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Levine v. State Farm Mutual Automobile Insurance Co.3/8/2004
$100,000.
Following the jury verdict, Levine filed a motion pursuant to M.R. Civ. P. 58 requesting that the court enter judgment in her favor in the amount of the jury verdict (plus costs) against State Farm, and in an amount equal to the prejudgment interest against Prudential. State Farm opposed Levine's motion, arguing that it only owed her the $50,000 by which the State Farm underinsured vehicle coverage exceeded Kruzynski's bodily injury coverage. State Farm also maintained that a "limits of liability" clause in its policy authorized an offset by the amount of Kruzynski's coverage limit because Kruzynski was "legally liable" for Levine's bodily injury due to his undisputed negligence in causing the accident.
The Superior Court granted Levine's Rule 58 motion and concluded that State Farm was responsible not only for the undisputed $50,000 by which Kruzynski was underinsured, but also for the $50,000 of Kruzynski's available insurance, which had become unavailable due only to the passage of time. This appeal followed.
II. DISCUSSION
Underinsured and uninsured vehicle coverage is intended to provide financial compensation in instances where the tortfeasor "'is uninsured'" or "'is financially unable to furnish adequate compensation for the injuries caused in the accident.'" Braley v. Berkshire Mut. Ins. Co., 440 A.2d 359, 362 (Me. 1982) (quoting Wescott v. Allstate Ins., 397 A.2d 156, 166 (Me. 1979)). It was not intended to supplant the tortfeasor's coverage. Consistent with that purpose, the State Farm underinsured vehicle policy at issue expressly provides that it does not cover any amounts covered by "the total of the bodily injury limits of all other vehicle liability policies . . . that apply to any person . . . legally liable for such bodily injury." (Emphasis omitted.) Thus, the plain language of Levine's coverage precludes recovery from State Farm for the amount by which Kruzynski was actually insured.
Levine argues, nonetheless, that the policy contravenes Maine's uninsured/underinsured vehicle statute, 24-A M.R.S.A. § 2902 (2000 & Supp. 2003). Therefore, the question presented is whether the statute mandates coverage by the underinsured vehicle coverage carrier of the amount that would have been paid by the tortfeasor, but for the injured party's failure to seek recovery.
Contrary to Levine's contentions, section 2902(4) does not require that the underinsured vehicle coverage carrier make all payments due from any insurer and then seek recovery from the tortfeasor's insurer. 24-A M.R.S.A. § 2902(4) (2000). It merely allows recovery from other responsible parties " n the event" that the underinsured vehicle coverage carrier has made payment to the insured. Id. The underinsured vehicle coverage carrier has the right pursuant to statute to pay its insured and then seek recovery from any "legally responsible" party. Id. Nothing in the statutes, however, mandates that approach.
Moreover, the entire statutory scheme makes it evident that underinsured vehicle coverage is in the nature of gap coverage, not a substitute for primary coverage. In mandating uninsured vehicle coverage in Maine, the Legislature intended to ensure coverage when an injured party is "legally entitled to recover damages from owners or operators of uninsured, underinsured or hit-and-run motor vehicles." 24-A M.R.S.A. § 2902(1) (2000) (emphasis added). There exists no indication of legislative intent to ensure coverage when and to the extent that the tortfeasor, in fact, has insurance. Because Kruzynski was only covered to a maximum of $50,000 per person, and Levine's damages totaled $100,000, Kruzynski was "underinsured" in the amount
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