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Dickau v. Vermont Mutual Ins. Co.

Supreme Judicial Court of Maine

December 31, 2014

JAMES M. DICKAU
v.
VERMONT MUTUAL INSURANCE CO

Argued September 9, 2014.

Page 622

On the briefs:

Steven D. Silin, Esq., and Robert H. Furbish, Esq., Berman & Simmons, P.A., Lewiston, for appellant James M. Dickau.

James D. Poliquin, Esq., Norman, Hanson, & DeTroy, LLC, Portland, for appellee Vermont Mutual Insurance Company.

At oral argument: Robert H. Furbish, Esq., for appellant James M. Dickau.

James D. Poliquin, Esq., for appellee Vermont Mutual Insurance Company.

Panel: SAUFLEY, C.J., and ALEXANDER, SILVER, MEAD, GORMAN, JABAR, and HJELM, JJ. Majority: SAUFLEY, C.J., and MEAD, GORMAN, and HJELM, JJ. Dissent: ALEXANDER, SILVER, and JABAR, JJ.

OPINION

Page 623

GORMAN, J.

[¶1] James M. Dickau appeals from a summary judgment entered on stipulated facts by the Superior Court (Kennebec County, Nivison, J.) in favor of Vermont Mutual Insurance Company on Dickau's complaint seeking uninsured motorist coverage. Dickau contends that, contrary to the Superior Court's decision, he is entitled to uninsured motorist coverage on his umbrella policy with Vermont Mutual pursuant to the policy language or, in the alternative, by operation of law. We affirm the judgment.

I. BACKGROUND

[¶2] The parties stipulated to the following material facts. In June of 2011, Dickau was riding his motorcycle in Maine when he was struck by a vehicle driven by Irida L. Macomber. The accident was caused by Macomber. Dickau suffered more than $250,000 in damages. At the time of the accident, Dickau was covered by two insurance policies: (1) a Dairyland Insurance Company policy insuring his motorcycle and providing $250,000 in uninsured motorist coverage, and (2) a Vermont Mutual personal umbrella policy providing liability coverage above any qualifying minimum primary insurance for up to $1 million per occurrence. Macomber had $100,000 in liability insurance coverage through Travelers Commercial Insurance Company. Dickau settled his claim against Macomber for her Travelers policy limit of $100,000.

Page 624

Dickau also settled his claim for uninsured motorist benefits with Dairyland for $150,000 (Dairyland's $250,000 uninsured motorist coverage maximum minus the $100,000 from Travelers).

[¶3] In May of 2012, Dickau commenced the present litigation seeking a declaratory judgment that his umbrella policy with Vermont Mutual provides for uninsured motorist coverage (Count I), and that, even if the policy does not, Vermont Mutual was nevertheless required to provide up to $1 million in uninsured motorist coverage pursuant to statute (Count II), as offset by the Travelers and Dairyland settlements.[1] The parties stipulated to the facts, and each moved for summary judgment.

[¶4] By decision dated November 12, 2013, the court granted Vermont Mutual's motion for summary judgment and denied Dickau's. Dickau appeals.

II. DISCUSSION

[¶5] Uninsured motorist (UM) coverage is a type of insurance that allows an injured person to recover, from his own insurer, damages caused by a party who is uninsured or underinsured.[2] 24-A M.R.S. § 2902 (2014). In this way, UM coverage represents an exception to the basic premise underlying insurance law, and tort law in general, that an injured person's damages are paid by or on behalf of the at-fault party. Beal v. Allstate Ins. Co., 2010 ME 20, ¶ 34, 989 A.2d 733; 9 Steven Plitt et al., Couch on Insurance 3d § 122:2 (2008 Rev. ed.); 1 Alan I. Widiss & Jeffrey E. Thomas, Uninsured and Underinsured Motorist Insurance [hereinafter UM Insurance ] § 1.1 (3d ed. 2005).

[¶6] The vast majority of states have opted to make UM coverage mandatory. Maine first did so in 1967, P.L. 1967, ch. 93, § 1 (effective Jan. 1, 1968), and is now among the forty-eight states[3] that require insurers to provide uninsured motorist coverage in certain circumstances:

A policy insuring against liability arising out of the ownership, maintenance or use of any motor vehicle may not be delivered or issued for delivery in this State with respect to any such vehicle registered or principally garaged in this State, unless coverage is provided in the policy or supplemental to the policy for the protection of persons insured under the policy who are legally entitled to recover damages from owners or operators of uninsured, underinsured or hit-and-run motor vehicles, for bodily injury, sickness or disease, including death, sustained by an insured person resulting from the ownership, maintenance or use of such uninsured, underinsured or hit-and-run motor vehicle.

24-A M.R.S. § 2902(1).

[¶7] Pursuant to 24-A M.R.S. § 2902(2), the amount of UM coverage a policy must provide to an owner or operator of a vehicle registered in Maine depends

Page 625

on the applicability of the Maine Automobile Insurance Cancellation Control Act (the MAICCA), 24-A M.R.S. § § 2911-2924 (2014). For policies subject to the MAICCA or to certain assigned risk plans,

the amount of coverage to be so provided may not be less than the amount of coverage for liability for bodily injury or death in the policy offered or sold to a purchaser unless the purchaser expressly rejects such an amount, but in any event may not be less than the minimum limits for bodily injury liability insurance provided for under Title 29-A, section 1605, subsection 1 [i.e., $50,000 per person or $100,000 per accident].

24-A M.R.S. § 2902(2); see 29-A M.R.S. § 1605(1) (2014). Thus, although an insured may elect to reject UM coverage equal to the full amount of coverage provided for bodily injury by his or her automobile liability policy in favor of only the statutory minimums, the insured may only do so by signing a form provided by the insurer that contains specific language to that effect. 24-A M.R.S. § 2902(2). For policies not subject to the MAICCA, UM coverage is required only according to the statutory minimums: " [T]he amount of coverage so provided may not be less than the minimum limits for bodily injury liability insurance provided for under Title 29-A, section 1605, subsection 1." 24-A M.R.S. § 2902(2); see 24-A M.R.S. § 2913 (2014).

[¶8] Given this statutory mandate, most insurers expressly include the required UM coverage in their policies and then account for that coverage in the premiums charged. 9 Steven Plitt et al., Couch on Insurance § 122:2; 1 Widiss & Thomas, UM Insurance § 2.7. When the policy is silent as to UM coverage, or when the premiums the insurer charges do not appear to account for any UM coverage, UM coverage is nevertheless deemed to be a part of the policy according to section 2902, absent the insured's express waiver. See 1 Widiss & Thomas, UM Insurance § 2.7.

[¶9] Dickau's appeal requires us to examine the scope of the policies to which the UM statute applies and, for the first time, to consider whether the UM statute's requirements apply to umbrella policies.

[¶10] An umbrella policy is one of two forms of excess insurance coverage, the other being so-called " true excess" policies. 4 Rowland H. Long, The Law of Liability Insurance § 22.03 (2005). A true excess policy " provides coverage above a single primary policy for specific risks," and " is purchased by the insured to protect against large losses or an accumulation of small losses." Id. In short, a true excess policy effectively extends the policy limit for an underlying primary policy covering precisely the same losses.

[¶11] An umbrella policy, in contrast, " provides coverage over more than one primary policy," such as homeowners' insurance, automobile insurance, boat insurance, aircraft insurance, general liability insurance, and the like.[4]Id. As with true excess policies, umbrella policies are " parasitic" in that they require ...


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