Hill v. American Family Mutual Insurance
150 Idaho 619
| Idaho | 2011Background
- Hill, injured in a 2005 two-car collision with a teen driver, had a UIM policy with American Family ($100,000 per person) containing an exhaustion clause.
- Hamiltons’ tortfeasor policy provided $25,000 bodily-injury coverage; Hill settled for $24,000 and pursued an additional $18,000 against American Family after credit for the $1,000 received.
- District court granted summary judgment for American Family, holding the exhaustion clause unambiguously required exhaustion of tortfeasor policy before UIM benefits.
- Idaho amended its UIM statute in 2008 to require offering UIM coverage; Hill argued constructive exhaustion and public policy favored UIM coverage.
- Court held exhaustion clause void as contrary to public policy and remedial UIM goals; Hill may pursue UIM benefits against American Family with credit for the settlement gap; case remanded for proceedings consistent with the opinion.
- Hill is not entitled to appellate attorney fees because no amount due under policy yet established
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the exhaustion clause bars UIM recovery. | Hill argues public policy requiring UIM overrides contract. | American Family argues clause unambiguous and enforceable. | Exhaustion clause void; no bar to UIM recovery. |
| Whether Hill is entitled to attorney fees on appeal. | If successful, Hill seeks fees under I.C. 41-1839(1). | No amount due under policy proven, so no fees. | No attorney fees awarded on appeal. |
Key Cases Cited
- Meckert v. Transamerica Ins. Co., 108 Idaho 597 (Idaho 1985) (no public policy on UIM prior to statute change)
- Erland v. Nationwide Ins. Co., 136 Idaho 131 (Idaho 2001) (no public policy on UIM prior to statute change)
- Blackburn v. State Farm Mut. Auto. Ins. Co., 108 Idaho 85 (Idaho 1985) (legislature decides policy, not court rewriting contracts)
- Hansen v. State Farm Mut. Auto. Ins. Co., 112 Idaho 663 (Idaho 1987) (director's approval of policy forms presumed public policy)
- Buffa v. Farmers Ins. Co., 119 Idaho 345 (Idaho 1991) (statutory nonretroactivity and public policy considerations)