Court Opinion

ID: 4305022
Source: CourtListenerOpinion
Date Created: 2018-08-17 17:01:43.88037+00
Date Added: 2024-06-11T14:07:59.645060
License: Public Domain

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               THE SUPREME COURT OF THE STATE OF ALASKA

NATHAN BALL,                  )
                              )                        Supreme Court No. S-16573
                   Appellant, )
                              )                        Superior Court No. 4FA-15-02904 CI
        v.                    )
                              )                        OPINION
ALLSTATE INSURANCE COMPANY, )

an Illinois company,          )                        No. 7275 – August 17, 2018

                              )
                   Appellee.  )
                              )

              Appeal from the Superior Court of the State of Alaska,
              Fourth Judicial District, Fairbanks, Michael A. MacDonald,
              Judge.

              Appearances: Ward Merdes, Merdes Law Office, P.C.,
              Fairbanks, for Appellant. Alfred Clayton, Jr. and Ryan
              Thomas Bravo, Clayton & Diemer, LLC, Anchorage, for
              Appellee.

              Before: Stowers, Chief Justice, Winfree, Maassen, Bolger,
              and Carney, Justices.

              WINFREE, Justice.

I.    INTRODUCTION
              Allstate Insurance Company denied underinsured motorist (UIM) coverage
to Nathan Ball for an accident involving his own vehicle after determining he was not
an insured person under his then-fiancée’s parents’ Allstate automobile insurance policy.
Ball contended that his fiancée was a “policyholder” for purposes of her parents’ policy,
a necessary predicate to his argument for UIM coverage under the policy. But the policy
declarations page did not list “policyholders,” it listed only “named insureds” and
“drivers.” The superior court ruled on summary judgment that the policy language was
not ambiguous because “policyholder” referred only to the parents, the “named
insureds,” that the fiancée — only a listed driver — had no objectively reasonable
expectation that she was a policyholder, and, therefore, that Allstate did not have a duty
to provide Ball UIM coverage. We agree that “policyholder” encompasses only the
named insureds, not listed drivers, and we therefore affirm the superior court’s decision.
II.    FACTS AND PROCEEDINGS
              In September 2012 Allstate delivered an automobile insurance policy
renewal to Richard and Kathryn Davis at their address in Tok, incorporating changes
they had requested to the policy. The policy listed “Richard & Kathryn Davis” as the
“NAMED INSURED(S)” and “Richard” and “Kathryn,” as well as “Vivian,” the
couple’s adult daughter, as “DRIVER(S).” (Emphases omitted.)
              One day in December Vivian and her then-fiancé, Nathan Ball, were
driving two of Ball’s vehicles; the vehicle Ball was driving stalled. Vivian backed the
vehicle she was driving to the front of the stalled vehicle so that Ball could attach a tow
chain. While Ball was positioned between the two vehicles, a third party drove into the
back of the stalled vehicle; Ball was seriously injured.
              Ball made successful claims under the third party’s liability insurance
coverage, under his own liability insurance coverage protecting Vivian, and under his
own UIM insurance coverage. Ball also made a claim under the UIM provision of the
Davises’ Allstate policy.
              The Allstate UIMprovision states Allstate “will pay all damages, other than
punitive or exemplary damages, that an insured person is legally entitled to recover from

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the owner or operator of an uninsured or underinsured auto because of . . . bodily injury
sustained by an insured person.” (Emphasis omitted.) The policy defines “[i]nsured
[p]ersons” as “[y]ou and any resident relative” or “[a]ny person while in, on, getting into
or out of your insured auto with your permission,” (emphases omitted) and defines
“insured auto” to include a motor vehicle “not owned by you or a resident relative if
being operated by you with the owner’s permission.” (Emphases omitted.) The policy
defines “[y]ou” or “[y]our” as “the policyholder named on the Policy Declarations and
that policyholder’s resident spouse.” (Emphases omitted.)
              Allstate denied coverage for Ball’s claim. Allstate contended that Ball did
not qualify as an insured person under the Davises’ policy because “[n]one of the
definitions of ‘[i]nsured [p]ersons’ appli[ed] to [Ball’s] status at the time of the accident.”
Allstate explained that Ball was “neither a policyholder of the Davis policy, nor a
resident relative in the Davis household,” that “[t]he two people defined as ‘you’ [and
thus policyholders] are Richard and Kathryn Davis,” and that the car Vivian was driving
at the time of the incident was owned by Ball and thus a non-owned auto under the
Davises’ policy.
              Allstate subsequently filed a complaint for a declaratory judgment that it
had no duty under the terms of the policy to make any payment to Ball for his UIM
claim, and it then moved for partial summary judgment. Allstate argued Ball was not an
insured under the policy because the policy language and cases considering similar
language established that Vivian — a listed permissive driver — did not meet the policy
definition of “you” and Ball’s vehicle did not meet the definition of “your insured auto.”
Ball’s opposition and cross-motion for summary judgment argued that the policy was
ambiguous because it defined “you” as “the policyholder named on the Policy
Declarations” but failed to name a policyholder on that page, instead listing “named
insureds” and “drivers.” Ball contended there was a reasonable expectation that the

