Saucier v. Allstate Ins. Co.
Case Date: 01/01/1999
Court: Supreme Court
Docket No: 1999 ME 197
Saucier v. Allstate Ins. Co., revised 1-14-00 Download as PDF Back to Opinions page MAINE SUPREME JUDICIAL COURT Reporter of Decisions Decision: 1999 ME 197 Docket: Aro-99-48 Argued: October 4, 1999 Decided: December 30, 1999 Panel:WATHEN, C.J., and RUDMAN, DANA, SAUFLEY, ALEXANDER, and CALKINS, JJ. ROBERT SAUCIER v. ALLSTATE INSURANCE COMPANY DANA, J. [¶1] Allstate Insurance Company appeals from a judgment entered in favor of the plaintiff, Robert Saucier, in the Superior Court (Aroostook County, Pierson, J.) following a bifurcated jury trial. In the first portion of the trial, the jury found that Saucier had suffered $200,000 in damages due to the negligence of an underinsured driver. In the second portion of the trial, the jury found that Allstate knowingly misrepresented pertinent facts of its policy provisions relating to Saucier's underinsurance coverage and that Allstate failed to pay an undisputed portion of Saucier's claim. As a result, the court ordered that Allstate pay to Saucier the per person limit of his underinsurance coverage minus the amount he actually received from the negligent driver's insurance company,{1} interest pursuant to 24-A M.R.S.A. § 2436-A(1)(A),{2} the amount of the undisputed medical payments claim plus interest pursuant to 24-A M.R.S.A. § 2436(1) & (3),{3} and costs, disbursements, and attorney's fees pursuant to 24-A M.R.S.A. § 2436-A(1). Allstate argues that the court erred: (1) in its determination that as a matter of law Allstate was not permitted to offset its coverage by the entire per person limit of the tortfeasor's coverage; (2) in its denial of Allstate's motion for judgment as a matter of law that it did not knowingly misrepresent its coverage; (3) in the instructions it gave to the jury; (4) by admitting evidence of Allstate's offer of $11,000 to Saucier in the second portion of the bifurcated trial; and (5) in its award of attorney fees to Saucier in the amount of $16,731.38. Saucier requests a remand for a determination of additional attorney fees associated with postjudgment proceedings and this appeal. We affirm the judgment and remand for a further determination of attorney fees pursuant to 24-A M.R.S.A. § 2436-A(1). I. BACKGROUND [¶2] In 1994, Saucier was injured in an automobile accident as a passenger in Alden Pelletier's vehicle. Pelletier died as a result of the accident. Two other passengers riding in Pelletier's car were also injured, as well as the driver of another vehicle hit by Pelletier's vehicle. [¶3] Pelletier carried liability insurance with Progressive Insurance Company that had a $25,000 per person limit and a $50,000 per accident limit.{4} Saucier, the two other passengers from Pelletier's vehicle, and the driver of the other car settled with Progressive. Saucier's share of the settlement was $10,594.65. Allstate, Saucier's insurance carrier, consented to this settlement. [¶4] Saucier's insurance with Allstate included uninsured motorist coverage with a per person limit of $50,000 and a per accident limit of $100,000. Saucier provided documentation of his medical bills and lost earnings to Allstate. Ultimately Allstate offered Saucier $10,000 in settlement of his claim, indicating that it was compelled to offset his coverage by the $25,000 limit of Pelletier's per person liability coverage with Progressive and by the $1000 medical payments coverage Saucier had with Allstate. Saucier did not accept this offer, but suggested that it reflected the undisputed portion of his claim and that Allstate should immediately pay that amount. Allstate responded that both the $10,000 and the $1000 were in dispute as it was disputing both damages and coverage. [¶5] Unable to reach an agreement with Allstate, Saucier brought suit against Allstate on three counts. In his complaint, Saucier sought $39,405.35 pursuant to the provisions of his policy with Allstate;{5} the undisputed portion of his claim plus interest as provided in the late payment statute, 24-A M.R.S.A. § 2436; and, alleging that Allstate knowingly misrepresented the extent of his coverage, damages, interest, attorney fees, and costs pursuant to the unfair claims settlement practices statute, 24-A M.R.S.A. § 2436-A. [¶6] Allstate made a motion for a summary judgment and sought