Summary
The Eighth Circuit held that under Iowa law, the phrase "legally entitled to recover" in an uninsured/underinsured motorist policy limits recovery to damages available in a tort action against the tortfeasor in the jurisdiction where the accident occurred—here, British Columbia, which only allows economic damages. The court affirmed summary judgment for the insurer, rejecting arguments that Iowa's underinsured motorist statute or liberal interpretation cases abrogated the Iowa Supreme Court's holding in *Hall v. Allied Mutual Insurance Co.*, and that the policy's "Available Insurance Provision" created affirmative coverage for non-economic losses.
Topics
Practice areas
Questions Presented
- Whether the phrase 'legally entitled to recover' in the UM/UIM coverage provisions of the insurance policy limits plaintiffs' recovery to damages they could recover from the tortfeasors in a tort action in British Columbia, or whether Iowa law determines the extent of recoverable damages.
Holdings
- The phrase 'legally entitled to recover' prevents plaintiffs from recovering non-economic damages under the policy because they could not recover such damages from the bus driver or bus company in a tort action in British Columbia.
Key quotations
“Applying Hall, as we must, plaintiffs are not 'legally entitled to recover' non-economic damages from the bus driver or the bus company and the district court did not err in granting summary judgment to West Bend.” (at 3)
“Where, as here, the insurer has no liability under the Policy's coverage provisions, the Available Insurance Provision does not operate as an affirmative grant of coverage extending to what are otherwise uncovered losses.” (at 5)
“The interpretation of an insurance policy and whether it provides coverage in a particular situation are questions of law that we review de novo.” (at 3)
Factual background
In 2018, Iowa residents Gregg Geerdes and Mary Murphy purchased a home and automobile insurance policy from West Bend Mutual Insurance Company. Their son, John Geerdes, died in 2019 from injuries sustained while a passenger on a charter bus that crashed in British Columbia, Canada. The bus driver's negligence caused the accident. The bus driver and bus company had liability coverage under a policy issued by the Insurance Corporation of British Columbia, which paid all no-fault motorist insurance benefits required under British Columbia law. Under British Columbia law, only economic damages (funeral costs) are available; non-economic damages are not recoverable. West Bend paid funeral expenses but denied plaintiffs' claim for non-economic damages under the policy's uninsured/underinsured motorist (UM/UIM) coverage. The policy covers accidents in Canada and provides UM/UIM benefits for compensatory damages the insured is 'legally entitled to recover' from the owner or operator of an uninsured or underinsured motor vehicle.
Procedural history
The district court granted summary judgment in favor of West Bend. Plaintiffs appeal.