State Farm Mutual Automobile Insurance v. Descheemaeker

178 Mich. App. 729 (1989) 444 N.W.2d 153

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
v.
DESCHEEMAEKER

Docket No. 106536.

Michigan Court of Appeals.

Decided June 13, 1989.

Romain, Donofrio, Kuck & Egerer, P.C. (by Ernst W. Kuck), for plaintiff.

Levin, Levin, Garvett & Dill (by Jeffrey A. Heldt), for defendants.

Before: CYNAR, P.J., and SHEPHERD and MARILYN KELLY, JJ.

PER CURIAM.

Defendants appeal as of right from a January 22, 1988, order granting summary disposition under MCR 2.116(C)(10) in favor of plaintiff on its complaint for declaratory relief. Plaintiff sought a determination of the extent of coverage afforded under a no-fault policy. The trial court ruled that all of defendants' claims came within the policy limit of $25,000 for "each person," and not the policy limit of $50,000 for "each accident" sought by defendants. We affirm.

The facts are not in dispute. On January 30, 1986, plaintiff's insured, Carolyn Fliger, was involved in an automobile accident with defendant John Descheemaeker, who sustained serious physical injuries. Fliger's insurance policy provided generally for liability coverage for bodily injury of $25,000 per person and $50,000 per accident.

John Descheemaeker filed suit against Fliger for his physical injuries, and his wife and children joined his suit seeking derivative damages for loss of consortium, society and companionship. It was agreed by the parties that John Descheemaeker's damages alone exceeded $25,000 and that the damages to his wife and children also exceeded $25,000. Defendants' claims against Fliger were settled by payment of the undisputed $25,000 policy limit for liability to a single individual (John Descheemaeker), with the second $25,000 (the difference between the policy limit for "each person" and the policy limit for "each accident") left to the final outcome of plaintiff's declaratory action. We agree with the trial court's ruling that defendants were not entitled to the second $25,000.

Since the question presented for our consideration is essentially one of contract interpretation, we begin by noting some of the basic rules applied to the construction of insurance contracts. The insurance contract must be interpreted by reading it as a whole and giving the contract language its ordinary and plain meaning rather than a technical or strained meaning. Boyd v General Motors Acceptance Corp, 162 Mich. App. 446, 452; 413 NW2d 683 (1987). If, after reading the entire contract, it can be reasonably understood in different ways, one providing coverage and the other excluding coverage, the contract is ambiguous and it is to be liberally construed against the drafter and in favor of coverage. Raska v Farm Bureau Mutual Ins Co of Michigan, 412 Mich. 355, 362; 314 NW2d 440 (1982); Usher v St Paul Fire & Marine Ins Co, 126 Mich. App. 443, 447; 337 NW2d 351 (1983). If, on the other hand, the contract language is not ambiguous, and does not contravene public policy, its terms must be enforced. Raska, supra, p 362; Usher, supra, p 447.

Here, defendants argue that, because John Descheemaeker's wife and children suffered derivative damages for loss of consortium, society and companionship as a result of his physical injuries suffered in the accident with plaintiff's insured, they are entitled to an additional $25,000 under the policy provisions providing coverage for bodily injuries. We reject this argument for two reasons.

First, the underlying policy defines a "bodily injury" as meaning "bodily injury to a person and sickness, disease or death which results from it." This definition of "bodily injury" has been found to be unambiguous and has been understood as contemplating "actual physical harm or damage to a human body." Farm Bureau Mutual Ins Co of Michigan v Hoag, 136 Mich. App. 326, 334-335; 356 NW2d 20 (1984), and see National Ben Franklin Ins Co of Michigan v Harris, 161 Mich. App. 86, 89; 409 NW2d 733 (1987). Nonphysical injuries, such as humiliation and mental anguish, that lack any physical manifestations do not constitute a "bodily injury." Hoag, supra, p 335; Harris, supra, p 89. Therefore, it follows that other nonphysical injuries, such as a loss of consortium, society and companionship, which lack any physical manifestations, are also not bodily injuries.

Secondly, even if the claims made by John Descheemaeker's wife and children did meet the minimal requirement of physical manifestation, the policy limit of $25,000 for "each person" would preclude their recovery because their damages would still be derivative in nature to John Descheemaeker's bodily injury. When policies fix a maximum recovery for "bodily" injury to one person, it has generally been held that the limitation is applicable to all claims of damages flowing from the bodily injury, even if part of the damages are claimed by someone other than the person suffering the bodily injury in the accident. In other words "all damage claims, direct and consequential, resulting from injury to one person, are subject to the limitation." Anno: Construction and application of provision in liability policy limiting the amount of insurer's liability to one person, 13 ALR3d 1228, 1234.

Here, the underlying policy set forth a $25,000 "each person" limitation and a $50,000 "each accident" limitation in the declaration page for bodily injuries. The related provisions describing precisely what bodily injuries are covered and what limitations apply state, in pertinent part:

We will pay damages which an insured becomes legally liable to pay because of:

a. bodily injury to others,

* * *

caused by accident resulting from the ownership, maintenance or use of your car.

* * *

Limits of Liability — Coverage A

The amount of bodily injury liability coverage is shown on the declarations page under "Limits of Liability — Coverage A — Bodily Injury, Each Person, Each Accident." Under "Each Person" is the amount of coverage for all damages due to bodily injury to one person. Under "Each Accident" is the total amount of coverage, subject to the amount shown under "Each Person," for all damages due to bodily injury to two or more persons in the same accident. [Emphasis in original.]

We hold that this language is not ambiguous. Read as a whole, the $50,000 "each accident" limitation does not apply unless two or more persons "in the same accident" are entitled to recover damages due to a bodily injury. Here, only one of the defendants, John Descheemaeker, was in the accident and, hence, the only limitation that applies is the $25,000 "each person" limitation. By defining "each person" as "the amount of coverage for all damages due to bodily injury to one person," the policy plainly subjects all damages, including any covered derivative damages, arising out of the physical/bodily injury to the person involved in the accident, to a $25,000 limitation.

Therefore, we conclude that the trial court correctly found that the "each person" liability limit of $25,000 under the policy was all that was available to satisfy the claims of all of the defendants in this lawsuit. John Descheemaeker was the only person to suffer physical injury from the accident and, hence, the only person to suffer the "bodily injury" necessary to trigger coverage under the policy. Since his damages alone exceeded $25,000, the other defendants cannot recover under any circumstances.^[1]

Affirmed.

NOTES

[1] Both parties cite Auto Club Ins Ass'n v Lanyon, 142 Mich. App. 108; 369 NW2d 269 (1985), as providing some support for their positions on whether defendants were entitled to an additional limit of liability. We disagree for the reason that Lanyon is factually distinct from this case. Unlike the underlying policy here, the Lanyon policy contained express language that the liability limit for "each person" includes "all claims for derivative damages." The mere absence of that express language here does not mean that derivative damages are "bodily injury" and is not dispositive of whether defendants are entitled to an additional limit of liability.