United States District Court, N.D. Iowa, Cedar Rapids Division
MEMORANDUM OPINION AND ORDER
K.E. Mahoney Chief United States Magistrate Judge.
insurance-coverage dispute arises out of a tragic car
accident that left Defendant Lois Schmitt-Selken widowed and
seriously injured. As I find that her insurance policy
unambiguously excludes underinsured motorist coverage under
the facts here, I will enter declaratory judgment in favor of
Plaintiff Meridian Security Insurance Company (Meridian).
married Donald Selken on June 3, 2017, and the two began
living together.A little more than a month later, on July
15, 2017, a drunk driver crashed head-on into a vehicle
driven by Donald in which Lois was a passenger. Donald died,
and Lois suffered serious injury.
time of the accident, Lois and Donald owned separate vehicles
and had separate insurance policies for those vehicles; the
vehicle involved in the crash belonged to Donald, and Lois
had no ownership interest in it. Donald's vehicle was
insured through Farm Bureau, and Lois will receive the
maximum payment of underinsured motorist benefits available
under that policy ($300, 000). Lois has also received payment
from the drunk driver's State Farm insurance policy ($1,
time of the accident, Lois insured her vehicle through
Meridian in a policy that provided a single occurrence limit
of $500, 000 in underinsured motorist coverage. Meridian
initiated this declaratory-judgment action in April 2018,
seeking an order holding that Lois is not entitled to
underinsured motorist coverage under the “owned but not
insured” exclusion in the Meridian policy. Doc. 1;
see 28 U.S.C. § 2201.
parties consented to the exercise of jurisdiction by a United
States magistrate judge, and the case was assigned to me for
final disposition. Doc. 11. Diversity jurisdiction exists
under 28 U.S.C. § 1332. See Docs. 1, 40, 42.
The parties submitted a joint stipulation of facts (Docs. 18,
and briefing (Docs. 20, 25, 26, 37, 38), and the case is
ready for decision (Doc. 27).
of an insurance policy is a matter of state law.”
Progressive N. Ins. Co. v. McDonough, 608 F.3d 388,
390 (8th Cir. 2010) (quoting Stan Koch & Sons
Trucking, Inc. v. Great W. Cas. Co., 517 F.3d 1032, 1039
(8th Cir. 2008)). The parties agree that Iowa law applies
here. Federal courts are “bound by decisions of the
highest state court when interpreting state law.”
Id. “If the highest state court has not
decided an issue[, the court] must attempt to predict how the
highest court would resolve the issue, with decisions of
intermediate state courts being persuasive authority.”
cardinal principle in construing insurance policies is
‘that the intent of the parties must control; and
except in cases of ambiguity this is determined by what the
policy itself says.'” Johnson v. Farm Bureau
Mut. Ins. Co., 533 N.W.2d 203, 206 (Iowa 1995) (quoting
Essex Ins. Co. v. Fieldhouse, Inc., 506 N.W.2d 772,
775 (Iowa 1993)). “An ambiguity exists if, after the
application of pertinent rules of interpretation to the
policy, a genuine uncertainty results as to which one of two
or more meanings is the proper one.” LeMars Mut.
Ins. Co. v. Joffer, 574 N.W.2d 303, 307 (Iowa 1998)
(quoting A.Y. McDonald Indus., Inc. v. Ins. Co. of N.
Am., 475 N.W.2d 607, 618 (Iowa 1991)). “Insurance
policies are construed in the light most favorable to the
insured, and exclusions are construed strictly against the
insurer.” Johnson, 533 N.W.2d at 206.
Meridian “Personal Auto Policy” at issue here
begins with a section of definitions followed by six parts,
one of which contains the underinsured motorist coverage, and
concludes with a number of endorsements that modify the
policy language. See Doc. 1-2. One of these
endorsements contains the following owned-but-not-insured
We do not provide Underinsured Motorists Coverage for
“bodily injury” sustained by any
“insured” . . . [w]hile “occupying” .
. . any motor vehicle owned by you which is not insured for
this coverage under this policy. . . .
See Doc. 18; Doc. 1-2 at 47.
argues that this exclusion applies because the policy defines
“you” to include Donald, and it is undisputed
that when the accident occurred, Lois occupied a vehicle
owned by Donald that was not insured under the Meridian
policy. Meridian ...