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State Farm Mut. Auto. Ins. Co. v. White - 1/3/2013

Arizona Court of Appeals Division One Holds that A.R.S. § 20-259.03 Does Not Bar Payment of Wrongful-Death Benefits from an Underinsured Motorist Policy to a Person Who Is Defined In the Policy as a Surviving Insured But Who Is Not a Named Insured Under the Policy.


Kristie White’s son was killed in a car accident with an underinsured motorist.  He was a passenger in a car driven by his grandmother.  The grandmother’s auto insurance policy from State Farm provided underinsured motorist (“UIM”) coverage that would pay “pay damages for bodily injury an insured is legally entitled to collect from the owner or driver of an underinsured motor vehicle.”  “Insured” was defined by the policy as being “the person or persons covered by uninsured motor vehicle or underinsured motor vehicle coverages” and included relatives of the persons named in the policy and also “any person entitled to recover damages because of bodily injury to an insured.”  Under the Arizona wrongful death statute, A.R.S. § 12-612, White was authorized to bring a wrongful death action.  State Farm filed a complaint against White seeking declaratory relief, arguing that under A.R.S. § 20-259.03, only White’s son was entitled to UIM coverage.  That statute states that

Notwithstanding any other law, in the case of the death of an insured who is covered under the uninsured and underinsured motorist coverages of a motor vehicle liability policy, recovery for wrongful death is limited to any party who is qualified to bring a wrongful death action pursuant to § 12-612 and who is also a surviving insured under the same coverages of the policy.

The trial court granted summary judgment in State Farm’s favor.  White appealed.

The Arizona Court of Appeals reversed.  In its appellate answering brief, State Farm had conceded that, if not for A.R.S. § 20-259.03, White’s parents’ insurance policy would have entitled White to receive UIM benefits for her son’s wrongful death.  The question before the court, therefore was whether White was “a surviving insured under the same coverages of the policy” within the meaning of A.R.S. § 20-259.03.  State Farm argued that the statute only allowed payment of wrongful-death UIM benefits to named insureds and their spouses and that White was not a named insured or a surviving spouse under the policy.  The court rejected State Farm’s interpretation of the statute, holding that “§ 20-259.03 does not bar an insurer from paying wrongful-death UIM benefits to anyone other than a named insured. The statute instead allows an insurer to pay wrongful-death UIM benefits to any eligible claimant that the insurer has chosen to define as ‘a surviving insured under the same coverage[] of the policy,’” and that the policy’s definitions included White.  The court rejected State Farm’s argument that a previous case, Bither v. Country Mutual Insurance Company, 226 Ariz. 198, 245 P.3d 883, (App. 2010), compelled judgment in its favor.  In Bither, the court of appeals had held that a mother could not receive wrongful-death uninsured motorist (“UM”) benefits after the death of her daughter in a car accident because the mother had not claimed to be “a surviving insured” as defined by the insurance policy at issue in the case.  Because the court of appeals had not decided in Bither whether the mother fell within the policy’s definition of “surviving insured,” the court of appeals held that Bither was inapplicable.  Thus holding that “§ 20-259.03 does not prohibit an insurer from providing underinsured motorist coverage on the facts presented,” the court reversed and remanded for entry of judgment in favor of White.

Judge Johnsen authored the opinion.  Judges Norris and Thompson concurred.

Posted by: James Rogers

Posted On: 2/1/2013