District, Salt Lake The Honorable Laura Scott No. 150901805
L. Rencher, Benjamin K. Lusty, Salt Lake City, for appellant.
D. Dean, Brett N. Anderson, Kristy L. Bertelsen, Salt Lake
City, for appellee.
Justice Himonas authored the opinion of the Court, in which
Chief Justice Durrant, Associate Chief Justice Lee, Justice
Durham, and Justice Pearce joined.
1 Danny Rutherford suffered extensive injuries when the work
van he was driving was hit by a vehicle that had run a red
light. Mr. Rutherford sought compensation from both his
employer's workers' compensation insurer and Truck
Insurance Exchange (TIE), which provides Mr. Rutherford's
employer with underinsured motorist coverage. Mr. Rutherford
seeks double recovery, arguing that Utah Code section
31A-22-305.3(4)(c)(iii)- which states that underinsured
motorist coverage "may not be reduced by benefits
provided by workers' compensation insurance"-means
that underinsured motorist insurance must compensate Mr.
Rutherford in full, up to the limits of the policy,
irrespective of whether workers' compensation insurance
has already covered a portion of the claim. In response, TIE
argues that under section 305.3(4)(c)(i) of the same
statute-which states that underinsured motorist coverage
"is secondary to the benefits provided by"
workers' compensation-it should not have to pay benefits
that workers' compensation has or should have covered. We
hold that TIE's status as a secondary insurer means that
it must fully compensate Mr. Rutherford within its policy
limits, but only for damages in excess of what workers'
compensation paid, so as to avoid an inappropriate double
recovery. We therefore reverse the district court's
contrary grant of summary judgment.
2 Mr. Rutherford was driving a company van in the course of
his employment when he was struck by an underinsured driver,
leaving him with significant injuries. In the wake of his
accident, Mr. Rutherford filed several claims for insurance
3 The first claim, to Mid Century Insurance, was for
workers' compensation benefits for medical expenses, lost
income, and permanent disability. Although Mr.
Rutherford's medical expenses exceed $250, 000, Mid
Century Insurance has paid only $183, 628.81 for medical
expenses. It has also paid benefits for lost wages and
permanent disability. Mr. Rutherford also recovered $50, 000
from the other driver's insurance, although Mid Century
Insurance subsequently recovered about $28, 000 of that total
in a subrogation action. Finally, because Mr. Rutherford was
acting in the scope of his employment when the crash
occurred, he also filed a claim with TIE, which insures Mr.
Rutherford's employer. Mr. Rutherford sought to recover
full benefits under TIE's underinsured motorist (UIM)
policy for medical expenses, lost income, lost vocational
capacity, future medical expenses, pre-and post-judgment
interest, and general damages.
4 Both Mr. Rutherford and TIE filed motions for summary
judgment. TIE sought a declaration that it was not liable to
pay Mr. Rutherford medical expenses, lost income, or
permanent or temporary disability benefits, which it argued
Mid Century Insurance should pay or has already paid. Mr.
Rutherford argued that Utah Code section 31A-22-305.3(4)(c)
and the collateral source rule prohibited TIE from deducting
workers' compensation benefits when determining its
liability to Mr. Rutherford. The district court granted
summary judgment for Mr. Rutherford, holding that Mr.
Rutherford's interpretation "is more consistent with
the underlying purpose" of Utah's insurance
statutes. The district court also relied on our prior
holdings in Thamert v. Continental Casualty Co., 621
P.2d 702 (Utah 1980), and Lieber v. ITT Hartford
Insurance Center, Inc., 2000 UT 90, 15 P.3d 1030, in
which we stated that a UIM insurer "should not be
permitted to offset payments received by the plaintiff as
workmen's compensation." Thamert, 621 P.2d
at 704; see also Lieber, 2000 UT 90, ¶ 24. TIE
timely appealed. We have jurisdiction over this matter under
Utah Code section 78A-3-102(3)(j).
5 Summary judgment is appropriate when "there is no
genuine dispute as to any material fact and the moving party
is entitled to judgment as a matter of law." Utah R.
Civ. P. 56(a). We review the district court's grant or
denial of summary judgment for correctness, drawing all
reasonable inferences from the facts in the light most