Stubbe v. Guidant Mutual

In the course of his employment, Brent Stubbe was injured in an automobile accident that was caused by an underinsured driver. Stubbe sought underinsured motorist benefits from his personal insurer, Guidant Mutual Insurance Company (Guidant), under both his automobile policy and his personal umbrella policy. An arbitration panel determined that Stubbe's accident-related damages were $436,332, with the parties reserving coverage issues. The underinsured motorist paid $50,000, worker's compensation paid $33,939.37 and Guidant paid $166,060.63 under Stubbe's automobile policy, but Guidant contested coverage under Stubbe's personal umbrella policy. When Stubbe sued for the balance of the arbitration award, Guidant raised its coverage defenses and counterclaimed, alleging that its initial payment to Stubbe erroneously included future medical expenses that it should not have paid. The circuit court granted summary judgment to Guidant on all issues. We conclude that Stubbe's umbrella policy is ambiguous and therefore, we construe it in favor of the insured to provide underinsured motorist protection for damages in excess of the automobile policy's limit. We further conclude that Stubbe's automobile policy is ambiguous in regard to its treatment of future medical expenses, and therefore, Stubbe is entitled to retain any payment for future medical expenses already paid by Guidant. Accordingly, we reverse the judgment of the circuit court and direct it to enter judgment in Stubbe's favor on remand in the amount of $186,332, the balance of the arbitration award that remains unpaid.

Background

2. On June9, 1997, Stubbe sustained severe personal injuries in an automobile accident caused by the negligence of Terry Thielmann. Thielmann carried an automobile insurance policy with a $50,000 liability limit, and Stubbe settled his claim against Thielmann and Thielmann's insurer for $50,000. Stubbe then sought additional damages from his own insurer, Guidant. Stubbe had two policies with Guidant relevant to this appeal: (1) a "Personal Car Policy," which provides $250,000 of underinsured motorist protection for claims involving bodily injury; and (2) a $1,000,000 "Personal Excess Liability Policy," or "umbrella" policy.

3. Pursuant to the requirements of the automobile policy, Stubbe and Guidant arbitrated the amount of damages, reserving coverage issues. The arbitration panel found total damages of $436,332, comprised of past medical expenses ($26,104); future medical expenses ($22,500); past lost earnings ($6,364); future lost earnings ($6,364); and general damages ($375,000).

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¶26. We conclude that Stubbe's umbrella policy is ambiguous and that it should be construed in favor of the insured to provide underinsured motorist protection for damages in excess of the automobile policy's liability limit. We further conclude that the underlying automobile policy is ambiguous as applied to a claim for future medical expenses that may be covered under the worker's compensation laws and that Stubbe is entitled to retain any payment for future medical expenses already paid by Guidant. Accordingly, we reverse the judgment of the circuit court and direct the circuit court to enter judgment in Stubbe's favor on remand in the amount of $186,332.

By the Court. Judgment reversed and cause remanded with directions.

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