Rowe v. Travelers Indemnity Co.

No. 90-081

IN THE SUPREME COURT OF THE STATE OF MONTANA
1990

KAREN ROWE, individually, and
as Guardian of JOSHUA ROWE and
KARRY ROWE; and WILLIAM BOURRET,
the Personal Representative of the
Estate of BARRY R. ROWE, Deceased,
Plaintiffs and Appellants,

THE TRAVELERS INDEMNITY COMPANY,
a Connecticut Corporation and
JOHN DOE AND RICHARD ROE, INC.,
a Montana Corporation,
Defendants and Respondents.

APPEAL FROM: District Court of the Eighth Judicial District,
In and for the County of Cascade,
The Honorable Leif B. Erickson, Judge presiding.

COUNSEL OF RECORD:
For Appellants:
Joseph R. Marra and David A. Hopkins; Marra, Wenz,
Johnson & Hopkins, P.C., Great Falls, Montana
For Respondents:
William Conklin and Allen P. Lanning; Conklin,
Nybo, LeVeque & Murphy, P.C., Great Falls, Montana
Judith Bartram; Jardine, Stephenson, Blewett &
Weaver, Great Falls, Montana (for John Doe and
Richard Roe, Inc.)

Submitted on Briefs: September 20, 1990

db
Decided: October 24, 1990
Filed:
Justice John Conway Harrison delivered the Opinion of the Court.

This is an appeal from the Eighth Judicial District, Cascade
County. Plaintiffs, the personal representative of the deceased,
Barry R. Rowe, his widow, Karen Rowe, and their two children,
sought a declaratory ruling that they were entitled to recover
uninsured motorist benefits under two umbrella policies issued by
Travelers Indemnity Company. The parties filed cross-motions for
summary judgment. The District Court denied the plaintiffs'
summary judgment motion and granted summary judgment to Travelers.
From this decision, plaintiffs appeal. We affirm.
The sole issue is whether the District Court erred in ruling
that an umbrella policy does not constitute an automobile or motor
vehicle policy which must include uninsured motorist coverage.

I.
On December 9, 1985, Barry R. Rowe was fatally injured in an
automobile collision with an alleged uninsured motorist. Rowe was
insured by a primary general liability insurance policy and two
umbrella policies, all issued by Travelers. The policies insured
Rowels business, Page-Werner, and Rowe and his two partners
individually. The primary policy contained single liability limits
of $500,000 and provided $50,000 in uninsured motorist coverage.
The other two policies, a Catastrophic Umbrella Policy (CUP),
and a Personal Liability Umbrella of Security Policy (PLUS), had
total liability limits of $3,000,000 and did not provide uninsured
motorist coverage. The CUP policy excluded coverage for obliga-
tions imposed by the uninsured motorist law. The PLUS policy did
not specifically exclude such coverage. However, Travelers refused
to extend uninsured motorist coverage beyond the $50,000 it had an
obligation to pay under the primary automobile liability policy.
Plaintiffs brought this action, claiming that Montana's
uninsured motorist statute, 5 33-23-201, MCA, required Travelers
to supply uninsured motorist coverage under each of the umbrella
policies.

