Mullen v. Liberty Mutual Insurance

589 A.2d 1275, 1991 Me. LEXIS 112

• Court: Supreme Judicial Court of Maine
• Decided: April 18, 1991
• Status: Published

Opinions

GLASSMAN, Justice.

Marci Mullen appeals from a summary judgment entered in the Superior Court (Waldo County, Alexander, J.) for the defendants, Liberty Mutual Insurance Company (Liberty Mutual) and Hanover Insurance Company (Hanover), on her claim that pursuant to 24-A M.R.S.A. § 2902 (1990),¹ she was legally entitled to recover damages under the underinsured motorist provisions in the Liberty Mutual and Hanover insurance policies. Mullen contends that the trial court erred in holding that section 2902(1) does not provide for recovery under an underinsured motor vehicle provision in an insurance policy when, as here, the limit of liability provided in the tortfeasor’s insurance policy exceeds the total amount of underinsured motor vehicle coverage available to the injured party. We affirm the judgment of the Superior Court.

The following facts are undisputed: Mullen, who was insured under the policies of Liberty Mutual and Hanover, was injured while a passenger in a vehicle struck by a vehicle operated by Richard Boody. Three other persons involved in the collision were also injured. The insurance policy on the Boody vehicle provided for a limit of liability up to $100,000 per occurrence. Under the provisions of a settlement agreement the other three persons received an aggregate of $95,000 and Mullen received $5,000. In the instant action, Mullen alleged that her damages exceeded $100,000 and that she was entitled to recover $40,000 under the underinsured motorist provisions of the insurance contracts between Liberty Mutual and the driver of the car in which Mullen was a passenger in the amount of $20,000 and between Hanover and Mullen’s father in the amount of $25,000. In their answers to Mullen’s complaint both Liberty Mutual and Hanover denied any obligation to pay Mullen and filed a joint motion for a summary judgment on the ground that the Boody vehicle was not underinsured within the meaning of section 2902(1). From the summary judgment entered for Liberty Mutual and Hanover pursuant to the court’s order granting their motion, Mullen appeals.

Mullen’s specific contention is that the word “coverage” as used in section 2902(1) requires that in determining whether Boody’s vehicle is underinsured the $5,000 she actually recovered under that policy is compared to the aggregate amount of $45,000 available to her under the provisions of the policies of Liberty Mutual and Hanover. Accordingly, she argues that she has a potential legal entitlement to $40,000 from Liberty Mutual and Hanover. We disagree.

Section 2902(1) defines an underinsured motor vehicle as “a motor vehicle for which coverage is provided, but in amounts less than the minimum limits for bodily injury liability insurance provided for under the motorist’s financial responsibility laws of this State or less than the limits of the injured party’s uninsured vehicle coverage.” (Emphasis added). We previously have held that coverage can be interpreted to encompass the aggregated limits of several insurance policies.² Connolly v. Royal Globe Ins. Co., 455 A.2d 932, 934 (Me.1983). Thus, in determining whether Boody’s vehicle was underinsured, Mullen is entitled to aggregate the limits of all insurance policies for which the insurers are potentially liable for her damages if in fact Boody’s car is underinsured, and Liberty Mutual and Hanover are entitled to aggregate the limits of any liability policies carried by Boody for which the insurers have a potential liability for Mullen’s damages. However, in each instance the coverage being aggregated is the limit value on the face of each of the policies. In the instant case, the determination of whether Boody’s vehicle was underinsured is based entirely on whether the total liability insurance on that vehicle is exceeded by the total of the insurance provided by the Liberty Mutual and Hanover policies. There is nothing in the language of section 2902(1), or in its legislative history, to support Mullen’s claim that coverage must be determined by reference to the number of other claimants, the amounts of their damages, their various level of uninsured vehicle protection, and any other recovery on their claims. On the contrary, the plain meaning of an insurance policy’s coverage is the scope or extent of the risk protected against. Webster’s Third International Dictionary 525 (1971); Black’s Law Dictionary 330 (5th ed.1979).

Because the extent of a tortfeasor’s protection from liability can only be determined from the face amount recited in the tortfeasor’s liability policy, it is of no consequence to a tortfeasor’s coverage what fraction of the policy is available to any particular injured party. Mullen errs in focusing the liability side of the comparison test on her recovery from Boody’s liability insurance. The statute focuses on the "motor vehicle for which coverage is provided,” that is, on the limits of the liability of Boody’s insurer for any accident involving that vehicle. If the Legislature had chosen by specific language in section 2902 to expand the ordinary meaning of the word coverage, it could have done so, as it did with regard to the term “uninsured motor vehicle,” which by statutory definition includes a vehicle that, although insured, is insured with a carrier that because of insolvency is unable to satisfy its legal liability within the limits of its policy.

The fundamental rule in statutory construction is that words must be given their plain ordinary meaning. Paradis v. Webber Hospital, 409 A.2d 672, 675 (Me.1979). We can disregard the strict wording of a statute if it is necessary to avoid an absurd result that frustrates the legislative purpose, see State v. Niles, 585 A.2d 181, 182 (Me.1990). Mullen argues that her recovery of $5,000 presents such an absurd result and is contrary to the remedial policy of section 2902. That the present statutory language may cause hardship to Mullen in this case does not render the results absurd, nor does it present justification to disregard the wording of the statute. While section 2902 reflects a policy of compensating injured parties and encouraging settlements, Wescott v. Allstate Ins., 397 A.2d 156, 167, 169 (Me.1979), the use of the face amount of a tortfeasor’s liability insurance to determine underinsured status also reflects a policy decision. The early determination whether underinsured motor vehicle coverage applies, before other injured parties have established their damages and their entitlements to a tortfeasor’s assets, is a legitimate legislative objective. For aught that appears in the record, Boody may have had personal assets sufficient to satisfy Mullen’s entire damages claim.

It is for the Legislature, and not for us, to amend section 2902 to provide underin-sured motor vehicle benefits to an injured party whose recovery on her liability claim against the tortfeasor, notwithstanding the amount of coverage on the insured vehicle involved, is less than the aggregate limits of her underinsured motor vehicle coverage. Based on the plain ordinary meaning of the present statutory language, the trial court properly held that the Boody vehicle was not an underinsured motor vehicle within the purview of section 2902(1).

The entry is:

Judgment affirmed.

McKUSICK, C.J., and ROBERTS, WATHEN and BRODY, JJ., concur.

1 . Section 2902 provides in pertinent part:

1. No policy insuring against liability arising out of the ownership, maintenance or use of any motor vehicle shall be delivered or issued for delivery in this State with respect to any such vehicle registered or principally garaged in this State, unless coverage is provided therein or supplemental thereto for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured, underin-sured or hit-and-run motor vehicles, for bodily injury, sickness or disease, including death, resulting from the ownership, maintenance or use of such uninsured, underinsured or hit- and-run motor vehicle. The coverage herein required may be referred to as "uninsured vehicle coverage." For the purposes of this section "underinsured motor vehicle" means a motor vehicle for which coverage is provided, but in amounts less than the minimum limits for bodily injury liability insurance provided for under the motorist’s financial responsibility laws of this State or less than the limits of the injured party’s uninsured vehicle coverage. (Emphasis added).

2 . Cf. Simpson v. Hanover Ins. Co., 588 A.2d 1183, 1186 (Me.1991) (under 24-A M.R.S.A. § 2902(4) injured party’s underinsured motorist coverage is face amount of policy minus settlement received from tortfeasor).