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GEICO General Insurance Co. v. Northwestern Pacific Indemnity Co.6/14/2005
between a primary UM policy and an excess liability policy. In Boyer the tortfeasor had liability insurance that far exceeded the amount of plaintiff's claim. Thus, priority of payment was not an issue. The tortfeasor had no excess liability insurance in either Burch or Gates. Thus, those opinions are not relevant to the issues presented here, either.
III. Opinions cited by GEICO from other jurisdictions are inapposite to the issue presented here.
GEICO relies on several opinions from other jurisdictions in support of its claim that excess liability carriers should pay their coverages before primary UM insurers pay will be required to pay under their policies. We disagree because in none of those opinions was the priority of payment between a UM policy and an excess liability policy considered. Instead, each case involved whether there was a "gap" between the tortfeasor's policy limit and the UM carrier's policy limit. As will be shown in the discussion of each of these opinions, the state law applicable in each case required that there be such a "gap," so the issue of priority of payment was not considered in any of them.
GEICO relies on four opinions that interpreted either Connecticut, Rhode Island or Pennsylvania law: Murphy v. Safety Ins. Co., 709 N.E. 2d 410, (Mass. 1999); Schilling v. Safeco Ins. Co., 2002 WL 522982 (Conn. 2002); Pennsylvania General Ins. Co. v. Morris, 599 A.2d 1042 (R.I. 1991); and State Farm Fire and Cas. Ins. Co. v. Sayles, 289 F.3d 181 (interpreting Connecticut law) (2dCir. 2002). These opinions are inapposite because, as noted, in each of those states the uninsured motorist statutes provide so called "gap" coverage. As will be explained, there was no issue as to the priority of payment between a UM policy and an excess liability policy.
In "gap" coverage states, unlike Oklahoma, an insured is allowed to recover under his UM coverage only if the tortfeasor's policy limit is less than the injured insured's UM policy limit. For example, if an injured insured has $100,000 in damages, the tortfeasor has a $10,000 policy limit, and the injured insured's UM policy limit is$50,000, the insured can collect only $40,000 from his UM carrier. But if the tortfeasor has $75,000 in coverage the insured can collect nothing from his UM carrier. This is so because there is no "gap," as the tortfeasor's $75,000 policy limit exceeds the UM carrier's $50,000 policy limit. In short, in "gap" states unless the tortfeasor's policy limit is less than the UM carrier's policy limit, the UM carrier is exempted from payment as a matter of law.
In each of the four opinions cited above, the issue was whether the injured insured, who was the plaintiff in each case, was entitled to have the court ignore $1,000,000 payments the insured had already received under the tortfeasor's excess liability policy in order to create a "gap" and make the insured's UM carrier liable under the UM policy. There was no issue whether the proceeds of the UM policy or the excess liability coverage should be paid first because the injured insured claimed that both carriers should pay their policy limits. Thus, these opinions shed no light on the issue at hand.
French v. New Jersey School Bd. Assoc. Ins. Group, 694 A.2d 1008 (N.J. 1997), is also inapposite. There, plaintiff, the injured insured, was trying to tack her employer's UM coverage to her personal UM policy's coverage so that there would be a "gap" between the tortfeasor's policy limits and plaintiff could collect from the UM carriers. Once again, there was no issue as to the priority of payment between a UM carrier and an excess carrier.
In Government Employees Ins. Co. v. Annaman
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