UM dispute: Challenge to other-owned-vehicle exclusion

UM dispute: Challenge to other-owned-vehicle exclusion

On August 15, 2012, Paul Galipeau was killed in a motor vehicle accident while riding his motorcycle. With the consent of his automobile insurer, State Farm Mutual Automobile Insurance Company, his estate settled a claim against the party at fault for $50,000, the limit of that party’s liability policy.

Galipeau and his wife, Judith, the personal representative of his estate, were insured under four policies issued by State Farm: one on the motorcycle that Paul was riding when the accident occurred, and the others covering three different vehicles. Each of the policies provided uninsured motorists coverage with a per-person limit of $100,000. The estate demanded $350,000 from State Farm, representing the aggregate of each policy’s UM coverage limit, less the $50,000 recovered from the party at fault. State Farm paid the $50,000 differential between the motorcycle policy’s UM limit and the $50,000 already recovered by the estate, and otherwise refused the demand.

The parties disputed whether State Farm Policy Form 9819B or the earlier Policy Form 9819A was in effect at the time of the accident. Each contained an “other-owned-vehicle exclusion” as follows:

Concerning UM coverage, Form 9819B provided:

THERE IS NO COVERAGE:

….

2. FOR AN INSURED WHO SUSTAINS BODILY INJURY:

a. WHILE OCCUPYING A MOTOR VEHICLE OWNED BY YOU OR ANY RESIDENT RELATIVE IF IT IS NOT YOUR CAR OR A NEWLY ACQUIRED CAR.

Pursuant to the policy definitions, “Your car means the vehicle shown under ‘YOUR CAR’ on the Declarations Page.”

Each of the four policies owned by Galipeau had a separate declarations page, each listing a different vehicle than the others. None of the three policies under which State Farm refused to pay listed the motorcycle on the declarations page.

Form 9819A provided:

THERE IS NO COVERAGE:

….

2. FOR BODILY INJURY TO AN INSURED:

a. WHILE OCCUPYING A MOTOR VEHICLE OWNED BY OR LEASED TO YOU, YOUR SPOUSE, OR ANY RELATIVE IF IT IS NOT INSURED FOR THIS COVERAGE UNDER THIS POLICY.

In addition, Form 9819B contained an anti-stacking provision that Form 9819A did not.

In April 2013, the estate filed a complaint against State Farm alleging breach of the three policies on which it refused payment, seeking damages of $300,000 as part of “compensatory damages … in excess of $400,000.” State Farm moved for summary judgment on the grounds that coverage was precluded by (1) the other-owned-vehicle exclusion; and (2) the anti-stacking provision, which State Farm asserted was effective against Galipeau when the accident occurred. The estate moved for partial summary judgment on the coverage issue, asserting the same grounds it subsequently advanced on appeal.

The court concluded that the other-owned-vehicle exclusion precluded coverage under the three non-motorcycle policies. For that reason, the court entered summary judgment for State Farm and denied the estate’s motion for partial summary judgment. The court did not address the issue of whether the anti-stacking provision also applied to the same end. The estate appealed.

On appeal, the estate argued that other-owned-vehicle exclusions violated Maine’s uninsured motorist statute, or that State Farm’s exclusion did not apply in this case because Galipeau paid a premium for UM coverage on each of his four State Farm policies.

The court held that the other-owned-vehicle exclusion was valid and that Galipeau had UM coverage under the policy that listed the motorcycle policy on the declarations page but not under the three policies that did not list the motorcycle.

In rejecting the estate’s contention that the Galipeaus’ payment of UM premiums on the other three policies compels coverage under all of them, the court cited case law and held that the trial court did not err in entering summary judgment for State Farm.

Estate of Galipeau vs. State Farm Mutual Automobile Insurance Company-Supreme Judicial Court of Maine-February 11, 2016-2016 WL 541049.