• Berendes v. Farmers Insurance Exchange, --- Cal.App.4th --- (2013)
  • December 3, 2013
  • Law Firm: McCormick Barstow Sheppard Wayte Carruth LLP - Fresno Office

    Kristina Berendes ("Berendes") was struck and killed by a car driven by David Scott Duril ("Duril"). At the time of the incident, Berendes was married and living with her husband and daughter, but not with her father, William Felix ("Felix").

    Duril's insurer, the California State Automobile Association, paid Berendes' husband and daughter Duril's policy limit of $50,000. Berendes' husband also had uninsured motorist coverage through Liberty Mutual Insurance which paid an additional $200,000 because Berendes was covered under the Liberty Mutual policy as her husband's spouse.

    The remaining insurance policies in the case were issued by Farmers to Felix as the named insured. The Felix policies included (1) an automobile policy for a 2001 Chrysler PT Cruiser, (2) an automobile policy for a 2005 Mercedes-Benz ML350; and (3) an umbrella policy with a limit of $1 million. Berendes paid an additional monthly premium to be listed and covered as a rated driver under the PT Cruiser automobile policy issued to Felix. The survivors of Berendes asserted that, to the extent Berendes qualified as an insured under any automobile policy issued to Felix, they were entitled to recover under Felix's $1 million umbrella policy.

    The survivors of Berendes filed a complaint against Farmers alleging bad faith and breach of contract. Farmers filed a motion for summary judgment claiming that there was no liability because Felix's policies did not include underinsured motorist coverage for Berendes, either by statutory mandate or contract interpretation. The court granted Farmers' motion for summary judgment finding that the plaintiffs failed to demonstrate Berendes was entitled to underinsured motorist coverage under the automobile or umbrella policies issued to Felix.


    Plaintiffs contended that, under Insurance Code section 11580.2, "no insurance policy covering a person for liability insurance shall be issued unless the policy also covers the person for [the liability of an uninsured motorist]." The court analyzed section 11580.2(a)(1), which states: "No policy or bodily injury liability insurance covering liability . . . shall be issued . . . unless the policy contains . . . a provision . . . insuring the insured . . . for all sums within the limits that he, she or they as the case may be, shall be legally entitled to recover as damages for bodily injury or wrongful death from the owner or operator of an uninsured motor vehicle." The court noted that the statue requires insurers to include a provision in automobile insurance policies covering the insured for the liability of an uninsured motorist. However, if the individual is not an "insured" then there is no required uninsured motorist coverage under the statute.

    The court then explained that, under Insurance Code section 11580.2, in order for Berendes to qualify as an insured she must be "[1] the named insured [here, Felix] ... [2] the spouse of the named insured ... [3], while residents of the same household, relatives of either while occupants of a motor vehicle or otherwise, [4] heirs and any other person while in or upon or entering into or alighting from an insured motor vehicle and [5] any person with respect to damages he or she is entitled to recover for care or loss of services because of bodily injury to which the policy provisions or endorsement apply . . . ."

    The court noted that Berendes did not qualify under any category of insured at the time of her death. Although she was the daughter of the named insured, she did not live in the same household. Moreover, as she was a pedestrian at the time of the accident she was not engaged in any activity related to a covered automobile. Therefore, Farmers was under no statutory obligation to provide coverage under such circumstances for the liability of an uninsured motorist.

    Plaintiffs then asserted that the phrase "insured person" in the "Part I - Liability" and "Part II - Uninsured Motorist" sections of the Felix automobile policies had two separate definitions of an insured which created an ambiguity. Moreover, an amendment to the PT Cruiser policy changed the definition of "insured person" to include Berendes. However, there was no mention of Part II - Uninsured Motorist in the endorsement and there was no similar endorsement to the policy modifying the definition of "insured person" as related to Part II - Uninsured Motorist.

    The court concluded that, based on the express policy language, Berendes was covered as a listed driver and therefore an insured person under Part I - Liability, but she did not qualify her as an insured person for purposes of Part II - Uninsured Motorist coverage. Lastly, the court rejected an argument that the reasonable expectations of an insured would be that uninsured motorist coverage was afforded to Berendes, finding the policy language to be clear and unambiguous and concluding that Berendes was covered for her own liability as a driver of an insured car and even for the liability of an uninsured motorist if Berendes was injured while an occupant of an insured car, but not for the liability of an uninsured motorist if she was injured while a pedestrian.


    The court's adherence to policy language defining an "insured" reinforces the conclusion that Insurance Code section 11580.2 does not statutorily mandate underinsured motorist coverage for all individuals even if they qualify as an insured under a separate portion of the applicable policy.