STATE OF MAINE SUPERIOR COURT CIVIL ACTION YORK, ss.
CYNTHIA MOLLEUR,
Plaintiff
ORDER
DAIRYLAND INSURANCE COMPANY,
Defendant
T h s matter comes before the Court on Plaintiff's motion for partial summary
judgment and Defendant Dairyland's motion for summary judgment pursuant to M.R.
(3iv. P. 56(c). The Plaintiff's Motion is Denied; the Defendant's Motion is Granted.
BACKGROUND
Plaintiff Cynthia Molleur ("Molleur") is a resident of Lyman, Maine. Defendant
Llairyland Insurance Company ("Dairyland") is a corporation principally based in
Virginia, but licensed to do business in Maine. Ths case focuses on a narrow issue
concerning Dairyland's liability under its underinsured motorist ("UIM) coverage.
In July 1999, Molleur was a passenger on a motorcycle operated by her then-
husband, Barry Hough ("Hough), on Interstate 80 in Pennsylvania. Patricia Farley
("Farley") was also traveling on Interstate 80 that day when her vehicle struck a deer
and stopped in the highway. Another vehcle also stopped near Farley's car. Soon
afterward, Hough's motorcycle approached the two vehcles, swerved to avoid them,
and then flipped, severely injuring Molleur. She fractured her right arm and injured the
radial nerve in that arm, among other injuries. Molleur filed suit in Pennsylvania and recovered $98,000. She received the
maximum amount available under Farley's policy, $15,000. She also received $3,000
from the other driver, and $80,000 from Dairyland for her claim against Hough. In
January 2006, Molleur filed this action against Dairyland seeking coverage under the
underinsured / uninsured motorist portion of Hough's policy. That portion of Hough's
policy provides as follows: "The amount of damages payable under this insurance will
be reduced by the amount paid by or on behalf of anyone responsible for your injury.
This includes any amount paid under the liability insurance ofthis policy. . . ."'
Molleur now seeks partial summary judgment on Dairyland's affirmative
defense2that it is entitled to offset any liability it may face under the UIM coverage with
amounts already paid to M ~ l l e u r .Dairyland ~ seeks summary judgment, contending
that because it compensated her under the liability coverage in an amount that
exceeded the UIM coverage, Molleur cannot recover additional compensation under the
UIM coverage.
DISCUSSION
1. Summarv Tudgment Standard.
Summary judgment is proper where there exist no genuine issues of material fact
such that the moving party is entitled to judgment as a matter of law. M.R. Civ. P. 56(c);
see also Levine v. R.B.K. Caly Coy., 2001 ME 77, q[ 4, 770 A.2d 653,655. A genuine issue is
raised "when sufficient evidence requires a fact-finder to choose between competing
versions of the truth at trial." Parrish v. Wright, 2003 ME 90, q[ 8, 828 A.2d 778, 781. A
1 Dairyland motorcycle insurance policy, p. 12 (emphasis added). 2 Dairyland has agreed not to pursue the statute of limitations affirmative defense that it initially raised. 3 The per-person UIM limit is $50,000; therefore, subtracting the $15,000 from Farley, the parties agree that the maximum amount Molleur would be entitled to receive under the policy is $35,000.
2 material fact is a fact that has "the potential to affect the outcome of the suit." Burdzel v.
Sobus, 2000 ME 84, ¶ 6, 750 A.2d 573, 575. "If material facts are disputed, the dispute
must be resolved through fact-finding." Curtis v. Porter, 2001 ME 158, 7, 784 A.2d 18,
22. At h s stage, the facts are reviewed "in the light most favorable to the nonmoving
party." Lightfoot v. Sch. Admin. Dist. No. 35, 2003 ME 24, ¶ 6, 816 A.2d 63, 65.
2. Does Dairvland Face Liability Under Both Its UIM and Liability Coverages, and If So, Is It Entitled to Offset Payments That It Made Under The Liability Portion of Its Policy?
This case addresses whether recovery under both a policy's UIM and its liability
coverage is permitted and, if so, whether the insurer may offset a payment made under
its liability coverage against whatever it might also owe under the UIM coverage
provisions of the same insurance policy. Molleur relies on two cases in whch the Law
Court discussed the public policy concerns surrounding reduction clauses in insurance
policies.
In a 1979 case, the Law Court held that a setoff clause was void on public policy
grounds. Wescott v. Allstate, 396 A.2d 156, 160 (Me. 1979). There, the plaintiff was a
passenger in a car that had collided with an uninsured motorist's vehcle. Id. After
settling with the insurer for the driver of the vehicle in which she was riding, she
attempted to recover under her own policy's uninsured motorist coverage, but was
denied. Id. at 161. The Law Court held that the clause violated public policy because
injured persons should be allowed to proceed against their own insurers when other
settlements have not fully compensated them for their damages. Id. at 169-170. It noted
that its decision was consistent with the legislative intent behind the statute requiring
companies to issue UIM coverage, 24-A M.R.S.A. § 2902(1). Id. at 170.
