Gillespie v. National Farmers Union Property & Casualty Co., 2016 ND 193

Samantha Gillespie was injured when a vehicle owned by her aunt, Angela Ayers, overturned; Ayers died and another passenger was injured.
Ayers’ liability insurer (GEICO) paid $25,000 in no-fault benefits and denied further liability coverage, allegedly on negligent-entrustment grounds (Gillespie had recently obtained a learner's permit).
Tina Taylor (Gillespie’s mother) had a Farmers Union policy including $100,000 per person / $300,000 per accident underinsured motorist (UIM) coverage.
Gillespie and Taylor sued Farmers Union for UIM benefits, claiming Ayers’ $25,000 liability limits were inadequate and GEICO’s liability was exhausted.
The district court granted summary judgment for Farmers Union, concluding plaintiffs failed to show the liability limits had been exhausted and plaintiffs had not shown Gillespie was legally entitled to recover from Ayers.
On appeal the Supreme Court of North Dakota affirmed, holding plaintiffs did not raise a genuine issue of material fact that liability was legally established or that liability limits were exhausted as required by statute and the policy.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether GEICO’s liability was "exhausted" so as to trigger Farmers Union UIM coverage	GEICO has refused further payments and plaintiffs pursued all available recovery so GEICO limits are effectively exhausted	Statutory/policy exhaustion requires settlements, judgments, or written offers; GEICO’s denial alone does not exhaust limits	Court: No — plaintiffs did not show exhaustion via payment, judgment, or written offer as required by statute/policy
Whether Gillespie is "legally entitled to collect" from Ayers (initial burden of proving liability)	Plaintiffs assert negligent entrustment by Ayers due to Gillespie’s inexperience; GEICO’s denial evidences Ayers’ potential liability	Plaintiffs have not filed a tort action against Ayers’ estate or produced admissible evidence establishing Ayers’ legal liability	Court: No — plaintiffs failed to present competent evidence raising a genuine fact issue that Ayers was legally liable, so UIM not payable
Whether summary judgment was improper given factual disputes	Gillespie claims unresolved factual issues about entrustment and exhaustion	Farmers Union argues plaintiffs offered only conclusory allegations and no admissible evidence on essential elements	Court: Summary judgment affirmed — plaintiffs bore burden to present admissible evidence and did not do so

Johnson v. Nodak Mut. Ins. Co., 699 N.W.2d 45 (N.D. 2005) (standard of review on summary judgment)
Collette v. Clausen, 667 N.W.2d 617 (N.D. 2003) (negligent entrustment and summary judgment principles)
Hurt v. Freeland, 589 N.W.2d 551 (N.D. 1999) (viewing evidence in light most favorable to nonmovant on summary judgment)
Mr. G's Turtle Mountain Lodge, Inc. v. Roland Twp., 651 N.W.2d 625 (N.D. 2002) (resisting party must present competent admissible evidence)
Iglehart v. Iglehart, 670 N.W.2d 343 (N.D. 2003) (nonmoving party cannot rely on speculation)
Saltsman v. Sharp, 803 N.W.2d 553 (N.D. 2011) (issues of fact may become issues of law when only one conclusion is reasonable)
Wisness v. Nodak Mut. Ins. Co., 806 N.W.2d 146 (N.D. 2011) (characterizing UIM as first-party coverage)
Hiltner v. Owners Ins. Co., 876 N.W.2d 460 (N.D. 2016) (statutory minimums for UIM and insurer can provide greater coverage)
DeCoteau v. Nodak Mut. Ins. Co., 603 N.W.2d 906 (N.D. 2000) (definition of underinsured motor vehicle under statute)
Rask v. Nodak Mut. Ins. Co., 626 N.W.2d 693 (N.D. 2001) (court will follow plain language of insurance policy and statutes)