a declaratory judgment regarding the amount of the offset to which it was entitled. The trial court denied Allstate's motion for a summary judgment and declared that pursuant to the terms of Saucier's policy, Allstate was only able to reduce Saucier's coverage by the amount he was actually paid by Pelletier, the underinsured motorist. Allstate then made a successful motion for a bifurcated trial in which the jury first determined liability and damages, and then proceeded to the claims regarding Allstate's failure to pay an undisputed portion of a claim and the knowing misrepresentation of pertinent facts of Allstate's policy. [¶7] In the first portion of the jury trial, Saucier presented evidence regarding the circumstances of the accident and his resulting injuries, which included fractured vertebrae and other injuries to his back. Saucier also presented evidence of the damages he incurred as a result of the accident, including approximately $17,000 in medical bills and lost wages because he was unable to continue work as a mill supervisor. He had to find less physically demanding work that paid substantially less. Saucier also presented evidence of his expected future lost wages and medical expenses, which included expenses for continuing physical therapy as well as medications that he would need throughout the course of his life. The jury found that the car accident was the result of Pelletier's negligence and that Saucier suffered past and prospective damages in the amount of $200,000. [¶8] In the second portion of the trial, both parties produced evidence regarding the exchange of communications that ensued from Saucier's attempt to collect on his uninsured motorist coverage with Allstate. Over Allstate's objection, Saucier was permitted to introduce evidence of Allstate's settlement offer of $11,000, which represented the $1000 worth of medical payments coverage (that was not dependent on a finding of liability), and $10,000 worth of uninsured motorist coverage. The jury found that Allstate failed to pay an undisputed portion of Saucier's claim-the $1000 medical payment benefit, and that Allstate misrepresented pertinent facts of its policy provisions. [¶9] Allstate filed a motion for a judgment as a matter of law regarding the claim that it misrepresented the extent of Saucier's coverage. The court denied the motion and entered a judgment in favor of Saucier on all claims. Allstate appeals from that judgment. II. DISCUSSION A. Allstate's Offset [¶10] Saucier's policy with Allstate provides that, with respect to payments pursuant to its uninsured motorist policy, "[d]amages payable will be reduced by . . . all amounts paid by the owner or operator of the uninsured auto or anyone else responsible." Allstate argues that this language should be construed to mean reduced by the entire amount available to Saucier but paid out by the underinsured motorist (or the underinsured's insurance company) to all claimants, and not just by that paid to its insured, Saucier.{6} Allstate contends that the trial court erred in holding that, as a matter of law, it could only offset its coverage by the amount actually paid to Saucier by Pelletier's insurance carrier and not by amounts paid to other claimants. In making this argument, Allstate notes that the quoted provision "does not specify who, or to how many claimants, the amount is paid to [sic]." [¶11] The meaning of the language used in an insurance contract is a question of law. See Jack v. Tracy, 1999 ME 13, ¶ 8, 722 A.2d 869, 871; Peerless Ins. Co. v. Wood, 685 A.2d 1173, 1174 (Me. 1996). We construe insurance policies liberally in favor of the insured and any ambiguity in the contract is resolved against the insurer. See Peerless, 685 A.2d at 1174. We view the language from the perspective of an average person. See id. [¶12] Notwithstanding Allstate's observation that the policy provision regarding its offset does not specify to whom "amounts paid" refers, the language is not ambiguous. The court did not err when it determined that pursuant to Allstate's own policy provision, Saucier's coverage could only be offset by the amount that he was paid by Progressive, and therefore Allstate's maximum exposure was the difference between the $50,000 per person limit and the $10,594.65 Saucier received from Progressive. [¶13] In support of its construction, however, Allstate cites cases in which the negligent motorist's underinsured status was at issue. The two cases on which Allstate principally relies, Mullen v. Liberty Mut. Ins. Co., 589 A.2d 1275 (Me. 1991), and Day v. Allstate Ins. Co., 1998 ME 278, 721 A.2d 983, indicate that "[t]o determine if a tortfeasor is underinsured, the court compares the relevant face amounts recited on the insurance policies without considering such factors as the amount of the insured's actual damages, the number of other claimants, or their recoveries." Day, 1998 ME 278 at ¶ 7, 721 A.2d at 985 (citations omitted) (emphasis added).