Scott GLOE, Plaintiff and Appellant, v. IOWA MUTUAL INSURANCE COMPANY, Defendant and Appellee.
Nos. 23088, 23095.
Supreme Court of South Dakota.
Decided March 2, 2005.
2005 SD 29
Acie W. Matthews, Sioux Falls, SD, for defendant and appellee.
ZINTER, Justice.
[¶ 1.] Scott Gloe‘s parents were struck and killed by an automobile. Gloe‘s
Facts and Procedural History
[¶ 2.] On September 1, 2001, pedestrians Larry and Verna Mae Gloe were struck and killed in an auto accident. Pursuant to
[¶ 3.] Two insurers provided liability coverage for this accident. American Family Insurance Company insured the automobile, with liability limits of $25,000 per person. Farmer‘s Insurance Group insured the driver, with liability limits of $100,000 per person. Each company paid its limits: $125,000 was paid for the wrongful death claims arising from Larry Gloe‘s death, and $125,000 was paid for the wrongful death claims arising from the death of Verna Mae Gloe.3 These sums were paid in return for a release of the tortfeasor and the liability carriers. Scott Gloe, his brother Michael Gloe,4 and their sister Karen Nelson5 received the wrongful death proceeds.
[¶ 4.] After settling with the liability carriers, Scott Gloe brought this declarato
[¶ 5.] Gloe‘s policy with Iowa Mutual provided UIM benefits, with limits of $250,000 per person and $500,000 per occurrence. Gloe conceded that if Iowa Mutual‘s policy provided UIM coverage, Iowa Mutual was entitled to set-off the amount that he received from the two liability insurers. However, Iowa Mutual denied that its policy provided any UIM coverage. Iowa Mutual‘s denial was based upon a policy endorsement that only provided UIM coverage for “bodily injury or death” sustained by an “insured.” Because Gloe sustained no bodily injury or death in this accident, and because Gloe‘s parents were not insureds under his policy, Iowa Mutual contended that its UIM coverage was unavailable.
[¶ 6.] Gloe acknowledged the policy language, but argued that the provision requiring “bodily injury or death” by an “insured” was incompatible with South Dakota‘s law requiring UIM coverage. The trial court disagreed. Gloe now appeals, raising the following issue:
- Whether South Dakota statutes preclude an insurer from restricting UIM coverage to bodily injury or death sustained by an insured.
By notice of review, Iowa Mutual raises the following issues:
- Whether Gloe is a real party in interest with an individual claim for damages after he settled the wrongful death claims on behalf of the wrongful death beneficiaries.
- Whether the personal representative‘s release of the tortfeasor, precludes Gloe‘s individual claim.
Analysis and Decision
[¶ 7.] “We review declaratory judgments as we would any other judgment or order.” Nelson v. Farmers Mutual Insurance Co. of Nebraska, 2004 SD 86, ¶ 5, 684 N.W.2d 74, 76 (citing
South Dakota‘s Statutes Do Not Mandate UIM Coverage for Wrongful Death Damages Arising Out Of the Death of a Third Party Who Has No Relationship With the Insurance Policy.
[¶ 8.] “In South Dakota, automobile insurance providers must provide underinsured motorist coverage in their policies.” Nelson, 2004 SD 86, ¶ 8, 684 N.W.2d at 77 (citing
[¶ 9.] The policy language at issue here provides coverage for damages an insured is “legally entitled to recover”6 from the owner or operator of an underinsured motor vehicle because of “bodily injury or death” sustained by “an insured.” The policy provides:
We will pay compensatory damages which an “insured” is legally entitled to recover from the owner or operator of an “underinsured motor vehicle” because of “bodily injury:”
- Sustained by an “insured,” and
- Caused by an accident.
The policy defines “bodily injury” as bodily harm, sickness or disease, including death, that results. It defines insureds as:
- You or any “family member.”
- Any other person “occupying” “your covered auto.”
- Any person for damages that person is entitled to recover because of “bodily injury” to which this coverage applies sustained by a person described in 1. or 2. above.
“Family member” means a person related to you by blood, marriage or adoption who is a resident of your household. This includes a ward or foster child.
