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Bono v. State Farm Mutual Automobile Insurance Co.

United States District Court, D. Arizona

March 22, 2017

Nancy Bono, Plaintiff,
v.
State Farm Mutual Automobile Insurance Company, a foreign corporation, Defendant.

          ORDER

          Cindy K. Jorgenson United States District Judge

         On December 22, 2016, Magistrate Judge Leslie A. Bowman issued a Report and Recommendation (Doc. 31) in which she recommended the Motion for Summary Judgment (Doc. 23) filed by Plaintiff Nancy Bono (“Bono”) be denied and the Motion for Summary Judgment (Doc. 25) filed by State Farm Mutual Automobile Insurance Company (“State Farm”) be granted. Bono has filed an objection (Doc. 32) and State Farm has filed a response (Doc. 33). Bono has requested oral argument. The Court finds it would not be assisted by oral argument and declines to set this matter for hearing.

         Standard of Review

         The standard of review that is applied to a magistrate judge's report and recommendation is dependent upon whether a party files objections - the Court need not review portions of a report to which a party does not object. Thomas v. Arn, 474 U.S. 140, 150, 106 S.Ct. 466, 472-73, 88 L.Ed.2d 435 (1985). However, the Court must “determine de novo any part of the magistrate judge's disposition that has been properly objected to. The district judge may accept, reject, or modify the recommended disposition; receive further evidence; or return the matter to the magistrate judge with instruction.” Fed.R.Civ.P. 72(b)(3); see also 288 U.S.C. § 636(b)(1) (“A judge of the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made.”).

         Report and Recommendation - Background and Standard of Review: Summary Judgment

         The parties stipulated to the facts summarized in the Report and Recommendation (“R&R”). See also Stipulated Statement of Facts RE Motions for Summary Judgment (Doc. 24). The Court adopts the facts stated by the magistrate judge.

         Additionally, the Court adopts that portion of the R&R that states the standard of review when the Court considers a motion for summary judgment.

         Statutory Definition

         Bono objects to the magistrate judge's conclusion that the applicable Arizona statutes defines Underinsured Motorist (“UIM”) “coverage, in pertinent part, as ‘coverage for a person' for ‘bodily injury . . . resulting from the accident' where ‘total damages' exceed the liability limits. It does not explicitly state whether bodily injury must be suffered by the covered person. ‘[T]he statute's language is subject to different interpretations . . . . ” (Doc. 31 at 5) (citations omitted). Bono asserts there is no need to analyze the legislative intent, as the magistrate judge did, because the statute is clear and unambiguous. Indeed, Bono asserts the statute only requires an injury and damages and the “broad language does not contain exceptions.” Taylor v. Travelers Indem. Co. of Am., 198 Ariz. 310, 314, 9 P.3d 1049, 1053 (2000).

         However, the Court agrees with the magistrate judge's reliance on Lowing v. Allstate Ins. Co., 176 Ariz. 101, 859 P.2d 724 (1993). Lowing stated that “[e]xceptions to coverage are not generally permitted unless expressly allowed by statute.” 176 Ariz. At 106. As pointed out by the magistrate judge, “the Lowing court did not limit itself to analyzing the language of the statute.” (R&R, p. 6). The Lowing court recognized that the statute defines UIM “coverage for a person” for “bodily injury . . . resulting from the accident” where “total damages” exceed the liability limits. 176 Ariz. At 103-04 (citation omitted). However, as stated by the magistrate judge, the statute “does not explicitly state whether the bodily injury must be suffered by the covered person. (R&R, p. 5). The Court agrees with the magistrate judge that the language of the statute is not clear and unambiguous and, therefore, interpretation is not limited to the language of the statute.

         Further, “every provision of a statute must be read in conjunction with the other provisions, giving meaning, if possible, to ‘each word, clause or sentence, considered in the light of the entire act itself and the purpose for which it was enacted into law.'” Doty-Perez v. Doty-Perez, 241 P.3d 372, 376-77, 388 P.3d 9, 13-14 (App. 2016) (citation omitted). In other words, the definition of UIM coverage, as stated in A.R.S. § 20-259.01(G), must be read in conjunction with A.R.S. § 20-259.01(B), which requires UIM to extend to and cover all persons insured under a policy. While § 20-259.01(G) does not include exceptions, the reading of §§ 20-259.01(B) and (G) together arguably does limit the coverage. It is not clear if § 20-259.01(B) is intended to limit the coverage for bodily injury to a covered person. Indeed, it is arguably § 20-259.01(B) that covers the parameters of the coverage while § 20-259.01(G) simply provides a definition. The Court agrees with the magistrate judge, therefore, that the statute is subject to different interpretations.

         UIM Supplemental Coverage - Bodily Injury

         Bono objects to the magistrate judge's inference that, because UIM coverage does not provide protection if the tortfeasor merely damages property, UIM coverage is not required where bodily injury is suffered by a non-insured, but where there is a pecuniary loss to the insured. Bono asserts this inference is illogical because A.R.S. § 28-4009 requires different liability coverage for bodily injury and property damage (i.e., liability vs. property damage portions of policies). Bono asserts, “It does not follow from the fact UIM coverage does not apply to property damage, payable under the property-damage limit of the liability policy, that wrongful-death damages, payable from the injury-liability limit of the liability policy, would not be included in UIM coverage.” (Doc. 32 at 3).

         The Court agrees with the magistrate judge that an inference can be made that Arizona's UIM coverage is designed to protect an insured's bodily integrity, rather than a pecuniary loss. See e.g. State Farm Mut. Auto. Ins. Co. v. Wilson, 162 Ariz. 251, 255, 782 P.2d 727, 731 (1989) (UIM coverage is required for bodily injury or death; it does “not even compensate the victim for the total loss (property as well as personal injury) suffered). (1989). Although Bono argues this does not mean that coverage does not apply to property damage, the Court finds there is no legislative intent to expand the coverage. Rather, the Arizona statutes provide protection “for each person actually injured or killed and not for each person with a damage claim.” Herring v. Lumbermen's Mut. Cas. Co., 144 Ariz. 254, 256, 697 P.2d 337, 339 ...


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