The opinion of the court was delivered by: Ralph R. Erickson, Chief Judge United States District Court
ORDER ADOPTING REPORT AND RECOMMENDATION AND SUPPLEMENTAL ANALYSIS
The Court received a Report and Recommendation from the Honorable Karen K. Klein, United States Magistrate Judge, pursuant to 28 U.S.C. § 636, recommending Defendant General Casualty Company of Wisconsin's ("General Casualty") motion for summary judgment be granted and Plaintiffs John and Janice Jung's Complaint be dismissed (Doc. #20). The Jungs objected to the Report and Recommendation (Doc. #22), and General Casualty filed a brief in response to the objections (Doc. #23).
On September 17, 2010, the Court held a hearing on the motion for summary judgment and objections to the Report and Recommendation. The Court, having carefully considered the arguments of the parties and after a de novo review of the objections to the Report and Recommendation, now issues this memorandum opinion and order.
The facts are not in dispute. John Jung was seriously injured in a motor vehicle accident. At the time of the accident, Jung was driving a vehicle owned by his employer, Tooz Construction, and insured by General Casualty. The tortfeasor was driving a vehicle he owned and insured under a motor vehicle liability policy and a personal excess liability policy.
The Jungs collected from the tortfeasor's insurer the $250,000 limit of liability coverage and the $1,000,000 limit of excess coverage. The Jungs now seek coverage under General Casualty's underinsured motor vehicle ("UIM") endorsement.
The dispute is whether, as a matter of law, the at-fault vehicle is underinsured pursuant to N.D. Cent. Code § 26.1-40-15.1 through 15.7 and as defined in General Casualty's policy. The Jungs first contend the Report and Recommendation improperly skipped analyzing the pertinent statutes governing UIM coverage. The Jungs also contend the focus of the inquiry is on the policy insuring the motor vehicle and not the driver, and the excess policy at issue insures the driver and does not constitute a motor vehicle policy for purposes of UIM coverage.
While the Jungs contend the magistrate judge skipped analyzing the law, the Report and Recommendation quotes N. D. Cent. Code § 26.1-40-15.3, which mandates UIM coverage and N.D. Cent. Code § 26.1-40-15.1, which defines underinsured motor vehicle. To the extent the Report and Recommendation can be construed as failing to analyze the statutory language, the Court begins its analysis with the statute. Under North Dakota law, an underinsured motor vehicle is defined as a vehicle for which there is a bodily injury liability insurance policy, or bond providing equivalent liability protection, in effect at the time of the accident, but the applicable limit of bodily injury liability of such policy or bond:
a. is less than the applicable limit for underinsured motorist coverage under the insured's policy; or
b. has been reduced by payments to other persons injured in the accident to an amount less than the limit for underinsured motorist coverage under the insured's policy.
N. D. Cent. Code § 26.1-40.-15.1(2). To trigger UIM coverage, a tortfeasor's motor vehicle must meet the statutory definition of underinsured motor vehicle in N. D. Cent. Code § 26.1-40-15.1(2). DeCoteau v. NoDak Mutual Ins. Co., 603 N.W.2d 906, 912 (N.D. 2000). If the threshold definition is not satisfied, an insured is not entitled to UIM coverage. Id.
In this case, the Jungs collected from the tortfeasor's insurer the limits of liability coverage for the motor vehicle and the limits of personal excess liability coverage. The personal excess liability policy specifically identified and insured the tortfeasor's vehicle. The excess policy not only described the vehicle, but also identified the underlying motor vehicle policy. The fact that the excess policy covers more than the underlying motor vehicle policy does not render it inapplicable for purposes of determining whether the vehicle is underinsured. The Court finds the excess policy in this case is ...