Mid-Century Insurance v. Daniel

Citations: 705 P.2d 156; 101 Nev. 433; 1985 Nev. LEXIS 442Docket: 15714

Court: Nevada Supreme Court; August 28, 1985; Nevada; State Supreme Court

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The Supreme Court of Nevada addressed an appeal concerning the interpretation of NRS 687B.145, which mandates insurance companies to provide uninsured and underinsured motorist protection. The case involved Jan Ellen Miller Daniel, who was injured in a collision with Lee Hua Mulnix. An arbitrator awarded Daniel $25,628.15 in damages, but both she and Mulnix had identical insurance limits of $15,000 per person. After settling with Mulnix for the policy maximum of $15,000, Daniel sought additional compensation from her insurance company, Mid-Century Insurance Company, for the remaining damages under her underinsured motorist coverage.

The district court ruled in favor of Daniel, holding Mid-Century liable for the difference in damages not covered by Mulnix’s policy. However, after accounting for $10,000 in no-fault benefits Daniel received, the court awarded her $628.15. Both parties appealed, with the primary legal question being whether NRS 687B.145(2) supports excess or reduction-type underinsured motorist protection. Mid-Century argued for the reduction approach, which would negate any excess recovery since Daniel’s underinsured motorist coverage matched the tortfeasor’s liability coverage. Daniel advocated for the excess approach, which would permit her to recover damages exceeding the tortfeasor’s insurance limits. The court affirmed the district court's interpretation, concluding it was consistent with the statute's plain language, and noted that an amendment in 1983 clarified provisions for excess-type underinsured motorist coverage.

Mid-Century argues that the 1983 amendment to the statute was a change rather than a clarification, asserting that from the statute's enactment in 1979 until its amendment, it adopted a reduction approach. However, the court agrees with Daniel that the original language clearly indicates legislative intent to adopt an excess method, meaning underinsured motorist coverage is triggered when the insured's damages exceed the tortfeasor's liability limits. The court concludes that the 1983 amendment clarified this intent rather than altering it. 

Regarding Daniel's cross-appeal, she contends that NRS 687B.145(1) prevents Mid-Century from offsetting her reparation benefits against her underinsured motorist benefits. Mid-Century clarifies that the district court did not allow a set-off but barred double recovery. NRS 687B.145(1) invalidates "anti-stacking" provisions for insureds who have paid separate premiums for multiple coverages. The court has historically rejected double recovery for the same loss, reaffirming that since Daniel has already received compensation for her injuries, she is not entitled to an additional $10,000 in underinsured motorist benefits. 

Finally, prior to its repeal, NRS 690B.020(7) prevented recovery under uninsured motor vehicle coverage if one was receiving basic reparation benefits, which the court interpreted as only precluding double recovery across no-fault and uninsured motorist provisions. The court maintains that stacking of benefits is allowed only when damages exceed reparation coverage limits.

Daniel is entitled to recover $628.15 from her underinsured motorist policy, as her damages were partially compensated by her reparation benefits. The district court's judgment was affirmed, which determined that Daniel's total damages amounted to $25,628.15, but she had already received $15,000 from the other driver’s insurance and $10,000 from her own no-fault policy, leaving her with a balance of $628.15. The relevant statutes, specifically NRS 687B.145, dictate that insurance companies must offer uninsured motorist coverage equal to bodily injury coverage limits and allow recovery for damages exceeding the other vehicle's limits. The version of NRS 687B.145 from 1979 applies to this case, as the accident occurred before amendments were made. Additionally, Daniel's argument that Mid-Century waived its right to offset the $10,000 no-fault payment against her underinsured motorist benefits was rejected, as her claims under the respective policies were considered separate, and Mid-Century had no obligation to notify her about potential set-offs related to distinct claims.