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Gloe v. Union Insurance Co.3/2/2005
oe only by the amount the insured motorist's company had paid to Michael Gloe. Aggregating all sums paid by the insured motorist's company was not allowed. Therefore, only those amounts paid by the tortfeasor's insurance company to Michael Gloe individually, i.e. $41,583 for father's death and $40,611 for mother's death, were allowed as a setoff against the $100,000 coverage for each corresponding death claim.
Insurance Policy Provisions
[ .] The statute defines the relationship between the insurance company and its insured. The language of the insurance policy does also. The insurance policy includes an endorsement specific to the South Dakota law. The policy language limits its liability to $100,000 "for each person for Underinsured Motorists Coverage . . . for damages for care, loss of services or death, arising out of 'bodily injury ' sustained by any one person in any one accident" and $300,000 for one accident. The policy clarifies further that " his is the most will pay regardless of the number of: 1. 'Insureds'; 2. Claims made; 3. Vehicles or premiums shown in the Declarations; or 4. Vehicles involved in the accident." In this case, only one insured claims under the policy. No amount has been paid to anyone under Union's policy.
[ .] Union's policy also provides for a setoff against the liability limits. It provides: "The limit of liability shall be reduced by all sums paid because of "bodily injury " [i.e. death] by or on behalf of persons or organizations who may be legally responsible. The majority relies heavily on this portion of the contract to conclude that sums paid to third parties by those legally responsible can be aggregated as a setoff to what it owes its own insured. Yet the language of the contract does not say this. Much like the statutory language, it does not specify to whom the sums must be paid before the offset can be taken. Since the contract is between the company and the insureds, the logical interpretation is that the sums must be paid to the company's insured before it can be offset.
[ .] In this case, the injured insured parties were the deceased Gloes' children individually. However, only Michael made a claim under his parent's policy. The injured parties and only persons legally entitled to recover for the deaths in this case were the children. Neither the decedents nor their estates received anything from the wrongful death claim. Michael received only a portion of the proceeds. Logically, only what he has received should offset his claim, not the entire amount paid in the wrongful death settlement. Although the other siblings may have been insureds under the policy, they have not made claims to Union. Consequently, the amounts they received have no bearing on Michael Gloe's individual claim under this policy. Had the other siblings made claims under this policy, it would be appropriate to aggregate the sums paid to all of them as a setoff against the $300,000 per accident limit. Such is not the case before us.
Conclusion
[ .] The underlying policy of the underinsurance law is to provide an injured person up to $100,000 for uncompensated damages. The Gloes paid premiums for this coverage. To allow Union to offset its only claim with money paid to third parties by or on behalf of the tortfeasor is contrary to public policy and the language of Union's policy and effectively leaves the insured without the coverage purchased.
[ .] I would affirm the trial court.
[ .] SABERS, Justice, joins this dissent.
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