{7} In other words, when determining the negligent motorist's coverage for purposes of determining his status as an uninsured motorist pursuant to 24-A M.R.S.A. § 2902(1), other claimants' actual recoveries, as well as that of the injured party, are disregarded. These cases, however, do not stand for the proposition that, when determining the coverage of the injured party pursuant to the contract provisions of that individual's uninsured motorist policy, the actual amount of money recovered from the uninsured individual is to be disregarded.{8} [¶14] Additionally, the construction given to the provision by Saucier and the Superior Court is consistent with observations made by this Court in other cases involving underinsurance coverage. In Tibbetts v. Maine Bonding and Cas. Co., 618 A.2d 731 (Me. 1992), Maine Bonding argued that it was entitled to an offset pursuant to a clause in its policy similar to the one at issue in this case for sums paid to the insured by a motorist other than the uninsured motorist for injuries not attributable to the uninsured motorist. Id. at 733. We held that the insurer was not entitled to an offset for those sums, stating: the clause in Maine Bonding's policy effects a reduction only for amounts recovered from [the underinsured motorist] or her insurer. Accordingly, to the amount of its policy limits, Maine Bonding's contractual obligation to the Tibbettses is determined by the amount of the Tibbettses' damages that are attributable to [the underinsured motorist], reduced by any recovery received from [her] or her insurer. Id. at 734 (emphasis added). [¶15] In Cobb v. Allstate Ins. Co., 663 A.2d 38, 40 (Me. 1995), we held that an offset for $25,000 paid to an insured by the tortfeasor applied entirely to the primary insurer whose liability limit was $40,000, and should not be prorated between the primary and secondary insurers. If a secondary insurer is not allowed to reduce its liability by amounts actually paid to the insured when those amounts have already been used as an offset by a primary insurer to reduce liability, it would be incongruous to allow an insurer to use amounts that were never paid to its insured as an offset to reduce its liability.{9} [¶16] The Superior Court did not err when it held as a matter of contract law that Allstate was required to pay $39,405.35 to Saucier. Cf. Buell v. American Universal Ins. Co., 621 A.2d 262, 265 (Conn. 1993) (addressing similar language in a policy, court held that trial court improperly reduced amount payable to insured by full amount of underinsured's liability limit when a portion of it was paid to someone else). B. Allstate's Motion for a Judgment as a Matter of Law [¶17] Allstate made two motions for a judgment as a matter of law pursuant to M.R. Civ. P. 50(a) and (b){10} on Saucier's claim that it knowingly misrepresented the extent of its coverage. The court denied both motions. Allstate argues that the court erred by allowing the issue to go before the jury and by not setting aside the jury's verdict that Allstate knowingly misrepresented pertinent facts relating to Saucier's coverage. [¶18] A motion for a judgment as a matter of law "should not be granted if 'any reasonable view of the evidence could sustain a verdict for the opposing party pursuant to the substantive law that is an essential element of the claim.'" Lewis v. Knowlton, 1997 ME 12, ¶ 6, 688 A.2d 912, 913 (quoting Currier v. Toys 'R' Us, Inc., 680 A.2d 453, 455 (Me. 1996)). Furthermore, we review the denial of a motion for a judgment as a matter of law, "to determine whether 'by any reasonable view of the evidence, including the inferences to be drawn therefrom, taken in the light most favorable to the non-moving party, the