Schulte v. PROGRESSIVE NORTHERN INSURANCE COMPANY

ZINTER, Justice

(concurring).

[¶ 13.] I concur and write to address Schulte’s argument that declining to require the payment of two liability limits deprives the insureds of coverage in violation of South Dakota’s public policy.

[¶ 14.] Schulte is correct that a vehicle operator is required to be insured to the same extent as the owner. “The operation of an omnibus clause creates Lability insurance in favor of persons other than the named insured to the same degree as the insured.” Estate of Trobaugh ex rel Trobaugh v. Farmers Ins. Exch., 2001 SD 37, ¶ 21, 623 N.W.2d 497, 502. This Court has also specifically held that a policy must cover the operator and one who negligently entrusts the vehicle to another. See Colonial Ins. Co. of Cal. v. Lundquist, 539 N.W.2d 871 (S.D.1995). Schulte hypothesizes that because his damages exceed the policy limits, if he settled with Joshua Hof-tiezer for the policy limits and then brought suit against Thomas Hoftiezer for negligent entrustment, Thomas — the insured who purchased the policy — “would have absolutely no coverage” in violation of these cases. However, the liability limit does not deny coverage to either insured.

[¶ 15.] On the contrary, even though Schulte’s damages may exceed the $100,000 liability limit, both Thomas Hof-tiezer and Joshua Hoftiezer are provided coverage for the damages sustained as a result of their separate alleged acts of negligence. It is only the limit of coverage for this accident that is qualified. As the Wisconsin Supreme Court observed in Folkman v. Quamme, 264 Wis.2d 617, 665 N.W.2d 857, 879 (2003):

[t]his observation ... does not alter the fact that Debra and Kenneth Sr. were both extended coverage; they merely happened to share the same liability subject to one limit of liability. The coverage purchased by the Folkmans is not illusory because the policy accurately and fairly set out its liability coverage terms in an unambiguous fashion and coverage was extended to each insured.

Similarly, Murbach v. Noel, 343 Ill.App.3d 644, 278 Ill.Dec. 426, 798 N.E.2d 810, 813 *441(2003) rejected Schulte’s argument that a single limit “violates public policy because if State Farm exhausts the limits of liability paying a judgment against one insured, other potentially liable insureds will be left without coverage for judgments against them.” The Murbach court noted:

Because the injured person may have but one recovery, indemnification of one insured reduces the liability of others covered under, the policy who are jointly and severally liable.5 Stated differently, any particular insured’s exposure for a judgment in excess of the policy limits is the same regardless of the number of insureds under the policy and on whose behalf the policy proceeds are nominally paid. Accordingly, imposing a stated limit of liability that does not vary with the number of insureds is not contrary to public policy.

Id.

[¶ 16.] Consequently, coverage is not being denied or 'reduced to either insured in this case. The coverage required by the omnibus statute has been provided., It is the premise of Schulte’s argument that is incorrect. Contrary to Schulte’s premise, Progressive “did extend coverage to all .... insureds. The problem the [two] insureds face is not that [they] were not covered under the policy. The problem is that the named insured did not purchase a greater amount of per occurrence liability.” Folkman, 665 N.W.2d at 874.6 •

. It should also be noted that if coverage is exhausted on the first insured, the second insured has a remedy. ' As in all' other cases where damages exceed coverage and one tort-feasor pays more than their pro rata share of the liability, the remedy is to seek contribution among joint tortfeasors! See SDCL 15-8-11 et seq.-

., It should be additionally noted that the total liability of all tortfeasors often exceeds the total amount of insurance coverage available ■ to- in'süreds, subjecting them to personal liability for the difference!