Jund v. Johnnie B's Bar & Grill, Inc.
814 N.W.2d 776
| N.D. | 2011Background
- Junds sued for injuries to Tracy Jund arising from an accident involving an underinsured motorist driver; Ransom County provided UIM coverage via the North Dakota Insurance Reserve Fund.
- Stipulations for summary judgment: Reinhardt’s vehicle underinsured; Junds obtained $100,000 from Reinhardt’s insurer; WSI paid $109,680.91; total compensatory damages exceeded the combined recoveries and the $250,000 UIM limit.
- District court held § 26.1-40-15.4(1) allows reduction by WSI benefits from the Junds’ total compensatory damages, not from the UIM limit, to avoid duplicative recovery and to keep the insured whole.
- Ransom County appealed, arguing the reduction should start from the UIM limit, based on the plain meaning of “for … underinsured motorist coverage.”
- This Court affirms the district court, concluding the reduction may be from total compensable damages rather than from the UIM limit, consistent with statutory history and purpose to make the insured whole.
- The case ultimately resolves around N.D.C.C. § 26.1-40-15.4(1) and related provisions, with DeCoteau and related legislative history guiding interpretation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Starting point for reduction under § 26.1-40-15.4(1)? | Junds: reduction from damages; not from limit. | Ransom County: reduction from the UIM limit. | Ambiguous statute; court starts from damages, not limit. |
| Statutory purpose of reductions—avoid duplication and make insured whole? | Reduction serves to prevent duplication and make whole. | Reduction should protect insurer by limiting to UIM limit. | Reduction is to avoid duplicative recovery and to make insured whole. |
| Relation to DeCoteau and Sandberg interpretations? | DeCoteau supports excess coverage making insured whole; Sandberg clarifies WSI interaction. | Arguments should align with the insurer’s limit as starting point. | Court aligns with DeCoteau and Sandberg to permit damage-based reduction. |
| Effect of legislative history on § 26.1-40-15.4(1) interpretation? | Legislative history shows intent to make insured whole, not offset against third-party coverage. | Leg history should not override plain language. | Legislative history supports taking reduction from damages to make insured whole. |
| Does the Sandberg decision control this outcome? | Sandberg discusses WSI subrogation but does not require reduction from UIM limit. | Sandberg governs unauthorized settlements effect on insurer, not the starting point. | Sandberg does not compel a limit-based reduction; it supports separate applicable mechanics. |
Key Cases Cited
- DeCoteau v. Nodak Mut. Ins. Co., 603 N.W.2d 906 (ND 2000) (distinguishes gap vs. excess underinsured coverage and supports excess/whole-coverage concept; reduction to avoid duplication.)
- Sandberg v. American Family Ins., 722 N.W.2d 359 (ND 2006) (addresses WSI reduction mechanics and not reduction from UIM limits; supports avoiding duplication.)
- Score v. American Fam. Mut. Ins. Co., 538 N.W.2d 206 (ND 1995) (construes underinsured policy language under 1987 statutes; discusses excess vs gap concepts.)
- GO Comm. ex rel. Hale v. City of Minot, 701 N.W.2d 865 (ND 2005) (statutory interpretation framework for ambiguous statutes; context and history may guide meaning.)
- North River Ins. Co. v. Tabor, 934 F.2d 461 (3d Cir. 1991) (federal treatment cited for interpretive context of insurance damages and offsets.)