Schwieterman v. Mercury Casualty Co.

229 Cal. App. 3d 1044, 280 Cal. Rptr. 804, 91 Daily Journal DAR 5191, 91 Cal. Daily Op. Serv. 3410, 1991 Cal. App. LEXIS 433

• Court: California Court of Appeal
• Decided: April 30, 1991
• Docket: G009382
• Status: Published

Opinions

Opinion

SONENSHINE, Acting P. J.

Dennis K. Schwieterman appeals a summary judgment entered against him in favor of Mercury Casualty Company. The court determined Schwieterman could not recover under his policy’s underinsured motorist benefits because the limits on his “uninsured motorist benefits were the same as [the tortfeasor’s] liability limits.” We affirm.¹

I

After Schwieterman and several other individuals were injured in an automobile accident, they settled with the tortfeasor’s insurance provider for the $30,000 policy limit of a “15/30 automobile liability policy.”² Schwieterman, claiming his $10,000 settlement was inadequate, demanded underinsured benefits from Mercury, his insurance provider.³ He maintains he is entitled to $5,000, i.e., the difference between the $15,000 underinsured limits and his $10,000 settlement.⁴

II

Insurance Code section 11580.2, subdivision (p)(2), defines an underinsured motor vehicle as one being insured “for an amount that is less than the [victim’s] uninsured motorist limits.” (Italics added.) The court found Schwieterman was not entitled to these benefits because his underinsured limits were the same as the tortfeasor’s liability limits.

Schwieterman maintains the statute was intended to provide benefits to those who would otherwise be undercompensated. He contends public policy favors underinsured coverage when, due to multiple claimants, the tortfeasor’s policy limits are insufficient.⁵ We agree with his premise but not with his conclusion.

The Legislature recognized minimum liability limits would be inadequate to fully compensate severely injured accident victims. Consequently, the 1984 amendment to Insurance Code section 11580.2 requires insurance carriers to include underinsured benefits in all policies providing uninsured coverage.⁶ This permits “individuals to purchase insurance for themselves in an amount they deem appropriate.” (Malone v. Nationwide Mutual Ins. Co. (1989) 215 Cal.App.3d 275, 279 [263 Cal.Rptr. 499], italics added.)

Schwieterman took advantage of the new legislation but purchased only minimum underinsured coverage. Now he complains such coverage is insufficient to fully compensate him for his injuries. If we were to adopt his reasoning, he would receive benefits for which he did not pay.⁷

Schwieterman’s position also ignores the statutory language which specifically excludes underinsured coverage when victims’ underinsured limits are no greater than the tortfeasors’ liability limits. He contends the language is unclear because it “neither expressly authorizes, nor expressly forbids” him from recovering under his own policy. He relies on Campbell v. State Farm Mut. Auto. Ins. Co. (1989) 209 Cal.App.3d 871 [257 Cal.Rptr. 542], which favors “compensation for innocent casualties . . . and instructs us to construe the uninsured motorist statute in favor of coverage . . . [when there is] [a]ny doubtful language in the statute.” {Id. at p. 874.)

However, the statute is clear and the court will not “interpret away clear language in favor of an ambiguity that does not exist.” (209 Cal.App.3d at p. 875.) Even the court in Campbell refused to create a statutory ambiguity. In that case, the plaintiff’s policy provided uninsured coverage but not underinsured coverage. The statute expanded uninsured motorist coverage to include underinsured benefits, but only for policies issued or renewed after the statute’s effective date. The court determined the statute clearly excluded plaintiff’s underinsured claim and presumed the “Legislature meant what it said.” (Great Lakes Properties, Inc. v. El Segundo (1977) 19 Cal.3d 152, 155 [137 Cal.Rptr. 154, 561 P.2d 244].)

Our decision is also consistent with Elwood v. Aid Ins. Co. (9th Cir. 1989) 880 F.2d 204, where coverage for underinsured benefits was similarly denied because the insured’s underinsured limits were the same as the tortfeasor’s liability limits. As with the present case, the tortfeasor would only be considered an underinsured motorist if his liability limits were less than the victim’s underinsured limits. That court found the “underinsured motorist coverage was never triggered because [the tortfeasor’s] vehicle did not meet the definition of ‘an underinsured motor vehicle.’ ”⁸ {Id. at p. 209.) It enforced the definition “because it is . . . plain, and clear.” {Ibid.)

Judgment affirmed. Respondent to receive costs on appeal.

Moore, J., concurred.

1 This is not a unanimous decision. Our dissenting colleague would like to rewrite history as well as the statute.

2 A “15/30 policy” pays a maximum of $15,000 per individual, per accident, but is limited to $30,000 total benefits per accident.

3 Mercury also insured the motorist responsible for the accident.

4 Underinsured coverage benefits allow victims of automobile accidents to recover from their own insurance provider when tortfeasors have either insufficient insurance coverage or no coverage.

5 Our dissenting colleague relies on Gray v. Zurich Insurance Co. (1966) 65 Cal.2d 263, 270, footnote 7 [54 Cal.Rptr. 104, 419 P.2d 168], which states insurance provisions “must be construed so as to give the insured the protection which he reasonably had a right to expect.” However, such interpretation applies to insurance policies and not to statutes. Statutory interpretation is confined to ascertaining the Legislature’s intent.

Schwieterman concedes the policy and statutory language are the same. He does not argue the construction of the policy, but maintains the statute should be interpreted to provide coverage.

6 Subdivision (p)(7) of section 11580.2 requires uninsured motorist coverage to include underinsured motorist benefits in any policy issued or renewed after July 1, 1985.

7 We note Schwieterman purchased underinsured coverage in amounts equal to the minimum liability limits required under California law. Therefore, if the tortfeasor is an insured motorist he could never receive underinsured benefits. Additionally, we agree Schwieterman would have been in a better position had the tortfeasor carried no insurance.

Our dissenting colleague contends this results in a fraud. However, the result is exactly as the Legislature intended. The Legislature wanted motorists, for their protection, to be able to purchase underinsured coverage in amounts higher than minimum liability limits.

The dissent’s argument requires a rewriting of the statute. No matter how legitimate Schwieterman’s points may be, we cannot do this. Schwieterman should direct his protests to the Legislature.

8 Rudd v. California Casualty Gen. Ins. Co. (1990) 219 Cal.App.3d 948 [268 Cal.Rptr. 624] is also instructive. The sole issue there was whether workers’ compensation benefits could be offset against underinsured coverage. The court, however, did contemplate a scenario where a tortfeasor’s liability limits would be equal to a victim’s underinsured limits. It concluded the “[ijnsured would by definition have no claim against his underinsurance coverage.” {Id. at p. 955.)