Kirkley v. State Farm Mutual Insurance

California Court of Appeal Jun 2, 1971 No. Civ. 10486Published

Before: Kaufman

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Holding. The court held that an insurer providing uninsured motorist coverage is liable for the full amount of the insured's damages up to the policy limit, without offsetting the liability insurance carried by the underinsured motorist, because the insurer is entitled to automatic subrogation against the tortfeasor.

Issues

Whether an insurer's uninsured motorist coverage liability is reduced by the amount of liability insurance carried by an underinsured motorist.
Whether the statutory subrogation rights of an insurer prevent a 'double coverage' benefit to the insured.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The statutory scheme contemplates that once the uninsured motorist coverage comes into play, the injured insured has resort to the full coverage for which he has paid.”

“To the extent of any payment made by it under the uninsured motorist coverage, the carrier is subrogated to the injured insured’s rights against the uninsured or underinsured motorist and is thus afforded recourse to such coverage as he has.”

[1080]

Opinion

KAUFMAN, J.

Defendant appeals from, an adverse judgment in an action for declaratory relief.

27ze Facts

On February 14, 1969, plaintiff and three other people were seriously injured in an automobile accident in Charlotte, North Carolina. Plaintiff and the other injured persons were occupants of a vehicle owned and operated by plaintiff’s brother, a resident of North Carolina. This vehicle was struck by another vehicle driven, allegedly negligently, by W. A. Kranick. Kranick carried liability insurance coverage with limits of $10,000 for injury to one person and $20,000 for injury to more than one person. These liability limits complied with the financial responsibility requirements of the State of North Carolina. The respective claims of the four injured persons each exceeds $10,000, and, for practical purposes, there is only $5,000 available for payment of plaintiff’s claim from Kranick’s liability insurance carrier.

Prior to February 14, 1969, in Orange County, California, defendant issued and delivered to plaintiff an automobile liability insurance policy, which included uninsured motorist coverage as required by section 11580.2 of the California Insurance Code with limits of $15,000 for injury to one person and $30,000 for injury to more than one person, subject to the limit for one person. This policy was in full force and effect on the date of the accident.

Plaintiff filed this action for a declaration of his rights under the policy. The parties having stipulated to the foregoing facts, judgment was entered decreeing that, under California Insurance Code section 11580.2 and the policy provisions, Kranick was an uninsured motorist; that defendant was therefore required to arbitrate plaintiff’s claim for personal injuries sustained by him in the North Carolina accident; and that the amount to which plaintiff is entitled under his uninsured motorist coverage is “not limited or offset in any manner by the liability insurance ... of ... W. A. Kranick.”

Contentions and Issues

Insurance Code section 11580.2, subdivision (b), defines “uninsured motor vehicle” 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. . . .” Two recent

Kirkley v. State Farm Mutual Insurance

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KAUFMAN, J.

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