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policy should be construed in favor of coverage because Vivian submitted an affidavit
stating she believed she was a policyholder.
             The superior court granted Allstate’s motion and denied Ball’s cross-
motion. The court determined the policy language was not ambiguous because
“policyholder” referred only to the named insureds — Richard and Kathryn — not to
listed drivers, and Vivian did not have an objectively reasonable expectation that she was
a policyholder.
             Ball filed a motion for reconsideration, arguing that the court unnecessarily
based its decision on “whether Vivian can be reasonably identified as a ‘Policyholder’ ”
because the policy did not define the term and Vivian had a reasonable expectation that
she was a policyholder. The court denied Ball’s motion, holding Ball’s interpretation of
“policyholder” was not reasonable and finding Ball failed to “raise any material facts or
propositions of law that change the [court’s] analysis.”
             Ball appeals, arguing the superior court erred in granting summary
judgment because “policyholder” is ambiguous and Vivian had an objectively reasonable
expectation that she was a policyholder.
III.   STANDARD OF REVIEW
             We review grants of summary judgment de novo.1 The superior court’s
interpretation of insurance policy language is also reviewed de novo.2 “We therefore

       1
             Christensen v. Alaska Sales &Serv., Inc., 335 P.3d 514, 516 (Alaska 2014)
(citing Hurn v. Greenway, 293 P.3d 480, 483 (Alaska 2013)).
       2
            United Servs. Auto. Ass’n v. Neary, 307 P.3d 907, 910 (Alaska 2013) (citing
State Farm Mut. Auto. Ins. Co. v. Dowdy, 192 P.3d 994, 998 (Alaska 2008)).

                                           -4-                                      7275

apply a de novo standard of review, ‘adopting the rule of law that is most persuasive in
light of precedent, reason, and policy.’ ”3
IV.    DISCUSSION
              “When interpreting insurance policies, we look to the language of the
disputed provisions, other provisions in the policy, extrinsic evidence, and case law
interpreting similar provisions.”4
              Insurance policies are construed . . . to honor a lay insured’s
              reasonable expectations. Policy language is construed in
              accordance with ordinary and customary usage. Ambiguities
              in . . . insurance policies are to be construed most favorably
              to an insured, but ambiguities only exist when there are two
              or more reasonable interpretations of particular policy
              language.[5]
       A.	    Disputed Policy Provision And Other Relevant Provisions
              The policy states Allstate “will pay all damages, other than punitive or
exemplary damages, that an insured person is legally entitled to recover from the owner
or operator of an uninsured or underinsured auto because of . . . bodily injury sustained
by an [i]nsured [p]erson.” (Emphasis omitted.) The policy defines “insured person” as
“[y]ou and any resident relative” or “[a]ny person while in, on, getting into or out of your
insured auto with your permission,” and defines “insured auto” to include a motor
vehicle “not owned by you or a resident relative if being operated by you with the
owner’s permission.” (Emphases omitted.) “You” and “[y]our” are defined as “the

       3
             Dowdy, 192 P.3d at 998 (quoting State Farm Mut. Auto. Ins. Co. v.
Lestenkof, 155 P.3d 313, 316 (Alaska 2007)).
       4
            Neary, 307 P.3d at 910 (citing Allstate Ins. Co. v. Teel, 100 P.3d 2, 4
(Alaska 2004)).
       5
            Dowdy, 192 P.3d at 998 (footnotes omitted) (citing Allstate Ins. Co. v.
Falgoust, 160 P.3d 134, 138-39 (Alaska 2007)).

