The State of Minnesota Court of Appeals recently heard the case of Cindy Engelke and Kurt Speich for the next of kin of Melissa A. Speich vs. State Farm Fire and Casualty Co. and Preston Doyle (Hennepin County District Court File No. 27-CV-09-19495).

On April 8, 2007 Melissa Speich died of injuries sustained in a motor vehicle accident which occurred when she was hit by a drunk driver.  She was driving her fiancé Adam Doyle’s Toyota Celica when the accident occurred.

The attorneys for Melissa’s next of kin first settled the case against the drunk defendant for his automobile insurance policy limits of $50,000.00.  They then brought a claim against State Farm Insurance, which insured Adam Doyle’s car, for underinsured motorist benefits.  Underinsured Motorist Coverage (UIM) exists to provide an insured with additional coverage when his or her damages exceed the value a defendant’s liability policy. The policy listed Adam Doyle and his mother Judith Doyle as named insureds, and it broadly defined an insured driver as “any other person while occupying…your car…Such vehicle has to be used within the scope of the consent of you or your spouse.”  State Farm agreed that Melissa met the broad definition of an insured under the policy language and paid out their $100,000.00 underinsured policy limits.

The attorneys for Melissa’s next of kin next sought to access a separate “umbrella” insurance policy issued by State Farm Mutual to Adam’s mother Judith Doyle and her husband, Preston Doyle.  An umbrella policy is usually tied to homeowners insurance and is intended to cover an insured’s losses in excess of any liability and underinsured coverage in the event of an accident.  The Doyle’s umbrella policy language defined an insured under the policy as the named insured, the named insured’s relatives who lived in the same household as the named insured, anyone who lived in the same household under 21 years of age who was under the care of a named insured, or a person using an automobile…owned by, rented by, or loaned to the named insured, provided that the named insured gave permission for the type of use.

State Farm refused to pay on the policy, arguing that 1.) Judith Doyle and Preston Doyle were the only named insureds on the umbrella policy; and 2) that Adam Doyle, not Judith Doyle, was the titled owner of the car.  State Farm argued further that Mellissa did not meet any of the other definitions of an insured under the policy.

Attorneys for the next of kin argued that the intent of the Doyles had been to cover the vehicle under the homeowner’s umbrella policy and that proof of their intent was that they had specifically listed Judith Doyle on the automobile insurance policy.  They further argued that State Farm could not claim Melissa was an insured on one policy but not an insured on another.   State Farm argued that the intent of the Doyles did not matter and that the actual terms of the umbrella policy dictated who was covered by the policy.  State Farm argued that the stricter definition of an insured in the umbrella policy excluded Melissa from coverage.

The District Court agreed with State Farm and dismissed the case on a summary judgment motion. On January 4, 2011 the Minnesota Court of Appeals upheld the District Court’s opinion.  They wrote in their opinion that: “The underlying policy and the umbrella policy are two separate contracts; there is nothing unlawful or improper in defining the scope of coverage differently in each policy.”

The Meshbesher Law Firm reminds you when meeting with your insurance agent to be very specific as to the extent of the coverage you want to purchase.  Read through your policy, and if you are not clear on its terms, call your agent and ask for written clarification.  You could also call an attorney to review your policy to make sure you are covered before tragedy strikes.

If you have been injured in an accident, call the Meshbesher Law Firm for a free consultation.  612-349-5215.

Author: Dan Meshbesher.  Meshbesher Law Firm.