique	facts	of	this	case.		Although	Wallace	and	Folce	have	

recovered	sums	in	excess	of	the	State	Farm	UM	policy	limits,	they	received	less	

than	what	they	would	have	been	entitled	to	had	the	Twin	Pines	vehicle	carried	

the	same	liability	insurance	as	the	plaintiffs’	$100,000	UM	policy	limits.	
14	

	     [¶24]		By	overlooking	the	$1,000,000	deductible	contained	in	the	Alterra	

policy,	the	Court	closes	this	donut	hole	and	improperly	credits	Twin	Pines	for	

having	 insurance	 it	 never	 purchased.	 	 See	 Jeffrey	 E.	 Thomas,	 4-24	 New	

Appleman	 on	 Insurance	 Law	 Library	 Edition	 §	 24.02(2)(a)	 (2011)	 (“A	 true	

excess	policy	does	not	broaden	the	underlying	coverage.		While	an	excess	policy	

increases	the	amount	of	coverage	available	to	compensate	for	a	loss,	it	does	not	

increase	the	scope	of	coverage.”	(footnote	omitted)).		If,	for	example,	under	the	

same	 circumstances	 Wallace	 and	 Folce’s	 damages	 totaled	 $1,000,000—the	

equivalent	of	the	deductible—and	the	Alterra	excess	policy	was	not	triggered,	

it	is	undoubted	that	the	Twin	Pines	vehicle	would	be	deemed	underinsured,	and	

Wallace	 and	 Folce	 would	 be	 entitled	 to	 recover	 the	 difference	 between	 the	

$100,000	of	UM	coverage	in	the	State	Farm	policy	and	the	$50,000	Safety	policy	

limits.	 	 See	 Cobb	 v.	 Allstate	 Ins.	 Co.,	 663 A.2d 38,	 40	 (Me.	 1995)	 (“Because	

Allstate’s	policy	is	excess,	it	has	no	applicability	at	all	until	the	primary	coverage	

is	 exhausted.”).	 	 However,	 because	 Wallace	 and	 Folce’s	 damages	 were	 so	

extensive	that	Alterra	settled	for	the	excess	policy	limits	(notwithstanding	the	

$1,000,000	deductible),	Twin	Pines	is	absolved	of	its	obligation	to	provide	the	

underlying	coverage,	and	State	Farm	is	relieved	of	its	obligation	to	provide	the	

UM	coverage	the	plaintiffs	paid	for.		Wallace	and	Folce	are	therefore	left	to	bear	
                                                                                       15	

the	brunt	of	this	shortfall	occasioned	by	the	$1,000,000	deductible	contained	in	

the	Alterra	excess	policy.	

	        [¶25]	 	 In	 conclusion,	 the	 plaintiffs	 Wallace	 and	 Folce	 are	 entitled	 to	

receive	 the	 difference	 between	 Twin	 Pines’	 primary	 coverage	 ($50,000	 per	

person)	 and	 the	 limits	 of	 the	 State	 Farm	 UM	 policy	 ($100,000	 per	 person).		

Therefore,	I	would	vacate	and	enter	a	judgment	in	favor	of	Wallace	and	Folce	

for	$50,000	each.	

	        	        	         	   	   	

Steven	D.	Silin,	Esq.,	and	Robert	H.	Furbish,	Esq.	(orally),	Berman	&	Simmons,	
P.A.,	Lewiston,	for	appellant	Matthew	J.	Wallace	
	
Michael	F.	Vaillancourt,	Esq.,	Ainsworth,	Thelin	&	Raftice,	P.A.,	South	Portland,	
for	appellant	Freja	Folce	
	
J.	 William	 Druary,	 Jr.,	 Esq.,	 and	 Gregory	 M.	 Patient,	 Esq.	 (orally),	 Marden,	
Dubord,	Bernier	&	Stevens,	PA	LLC,	Waterville,	for	appellee	State	Farm	Mutual	
Automobile	Insurance	Company	
	
	
Cumberland	County	Superior	Court	docket	numbers	CV-2013-367	and	CV-2013-532	
FOR	CLERK	REFERENCE	ONLY