[¶ 10.] Because Gloe‘s parents were not residents of Gloe‘s household and were not occupants of a covered auto, they were not insureds under this policy language. Furthermore, the insured, Scott Gloe, suffered no bodily injury or death in the accident. Therefore, no UIM coverage was available under the policy. Gloe, however, contends that this policy provision violates the public policy of the UIM and uninsured (UM) statutes of this State.
[¶ 11.] “Since statutes must be construed according to their intent, the intent must be determined from the statute as a whole, as well as enactments relating to the same subject.” Martinmaas v. Engelmann, 2000 SD 85, ¶ 49, 612 N.W.2d 600, 611. Furthermore, because of the similarity of subject and purpose of UM and UIM statutes and coverage, most of the decisions considering this issue construe UM and UIM claims, policies, and statutory language interchangeably. This is understandable because, as was noted in Jones, 51 P.3d at 1045, construing UM and UIM statutes separately “would create the anomalous situation where benefits for the wrongful death of an uninsured person were not required if the motorist causing death was uninsured, but required if the motorist was underinsured.” Therefore, we construe our UM and UIM statutes together.7 We also apply the case law considering UM and UIM coverage interchangeably.
No policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance, or use of a motor vehicle may be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state . . . unless coverage is provided therein or supplemental thereto in limits for bodily injury or death equal to the coverage provided by such policy for bodily injury and death, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles and hit-and-run motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefrom. However, the coverage required by this section may not exceed the limits of one hundred thousand dollars because of bodily injury to or death of one person in any one accident and, subject to the limit for one person, three hundred thousand dollars because of bodily injury to or death of two or more persons in any one accident, unless additional coverage is requested by the insured. . . .
[¶ 13.] The complementary UIM statutes fail to as specifically address the question of who is intended to be protected by the mandated coverage and whether bodily injury or death of an insured was contemplated. Instead, they simply refer to coverage for “bodily injury to or death of [a] person” and “damages as its insured may recover on account of bodily injury or death arising out of an automobile accident. . . .”
No motor vehicle liability policy of insurance may be issued or delivered in this state with respect to any motor vehicle registered or principally garaged in this state . . . unless underinsured motorist coverage is provided therein at a face amount equal to the bodily injury limits of the policy. However, the coverage required by this section may not exceed the limits of one hundred thousand dollars because of bodily injury to or death of one person in any one accident and, subject to the limit for one person, three hundred thousand dollars because of bodily injury to or death of two or more persons in any one accident, unless additional coverage is requested by the insured. . . .
Subject to the terms and conditions of such underinsured motorist coverage, the insurance company agrees to pay its own insured for uncompensated damages as its insured may recover on account of bodily injury or death arising out of an automobile accident because the judgment recovered against the owner of the other vehicle exceeds the policy limits thereon. Coverage shall be limited to the underinsured motorist coverage limits on the vehicle of the party recovering less the amount paid by the liability insurer of the party recovered against.
[¶ 14.] Gloe disregards the language in
[¶ 15.] Iowa Mutual responds by pointing out that
[¶ 16.] However, the “subject to the terms and conditions” language of
[¶ 17.] The public policy of this state is set forth in its statutes and
The purpose of uninsured [and therefore underinsured] motorist statutes is to provide the same insurance protection to the insured party who is injured by an Uninsured [or Underinsured] or unknown motorist that would have been available to him had he been injured as a result of the negligence of a motorist covered by the minimum amount of liability insurance.
Clark v. Regent Ins. Co., 270 N.W.2d 26, 29 (S.D. 1978) (emphasis added); Nickerson v. American States Ins., 2000 SD 121, ¶ 15, 616 N.W.2d 468, 472 n. 4. Thus, when the purpose expressed in Clark (protecting the insured party who is injured by another motorist) is considered with the purpose expressed in
[¶ 18.] We do not, however, believe that UM/UIM coverage was mandated for the consequential losses a wrongful death beneficiary incurs simply because that beneficiary has an auto policy and the decedent happens to be a relative for which the beneficiary is legally entitled to maintain a wrongful death action. As the court in Livingston v. Omaha Property & Cas. Ins. Co., stated:
[T]o accept plaintiff‘s interpretation would permit plaintiff to recover under her uninsured motorist policy for the death of any person from whom she is legally entitled to bring a claim under the wrongful death statute, such as the death of her children, any lineal descendant, her brothers and sisters, her parents, or any other descendant. It would provide coverage by plaintiff‘s insurance company for hazards associated with the operation of the vehicles of all of these individuals, none of whom are insured under her policy.
