J. Katzmann
HISTORY: Commerce Insurance Company (Commerce) sought
judgment declaring the amount of UIM benefits owed to the Blackburns in
Superior Court. Commerce and the
Blackburns filed cross motions for summary judgment. The trial judge granted summary judgment for
Commerce. Interpretation of an insurance
policy is a question of law, which the Appeals Court reviewed de novo.
FACTS: The facts are not in dispute. The driver (Steven D. Blackburn) and
passenger (Angelica M. Blackburn) were in an accident with a vehicle driven by
Helen Vieira. Both parties were insured,
but with different coverage limits.
Vieira’s policy had bodily injury liability coverage limits of $50,000
per person and $100,000 per accident.
The Blackburn’s insurance policy covered $100,000 per person and
$300,000 per accident with their underinsured motorist (UIM) coverage. Angelica incurred medical bills and lost
wages in excess $241,000 and Steven incurred medical bills and lost wages in
excess of $80,000. Vieira’s insurer paid
$50,000 per person, to Steven and Angelica, the maximum amount her coverage
allowed for bodily injury to others.
The
Blackburns’ injuries exceeded the amount of coverage available through Vieira’s
insurance and therefore sought coverage from their insurer, Commerce. The parties agree that the Blackburns have a
valid claim for UIM benefits, but disagree as to the available amount. Commerce claims that each of the Blackburns
should receive $50,000 (per paragraph B), and the Blackburns argue they should
each receive the full $100,000 that is listed as their policy’s UIM coverage
(per paragraph A). The difference in
interpretation is based on whether UIM benefits are calculated based on
paragraph A or B in the insurance policy.
ISSUE: Did Commerce agree to pay up to the
difference between the per accident limit of Vieira’s coverage ($100,000) and
the per accident limit of the Blackburns’ policy ($300,000), which is $200,000 total
according to paragraph A?
No.
Underinsured motorist benefits are governed by G.L. c. 175, § 113L and
leaves the details of UIM coverage “subject to the terms of the policy.” §
113L(2). Based on case law, the court analyzed
the words of the policy according to the fair meaning of the language used, as
applied to the subject matter. The “fair
meaning” of the language used in the policy, the key term in paragraph B, is
the language specifying that recovery is “subject to the ‘per person’
limit.” This is consistent with basic
contract principles and is not ambiguous.
The sole difference in calculation between the paragraphs is that under
paragraph B the total amount of underinsured benefits to be paid to all persons
with underinsured clams cannot exceed the per accident limit. Therefore Commerce’s interpretation is fair
by deducting the amounts received for bodily injury liability coverage from
Vieira’s liability insurer and worker’s compensation benefits from the amount
of UIM benefits and complies with G.L. c 175, § 113L.
JUDGMENT: Affirmed
judge’s decision granting summary judgment for Commerce. (MB)
