Opinion
No. 3-145 / 02-1016
Filed May 14, 2003
Appeal from the Iowa District Court for Iowa County, L. Vern Robinson, Judge.
Plaintiff estate appeals from a district court ruling granting summary judgment in favor of defendant insurer in the estate's declaratory judgment action for insurance benefits following a fatal car accident. AFFIRMED.
Michael J. Pitton of Pitton Law Firm, P.C., Iowa City, for appellants.
William H. Roemerman of Crawford, Sullivan, Read Roemerman, P.C., Cedar Rapids, for appellee.
Considered by Sackett, C.J., and Huitink, and Vogel, JJ.
The executors of Roxine Ruegsegger's estate appeal from an adverse summary judgment ruling in a declaratory judgment action limiting Iowa Mutual Insurance Company's liability for wrongful death damages to the maximum of its uninsured motorist coverage under an automobile insurance policy. We affirm.
I. Background Facts and Proceedings.
Roxine Ruegsegger died as the result of injuries she received in a two-car accident on October 22, 2000. At the time of the accident Roxine was a passenger in a car driven by her husband, Orville. Terry Jones was the driver of the other vehicle.
Both Jones and Roxine's estate claimed the accident was Orville's fault. Iowa Mutual Insurance Company, Orville's insurer, paid Jones $13,000 under the terms of its policy's third-party liability coverage. Citing the "family member exclusion" of the policy's liability coverage, Iowa Mutual declined to cover any of Orville's liability to Roxine's estate. Because Orville was left uninsured by virtue of the controlling family member exclusion, Iowa Mutual determined Roxine was entitled to uninsured motorist coverage of no more than "the limit specified in the financial responsibility law of Iowa" or $20,000. See Iowa Code § 321A.21(2)(b) (2001).
The executors of Roxine's estate rejected Iowa Mutual's resulting offer of $20,000 uninsured motorist benefits claiming Roxine was entitled to greater benefits under the policy's underinsured motorist coverage. Their theory of recovery in this declaratory judgment action was premised on Iowa Mutual's $13,000 payment to Jones under the third-party liability provisions of Orville's policy. They argued that Orville could not be uninsured if the policy provided liability coverage for Jones's claims. The executors also challenged the validity of the family member exclusion on public policy grounds and advanced a reasonable expectation theory in support of their claims for underinsured motorist coverage.
In a ruling granting Iowa Mutual's motion for summary judgment, the trial court rejected all of the executors' coverage theories. The court determined Orville was uninsured rather than underinsured and the amount of the controlling coverage was limited to $20,000. The executors' posttrial motions were denied resulting in this appeal.
On appeal the executors claim the trial court erred by declaring Iowa Mutual's liability to Roxine's estate was limited to $20,000 uninsured motorist benefits. The executors also claim the trial court erroneously rejected their reasonable expectations theory and public policy challenge to the family member exclusion provision of the policy.
II. Standard of Review.
Our review of a summary judgment ruling is at law. Iowa R.App.P. 6.4; Nicodemus v. Milwaukee Mut. Ins. Co., 612 N.W.2d 785, 786 (Iowa 2000). A summary judgment will be affirmed when the moving party has shown there are no genuine issues of material fact and the party is entitled to judgment as a matter of law. Lee v. Grinnell Mut. Reins. Co., 646 N.W.2d 403, 406 (Iowa 2002). Summary judgment is properly granted if the only controversy concerns the legal consequences flowing from undisputed facts. Krause v. Krause, 589 N.W.2d 721, 724 (Iowa 1999).
III. Underinsured Motorist Coverage v. Uninsured Motorist Coverage.
If an automobile insurance policy includes a family member exclusion, there is no coverage for the insured's liability to the family member. In re Estate of Boyd, 634 N.W.2d 630, 641 (Iowa 2001). In Krause, 589 N.W.2d at 723, the supreme court addressed this issue, stating:
We note that in Krause, 589 N.W.2d at 723, the parties stipulated the husband had no liability coverage under the policy and thus was considered an uninsured motorist.
The policy includes language known as a "family member exclusion." It states that there is no liability coverage for any insured for bodily injury sustained by another insured or family member. In other words, a named insured would have no liability coverage for his or her actions which cause injuries to another named insured or family member. Thus, Paul was an uninsured motorist in regard to a claim by Debra against him for personal injuries arising from the accident.
The supreme court more recently resolved the issue the same way in Ringelberg v. EMC Ins. Group, Inc., ___ N.W.2d ___, ___ (Iowa 2003). In Ringelberg recovery was again limited to uninsured motorist benefits because the relevant policy provided that:
if the policy's liability coverage was not available as a result of a policy exclusion, the uninsured motorist limit was stepped down to $20,000 per person and $40,000 per accident, the minimum limit mandated by the Iowa financial responsibility law, Iowa Code § 321A.21(2)(b).
Id. (footnote omitted).
We believe Krause and Ringelberg dictate the same result here. Orville had no liability coverage for the executors' claims by virtue of the family member exclusion and was therefore by definition uninsured. Because uninsured and underinsured coverage are mutually exclusive coverages, Pudil v. State Farm Mutual Insurance Co., 633 N.W.2d 809, 813 (Iowa 2001), the trial court correctly declared Iowa Mutual's liability to Roxine's estate was limited to the policy's stated uninsured motorist coverage. We affirm on this issue.
IV. Reasonable Expectations
The executors argue that even if the foregoing issue is resolved against them, they are nevertheless entitled to the coverage claimed under the "reasonable expectation doctrine." This doctrine has been expressed in the following terms:
The doctrine of reasonable expectations is more than a rule of interpretation. It seeks to avoid the frustration of an insured's expectations notwithstanding policy language that appears to negate coverage. It is a narrow doctrine that is primarily employed when the insurance coverage provided eviscerates terms explicitly agreed to or is manifestly inconsistent with the purpose of the transaction for which the insurance was purchased.
Monroe County v. International Ins. Co., 609 N.W.2d 522, 526 (Iowa 2002). The trial court rejected the executors' reasonable expectations theory, stating:
There are no facts in issue shown by deposition, correspondence, affidavits, etc., which indicate Orville did anything or discussed any matter with Iowa Mutual's agent which raised any issue relating to family member exclusions. Likewise, there is nothing in the file which shows the insurer fostered any expectations that were contrary to plainly stated policy coverages and exclusions.
Our review of the record leads us to the same conclusion. The executors, as the parties resisting summary judgment, have accordingly failed in their burden to set forth facts showing that there are any genuine issues remaining to be tried under this theory of recovery. SeeIowa R.Civ.P. 1.981(3).
We affirm on this issue.
V. Public Policy
The estate claims that in this case, the family member exclusion for underinsured vehicles violates public policy because it contravenes the statutory requirements for underinsured motorist insurance coverage. Under the policy, the definition of an underinsured motor vehicle did not include a vehicle, "[o]wned by or furnished or available for the regular use of you or any `family member.'"
Because we have already determined that the underinsured provisions of Orville's policy are not implicated here, we need not address this issue. In any event, we note that the family member exclusion in an underinsured context has withstood a similar public policy challenge. See Jones v. American Star Ins. Co., 501 N.W.2d 536, 538 (Iowa 1993) (holding an exclusion denying benefits under the underinsured motorist clause of a policy when the liability portion of the same policy had been paid in full was not void on public policy grounds).
The trial court correctly granted summary judgment in favor of Iowa Mutual Insurance Company, and we therefore affirm the judgment entered below.