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Truck Insurance Exchange v. Rutherford

Supreme Court of Utah

April 27, 2017

Truck Insurance Exchange, Appellant,
Danny L. Rutherford, Appellee.

         On Direct Appeal

         Third District, Salt Lake The Honorable Laura Scott No. 150901805

          Jaryl L. Rencher, Benjamin K. Lusty, Salt Lake City, for appellant.

          Mark 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 compensation.

         ¶ 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 ...

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