11.
While this is a case of first impression in Montana, several
other jurisdictions have addressed the issue of whether their
uninsured motorist statutes mandate issuance of uninsured motorist
coverage in umbrella policies. These cases have been resolved on
either of two grounds: (1) the type of uninsured motorist statute;
or (2) the type of insurance. See, e.g., Bartee v. R.T.C.
Transportation, Inc. (Kan. 1989), 781 P.2d 1084; Cohn v. Pacific
Employers Insurance Co. (Conn. 1990), 569 A.2d 544.
The courts basing their decisions on the type of uninsured
motorist statute have discerned two differing policy considerations
and legislative intent underlying such statutes, depending on the
jurisdiction. "Minimum liability" statutes require that motorists
maintain a minimum level of liability insurance and, therefore, a
minimum level of uninsured coverage. The policy in such states is
to ensure that injured motorists can recover the same amount as
would have been available from an insured motorist who maintained
the minimum statutory limit of bodily injury liability coverage.
Continental Insurance Co. v. Howe (Fla. App. 3 Dist. 1986), 488
So.2d 917, 919.
"Full recovery" statutes, on the other hand, require insurers
to issue uninsured motorist coverage equal to the amount of bodily
injury liability insurance that the policy provides. For example,
if the insurance policy has limits of $50,000/$100,000 for bodily
injury liability, the insurer must also provide $50,000/$100,000
in uninsured motorist coverage. The policy underlying these
statutes is to I'allow full recovery under the terms of any
applicable policies when a person is injured by an uninsured
m~torist.~~
Continental, 488 So.2d at 919-20.
Most jurisdictions which have llfull recoveryI1 uninsured
motorist statutes have concluded that since an umbrella policy
includes liability coverage for motor vehicle accidents, an
umbrella policy must offer an equivalent amount of uninsured
motorist benefits to the insured in order to permit full recovery.
See Chicago Insurance Co. v. Dominguez (Fla. App. 1982), 420 So.2d
882; Bartee v. R.T.C. Transportation, Inc. (Kan. 1989), 781 P.2d
1084; Southern American Insurance Co. v. Dobson (La. 1983), 441
So.2d 1185; Cincinnati Insurance Co. v. Siemens (Ohio App. 1984),
474 N.E.2d 655. But see United Services Automobile Assln v.
Wilkinson (N.H. 1989), 569 A.2d 749 (holding that uninsured
motorist statute does not apply to umbrella policies, even though
statute was vvfullrecovery" type).
Montana's uninsured motorist statute provides Ivminimum
liabilityvvinsurance:
(1) No automobile liability or motor
vehicle liability 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 shall be delivered or
issued for delivery in this state . . . unless
coverage is provided therein or supplemental
thereto, in limits for bodily injury or death
set forth in 61-6-103 . . .
for the protection
of persons insured thereunder who are legally
entitled to recover damages from owners or
operators of uninsured motor vehicles because
of bodily injury, sickness, or disease,
including death, resulting therefrom.
Section 33-23-201(1), MCA (1985). The minimum amounts of uninsured
coverage which must be provided pursuant to 5 61-6-103, MCA, are
$25,000 for one person and $50,000 for two persons. Montana has
no requirement that uninsured coverage must equal the policy's
coverage for bodily injury liability unless the limits are not
specified in the policy. See 5 33-23-203, MCA.
In this case, however; both parties agree that the distinction
between vvminimum liabilityvv and Ivfull recoveryvv statutes is
meaningless. Rather, their argument involves whether an umbrella
policy is within the realm of insurance contemplated by the
uninsured motorist statute.
Plaintiffs argue that the words vv[n]oautomobile liability or
motor vehicle liability policy" in the uninsured motorist statute
do not exclude umbrella insurance policies; therefore, umbrella
policies must include uninsured motorist coverage because they also
provide I1motorvehicle liability1! insurance.
Travelers contends that umbrella policies are fundamentally
different from automobile liability policies since umbrella
policies are intended solely to provide excess liability
protection for claims against the insured by third parties.
Because of this difference, an umbrella policy is not a I1motor
vehicle liability policyf1I designed to be controlled by the
uninsured motor vehicle statute.
Courts have discussed the unique nature of umbrella policies,
which are a continuation of an underlying primary policy. Thompson
v. Grange Insurance Assln. (Wash. App. 1983), 660 P.2d 307, 311.
Umbrella policies I1provide at a modest cost broad coverage for
catastrophic losses, and excess coverage over and above any type
of primary coverage. . . .I1 United Services Automobile Assln, 569
A.2d at 753. While the excess coverage of an umbrella or
catastrophe policy protects an insured and his business against
liability from third parties, the uninsured motorist protection of
the underlying primary policy does not involve liability claims
against the insured from third parties. Matarasso v. Continental
Casualty Co. (App. Div. 1981), 440 N.Y.S.2d 40, 41.
However, we need go no further than our own statutes to
determine whether an excess or umbrella policy is a "motor vehicle
liability policy" as contemplated by the uninsured motorist
statute. A I1motorvehicle liability policy11' is defined as:
an owner's or operator's policy of liability
insurance, certified as provided in 61-6-133
or 61-6-134 as proof of financial responsibil-
ity and issued, except as otherwise provided
in 61-6-134, by an insurance carrier duly
authorized to transact business in this state,
to or for the benefit of the person named
therein as insured.
Section 61-6-103 (I), MCA (1985). The "motor vehicle liability
policy1'must "designate by explicit description or by appropriate
reference all motor vehicles with respect to which coverage is
thereby to be granted." Section 61-6-103(2)(a), MCA (1985). With
respect to excess coverage, the statute provides:
(8) Any policy which grants the coverage
required for a motor vehicle liability policy
may also grant any lawful coverage in excess
of or in addition to the coverage specified
for a motor vehicle liability policy and such
excess or additional coverage shall not be
subject to the provisions of this part. With
respect to a policy which grants such excess
or additional coverage the term ''motor vehicle
liability shall apply only to that
part of the coveraqe which is required by this
section.
Section 61-6-103 (8), MCA (1985) (emphasis added) . The statutory
definition of "motor vehicle liability policyI1 does not include
excess insurance, such as an umbrella policy. Thus, an umbrella
policy could not constitute a "motor vehicle liability policy1'as
envisioned by the uninsured motorist statute.

