Fifth District reverses Crowder in underinsured claim dispute

The Fifth District Appellate Court has reversed Madison County Circuit Judge Barbara Crowder saying she erred in granting summary judgment to the wrong party in a dispute involving underinsured motorist coverage.

In a Rule 23 decision posted June 11, the court reversed and remanded a case filed by an Alhambra family who sought $250,000 from their insurer Country Preferred Insurance after being paid the same amount in a policy limit settlement with State Farm which insured another party in an accident.

Michael and Beth Niemier and son Brandon Niemier had filed a declaratory judgment action against Country Preferred based upon an Aug. 30, 2011 accident in which Brandon was struck by a vehicle while operating a farm tractor.

After the accident Brandon incurred $186,111 in medical expenses. Michael and Beth settled with State Farm for the per person liability limit of $250,000. Under the terms of settlement, $110,000 was allocated to Brandon and $140,000 was allocated to them.

Following the settlement with State Farm, the Niemiers made a claim with Country Preferred seeking underinsured per person policy limits of $250,000.

Country Preferred denied the claim saying that the other vehicle was not an underinsured vehicle as defined in its policy.

After discovery was taken in the case brought by the Niemiers in 2012, each party filed a motion for summary judgment.

Justice Judy Cates wrote the court’s order saying the purpose of underinsured coverage is to fill the gap between benefits paid by a responsible party’s insurance carrier and the limit of underinsurance coverage specified in an insured’s policy.

Cates noted that Brandon Niemier was the only person who sustained physical injuries. She wrote that under the “plain language” of the Country Preferred policy, Brandon's parents' claims for medical expenses and loss of society arose from bodily injuries to one person and thus fell within the $250,000 per person underinsured limit in the Country Preferred policy.

Cates further noted that State Farm paid the maximum per person liability limit to the Niemiers to resolve all claims.

“Since the tortfeasor's ‘per person’ limit of liability is the same as the ‘per person’ limit of underinsured coverage in the Country Preferred policy, and since the Niemiers' claims fit within the ‘per person’ underinsured limit, there is no gap in coverage,” Cates wrote.

“The trial court erred in finding that the Country Preferred policy afforded underinsured coverage up to $140,000 for Brandon and up to $110,000 for his parents.”

The case was remanded with instructions to enter summary judgment in favor of Country Preferred.

Justices Stephen Spomer and Bruce Stewart concurred.