Grier v. Nationwide Mutual Insurance

NO. 90-272

IN THE SUPREME COURT OF THE STATE OF MONTANA
1991

ARVID GRIER,
Plaintiff,
-vs-
NATIONWIDE MUTUAL INSURANCE COMPANY, -
j U N 4 1991

ORIGINAL PROCEEDING:

COUNSEL OF RECORD:
For Plaintiff:
Richard Reep argued; Graham, Reep & Spoon,
Missoula, Montana
For Defendant:
Paul C. Meismer argued; Garlington, Lohn & Robinson,
Missoula, Montana
For Amicus Curiae:
Molly Shepherd; Worden, Thane & Haines, Missoula,
Montana

Submitted: May 9, 1991
Decided: June 4, 1991

Filed:
Chief Justice J. A. Turnage delivered the Opinion of the Court.
This is a certified question submitted by the United States
District Court for Montana. This Court accepted certification of
the question by order dated June 5, 1990.
The certified question as presented by the federal court was:
Is an offset provision in an Itunderinsured
motoristu policy, entitling the insured to an
offset for an amount equal to the liability
coverage available from a responsible tort-
feasor, void as contrary to the public policy
of the State of Montana?
We rephrase the question as follows:
Does the contested provision contained in this
insurance policy provide uninsured motorist
coverage or underinsured motorist coverage?
If it provides uninsured motorist coverage, is
the offset provision void as contrary to the
public policy of the State of Montana?
Nationwide Mutual Insurance Company (Nationwide) issued a
policy of automobile liability insurance to Arvid Grier, a resident
of Missoula, Montana. The policy provided coverage for Grierls
1988 Dodge Caravan from December 8, 1988, through December 8, 1989.
On December 19, 1988, while driving his Dodge Caravan, Grier
was rear-ended by a driver insured by Farmers Union Insurance
Company for the statutory minimum $25,000 for bodily injury. Grier
suffered severe and permanent injuries for which Farmers Union
Insurance Company has paid its entire $25,000 policy limit. Grier
now seeks to recover under his own insurance policy.
 The pertinent provision of the Nationwide insurance policy is
found at page 3 of the 1999B endorsement, under the UNINSURED
MOTORISTS coverage:
We will pay compensatory bodily injury (mea-
ning bodily injury, sickness, disease, or
death) damages that are due you by law from
the owner or driver of an uninsured motor
vehicle ...
...
An uninsured motor vehicle is:
...
2. one which is underinsured. This is one
for which there are bodily injury liability
coverage or bonds in effect. Their total
amount, however, is less than the limits of
this coverage. These limits are shown in your
policy's Declarations.
The policy also provides, on the same page, under LIMITS OF
PAYMENT, that Iv[t]he limits of this coverage will be reduced by any
amount paid by or for any liable parties." Grierts policy of
insurance included UNINSURED MOTORISTS coverage in the amounts of
$25,000 for each person and $50,000 for each occurrence.
This Court has been consistent in invalidating insurance
contract clauses wherein the insurer attempts to limit its
liability for uninsured motorist coverage. See, e.g., Sullivan v.
Doe (1972), 159 Mont. 50, 495 P.2d 193; Guiberson v. Hartford Cas.
Ins. Co. (1985), 217 Mont. 279, 704 P.2d 68. The purpose of
Montana's uninsured motorist statute, 5 33-23-201, MCA, is the
protection of persons insured from acts of the uninsured.
Guiberson, 704 P.2d at 74.
 Montana has no statutory insurance requirement concerning
underinsured motorists. The question presented by the federal
court was whether the public policy prohibiting offsets against
coverage for uninsured motor vehicles also extends to cases
involving underinsured motorists. The parties have briefed this
issue at length.
However, the insurance policy in this case is set up in a
unique fashion. As set forth above, the "underinsuredtt
motorist
provision is part of the section on uninsured motorist coverage.
There is no separate policy section providing for underinsured
motor vehicle coverage. According to the declarations page of the
policy, no separate premium was charged for underinsured motorist
coverage. In fact, the declarations page makes no mention
whatsoever of underinsured motor vehicle coverage. We conclude
that, under these circumstances, the "underinsuredttcoverage is
part of the uninsured motor vehicle coverage. As such, the public
policy of Montana prohibits any offset for the amount of coverage
carried by the third-party tortfeasor.
As the parties noted in oral argument, this Court is not
presented with the issues of whether the insurance policy is
ambiguous or whether the vehicle driven by the tortfeasor was
wunderinsuredtt
under Grierts insurance policy. Those are issues
to be resolved in the federal court.
 The answer to the certified question as we have restated it
is that the ltunderinsuredll
provision in question is part of the
uninsured motor vehicle coverage and that no offset is permissible.

We concur: / F Chief Justice