'section 33-23-204 (2), MCA, enacted in 1987, specifically
refers to Title 61, Chapter 6 of the Code in defining I1motor
vehicle liability policy.I1
 A majority of courts which have addressed this issue have
concluded that umbrella policies are not ''motor vehicle liability
policies1'as defined by their uninsured motorist statutory schemes,
similar to Montana's. See OIHanlon v. Hartford Accident and
Indemnity Co. (3d Cir. 1981), 639 F.2d 1019 (interpreting Delaware
law); Trinity Universal Ins. Co. v. Metzger (Ala. 1978), 360 So.2d
960; Furlough v. Transamerica Insurance Co. (Cal. App. 2 Dist.
1988), 249 Gal-Rptr. 703; Cohn v. Pacific Employers Ins. Co. (Conn.
1990), 569 A.2d 544; Continental Insurance Co. v. Howe (Fla. App.
3 Dist. 1986), 488 So.2d 917, rehlq denied 494 So.2d 1151
(interpreting Rhode Island law) ; Cincinnati Insurance Co. v. Miller
(Ill. App. 1 Dist. 1989), 546 N.E.2d 700, rehlq denied 550 N.E.2d
554 ; United Services Automobile Asslnv. Wilkinson (N.H. 1989) , 569
A.2d 749; Matarasso v. Continental Casualty Co. (App. Div. 1981),
440 N.Y.S.2d 40; Moser v. Liberty Mutual Insurance Co. (Okla.
1986), 731 P.2d 406; MacKenzie v. Empire Insurance Co. (Wash.
1989), 782 P.2d 1063.
As we have stated previously, the purpose of the uninsured
motorist statute, for those who elect such coverage, is to
recompense innocent persons injured through the negligence of

motorists who, because they are uninsured and not financially
responsible, cannot be made to respond in damages. See Guiberson
v. Hartford Casualty Insurance, Inc. (1985), 217 Mont. 279, 289,
704 P.2d 68, 74; see also Horace Mann Insurance v. Hampton (1989),
235 Mont. 354, 357, 767 P.2d 343, 344 (stating purpose of Mandatory
Liability Protection Act).-
However, reading §§ 33-23-201 and 61-6-103, MCA, together, the
statutes clearly apply only to primary automobile insurance, not
to a commercial umbrella policy issued to protect the insured from
liability to third parties. If the legislature desires uninsured
motorist coverage to equal liability coverage from any source, it
may amend the statute accordingly.
When no genuine issue exists as to any material fact, the
moving party is entitled to summary judgment as a matter of law.
Rule 56(c), M.R.Civ.P.; Blaskovich v. Noreast Development Corp.
(Mont. 1990), 790 P.2d 977, 978, 47 St.Rep. 740, 742. The party
asserting summary judgment.hasthe burden of demonstrating that no
genuine issue of material fact exists. Once this is established,
the burden shifts to the other party to show otherwise. Rule
56(e), M.R.Civ.P. We hold that Montana's uninsured motorist
statute does not require an insurer to provide uninsured motorist
coverage in an excess or umbrella policy. Since a genuine issue
of material fact has not been demonstrated, the District Court did
not err in denying summary judgment to plaintiffs and granting
defendant's motion for summary judgment.
Our ruling does not mean that an insurer may not offer
additional uninsured motorist coverage as part of a primary policy
or umbrella policy.
Affirmed.
. .

We concur: