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The California Court of Appeal, Third Appellate District, affirmed a trial court judgment declaring that an injured party was not entitled to uninsured motorist coverage, even though the vehicle involved in the accident was not covered by any auto liability insurance coverage. Pursuant to the statutory definition of "uninsured motor vehicle," the sole question is whether the owner or operator of the vehicle have insurance coverage at the time of the accident for liabilities arising from the ownership, maintenance or use of the vehicle. Since the owner and operator's liabilities were covered under a personal liability umbrella policy, their vehicle did not qualify as an "uninsured motor vehicle."
Douglas Nielsen ("Nielsen") was a passenger in an Acura driven by Bryan Jones ("Jones"). Jones lost control of the Acura and crashed into a pole. Nielsen was thrown from the car, rendering him a quadriplegic. Jones's mother, Carla Brown ("Brown"), owned the Acura and apparently lent it to Jones. The Acura was not covered by any auto liability insurance policy at the time of the accident. However, Brown had a $1 million personal liability umbrella policy with State Farm Insurance Company ("State Farm"). State Farm provided coverage for both Jones and Brown under this policy, and paid Nielsen $1 million in a good faith settlement of his action against Jones and Brown.
Nielsen then made a claim under the uninsured motorist coverage of his father's California Capital Insurance Company ("CCIC") auto liability policy. CCIC declined the claim, concluding the Acura was not an "uninsured motor vehicle" because of the State Farm coverage. CCIC filed a declaratory relief action to resolve the issue.
The trial court agreed with CCIC's position and entered judgment in its favor. Nielsen appealed. He argued CCIC's uninsured motorist coverage was applicable because the Acura was an "uninsured motor vehicle" since it was not covered at the time of the accident.
The Court rejected this contention. It explained California law requires uninsured motorist coverage for an injured person if he is "legally entitled to recover as damages for bodily injury or wrongful death from the owner or operator of an uninsured motor vehicle." (Citing Cal. Ins. Code ยง 11580.2, emphasis added.) "Uninsured motor vehicle" is defined to mean "a motor vehicle with respect to the ownership, maintenance or use of which there is no bodily injury liability insurance or bond applicable at the time of the accident."
The Court held that, under these statutory provisions, uninsured coverage is only available if the owner of the Acura (Brown) and the operator of the Acura (Jones) were liable for Nielsen's bodily injuries because of their ownership, maintenance or use of the Acura, and they did not have any applicable bodily injury liability insurance policy to cover these liabilities. Since both Brown and Jones were covered under the State Farm policy, the Acura did not qualify as an "uninsured motor vehicle." Thus, Nielsen had no claim under the uninsured motorist coverage.
The Court rejected Nielsen's contention that the sole consideration should be whether the vehicle itself is covered. The Court concluded the Legislature's focus with respect to uninsured motorist coverage is not on the vehicle's coverage but on the owner or operator's bodily injury liability coverage.
Nielsen further argued the fundamental purpose of California's uninsured motorist coverage is to provide the insured with the same insurance protection he would have enjoyed had the tortfeasor carried liability limits equal to the insured's uninsured motorist limits. Nielsen argued that if the Acura had been insured he would have received $100,000 from the auto carrier in addition to the $1 million he received from State Farm. Nielsen argued that precluding him from recovering this additional $100,000 therefore contravened California public policy.
The Court rejected this contention. It held the State Farm personal liability umbrella policy provided coverage in addition to any underlying coverage up to $1 million. Thus, even if the Acura had been insured Nielsen would only have received a total of $1 million.
This opinion is not final. Though it has been certified for publication, it may be withdrawn from publication, modified on rehearing, or granted review by the California Supreme Court. Should any of these events occur, the opinion would be unavailable for use as authority in other cases.
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