Farm Bureau Mutual Insurance v. Schrock
252 P.3d 98
| Idaho | 2011Background
- Farm Bureau issued two policies to John and Lisa Schrock: a City Squire auto policy ($500,000 liability) and a Personal Umbrella Policy ($1,000,000 excess).
- Stacy Schrock, a passenger and Lisa and John’s daughter, sustained significant injuries in a single-car accident in which Christa Springer was the driver with Stacy’s permission.
- Farm Bureau sought a declaration of no coverage under the Umbrella Policy, arguing Christa was not an insured and exclusions 8, 9, and 16 barred coverage.
- District court granted summary judgment for Farm Bureau, holding Exclusion 8 limited coverage and Household Exclusion applied, and I.C. § 49-2417 did not apply to umbrella policies.
- Appellants countered that Exclusion 8 was a savings clause that could extend underlying coverage, argued imputed liability under § 49-2417, and sought coverage or Reed-based public policy relief; they also sought attorney fees.
- The Idaho Supreme Court affirmed, holding the Household Exclusion unambiguously denied coverage for Stacy and that § 49-2417 does not apply to umbrella policies; public policy did not require extension of household coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is Exclusion 8 a savings clause that affects other exclusions? | Schrock argues Exclusion 8 saves underlying coverage and creates ambiguity with Permissive Driver and Household Exclusions. | Farm Bureau contends Exclusion 8 is not a saving clause and operates independently of Exclusions 9 and 16. | Exclusion 8 is ambiguous; construed in insured’s favor, it does not create coverage but the Household Exclusion governs. |
| Does the Household Exclusion bar Stacy's Umbrella-Policy claim as a relative of an insured? | Schrock contends Reed public policy should require coverage for household members under umbrella policy. | Farm Bureau asserts Household Exclusion clearly excludes Stacy as Lisa's relative. | Household Exclusion unambiguously denies coverage for Stacy. |
| Does I.C. § 49-2417 apply to umbrella policies and impute liability up to umbrella limits? | Imputation to Lisa could extend coverage up to umbrella limits. | § 49-2417 applies to motor vehicle policies only and does not apply to umbrella policies. | § 49-2417 does not apply to the Umbrella Policy. |
| Does public policy require extending coverage to household members in umbrella policies? | Reed-like public policy should mandate coverage for household members. | No clear public policy extending Reed to umbrella policies exists; umbrella policy context differs. | Public policy does not require extending household-member coverage to umbrellas. |
| Are Appellants entitled to attorney fees on appeal? | Appellants seek fees under applicable statutes. | Farm Bureau contends Appellants are not prevailing parties entitling fees. | Appellants are not entitled to attorney fees. |
Key Cases Cited
- Farm Bureau Mut. Ins. Co. of Idaho v. Reed, 109 Idaho 849 (1985) (household exclusion public policy analysis for motor vehicle policies)
- Kinsey v. Farm Bureau Ins. Co., 149 Idaho 415 (2010) (ambiguous policy language construed against insurer; adhesion contracts)
- Cherry v. Coregis Ins. Co., 146 Idaho 882 (2009) (policy ambiguity; standard of review for summary judgment)
- Oregon Mut. Ins. Co. v. Farm Bureau Mut. Ins. Co. of Idaho, 148 Idaho 47 (2009) (imputing negligence under § 49-2417; assignment of liability)
- Talbot v. Farmers Ins. Co. of Idaho, 133 Idaho 428 (1999) (construction of exclusionary language; narrowly construe to limit coverage)