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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Ball v. Allstate Insurance Company (8/17/2018) sp-7275

Ball v. Allstate Insurance Company (8/17/2018) sp-7275

          Notice:   This opinion is subject to correction before publication in the P                    ACIFIC  REPORTER.  

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                     THE  SUPREME  COURT  OF  THE  STATE  OF  ALASKA  

NATHAN  BALL,                                                    )  

                                                                 )    Supreme  Court  No.  S-16573  

                               Appellant,                        )  


                                                                 )    Superior Court No. 4FA-15-02904 CI  

          v.                                                     )  


                                                                 )    O P I N I O N  





an Illinois company,                                             )    No. 7275 - August  17, 2018


                               Appellee.                         )  




                    Appeal  from  the  Superior  Court  of  the  State  of  Alaska,  


                    Fourth Judicial District, Fairbanks, Michael A. MacDonald,  



                    Appearances:             Ward  Merdes,  Merdes  Law  Office,  P.C.,  


                    Fairbanks,  for  Appellant.                 Alfred  Clayton,  Jr.  and  Ryan  


                    Thomas Bravo,  Clayton  & Diemer,  LLC,  Anchorage,  for  



                    Before:  Stowers, Chief Justice, Winfree, Maassen, Bolger,  


                     and Carney, Justices.  


                    WINFREE, Justice.  





to Nathan Ball for an accident involving his own vehicle after determining he was not  


aninsured person under his then-fiancée's parents' Allstateautomobileinsurancepolicy.  

----------------------- Page 2-----------------------


Ball contended that his fiancée was a "policyholder" for purposes of her parents' policy,  


a necessary predicate to his argument for UIM coverage under the policy. But the policy  


declarations  page  did  not  list  "policyholders,"  it  listed  only  "named  insureds"  and  


"drivers."  The superior court ruled on summary judgment that the policy language was  


not  ambiguous  because  "policyholder"  referred  only  to  the  parents,  the  "named  


insureds," that the fiancée - only a listed driver - had no objectively reasonable  


expectation that she was a policyholder, and, therefore, that Allstate did not have a duty  


to provide Ball UIM coverage.   We agree that "policyholder" encompasses only the  


named insureds, not listed drivers, and we therefore affirm the superior court's decision.  




                    In  September  2012  Allstate  delivered  an  automobile  insurance  policy  


renewal to Richard and Kathryn Davis at their address in Tok, incorporating changes  


they had requested to the policy.  The policy listed "Richard & Kathryn Davis" as the  


"NAMED  INSURED(S)"  and  "Richard"  and  "Kathryn,"  as  well  as  "Vivian,"  the  


couple's adult daughter, as "DRIVER(S)."  (Emphases omitted.)  


                    One  day  in  December  Vivian  and  her  then-fiancé,  Nathan  Ball,  were  


driving two of Ball's vehicles; the vehicle Ball was driving stalled.  Vivian backed the  


vehicle she was driving to the front of the stalled vehicle so that Ball could attach a tow  


chain.  While Ball was positioned between the two vehicles, a third party drove into the  


back of the stalled vehicle; Ball was seriously injured.  


                    Ball made successful claims under the third  party's liability insurance  


coverage, under his own liability insurance coverage protecting Vivian, and under his  


own UIM insurance coverage.  Ball also made a claim under the UIM provision of the  


Davises' Allstate policy.  


                    TheAllstateUIMprovision states Allstate"will pay all damages, other than  


punitive or exemplary damages, that an insured person is legally entitled to recover from  

                                                               -2-                                                         7275

----------------------- Page 3-----------------------


the owner or operator of an uninsured or underinsured auto because of . . . bodily injury  


sustained by an insured person."  (Emphasis omitted.)  The policy defines "[i]nsured  


[p]ersons" as "[y]ou and any resident relative" or "[a]ny person while in, on, getting into  


or out of your insured auto with your permission," (emphases omitted) and defines  


"insured auto" to include a motor vehicle "not owned by you or a resident relative if  


being operated by you with the owner's permission."  (Emphases omitted.)  The policy  


defines "[y]ou" or "[y]our" as "the policyholder named on the Policy Declarations and  


that policyholder's resident spouse."  (Emphases omitted.)  


                    Allstate denied coverage for Ball's claim. Allstate contended that Ball did  


not qualify  as  an insured  person  under  the Davises'  policy  because "[n]one of the  


definitions of '[i]nsured [p]ersons' appli[ed]to [Ball's] status at the time of the accident."  


Allstate explained  that  Ball was "neither a policyholder of the Davis policy, nor a  


resident relative in the Davis household," that "[t]he two people defined as 'you' [and  


thus policyholders] are Richard and Kathryn Davis," and that the car Vivian was driving  


at the time of the incident was owned by Ball and thus a non-owned auto under the  


Davises' policy.  


                    Allstate subsequently filed a complaint for a declaratory judgment that it  


had no duty under the terms of the policy to make any payment to Ball for his UIM  


claim, and it then moved for partial summary judgment. Allstate argued Ball was not an  


insured under the policy because the policy language and cases considering similar  


language established that Vivian - a listed permissive driver - did not meet the policy  


definition of "you" and Ball's vehicle did not meet the definition of "your insured auto."  


Ball's opposition and cross-motion for summary judgment argued that the policy was  


ambiguous  because  it  defined  "you"  as  "the  policyholder  named  on  the  Policy  


Declarations" but failed to name a policyholder on that page, instead listing "named  


insureds" and "drivers."  Ball contended there was a reasonable expectation that the  

                                                               -3-                                                         7275

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 policy should be construed in favor of coverage because Vivian submitted an affidavit                                                                                                                                                                                                                                                           

 stating she believed she was a policyholder.                                                                                                                                                    

                                                           The   superior   court   granted   Allstate's   motion   and   denied  Ball's cross- 

 motion.     The   court   determined   the   policy   language   was   not   ambiguous   because  

 "policyholder" referred only to the named insureds - Richard and Kathryn - not to                                                                                                                                                                                                                                                                                           

 listed drivers, and Vivian did not have an objectively reasonable expectation that she was                                                                                                                                                                                                                                                                           

 a policyholder.                                                    

                                                           Ball filed a motion for reconsideration, arguing that the court unnecessarily                                                                                                                                                                                    

 based its decision on "whether Vivian can be reasonably identified as a 'Policyholder' "                                                                                                                                                                                                                                                                                        

 because the policy did not define the term and Vivian had a reasonable expectation that                                                                                                                                                                                                                                                                              

 she was a policyholder. The court denied Ball's motion, holding Ball's interpretation of                                                                                                                                                                                                                                                                                    

 "policyholder" was not reasonable and finding Ball failed to "raise any material facts or                                                                                                                                                                                                                                                                                   

 propositions of law that change the [court's] analysis."                                                                                                                                                                                       

                                                           Ball   appeals,   arguing   the   superior   court   erred   in   granting   summary  

judgment because"policyholder"isambiguousandVivianhadan                                                                                                                                                                                                                               objectivelyreasonable   

 expectation that she was a policyholder.                                                                                                                                       

 III.                         STANDARD OF REVIEW                                                              

                                                                                                                                                                                                                                                                                     1        The superior court's  

                                                           We review grants of summary judgment de novo.                                                                                                                                                                                                                                               

 interpretation of insurance policy language is also reviewed de novo.2                                                                                                                                                                                                                                                  "We therefore  


                              1                            Christensen v. Alaska Sales &Serv., Inc.                                                                                                                                    , 335 P.3d 514, 516 (Alaska 2014)                                                                                     

 (citing  Hurn v. Greenway                                                                                       , 293 P.3d 480, 483 (Alaska 2013)).                                                                                       

                              2                             UnitedServs. Auto. Ass'n v. Neary, 307 P.3d 907, 910 (Alaska2013) (citing  


 State Farm Mut. Auto. Ins. Co. v. Dowdy, 192 P.3d 994, 998 (Alaska 2008)).  


                                                                                                                                                                                      -4-                                                                                                                                                                        7275

----------------------- Page 5-----------------------

apply a de novo standard of review, 'adopting the rule of law that is most persuasive in                                                                


light of precedent, reason, and policy.' "                                  

IV.         DISCUSSION  


                        "When interpreting insurance policies, we look to the language of the  


disputed provisions, other provisions in the policy, extrinsic evidence, and case law  



interpreting similar provisions." 


                        Insurance policies are construed . . . to honor a lay insured's  


                        reasonable expectations.                        Policy  language is  construed  in  


                        accordance with ordinary and customary usage. Ambiguities  


                        in . . . insurance policies are to be construed most favorably  


                        to an insured, but ambiguities only exist when there are two  


                        or  more  reasonable  interpretations  of  particular  policy  


            A.	         Disputed Policy Provision And Other Relevant Provisions  


                        The policy states Allstate "will pay all damages, other than punitive or  


exemplary damages, that an insured person is legally entitled to recover from the owner  


or operator of an uninsured or underinsured auto because of . . . bodily injury sustained  


by an [i]nsured [p]erson."  (Emphasis omitted.)  The policy defines "insured person" as  


"[y]ou and any resident relative" or "[a]ny person while in, on, getting into or out of your  


insured  auto with your permission," and defines "insured auto" to include a motor  


vehicle "not owned by you or a resident relative if being operated by you with the  


owner's permission."  (Emphases omitted.)  "You" and "[y]our" are defined as "the  


            3           Dowdy,   192   P.3d  at   998   (quoting   State   Farm   Mut.   Auto.   Ins.   Co.   v.  

Lestenkof, 155 P.3d 313, 316 (Alaska 2007)).                         

            4           Neary, 307 P.3d at 910 (citing Allstate Ins. Co. v. Teel , 100 P.3d 2, 4  


(Alaska 2004)).  


            5           Dowdy, 192 P.3d at 998 (footnotes omitted) (citing Allstate Ins. Co. v.  


Falgoust, 160 P.3d 134, 138-39 (Alaska 2007)).  


                                                                           -5-	                                                                   7275

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policyholder named on the Policy Declarations and that policyholder's resident spouse."  


(Emphases omitted.)  


                    Thepolicy declarations do notnameany"policyholders"in the five distinct  


rows of information.   Instead, the declarations page's first row states the "NAMED  


INSURED(S)": "Richard &Kathryn Davis"and their Tokaddress. (Emphasis omitted.)  


Thatsamerowlists"YOURALLSTATEAGENT"and"YOURBILL,"providing "your  


payment options."  (Emphases omitted.)  The second row lists the policy number and  


period.  The third row identifies "DRIVER(S) LISTED":  "Richard, Kathryn, Vivian."  


(Emphasis  omitted.)              The  fourth  and  fifth  rows  list  the  covered  vehicles  and  total  


premium, respectively.  


                    The policy is addressed to "Richard & Kathryn Davis."  The policy cover  


letter notifies Richard and Kathryn of the changes "you requested to your policy";  


identifies "[y]our premium" and "[y]our discount savings for this policy period"; and  


instructs them to "[v]erify the vehicles and drivers listed on the Policy Declarations."  


(Emphasis added.)  The policy's "Proof of Insurance Card" lists "Richard & Kathryn  


Davis" with their Tok address.  Adjacent to this information, the policy states:  "[t]he  


Policy Declarations section contains detailed information about your policy such as  


drivers, vehicles, coverages, limits, and premiums."  (Emphasis added.)  


                    The "General" section of the policy, which identifies the scenarios that  


would result in a premium change, states:   "The premium for each auto is based on  


information Allstate has received from you or other sources. . . . You agree that if this  


information  changes  or  is  incorrect  or  incomplete,  we  may  adjust  your  premium  


accordingly during the policy period."  (Emphases omitted.)  One enumerated change  


that could result in a premium adjustment is a "change in  drivers  residing  in  your  


household, their ages or marital status."  (Emphasis added; original emphasis omitted.)  

                                                               -6-                                                        7275

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                                           Although thepolicydeclarationspagedoesnotidentifythe"policyholders,"                                                                                                             

 it is apparent that "Richard & Kathryn" - the persons identified as insureds, named on                                                                                                                                                                                 

 the policy's insurance cards, and identified as those financially responsible for the policy                                                                                                                                                               

 -  are intended to be the policyholders.                                                                                        By contrast, "Vivian" is identified only as a                                                                                              

 permissive driver of the listed vehicles and Vivian's last name and contact information                                                                                                                                                  

 are not listed anywhere on the policy.                                                                                    The policy repeatedly distinguishes "you" and                                                                                            

 "your" from "drivers," but it does not distinguish "you" and "your" from "insureds." As                                                                                                                                                                               

 Allstate argues, "[i]f 'you' and 'drivers' were plausibly the same person(s), the Policy  

 would not continually list them separately and inform 'you' of 'your' duties regarding                                                                                                               

  'driver(s).' "      

                      B.                   Ordinary And Customary Usage                                                             

                                           "Policy language is construed in accordance with ordinary and customary                                                                                                                             



                             The parties dispute the ordinary and customary usage of "policyholder." Citing  


 an internet dictionary, Ball argues that "[a] common, general dictionary definition of the  


 term 'policyholder' is 'an insured.' "  Allstate contends this definition is too "broad[],"  


 arguing that "ordinary and popular definitions of 'policyholder' have one thread that  


 weaves them together: they use policy ownership and control as the foundation of being  


 a policyholder."  


                                           Black's Law Dictionary defines policyholder as "[s]omeone who owns an  


 insurance policy, regardless of whether that person is the insured party. - Also termed  

                                             7          Webster's  Third  New  International  Dictionary  similarly  defines  

policyowner ."                                                                                                                                                                                                        

                      6                   Falgoust, 160 P.3d at 139.                                            



                                          Policyholder, BLACK 'S   LAW   DICTIONARY   (10th ed. 2014) (emphasis in                                                                                                                                                      


                                                                                                                                    -7-                                                                                                                         7275

----------------------- Page 8-----------------------


policyholder as "one . . . granted an insurance policy."                                                                                  The owners of the Allstate                     

policy  are   "Richard   &   Kathryn   Davis":     they   procured   the   policy;   the   policy   was  

addressed and mailed to them at their address in Tok; they were financially responsible                                                                                          

for premium changes; and they had the ability to change or confirm changes to the                                                                                                                   

policy, including rejecting UIMcoverage. These                                                                    ownership attributes are not applicable  

to Vivian, who is merely a permissive driver.                                                               Only Richard and Kathryn Davis - the                                                     

named insureds - are owners and thus policyholders of the policy.                                                                                                

                                Our natural replacement of one with the other in a case interpreting a                                                                                                   

different provision in                                a nearly              identical policy further                                   suggests that "policyholder"     

                                                                                         9      And we also  note that Alaska's Division of  

usually means the "named                                           insured."                                                                                                                          

Insurance has used "named insured" and "policyholder" interchangeably.  In 1997 the  


legislature enacted AS 28.20.440(l), permitting a "person named as insured" to exclude  


from coverage a household or family member.  The Division, in a bulletin to insurers,  


expressed  concern  that  "a policyholder  may  be  unaware  of  the  potential  risks"  of  


requesting such an exclusion and encouraged insurers "to develop a disclosure form for  


the named insured to sign if the named insured requests that a relative or resident of the  


household be excluded from the policy."10  If Ball's interpretation controlled, this statute  


could enable someone in Vivian's situation - without the requisite ownership attributes  


                8              Policyholder, W                      EBSTER'S THIRD NEW INTERNATIONAL DICTIONARY  (2002).  

                9              See Teel, 100 P.3d at 3-4 (interpreting whether policy language describing  


coverage for bodily injury barred negligent infliction of emotional distress claim).  The  


policy  in  that  case  similarly  defined  "you"  as  "the  policyholder  named  on  the  


declarations page and that policyholder's resident spouse." When restating the policy's  


definition of "insured person," we replaced "you" with "[t]he named insured."  Id.  


                10              State of Alaska Dep't of Commerce & Econ. Dev., Bulletin 97-07 (July 22,  


 1997) (emphases added).  


                                                                                                   -8-                                                                                          7275

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of a policyholder - to remove from coverage any other person listed on the declarations                                                                                                  

page who was a household or family member.                                                                             This is not an objectively reasonable                                

interpretation of the policy language.                              

                 C.              Case Law From Other Jurisdictions                             

                                 Case    law    from    other    jurisdictions    supports    our    interpretation    that  

"policyholder" encompasses "named insureds" but not listed drivers.                                                                                                      Carlson v. Allstate        

Insurance Co.                       , from the Minnesota Supreme Court, is squarely on point in its analysis                                                                         

of a nearly identical UIM policy provision listing two parents as named insureds and                                                                                                                         


their two sons as drivers.                                                                                                                                                                          

                                                                  The Carlson court held the policy was unambiguous because  


"a reasonable interpretation of the policy is that the term 'policyholder' refers to the  



                                                                                                                                                                                         The court's  

named insureds and not the drivers listed on the declarations page." 

                                                                                                                                                                                                         13 and  



conclusion was premised on its review of the dictionary definitions of policyholder 

its determination that a reasonable person would know who owns an insurance policy by  


looking at who "secured the policy and paid the premiums."14                                                                                                    Because there was no  


basis for an alternative interpretation "[o]ther than the fact that the drivers as well as the  


named insureds appear on the declarations page," the court concluded that "a reasonable  


                 11              749  N.W.2d  41,  43-44  (Minn.  2008).  

                 12              Id.  at  45.  

                 13              Id.   ("[O]ne   who   owns   an   insurance   policy."   (quoting   Policyholder,  

BLACK 'S  LAW  DICTIONARY (8th ed. 2004)));  id.  ("[T]he individual .  .  .  in  whose  name  

an  insurance  policy  is  written;  an  insured."  (alteration  in  original)  (quoting  Policyholder,  


                 14              Id.   

                                                                                                        -9-                                                                                               7275

----------------------- Page 10-----------------------

person, even one unversed in the law or insurance, would understand that 'policyholder'                                   

referred to the policy's owner."                     15  

                      In Laird v. Allstate Insurance Co. the Oregon Court of Appeals held that  


a daughter was not a policyholder of a nearly identical policy when she was listed by her  


first name and her parents were listed as named insureds.16   The court reasoned that "the  


only plausible construction of the policy is to read the word 'policyholder' as referring  


to the named insureds."17                       The court premised its conclusion on its analysis of the  


ordinary meaning of policy and policyholder, the fact that "the named insureds are the  


persons who obtain and control an insurance policy," and its reasoning that "[i]f 'you'  


and 'your' were intended to include listed drivers other than the named insureds, it seems  


likely that the policy would note the address of any such person."18  


           D.          Summary  

                      Basedon Allstate's policy language, commonusage of "policyholder,"and  


otherjurisdictions' analysis ofsimilar policy language,"policyholder"encompassesonly  


           15         Id.  at  45-46.  

           16         221  P.3d  780,  781  (Or.  App.  2009).  

           17         Id.  at  785.  

           18         Id. ;  see  also  Allstate  Ins.   Co.  v.  Agoston , No.   1:11-cv-1210-WTL-TAB,  

2012   WL   2562384,   *3-4   (S.D.   Ind.  June   29,   2012)   (holding   that   omission   of  

"policyholder"  on  declarations  page  was  not  ambiguous  because  only  parents'  address  

was  listed,  that  next  to  parents'  names  it  stated  "Your  Allstate  Agent"  and  "Your  Bill,"  

and  that   because  "your"  clearly  refers  to  parents  "[i]t  would  be  unreasonable  to  construe  

[the daughter], who is only listed as a driver, as a policyholder"). Cf. Reynolds v. Allstate  


Ins. Co., 855 F. Supp. 2d 989, 997 (N.D. Cal. 2012) (analyzing whether passenger whose  


name appeared as named insured fit within policy's household exclusion language;  


finding ambiguity because declarations page did not identify "policyholder," but noting  


"the fact that the term 'policyholder' is not defined in the policy does not by itself create  


an ambiguity").  


                                                                     -10-                                                               7275

----------------------- