United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 10-3350
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John Jung; Janice Jung, *
*
Appellants, *
*
v. * Appeal from the United States
* District Court for the
General Casualty Company of * District of North Dakota.
Wisconsin, *
*
Appellee. *
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Submitted: June 15, 2011
Filed: August 9, 2011
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Before LOKEN, BEAM, and GRUENDER, Circuit Judges.
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BEAM, Circuit Judge.
John and Janice Jung (the Jungs) challenge the denial of their claim for benefits
arising from an underinsured motorists (UIM) policy issued by appellee, General
Casualty of Wisconsin. The district court1 granted summary judgment in favor of
General Casualty. The Jungs appeal. We affirm.
1
The Honorable Ralph R. Erickson, Chief Judge, United States District Court
for the District of North Dakota.
I. BACKGROUND
On November 30, 2006, John Jung (Jung) was seriously injured in a motor-
vehicle accident caused by a negligent driver, Richard Martin. At the time of the
accident, Jung was driving a 2006 Dodge Ram 2500 pickup owned by his employer,
Tooz Construction. The vehicle was covered by an insurance policy Tooz had
purchased from General Casualty. The policy included a $1,000,000 UIM
endorsement. Martin was driving a 2001 Dodge pickup he owned and insured under
a motor-vehicle-liability policy issued by Nodak Mutual Insurance Company. That
policy had a liability limit of $250,000 per person and $500,000 per accident. Martin
also had an excess-liability policy issued by Nodak Mutual, which had a $1,000,000
limit. The excess-liability policy specifically listed operation of Martin's truck as an
insured risk.
On July 30, 2008, the Jungs, Nodak Mutual, and Martin reached a settlement
agreement under which the Jungs received $1,250,000. The settlement was paid via
two separate checks: one check for $250,000–the full amount of Martin's motor-
vehicle-liability policy–and one for $1,000,000–the full value of Martin's excess-
liability policy. The Jungs then filed a claim with General Casualty for coverage
pursuant to the UIM endorsement. General Casualty denied the Jungs' claim after
concluding that Martin's vehicle was not underinsured.
On November 24, 2008, the Jungs filed suit against General Casualty in federal
district court. General Casualty moved for summary judgment, arguing that, as a
matter of law, Martin's truck was not underinsured. The motion was referred to the
magistrate judge2 who issued a report, recommending that summary judgment be
granted. The Jungs filed objections with the district court. After a hearing, the district
2
The Honorable Karen K. Klein, United States Magistrate Judge for the District
of North Dakota.
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court adopted the magistrate judge's recommendations and granted General Casualty's
motion for summary judgment. The Jungs then filed a Request to Certify a Question
of Law to the North Dakota Supreme Court. On October 15, 2010, the district court
entered an order denying this request. The Jungs appeal the adverse grant of summary
judgment and the denial of their request for certification.
II. DISCUSSION
We review the district court's grant of a motion for summary judgment de novo.
Genosky v. Minnesota, 244 F.3d 989, 992 (8th Cir. 2001). Summary judgment is
appropriate where there is no genuine issue as to any material fact and the moving
party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S.
317, 322-23 (1986). Here, there is a potentially dispositive legal issue; General
Casualty is entitled to summary judgment if Martin's vehicle was, as a matter of law,
not underinsured. See DeCoteau v. Nodak Mut. Ins. Co., 603 N.W.2d 906, 912 (N.D.
2000). Because we are sitting in diversity, this issue is governed by North Dakota
state law. Walker v. Armco Steel Corp., 446 U.S. 740, 747 (1980).
The North Dakota Century Code establishes the minimum standard for UIM
coverage in the state, requiring a UIM insurer to compensate an insured for "bodily
injury" damages that the insured is legally entitled to collect from the operator of an
underinsured motor vehicle, so long as those damages arise "out of the ownership,
maintenance, or use" of that vehicle. N.D. Cent. Code Ann. § 26.1-40-15.3(1). The
Code goes on to define an underinsured motor vehicle as "a motor vehicle for which
there is a bodily injury liability insurance policy, or bond providing equivalent
liability protection, in effect at the time of the accident, but the applicable limit of
bodily injury liability of such policy or bond [i]s less than the applicable limit for
underinsured motorist coverage under the insured's policy." N.D. Cent. Code Ann.
§ 26.1-40-15.1(2)(a).
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Under this "gap" approach to defining underinsured status, a vehicle is only
underinsured if the policy limits applicable to that vehicle are less than the UIM
coverage in the policy under which the insured seeks benefits. Score v. Am. Family
Mut. Ins. Co., 538 N.W.2d 206, 208 (N.D. 1995). Thus, here, the relevant question
is whether Martin's truck insured by Nodak Mutual was a "motor vehicle for which
there is a bodily injury liability policy" with an applicable limit of less than the
applicable limit of Jung's $1,000,000 UIM endorsement in the General Casualty
policy. It is undisputed that Martin's car was covered by a $250,000 automobile-
liability policy issued by Nodak Mutual. If this were the only applicable policy, there
would be a gap of $750,000, Martin's vehicle would be underinsured, and summary
judgment would be inappropriate. However, General Casualty argues that Martin's
personal excess-liability policy is a "bodily injury policy" that applies to the at-fault
vehicle and that, therefore, there is $1,250,000 worth of coverage on Martin's car,
rendering it, as a matter of law, not underinsured. Thus, our decision here turns on
whether, under North Dakota law, Martin's excess-liability policy issued by Nodak
Mutual counts as a policy that covers his vehicle for purposes of section
26.1-40-15.1.3
3
General Casualty argues that we should look to the definition of
"underinsured" found in its policy, which defines a vehicle as underinsured when the
"sum of all liability bonds or policies that apply at the time of the accident" are less
than the UIM coverage amount. This definition arguably defines the policies relevant
to determining whether a vehicle is underinsured more broadly than the North Dakota
statute does, referring to the "sum of all liability policies" that "apply." The Jungs
argue it would be inappropriate for us to look to this policy definition because the
statutory underinsurance mandate sets a coverage floor and that an insurer cannot, in
effect, provide less coverage by changing the definition of "underinsured." See
Sandberg v. Am. Family Ins. Co., 722 N.W.2d 359, 362 (N.D. 2006) (an insurance
company cannot provide UIM insurance on terms less favorable than those outlined
in the statute). Because we find that the excess-liability policy is relevant under the
statutory definition of underinsured, we do not reach this question.
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The Jungs argue that this question is controlled by Rask v. Nodak Mut. Ins. Co.,
626 N.W.2d 693 (N.D. 2001). In Rask, the North Dakota Supreme Court determined
that the at-fault vehicle was underinsured even though the insured collected money in
a settlement from two separate insurance policies that, when combined, totaled more
than the limit of the insured's UIM policy. The Rask court refused to count one of the
policies under which the insured was paid in the underinsurance analysis because it
was a liability policy that covered the tortfeasor-driver but had no other connection
to the vehicle involved in the accident. The Rask court reasoned that the language of
section 26.1-40-15.1 required it to look at the insured status of the motor vehicle,
rather than the driver. Id. at 697. The Jungs argue that Rask establishes a general
rule that personal-excess-liability policies are not relevant to determining whether a
vehicle is underinsured under section 26.1-40-15.1. However, this argument
overstates Rask's reach. We read Rask more narrowly and conclude it is
distinguishable from the instant case.
Rask involved a tortfeasor who was driving someone else's car. The two policies
under which the plaintiff recovered pursuant to the settlement agreement were: (1) the
liability policy for the vehicle involved in the accident, which applied because the
tortfeasor was a permissive user, and (2) the tortfeasor's automobile- insurance policy,
which primarily applied to the tortfeasor's vehicle, but incidentally covered her as the
driver of another vehicle. Id. at 695. The Rask court excluded consideration of the
second policy because it was only incidentally attached to the at-fault vehicle because
the tortfeasor happened to be driving the vehicle. There was no link between the
vehicle and the policy except when the tortfeasor happened to be driving as a
permissive user. This lack of anything more than an incidental connection between the
tortfeasor and the vehicle was central to the Rask court's analysis. Id. at 697 ("Because
the accident did not arise out of the ownership, maintenance, or use of any of the
vehicles owned by [the tortfeasor] and insured by [the tortfeasor's insurance company],
it would be inappropriate to look to those vehicles to determine whether the . . . vehicle
involved in the accident was underinsured."). In contrast, here, Martin was the owner,
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operator, and insurer of the vehicle involved in the accident. Martin's personal excess-
liability policy also specifically referenced the 2001 Dodge pickup involved in the
accident, labeled it a "covered vehicle," and referenced Martin's primary liability policy
on that vehicle. The connection between the involved vehicle and Martin's excess-
liability policy was not merely incidental as it was in Rask.
This connection is enough to distinguish this case from Rask and to make
Martin's excess-liability policy relevant to the underinsurance calculations under
section 26.1-40-15.1. The Rask court relied on statutory language to conclude that the
policy in question was excluded. That same statutory language covers the excess-
liability policy4 here. The Jungs repeatedly characterize the inquiry as being whether
the excess-liability policy is a "motor-vehicle-liability policy," but this reads a
requirement into the statute that simply is not there. The statute only requires that the
policy be a "bodily injury" policy that covers a motor vehicle; if the legislature
intended to limit the analysis to traditional, primary motor-vehicle-liability policies,
it could have done so. See Farmers Union Mut. Ins. Co. v. Assoc. Elec. and Gas Ins.
