GEICO General Ins. v. Laurie L. Sabo

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 02-2121
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Geico General Insurance Company, *
*
Appellee, * Appeal from the United States
* District Court for the District
v. * of South Dakota.
*
Laurie L. Sabo, * [UNPUBLISHED]
*
Appellant. *
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Submitted: December 9, 2002
Filed: December 16, 2002
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Before McMILLIAN, FAGG, and BYE, Circuit Judges.
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PER CURIAM.
Laurie L. Sabo, a South Dakota resident, appeals the district court’s adverse
grant of summary judgment in this diversity-based insurance coverage case. While
Sabo was insured by Geico General Insurance Company (Geico), the car she was
driving was involved in an accident that injured her husband, a passenger in the car.
Sabo’s husband sued her in state court for injuries related to the accident. Geico filed
a declaratory judgment action in federal court, arguing it did not have a duty to
defend or indemnify Sabo in the underlying lawsuit because Sabo’s policy did not
cover bodily injury to a relative residing in her household. We review the district
court’s grant of summary judgment de novo. See Equip Mfrs. Inst. v. Janklow, 300
F.3d 842, 849 (8th Cir. 2002) (standard of review).
Geico’s duties to indemnify and defend Sabo are independent and severable
duties. See Stoebner v. South Dakota Farm Bureau Mut. Ins. Co., 598 N.W. 2d 557,
559 (S.D. 1999). On appeal, Sabo argues her policy does not excuse Geico from its
duties to indemnify her or to defend her against her husband’s claims. The relevant
portion of the policy, Section I, explains Geico’s liability and creates the duties to
defend and indemnify:
EXCLUSIONS
When Section I Does Not Apply
We will not defend any suit for damage if one or more of the exclusions
listed below applies.
1. Bodily injury to any insured or any relative of an insured residing in
[her] household is not covered in excess of the minimum coverages required
by the Financial Responsibility Law of the State of South Dakota.
(Emphasis in original). South Dakota’s Financial Responsibility Law sets the
minimum coverage amount for “bodily injury . . . or death of one person in any one
accident” at $25,000. S.D.C.L. § 32-35-70 (2002). This statute also states a “policy
may exclude or limit coverage . . . for a relative residing in the named insured’s
household.” Id. (emphasis added). We conclude this statute permits but does not
require Geico to exclude Sabo’s husband from coverage under Sabo’s policy. See
Douville v. Christensen, 641 N.W.2d 651, 654 (S.D. 2002) (interpreting statutory
provisions according to their plain meaning and effect); see also Empl. Mut. Cas. Co.,
Inc. v. State Auto Ins., 623 N.W.2d 462, 465 (S.D. 2001) (discussing legislative intent
to allow exclusion of family members from insurance policies under S.D.C.L. § 32-
35-70). The extent to which Sabo’s husband is covered under her policy thus
depends on the language of that policy.
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As written, Sabo’s policy limits bodily injury coverage for Sabo and relatives
living in her household to the minimum coverage amounts set by South Dakota law.
Because the policy does not completely exclude Sabo’s relatives from coverage,
Geico must indemnify Sabo for her husband’s accident-related injuries up to $25,000.
Additionally, because Geico must indemnify Sabo, the enumerated exception to
Geico’s duty to defend is not triggered and Geico must defend Sabo against her
husband’s claims.
For the reasons stated above, we reverse the judgment of the district court and
remand for further proceedings consistent with this opinion.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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