Colonial Insurance v. Tumbleson

889 F. Supp. 1136, 1995 U.S. Dist. LEXIS 9934, 1995 WL 413144
CourtDistrict Court, D. Alaska
DecidedJuly 7, 1995
DocketNo. A94-184 CV (JKS)
StatusPublished

This text of 889 F. Supp. 1136 (Colonial Insurance v. Tumbleson) is published on Counsel Stack Legal Research, covering District Court, D. Alaska primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Colonial Insurance v. Tumbleson, 889 F. Supp. 1136, 1995 U.S. Dist. LEXIS 9934, 1995 WL 413144 (D. Alaska 1995).

Opinion

ORDER FROM CHAMBERS

(Reconsideration)

SINGLETON, District Judge.

I. INTRODUCTION

In this action for declaratory judgment, Colonial Insurance Company of California (“Colonial”) seeks a declaration that it is not obligated to pay the claims of Derek Tumble-son and his family (“Tumblesons”) under the uninsured/underinsured (“UM/UIM”) coverage of the auto insurance issued to them by Colonial. Both parties moved for summary judgment (Docket Nos. 3 & 5) and the Court issued a decision in favor of Plaintiff, declaring that the Tumbleson’s cannot recover under the UIM policy issued by Colonial. Docket No. 24 (published at 873 F.Supp. 310 (D. Alaska 1995)). The Tumblesons, specifically Derek, Laurie, and Kristin, request that the Court reconsider its decision. Docket No. 29; see Motion for Reconsideration at Docket No. 35.

Jurisdiction in this ease is based on diversity of citizenship. 28 U.S.C. § 1332. This Court’s authority to grant declaratory judgment is found in 28 U.S.C. § 2201. Since jurisdiction is based on diversity of citizenship, the Court looks to Alaska law for guidance in interpreting statutes and constitutional provisions. State Farm Mut. Auto Ins. Co. v. Davis, 937 F.2d 1415 (9th Cir.1991).

II.BACKGROUND FACTS

On May 9,1993, David Schram (“Schram”) rear-ended Derek Tumbleson’s 1990 Pontiac with his 1990 Chevrolet pickup truck. Injured in the accident were husband Derek [1138]*1138Tumbleson, wife Laurie Tumbleson, and the Tumbleson children, Andrew, Deanna, and Kristin. At the time of the accident, Schram’s vehicle was insured by State Farm with liability coverage limits of $100,000/$300, 000 (per person/per occurrence). The Tum-blesons’ vehicle was insured by Colonial. The Tumblesons’ policy included liability coverage with limits of $50,000/$100,000. Docket No. 5 at 2, Exhibit 1, p. 1. For an additional premium, the Tumblesons also purchased UM/UIM coverage with limits of $50,000/$100,000. Id. at Exhibit 2, p. 1. State Farm paid the policy limit of $300,000 to the Tumblesons in the following manner:

$100,000 plus interest & Rule. 82 attorney fees to Andrew
$100,000 plus interest & Rule 82 attorney fees to Deanna
$ 92,500 plus interest & Rule 82 attorney fees to Derek & Laurie (combined)
$ 7,500 to Kristin

The amounts received by the Tumblesons are allegedly insufficient to fully compensate them for their injuries. Docket No. 5. Each therefore made a claim for UIM coverage and Colonial sought a declaration from this Court that the UIM policy does not afford coverage. The Colonial policy in effect at the time of the accident is similar to Alaska’s UIM statute. The differences are purely semantic. See ALASKA Stat. § 28.20.445. The triggering mechanism of the statute, section (h), provides:

(h) “Underinsured motor vehicle” means a motor vehicle licensed for highway use with respect to the ownership, operation, maintenance, or use of which motor vehicle there is a bodily injury or property damage insurance policy or a bond applicable at the time of the accident and the amount of insurance or bond
(1) is less than the limit for uninsured and underinsured motorists coverage under the insured’s policy; or
(2) has been reduced by payments to persons other than an insured, injured in an accident, to less than the limit for uninsured and underinsured motorists coverage under the insured’s policy.

ALASKA Stat. § 28.20.445(h) (emphasis added). The sections of the statute that determine the amount of coverage, sections (a) and (b), provide:

(a) The maximum liability of the insurance carrier under the uninsured and under-insured motorists coverage required to be offered under AS 28.20.440 shall be the lesser of
(1) the difference between the amount of the covered person’s damages for bodily injury and property damage and the amount paid to the covered person by or for a person who is or may be held legally liable for the damages; and
(2) the applicable limit of liability of the uninsured and underinsured motorist coverage.
(b) An amount payable under the uninsured and underinsured motorist coverage shall be excess to an amount payable under automobile bodily injury, death, or medical payments coverage, or as workers’ compensation benefits and may not duplicate amounts paid or payable under valid and collectible automobile bodily injury, death, or medical payments coverage, or as workers’ compensation benefits.

Alaska Stat. §§ 28.20.445(a) and (b).

III. PROCEDURAL HISTORY

In its Order dated January 20, 1995, the Court determined that UIM coverage is not triggered because neither subsection (h)(1) nor (h)(2) is satisfied. Docket No. 24. Section (h)(1) is not satisfied because Schram’s liability policy limits ($100,000/$300,000) are greater than the Tumblesons’ UIM policy limits ($50,000/$100,000). Section (h)(2) is not satisfied because Schram’s liability carrier made payments to each of the Tumble-sons, and nobody else. The tortfeasor’s available policy limit was therefore not reduced by payments to persons other than an insured. The Court also rejected the Tum-blesons’ argument that section (h) should be judicially repealed because the legislature, in amending the UM/UIM statute and adding section (b), inadvertently forgot to repeal [1139]*1139section (h). The Court refused to impliedly repeal section (h), determining, inter alia, that sections (b) and (h) can be read together to produce a reasonable result. The Tumble-sons then moved the Court to consider a late filed motion for reconsideration. Docket No. 29. The Court accepted the Tumblesons’ motion to file late and now considers the merits of their claims. Id.; see Motion for Reconsideration at Docket No. 35.

IV. DISCUSSION

In their motion for reconsideration, the Tumblesons argue that even if section (h) is dispositive of whether UIM coverage is triggered, Derek, Laurie, and Kristin Tumbleson are nonetheless entitled to UIM coverage because each settled for less than $50,-000, the per person limit under the Colonial UIM policy. The Tumblesons reason that the Court erred in its section (h) analysis by comparing the Tumblesons’ collective $300,-000 settlement to the $100,000 per occurrence UIM limit rather than comparing the individual settlement amounts to the $50,000 per person UIM limit. Docket No. 35 (citing Gabriel v. Minn. Mut. Fire and Cas., 506 N.W.2d 73 (N.D.1993) for the proposition that an insured is entitled to UIM coverage whenever she receives settlement from the liability carrier and such settlement is less than the individual UIM limit).

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Bluebook (online)
889 F. Supp. 1136, 1995 U.S. Dist. LEXIS 9934, 1995 WL 413144, Counsel Stack Legal Research, https://law.counselstack.com/opinion/colonial-insurance-v-tumbleson-akd-1995.