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Brown v. State Farm Mutual Automobile Insurance Co.12/14/1989
Elizabeth Brown (Brown), personal representative of the estate of Jennifer Michelle Goode (Jennifer), petitions us to review a court of appeals decision holding that the underinsured motorist (UIM) coverage in the policy sold to Jennifer's stepfather by State Farm Mutual Automobile Insurance Company (State Farm) did not cover her wrongful death claim. See Brown v. State Farm Mut. Auto. Ins. Co., 161 Ariz. 427, 778 P.2d 1323 (Ct.App.1989).
We accepted review to determine whether an insurer may invoke the escape or pro rata provisions of its "other insurance" clause to deny coverage under first party UIM coverage, an issue of first impression. Rule 23, Ariz.R.Civ.App.P., 17B A.R.S. We have jurisdiction pursuant to Ariz. Const. art. 6, § 5(3) and A.R.S. § 12-120.24.
I. FACTS
The facts are undisputed. Jennifer was a passenger in a car driven by Christopher Culliver. The car was involved in an accident with another vehicle driven by Darryl McGlothin. Jennifer died as the result of the accident.
McGlothin's car was insured for liability by Farmers Insurance Company (Farmers) with limits of $50,000 per person. Culliver's host vehicle was insured by Universal Insurance Company (Universal). Jennifer was an insured under the Universal policy because the policy defined an insured as "anyone occupying a COVERED AUTO." Jennifer was also an insured under the policy issued to her stepfather by State Farm. Both the Universal and State Farm policies provided UIM coverage of $100,000 per person. The parties stipulated that the damages in the wrongful death claim were at least $250,000.
Farmers paid the $50,000 liability limit to Brown, as personal representative of Jennifer's estate. Because at least $200,000 remained unpaid on the claim, Brown demanded that Universal and State Farm each pay $100,000 under their respective UIM provisions. Meeting resistance from the two insurers, she sought declaratory relief in the trial court to determine her rights under the terms of the automobile insurance policies.
II. PROCEDURAL HISTORY
A. Trial Court
The parties all filed motions for summary judgment. Before the trial court ruled, however, Universal agreed to pay its policy limits of $100,000. State Farm contended the Universal policy provided primary coverage. Therefore, State Farm argued, it was the excess insurer and under its policy had no liability after Universal had paid the full limits available ($100,000).
The trial court held that Jennifer was an insured under both policies. The court compared the other insurance provisions of the two policies. Citing the provision in the Universal policy that stated "[the Universal policy] is excess for any covered auto not owned by the insured . . ." and determining that Jennifer had not owned the "covered auto," the court found that Universal provided excess UIM coverage. Minute Entry, dated March 25, 1988. Referring to the State Farm provision stating that its policy is excess " f the insured [Jennifer] sustains bodily injury while occupying a vehicle not owned by you, your spouse or any relative, " the court determined that State Farm also provided excess UIM coverage. Id. (emphasis in original). Thus, finding that both policies were excess, and therefore equal, the court held that the coverage was to be prorated, so that each insurer was liable to pay $50,000 of its $100,000 UIM limit. Therefore, the court ordered State Farm to pay Brown $50,000.
Thus, Farmers ha
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