927 S.W.2d 444, 446 (Mo. Ct. App. 1996) (citing Elder v. Metropolitan Prop. and Cas. Co., 851 S.W.2d 557, 562 (Mo. Ct. App. 1993)).
[¶ 19.] Thus, most courts have concluded that coverage is not mandated where the cause of action is for wrongful death of a person “who was in no way connected to [the insured‘s] automobile insurance policy, who did not reside in [the insured‘s] household, nor who, if had survived the accident, would have had any right of recovery under [the insured‘s] policy.” Temple v. Travelers Indemnity Co., 2000 WL 33113814 *5 (Del. Super. Ct. 2000) (unpublished opinion) aff‘d., 782 A.2d 267, (Del. Supr. 2001). See also Jones, 51 P.3d at 1045 (stating that allowing recovery of UIM benefits for the death of an individual who was not insured under the insured‘s auto policy, did not reside in the insured‘s household, and would have had no right of recovery under the insurance policy if he had survived, would be contrary to common sense); Lafleur v. Fidelity Cas. Co. of New York, 385 So. 2d 1241, 1245 (La. Ct. App. 1980) (holding the legislature did not intend UM statute to require UM policy to cover wrongful death of third persons); Spurlock v. Prudential Ins. Co., 448 So. 2d 218, 219 (La. Ct. App. 1984) (holding the Legislature never intended “to afford coverage for what an insured may be legally entitled to recover as his ‘wrongful death’ damages, sustained because of some third
[¶ 20.] Gloe, however, argues that we should not follow this clear weight of authority because it would write the word “death” out of the UM/UIM statutes. To support this argument, Gloe points out that our statutes specifically allow recovery for wrongful death as well as bodily injury, but an insured decedent cannot recover for his own death under South Dakota law. See
[¶ 21.] However, Gloe fails to recognize that the Legislature included the word “death” to cover other wrongful death claims. Although the majority rule does not contemplate coverage for the wrongful death of third parties, wrongful death claims are covered if the person killed is an insured. Thus, the word “death” has meaning in the statute because, while Gloe may not recover under his policy for the death of non-insured relatives, UIM coverage is provided for the wrongful death of Gloe‘s family household members who suffer death at the hands of an underinsured motorist because they are insureds. Likewise, Gloe‘s family household members have UM/UIM coverage for his wrongful death at the hands of an uninsured or underinsured motorist. And finally, any other person who has a right to recover because of an insured‘s death has coverage. They are afforded UIM coverage because paragraph three of the endorsement at issue specifically makes them insureds. That endorsement provides that insureds include “[a]ny person for damages that person is entitled to recover because of ‘bodily injury [or death]’ to which this coverage applies sustained by [an insured].” See supra ¶ 9. For these reasons, the word “death” is not written out of the statute. Rather, the term has significant effect because the named insured, his family household members, and any other person who has a right to recover for wrongful death are all afforded UIM coverage for the wrongful death of an insured.
[¶ 22.] Other states recognize this UIM death benefit. Thus, the word “death” has meaning because “coverage is intended to provide indemnity for damages resulting from an insured‘s wrongful death payable” to those persons entitled to bring a wrongful death action. Livingston, 927 S.W.2d at 446 (emphasis added). See also Farmers Ins. Exchange, 939 P.2d at 521. Stated another way, the word death has meaning because when it comes to wrongful death claims “the legislature contem
[¶ 23.] Gloe‘s argument is also fundamentally flawed because, as Florida has noted, he incorrectly focuses solely upon the fact that he was an insured under his UIM policy, when the correct focus should be whether the person who suffered bodily injury or death had UM (or UIM) coverage. Valiant Ins. Co. v. Webster, 567 So. 2d 408, 410 (Fla. 1990) (disapproved on other grounds). However, when the question correctly focuses on whether the party injured in an automobile accident had UM/UIM coverage, the weight of authority concludes that the “statute does not require coverage for anyone who may be entitled to recover consequential damages as a survivor under the wrongful death statute when the decedent himself had neither liability nor uninsured motorist coverage under the policy.” Id. at 411.
