473 F.Supp.3d 978
D.S.D.2020Background
- Plaintiff Union Insurance issued a commercial Business Auto policy to DC Automotive covering Dec. 5, 2016–Dec. 5, 2017; the policy included a UM/UIM endorsement and listed ten specific vehicles in Item Three of the Declarations.
- Defendant Bruce Scholz was a DC Automotive employee who, on Dec. 1, 2017, was test-driving a customer-owned vehicle after repairs and suffered injuries in an accident; the tortfeasor’s insurer paid its $50,000 limit.
- Scholz sought underinsured motorist (UIM) benefits under DC Automotive’s policy; Union Insurance denied the claim and sued for a declaratory judgment that Scholz is not an "insured" under the UIM endorsement.
- Union moved for judgment on the pleadings under Rule 12(c); Scholz alleged missing policy forms and raised coverage and public-policy arguments in response.
- The policy’s Schedule of Coverages used symbol “7” to limit UIM coverage to the autos listed in Item Three (the ten owned vehicles); the customer vehicle was not one of those listed.
- The court concluded the policy unambiguously limited UIM coverage to occupants of the covered autos listed in Item Three, Scholz was not occupying a covered auto, and judgment on the pleadings for Union was granted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Scholz is an "insured" for UIM while occupying a non‑owned customer vehicle | UIM applies only to persons "occupying" a "covered auto," and the policy defines covered autos for UIM by symbol 7 as only those listed in Item Three (owned vehicles) | The UIM endorsement does not use the word "owned" and could be read to cover non‑owned vehicles; ambiguity favors insured | Held: Policy unambiguous; UIM limited to listed covered autos in Item Three; Scholz not an insured, no UIM coverage |
| Whether absence of symbol notation in the UIM endorsement creates ambiguity about which autos are covered | Schedule of Coverages shows symbol 7 next to UIM and Item Three defines those autos; endorsement need not repeat the symbol | Missing symbol in the endorsement creates structural confusion as to whether coverage is "any auto" or scheduled autos | Held: No ambiguity; reader can consult Schedule of Coverages and Item Three; symbol 7 controls; no coverage for non‑listed vehicle |
| Whether public policy or SD statutes require broader UIM coverage than the policy provides | Policy complies with SD law; SDCL 58‑11‑9.5 permits UIM coverage to be "subject to the terms and conditions" of the policy | Public policy favors liberal UIM interpretation to protect injured insureds; limiting to owned/scheduled vehicles frustrates UIM purpose | Held: SD law permits limitations on UIM; limitation here is valid and not contrary to public policy |
| Whether judgment on the pleadings under Rule 12(c) was appropriate | The certified Policy attached to the complaint is part of the pleadings; no genuine dispute of material fact; 12(c) reviewed under 12(b)(6) standard | Scholz argued missing forms and challenged the Policy’s completeness | Held: Exhibit A is a true and complete copy; Scholz did not raise a factual dispute sufficient to avoid 12(c); judgment for Union granted |
Key Cases Cited
- Ashley Cnty., Ark. v. Pfizer, Inc., 552 F.3d 659 (8th Cir. 2009) (Rule 12(c) reviewed under same standard as Rule 12(b)(6))
- Westcott v. City of Omaha, 901 F.2d 1486 (8th Cir. 1990) (motion treated as 12(c) where answer already filed; 12(b)(6) standard applies)
- Wishnatsky v. Rovner, 433 F.3d 608 (8th Cir. 2006) (courts accept well‑pleaded allegations and resolve inferences for nonmovant on 12(c))
- Porous Media Corp. v. Pall Corp., 186 F.3d 1077 (8th Cir. 1999) (courts may consider exhibits embraced by the pleadings on a 12(c) motion)
- Gloe v. Iowa Mut. Ins. Co., 694 N.W.2d 238 (S.D. 2005) (UIM protects insureds; coverage not created where there is none)
- De Smet Ins. Co. of S.D. v. Pourier, 802 N.W.2d 447 (S.D. 2011) ("owned‑but‑not‑insured" exclusion valid under SD UIM statute)
- Wheeler v. Farmers Mut. Ins. Co. of Neb., 824 N.W.2d 102 (S.D. 2012) (distinguishing uninsured and underinsured statutes; UIM statute permits limits)