In another case, the Court considered the narrower issue of whether an insurer
"may reduce its obligation" to its insured "by the amount of the settlement" the insured 3 obtained from "an insured joint tortfeasor." Tibbetts v. Me. Bonding t3 Casualty Co., 618
A.2d 731, 732 (Me. 1992). There, the plaintiffs were involved in a collision with two
other cars. Id. After settling with one driver for his policy limits, the plaintiffs claimed
that the other driver was underinsured and elected to seek recovery from their own
policy's underinsured motorist coverage. Id. Their company argued that it did not
have to pay a n y h n g because the second driver was not underinsured, but even if it did
have to pay, it was allowed to subtract the amount of the settlement. Id. First, the
Court noted that under statutory and common law, it determines whether a driver was
underinsured by deducting the amount of his or her liability coverage from the
plaintiff's UIM coverage limit. Id. at 733. In Tibbetts, the driver was found to be
underinsured, and the Court held that the plaintiffs' insurer could not offset the
settlement amount because the UIM law is intended to allow for full recovery
regardless of the level of a tortfeasor's coverage. Id. at 733-734.
Dairyland, however, relies upon the Law Court's analysis in Bourque v. Dairyland
Ins. Co. to support a setoff in h s particular situation. 1998 ME 178, 741 A.2d 50. In
Bourque, the plaintiff was a passenger in a car involved in a collision that killed the
driver and seriously injured him. Id. 9 2, 741 A.2d at 51. He settled with the decedent's
insurer for the liability limit per person but reserved his right to pursue UIM claims. Id.
A unique issue confronting the Law Court was the validity of the decedent's policy's
provision barring recovery under both its LTIM and liability coverage; the policy
specifically stated that a car insured by the company was not an uninsured car. Id. ¶ 11,
741 A.2d at 53-54. In accordance with its stance in a prior case, the Court held that the
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STATE OF MAINE SUPERIOR COURT CIVIL ACTION YORK, ss.
CYNTHIA MOLLEUR,
Plaintiff
ORDER
DAIRYLAND INSURANCE COMPANY,
Defendant
T h s matter comes before the Court on Plaintiff's motion for partial summary
judgment and Defendant Dairyland's motion for summary judgment pursuant to M.R.
(3iv. P. 56(c). The Plaintiff's Motion is Denied; the Defendant's Motion is Granted.
BACKGROUND
Plaintiff Cynthia Molleur ("Molleur") is a resident of Lyman, Maine. Defendant
Llairyland Insurance Company ("Dairyland") is a corporation principally based in
Virginia, but licensed to do business in Maine. Ths case focuses on a narrow issue
concerning Dairyland's liability under its underinsured motorist ("UIM) coverage.
In July 1999, Molleur was a passenger on a motorcycle operated by her then-
husband, Barry Hough ("Hough), on Interstate 80 in Pennsylvania. Patricia Farley
("Farley") was also traveling on Interstate 80 that day when her vehicle struck a deer
and stopped in the highway. Another vehcle also stopped near Farley's car. Soon
afterward, Hough's motorcycle approached the two vehcles, swerved to avoid them,
and then flipped, severely injuring Molleur. She fractured her right arm and injured the
radial nerve in that arm, among other injuries. Molleur filed suit in Pennsylvania and recovered $98,000. She received the
maximum amount available under Farley's policy, $15,000. She also received $3,000
from the other driver, and $80,000 from Dairyland for her claim against Hough. In
January 2006, Molleur filed this action against Dairyland seeking coverage under the
underinsured / uninsured motorist portion of Hough's policy. That portion of Hough's
policy provides as follows: "The amount of damages payable under this insurance will
be reduced by the amount paid by or on behalf of anyone responsible for your injury.
This includes any amount paid under the liability insurance ofthis policy. . . ."'
Molleur now seeks partial summary judgment on Dairyland's affirmative
defense2that it is entitled to offset any liability it may face under the UIM coverage with
amounts already paid to M ~ l l e u r .Dairyland ~ seeks summary judgment, contending
that because it compensated her under the liability coverage in an amount that
exceeded the UIM coverage, Molleur cannot recover additional compensation under the
UIM coverage.
DISCUSSION
1. Summarv Tudgment Standard.
Summary judgment is proper where there exist no genuine issues of material fact
such that the moving party is entitled to judgment as a matter of law. M.R. Civ. P. 56(c);
see also Levine v. R.B.K. Caly Coy., 2001 ME 77, q[ 4, 770 A.2d 653,655. A genuine issue is
raised "when sufficient evidence requires a fact-finder to choose between competing
versions of the truth at trial." Parrish v. Wright, 2003 ME 90, q[ 8, 828 A.2d 778, 781. A
1 Dairyland motorcycle insurance policy, p. 12 (emphasis added). 2 Dairyland has agreed not to pursue the statute of limitations affirmative defense that it initially raised. 3 The per-person UIM limit is $50,000; therefore, subtracting the $15,000 from Farley, the parties agree that the maximum amount Molleur would be entitled to receive under the policy is $35,000.
2 material fact is a fact that has "the potential to affect the outcome of the suit." Burdzel v.
Sobus, 2000 ME 84, ¶ 6, 750 A.2d 573, 575. "If material facts are disputed, the dispute
must be resolved through fact-finding." Curtis v. Porter, 2001 ME 158, 7, 784 A.2d 18,
22. At h s stage, the facts are reviewed "in the light most favorable to the nonmoving
party." Lightfoot v. Sch. Admin. Dist. No. 35, 2003 ME 24, ¶ 6, 816 A.2d 63, 65.
2. Does Dairvland Face Liability Under Both Its UIM and Liability Coverages, and If So, Is It Entitled to Offset Payments That It Made Under The Liability Portion of Its Policy?
This case addresses whether recovery under both a policy's UIM and its liability
coverage is permitted and, if so, whether the insurer may offset a payment made under
its liability coverage against whatever it might also owe under the UIM coverage
provisions of the same insurance policy. Molleur relies on two cases in whch the Law
Court discussed the public policy concerns surrounding reduction clauses in insurance
policies.
In a 1979 case, the Law Court held that a setoff clause was void on public policy
grounds. Wescott v. Allstate, 396 A.2d 156, 160 (Me. 1979). There, the plaintiff was a
passenger in a car that had collided with an uninsured motorist's vehcle. Id. After
settling with the insurer for the driver of the vehicle in which she was riding, she
attempted to recover under her own policy's uninsured motorist coverage, but was
denied. Id. at 161. The Law Court held that the clause violated public policy because
injured persons should be allowed to proceed against their own insurers when other
settlements have not fully compensated them for their damages. Id. at 169-170. It noted
that its decision was consistent with the legislative intent behind the statute requiring
companies to issue UIM coverage, 24-A M.R.S.A. § 2902(1). Id. at 170.
In another case, the Court considered the narrower issue of whether an insurer
"may reduce its obligation" to its insured "by the amount of the settlement" the insured 3 obtained from "an insured joint tortfeasor." Tibbetts v. Me. Bonding t3 Casualty Co., 618
A.2d 731, 732 (Me. 1992). There, the plaintiffs were involved in a collision with two
other cars. Id. After settling with one driver for his policy limits, the plaintiffs claimed
that the other driver was underinsured and elected to seek recovery from their own
policy's underinsured motorist coverage. Id. Their company argued that it did not
have to pay a n y h n g because the second driver was not underinsured, but even if it did
have to pay, it was allowed to subtract the amount of the settlement. Id. First, the
Court noted that under statutory and common law, it determines whether a driver was
underinsured by deducting the amount of his or her liability coverage from the
plaintiff's UIM coverage limit. Id. at 733. In Tibbetts, the driver was found to be
underinsured, and the Court held that the plaintiffs' insurer could not offset the
settlement amount because the UIM law is intended to allow for full recovery
regardless of the level of a tortfeasor's coverage. Id. at 733-734.
Dairyland, however, relies upon the Law Court's analysis in Bourque v. Dairyland
Ins. Co. to support a setoff in h s particular situation. 1998 ME 178, 741 A.2d 50. In
Bourque, the plaintiff was a passenger in a car involved in a collision that killed the
driver and seriously injured him. Id. 9 2, 741 A.2d at 51. He settled with the decedent's
insurer for the liability limit per person but reserved his right to pursue UIM claims. Id.
A unique issue confronting the Law Court was the validity of the decedent's policy's
provision barring recovery under both its LTIM and liability coverage; the policy
specifically stated that a car insured by the company was not an uninsured car. Id. ¶ 11,
741 A.2d at 53-54. In accordance with its stance in a prior case, the Court held that the
plaintiff could not recover under both the liability and UIM coverage afforded by the
same insurance policy. Id. q[ 12, 741 A.2d at 54. The public policy import of protecting accident victims through LTIM coverage is
undisputed. The parties do not dispute that Molleur should be able to recover under
the liability provisions of her former husband's policy. Indeed, Dairyland has already
paid Molleur the limits of Hough's per-person collision coverage, less the amount of the
settlement with Farley. The question presented is whether Molleur should be able to
augment her recovery by pursuing Dairyland twice under different provisions of the
same insurance policy. Tibbetts clearly is distinguishable from this situation because it
involved two dfferent policies, whereas Bourque involved an attempted recovery under
separate provisions of the same policy. This case is virtually identical to Bourque, as
Molleur seeks to recover under Dairyland's UIM plan when she has already recovered
under the liability coverage in an amount that would exceed available UIM funds. As a
matter of law, she cannot also recover under Hough's LTIM coverage.
The entry will be as follows:
Defendant's Motion for Summary Judgment is Granted. Judgment for the Defendant.
Dated: March 29,2007
I Justice, Superior Court Stephen C. Whiting, Esq. - PL Martica S. Douglas, Esq. - DEF Christine Kennedy-Jensen, Esq. - DEF
4 Given this result, this Court need not address Dairyland's argument that Molleur cannot recover UIM benefits because she did not exhaust her remedies with other tortfeasors.