                                              -5-	                                    7275

policyholder named on the Policy Declarations and that policyholder’s resident spouse.”
(Emphases omitted.)
             The policy declarations do not name any “policyholders” in the five distinct
rows of information. Instead, the declarations page’s first row states the “NAMED
INSURED(S)”: “Richard & Kathryn Davis” and their Tok address. (Emphasis omitted.)
That same row lists “YOUR ALLSTATE AGENT” and “YOUR BILL,” providing “your
payment options.” (Emphases omitted.) The second row lists the policy number and
period. The third row identifies “DRIVER(S) LISTED”: “Richard, Kathryn, Vivian.”
(Emphasis omitted.) The fourth and fifth rows list the covered vehicles and total
premium, respectively.
             The policy is addressed to “Richard & Kathryn Davis.” The policy cover
letter notifies Richard and Kathryn of the changes “you requested to your policy”;
identifies “[y]our premium” and “[y]our discount savings for this policy period”; and
instructs them to “[v]erify the vehicles and drivers listed on the Policy Declarations.”
(Emphasis added.) The policy’s “Proof of Insurance Card” lists “Richard & Kathryn
Davis” with their Tok address. Adjacent to this information, the policy states: “[t]he
Policy Declarations section contains detailed information about your policy such as
drivers, vehicles, coverages, limits, and premiums.” (Emphasis added.)
             The “General” section of the policy, which identifies the scenarios that
would result in a premium change, states: “The premium for each auto is based on
information Allstate has received from you or other sources. . . . You agree that if this
information changes or is incorrect or incomplete, we may adjust your premium
accordingly during the policy period.” (Emphases omitted.) One enumerated change
that could result in a premium adjustment is a “change in drivers residing in your
household, their ages or marital status.” (Emphasis added; original emphasis omitted.)

                                           -6-                                     7275

                 Although the policy declarations page does not identify the “policyholders,”
it is apparent that “Richard & Kathryn” — the persons identified as insureds, named on
the policy’s insurance cards, and identified as those financially responsible for the policy
— are intended to be the policyholders. By contrast, “Vivian” is identified only as a
permissive driver of the listed vehicles and Vivian’s last name and contact information
are not listed anywhere on the policy. The policy repeatedly distinguishes “you” and
“your” from “drivers,” but it does not distinguish “you” and “your” from “insureds.” As
Allstate argues, “[i]f ‘you’ and ‘drivers’ were plausibly the same person(s), the Policy
would not continually list them separately and inform ‘you’ of ‘your’ duties regarding
‘driver(s).’ ”
       B.        Ordinary And Customary Usage
                 “Policy language is construed in accordance with ordinary and customary
usage.”6 The parties dispute the ordinary and customary usage of “policyholder.” Citing
an internet dictionary, Ball argues that “[a] common, general dictionary definition of the
term ‘policyholder’ is ‘an insured.’ ” Allstate contends this definition is too “broad[],”
arguing that “ordinary and popular definitions of ‘policyholder’ have one thread that
weaves them together: they use policy ownership and control as the foundation of being
a policyholder.”
                 Black’s Law Dictionary defines policyholder as “[s]omeone who owns an
insurance policy, regardless of whether that person is the insured party. — Also termed
policyowner.”7       Webster’s Third New International Dictionary similarly defines

       6
                 Falgoust, 160 P.3d at 139.
       7
                 Policyholder, BLACK’S LAW DICTIONARY (10th ed. 2014) (emphasis in
original).

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policyholder as “one . . . granted an insurance policy.”8 The owners of the Allstate
policy are “Richard & Kathryn Davis”: they procured the policy; the policy was
addressed and mailed to them at their address in Tok; they were financially responsible
for premium changes; and they had the ability to change or confirm changes to the
policy, including rejecting UIM coverage. These ownership attributes are not applicable
to Vivian, who is merely a permissive driver. Only Richard and Kathryn Davis — the
named insureds — are owners and thus policyholders of the policy.
              Our natural replacement of one with the other in a case interpreting a
different provision in a nearly identical policy further suggests that “policyholder”
usually means the “named insured.”9 And we also note that Alaska’s Division of
Insurance has used “named insured” and “policyholder” interchangeably. In 1997 the
legislature enacted AS 28.20.440(l), permitting a “person named as insured” to exclude
from coverage a household or family member. The Division, in a bulletin to insurers,
expressed concern that “a policyholder may be unaware of the potential risks” of
requesting such an exclusion and encouraged insurers “to develop a disclosure form for
the named insured to sign if the named insured requests that a relative or resident of the
household be excluded from the policy.”10 If Ball’s interpretation controlled, this statute
could enable someone in Vivian’s situation — without the requisite ownership attributes

       8
              Policyholder, WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY (2002).
       9
              See Teel, 100 P.3d at 3-4 (interpreting whether policy language describing
coverage for bodily injury barred negligent infliction of emotional distress claim). The
policy in that case similarly defined “you” as “the policyholder named on the
declarations page and that policyholder’s resident spouse.” When restating the policy’s
definition of “insured person,” we replaced “you” with “[t]he named insured.” Id.
       10
           State of Alaska Dep’t of Commerce & Econ. Dev., Bulletin 97-07 (July 22,
1997) (emphases added).

