Minnesota Court of Appeals: Mother's Son not allowed to Recover UIM Benefits under his Auto Policy for Amounts Claimed for Mother's Wrongful Death

The Minnesota Court of Appeals in Hanbury v. American Family Mutual Insurance Co., No. A14-1746 (Minn. Ct. App. June 15, 2015) determined that the Minnesota No-Fault Automobile Insurance Act does not require payment of Underinsured Motorist (UIM) benefits to a party who was not involved in an accident, and was instead seeking such benefits as trustee for the next of kin of a person killed in an automobile accident.

In this particular case, Appellant Jon Hanbury's mother, Mary Ellen Hanbury, was killed in a car crash. The crash was her husband's fault. Appellant Hanbury was named trustee for his mother's next-of-kin and settled with Mary Ellen's husband’s insurance company for the husband's policy limits of $100,000. Then, when Appellant Hanbury turned to his own American Family auto policy seeking UIM benefits, he was denied. American Family relied on the limitation in Appellant Hanbury’s policy which provided UIM benefits only for "...bodily injury to an injured person..." Here, under the terms of the policy, Appellant Hanbury was not covered for such UIM benefits because he was not only uninjured, but was not even in the car at the time of the accident.

Because the policy language clearly did not allow it, the question then became whether Minnesota's no-fault act required payment be made to Appellant Hanbury under his own UIM coverage. The appellate court considered the language of the UIM statute and determined it to be ambiguous. See Minn. Stat. § 65B.43, subd. 19 (requiring UIM coverage for "the protection of persons insured under that coverage who are legally entitled to recover damages for bodily injury from owners or operators of underinsured motor vehicles." ). Nevertheless, the court said that the no-fault act did not intend to require UIM benefits be paid to someone in Appellant Hanbury's position. It found his policy to be valid under the act and affirmed dismissal of his UIM claims.