[¶ 24.] Gloe also notes that Iowa, Maryland, Nebraska, and Ohio have all concluded that coverage is afforded. The Iowa Supreme Court determined that because their UM statute did not require bodily injury to the insured, a wife could recover for her non-insured husband. Hinners v. Pekin Ins. Co., 431 N.W.2d 345 (Iowa 1988). That court reached the same result in a case involving UIM coverage in Wetherbee v. Economy Fire & Cas. Co., 508 N.W.2d 657 (Iowa 1993). Maryland concluded that it would be contrary to the broad purpose of their uninsured motorist law to restrict coverage to cases involving damages arising from death sustained by an insured. Forbes v. Harleysville Mut. Ins. Co., 322 Md. 689, 589 A.2d 944 (1991). Nebraska similarly held that an insured may recover wrongful death damages arising from the death of a non-insured person. State Farm Mut. Auto. Ins. Co. v. Selders, 187 Neb. 342, 190 N.W.2d 789 (1971). Finally, Ohio held that it was contrary to their law to restrict coverage to bodily injury sustained by an insured. Sexton v. State Farm Mut. Auto. Ins. Co., 69 Ohio St. 2d 431, 433 N.E.2d 555 (1982).
[¶ 25.] However, in reaction to this minority interpretation, all but one of these state‘s respective legislatures corrected each court‘s interpretation and clarified that such coverage was not intended. In Ohio, the legislature amended their UIM statute to specifically overrule Sexton so that policies may limit coverage to bodily injury suffered by an insured. Atlanta Cas. Co., 598 S.E.2d at 72 (citing Beagle v. Walden, 78 Ohio St. 3d 59, 676 N.E.2d 506 (1997)). Similarly, Forbes is no longer the law in Maryland. That legislature corrected the court‘s interpretation and clarified its statute to only “apply to, and require UIM coverage for, a wrongful death claim where the deceased is an ‘insured.‘” Id. (citing Nicholson v. Nationwide Mut. Ins. Co., 2001 WL 985099 (Del. Super. Ct. 2001)). Finally, as with the other states, the Nebraska legislature amended its UM statutes to disallow recovery in these cases. London, 63 P.3d at 556 n. 1.
[¶ 26.] Thus, the vast majority of courts that have considered this issue have “uniformly interpreted their respective statutes as providing coverage only for injuries to those insured under the policy.” Atlanta Cas. Co., 598 S.E.2d at 72. Atlanta Cas. Co. notes that the states that have upheld the insurance provision at issue here include: Alaska, Arizona, California, Colorado, Delaware, Florida, Illinois, Indiana, Louisiana, Mississippi, Missouri, Oklahoma, Rhode Island, Washington, and
[¶ 27.] Because we reiterate that the purpose of these statutes is to protect the insured party who is injured in an accident, we agree with the reasoning of the clear majority of courts that have found no mandated UM or UIM coverage for the wrongful death of one not insured under the claimant‘s policy. We also do so because “[w]hile uninsured [and underinsured] motorist coverage is to be given a liberal interpretation, coverage should not be created where there is none.” Livingston, 927 S.W.2d at 446 (citing Elder, 851 S.W.2d at 562). Therefore, mandating UIM coverage for Gloe would result in an extension of coverage “for a decedent who is not an insured under the claimant‘s policy. . . .” London, 63 P.3d at 556. See also Farmers Ins. Exchange, 939 P.2d 517.
[¶ 28.] We finally note that mandating coverage for wrongful death in this case would require insurance coverage for Gloe‘s parents’ deaths even though neither Gloe nor his parents would have had any coverage had his parents survived with serious uncompensated injuries. There would be no coverage because Larry and Verna Mae were not insureds and Scott Gloe has no right of recovery for his parents’ personal injuries. Consequently, Gloe‘s construction of the statutes would create the anomalous result that UIM coverage would be available if the victim of the accident died, but unavailable if the victim survived and sustained substantial uncompensated damages. The legislature could not have intended that result.
[¶ 29.] Because Gloe‘s parents were not insureds and did not have UIM coverage under this policy, there could have been no recovery had they been injured, instead of being killed. Furthermore, although Gloe was an insured, he did not suffer any bodily injury and he had no involvement in the accident. Yet, after settling the wrongful death action for the death of his parents, he sought to recover further pecuniary loss under his automobile policy only because the decedents hap-
[¶ 30.] In light of the disposition of this issue, we need not reach the other issues raised in Iowa Mutual‘s notice of review.
[¶ 31.] Affirmed.
[¶ 32.] GILBERTSON, Chief Justice, and KONENKAMP, Justice, concur.
[¶ 33.] SABERS and MEIERHENRY, Justices, dissent.
MEIERHENRY, Justice (dissenting).
[¶ 34.] I respectfully dissent. Based upon the plain meaning of the statutory language, Gloe should be allowed to recover from his own underinsured coverage for the wrongful death of his parents. The majority concludes that the law was intended to protect only the insured person‘s injury or death. This, the majority concludes is public policy. I cannot agree. Public policy is what the legislature says it is. What the legislature said is that an insured may claim under his own policy if he is legally entitled to recover for a death caused by an underinsured tortfeasor.
[¶ 35.] The majority reaches a contrary conclusion, in part, by emphasizing one portion of the statutory language in
[¶ 36.] We have consistently restrained our interpretation of a law to the plain meaning of the words and have declined to expand its meaning to what we think it should have said or what we think the legislature may have meant. We should also restrain ourselves in this case. If the legislature does not want underinsured coverage for wrongful death beneficiaries, it can amend the language of the statutes clearly to say so, as has been done in some other states. We recently reiterated how we determine legislative intent:
The intent of a statute is determined from what the legislature said, rather than than what the courts think it should have said, and the court must confine itself to the language used.
Words and phrases in a statute must be given their plain meaning and effect. When the language in a statute is clear, certain and unambiguous, there is no reason for construction, and the Court‘s only function is to declare the meaning of the statute as clearly expressed. Moreover, [i]n arriving at the intention of the Legislature, it is presumed that the words of the statute have been used to convey their ordinary, popular meaning.
SDCL 2-14-1 requires that words in a statute are to be understood in their ordinary sense. We finally note that a [j]udicial interpretation of a statute thatfail[s] to acknowledge its plain language would amount to judicial supervision of the legislature.
In re West River Electric Ass‘n. Inc., 2004 SD 11, ¶ 21, 675 N.W.2d 222, 228 (citations and quotations omitted).
[¶ 37.] The plain language of
Subject to the terms and conditions of such underinsured motorist coverage, the insurance company agrees to pay its own insured for uncompensated damages as its insured may recover on account of bodily injury or death arising out of an automobile accident because the judgment recovered against the owner of the other vehicle exceeds the policy limits thereon.
(Emphasis added). As Gloe points out, in South Dakota decedents or estates of decedents cannot legally recover for their own deaths.
[¶ 38.] Another principle of statutory construction is to give effect to each word, phrase or sentence of a statute.
A statute should be construed so that effect is given to all its provisions, so that no part will be inoperative or superfluous, void or insignificant, . . . No clause sentence or word shall be construed as superfluous, void or insignificant if the construction can be found which will give force to and preserve all the words of the statute. While every word of a statute must be presumed to have been used for a purpose, it is also the case that every word excluded from a statute must be presumed to have been excluded for a purpose.
2A NORMAN J. SINGER, SUTHERLAND STATUTORY CONSTRUCTION § 46.06, 181-92 (6th Ed 2000) (emphasis added). We have to presume that the legislature used the words it did for a purpose and left out words for a purpose. The legislature wanted protection for those who suffered uncompensated damages due to underinsured and uninsured motorists’ negligence. Those suffering damages as outlined by the statute are those who are legally entitled to recover damages for bodily injury and death. The only one who can legally recover damages for death is one entitled to recover under South Dakota‘s wrongful death statutes. Had the legislature intended to limit recovery to an insured‘s own injury or to a household member‘s injury or death, it could have easily done so. For example, the legislature could have written the statute to say:
“Subject to the terms and conditions of such underinsured motorist coverage, the insurance company agrees to pay its own insured for uncompensated damages as its insured may recover on account of bodily injury or death [of an insured] arising out of an automobile accident because the judgment recovered against the owner of the other vehicle exceeds the policy limits thereon.”
See
[¶ 39.] I would reverse the lower court and allow Gloe‘s claim to proceed.
[¶ 40.] SABERS, Justice, joins this dissent.