Servs. Ltd., 737 N.W.2d 253, 256 (N.D. 2007) (discussing interpretation of another
North Dakota statute that included the term "motor vehicle liability insurance policy").
The question is not whether Martin's excess-liability policy is a motor-vehicle-liability
policy. Rather, it is whether Martin's excess-liability policy is a "bodily injury" policy
that covers the vehicle involved in the accident. We conclude that it is and that it does.
This is consistent with the approach adopted by other jurisdictions that use the
gap method of defining underinsurance. The cases have consistently found that
4
While the statute refers only to a singular policy, we do not read that as
intended to limit the inquiry to a single primary automobile policy. Under North
Dakota law, singular terms are assumed to include the plural unless a contrary intent
is clear. N.D. Cent. Code Ann. § 1-01-35; Beaudoin v. Texaco, Inc., 653 F. Supp.
512, 516 (D.N.D. 1987). We see no contrary intent and assume section 26.1-40-15.1
counts any "bodily injury" policy that covers the automobile.
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personal-excess-liability policies held by the owner and operator of the at-fault vehicle
count when determining whether that vehicle is underinsured. Penn. Gen. Ins. Co. v.
Morris, 599 A.2d 1042, 1043-44 (R.I. 1991); Murphy v. Safety Ins. Co., 709 N.E.2d
410, 412 (Mass. 1999); State Farm Fire and Cas. Ins. Co. v. Sayles, 289 F.3d 181,
186-87 (2d Cir. 2002) (interpreting Connecticut law).
The Jungs' argument that an excess-liability policy should not count when
determining underinsured status because the policy does not provide no-fault coverage
is similarly unpersuasive. While there is a North Dakota statutory requirement that any
"motor vehicle liability insurance policy" provide no-fault coverage, see Farmers
Union, 737 N.W.2d at 256, as we discussed above, section 26.1-40-15.1 does not limit
its reach to only "motor vehicle liability insurance" policies. The statutory language
is broader, and we find no reason why it would not include a policy that undisputedly
provides liability coverage for "bodily injury," caused by operation of the insured's
vehicle merely because that policy does not have other characteristics of traditional
motor-vehicle-liability polices. Further, as a policy matter, the availability of no-fault
benefits appears to be irrelevant to determining whether a particular policy affects the
underinsured status of a vehicle because UIM coverage is triggered only when the
driver of that vehicle is legally responsible for the insured's damages.
We conclude that Martin's excess-liability policy was relevant to determining
the underinsured status of his vehicle. Thus, as a matter of law, Martin's vehicle was
not underinsured and, the Jungs were not entitled to coverage under the UIM
endorsement.
The Jungs also argue that the district court erred by not certifying this question
of state law to the North Dakota Supreme Court. We review the decision not to certify
a question only to determine if the district court abused its discretion. Perkins v. Clark
Equip. Co., 823 F. 2d 207, 209 (8th Cir. 1987). The district court did not abuse its
discretion here. The Jungs chose to bring this case in federal court, and nearly two
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years passed before they requested certification. In fact, the Jungs did not request
certification until after the district court rendered summary judgment against them. We
generally do not allow certification after a case has been decided.5 Id. Further, federal
courts have a duty to address matters of state law, even when that law is unsettled,
Guillard v. Niagara Machine & Tool Works, 488 F.2d 20, 24 (8th Cir. 1973), and we
see no particular reason that this case required certification. For these same reasons,
we decline to certify the question to the North Dakota Supreme Court ourselves.
III. CONCLUSION
We affirm.
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5
The Jungs argue that the district court committed an abuse of discretion by
relying on an improper reason to deny their request for certification. In denying the
Jungs' request for certification, the district court emphasized that the Jungs did not
request certification until after the district court issued an order granting summary
judgment. The Jungs argue that the district court should not have held this delay
against them because, according to the Jungs, the North Dakota Supreme Court could
not have answered a certified question before the district court order issued as there
would not have been a case or controversy for the state court to decide. This is simply
wrong. The North Dakota Supreme Court may answer a certified question prior to
judgment, see N.D. R. App. P. 47, and the Jungs' delay in requesting certification was
a proper factor for the district court to consider. Perkins, 823 F.2d at 209-10. The
Jungs' argument to the contrary is meritless and appears to confuse certification from
state-district courts with certification from federal courts.
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