verdict can be sustained.'" Colvin v. A R Cable Services-ME, Inc., 1997 ME 163, ¶ 6, 697 A.2d 1289, 1290 (quoting Williams v. Inverness Corp., 664 A.2d 1244, 1246 (Me. 1995)). We have recently stated with regard to M.R. Civ. P. 50(b), "a party seeking a judgment as a matter of law after trial has the burden of establishing that the adverse jury verdict was 'clearly and manifestly wrong.'" Maine Energy Recovery Co. v. United Steel Structures, Inc., 1999 ME 31, ¶5, 724 A.2d 1248, 1250 (quoting Townsend v. Chute Chem. Co., 1997 ME 46, ¶ 8, 691 A.2d 199, 202). [¶19] Taken in the light most favorable to Saucier, the facts can and do support the jury's determination that Allstate, through its claim analyst knowingly misrepresented its obligations pursuant to the terms of its policy. The jury could reasonably conclude that the claim analyst had been directed by Allstate to disregard its policy provisions and reduce claimant's damages by the full liability limit of the underinsured's policy, regardless of the amount paid to the claimant.{11} Although the claim analyst testified that she had been instructed by Allstate that case law, specifically Mullen, had somehow abrogated the terms of its policies regarding the measure of offsets, the jury could have rejected this as a credible explanation of Allstate's approach and instead concluded that Allstate was aware of its obligations pursuant to the terms of its policy, but was simply representing otherwise to Saucier. [¶20] Allstate argues that its claim analyst did not consciously misrepresent the terms of Saucier's policy because she was relying on directions from Allstate and its representatives. However, this reasoning would enable an insurer to avoid liability for misrepresentations as long as the spokesperson for the company was kept ignorant of the basis of the representations. This is clearly in contravention of the statute. Allstate is responsible for the actions of all its representatives, even when one is merely repeating what another has told her regarding Allstate's policy provisions. [¶21] Allstate also argues that because its representations were based on its interpretation of a question of law, the jury could not have found that it knowingly misrepresented the extent of its coverage. But, as noted above, the jury was not bound to accept Allstate's explanation of its representations. The trial court correctly instructed the jury on the issue of knowing misrepresentation: Knowing misrepresentation means to be aware that you are misrepresenting something. In other words, you know the policy says one thing and means one thing but you tell the insured something else. . . . And in this case, also, the question isn't who is right or wrong or whether Allstate took a position that was different from Mr. Saucier's. . . . So this has to be a knowledgeable misrepresentation and awareness that there was a misrepresentation, not a dispute as to what something says. Having been correctly instructed on Allstate's obligations pursuant to its contract with Saucier, a jury could have found that it knowingly misrepresented the extent of its coverage, notwithstanding the fact that Allstate sought to justify its representations with case law. [¶22] Additionally, because the meaning of policy provisions is always a question of law, Allstate's argument would, in effect, preclude any insurer from being held accountable for its misrepresentations unless the very same policy provisions had been previously construed by this Court. Until that point, the insurer could argue that its policy provisions all involved unresolved questions of law. But see Seabury Hous. Assocs v. Home Ins. Co., 695 F. Supp. 1244, 1248 (D. Me. 1988) (after finding that contract governing coverage was ambiguous, court granted defendant insurer a summary judgment on claim that it failed to pay an undisputed portion of a claim when plaintiff argued that to be disputed, claim had to be disputed in good faith: because language was ambiguous, dispute could not be in bad faith). [¶23] Because Allstate has failed to demonstrate that no reasonable view of the evidence could sustain a jury verdict on Saucier's claim or that the jury's verdict is clearly and manifestly wrong, the trial court properly denied both its motions for a judgment as a matter of law. Click here for part 2 of this opinion. |