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Brown v. State Farm Mutual Automobile Insurance Co.3/16/1989
motor vehicle in an occurrence out of which a liability loss shall arise, it shall be conclusively presumed that the insurance afforded by that policy in which such motor vehicle is described or rated as an owned automobile shall be primary and the insurance afforded by any other policy or policies shall be excess.
The purpose of the statute is to provide firm rules regarding priority between carriers. Nationwide Mutual Insurance v. CNA Insurance Co., 159 Ariz. 368, 767 P.2d 716, (1988). It does so by creating conclusive presumptions as to which policy provides primary coverage and which provides excess coverage when more than one policy covers the same loss. Id. Appellee argues that § 28-1170.01 applies only to liability insurance and not to underinsured motorist insurance. With regard to subsection A, that argument was rejected in Nationwide, the court reasoning that:
There is nothing in the language of § 28-1170.01(A) to suggest that automobile liability insurance, as used in that section, was intended to have a narrower meaning than that required by § 20-259.01(A) [requiring uninsured motorist coverage in all automobile liability insurance policies issued in Arizona], or that the priorities established by that subsection did not apply to all types of coverage.
Id. 159 Ariz. at 370, 371, 767 P.2d at 718, 719. The court's reasoning applies equally to subsection B and to underinsured motorist insurance. It also best serves the purpose envisioned by the legislature of providing a firm rule to deal with such cases.
We hold, therefore, that pursuant to § 28-1170.01(B), the Universal policy is conclusively presumed to be primary and the State Farm policy is excess. Universal is liable, therefore, for the liability limit of $100,000, which it has already paid. State Farm's excess coverage applies "only in the amount by which it exceeds the primary coverage." Because both policies had coverage of $100,000, State Farm has no liability.
Because the argument on cross-appeal is premised upon the claim that both policies are excess and, for the reasons set forth above, we have held that Universal's policy is primary, we reject the argument.
The case is reversed and remanded for proceedings consistent with this opinion.
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