                                            -8-                                      7275

of a policyholder — to remove from coverage any other person listed on the declarations
page who was a household or family member. This is not an objectively reasonable
interpretation of the policy language.
       C.     Case Law From Other Jurisdictions
              Case law from other jurisdictions supports our interpretation that
“policyholder” encompasses “named insureds” but not listed drivers. Carlson v. Allstate
Insurance Co., from the Minnesota Supreme Court, is squarely on point in its analysis
of a nearly identical UIM policy provision listing two parents as named insureds and
their two sons as drivers.11 The Carlson court held the policy was unambiguous because
“a reasonable interpretation of the policy is that the term ‘policyholder’ refers to the
named insureds and not the drivers listed on the declarations page.”12 The court’s
conclusion was premised on its review of the dictionary definitions of policyholder13 and
its determination that a reasonable person would know who owns an insurance policy by
looking at who “secured the policy and paid the premiums.”14 Because there was no
basis for an alternative interpretation “[o]ther than the fact that the drivers as well as the
named insureds appear on the declarations page,” the court concluded that “a reasonable

       11
              749 N.W.2d 41, 43-44 (Minn. 2008).
       12
              Id. at 45.
       13
             Id. (“[O]ne who owns an insurance policy.” (quoting Policyholder,
BLACK’S LAW DICTIONARY (8th ed. 2004))); id. (“[T]he individual . . . in whose name
an insurance policy is written; an insured.” (alteration in original) (quoting Policyholder,
THE RANDOM HOUSE DICTIONARY OF THE ENGLISH LANGUAGE (2d ed. 1987))).
       14
              Id.

                                             -9-                                        7275

person, even one unversed in the law or insurance, would understand that ‘policyholder’
referred to the policy’s owner.”15
              In Laird v. Allstate Insurance Co. the Oregon Court of Appeals held that
a daughter was not a policyholder of a nearly identical policy when she was listed by her
first name and her parents were listed as named insureds.16 The court reasoned that “the
only plausible construction of the policy is to read the word ‘policyholder’ as referring
to the named insureds.”17 The court premised its conclusion on its analysis of the
ordinary meaning of policy and policyholder, the fact that “the named insureds are the
persons who obtain and control an insurance policy,” and its reasoning that “[i]f ‘you’
and ‘your’ were intended to include listed drivers other than the named insureds, it seems
likely that the policy would note the address of any such person.”18
       D.     Summary
              Based on Allstate’s policy language, common usage of “policyholder,” and
other jurisdictions’ analysis of similar policy language, “policyholder” encompasses only

       15
              Id. at 45-46.
       16
              221 P.3d 780, 781 (Or. App. 2009).
       17
              Id. at 785.
       18
               Id.; see also Allstate Ins. Co. v. Agoston, No. 1:11-cv-1210-WTL-TAB,
2012 WL 2562384, *3-4 (S.D. Ind. June 29, 2012) (holding that omission of
“policyholder” on declarations page was not ambiguous because only parents’ address
was listed, that next to parents’ names it stated “Your Allstate Agent” and “Your Bill,”
and that because “your” clearly refers to parents “[i]t would be unreasonable to construe
[the daughter], who is only listed as a driver, as a policyholder”). Cf. Reynolds v. Allstate
Ins. Co., 855 F. Supp. 2d 989, 997 (N.D. Cal. 2012) (analyzing whether passenger whose
name appeared as named insured fit within policy’s household exclusion language;
finding ambiguity because declarations page did not identify “policyholder,” but noting
“the fact that the term ‘policyholder’ is not defined in the policy does not by itself create
an ambiguity”).

                                            -10-                                       7275

the “named insureds,” not listed drivers; we therefore affirm the superior court’s grant
of summary judgment.
V.    CONCLUSION
             The superior court’s decision is AFFIRMED.

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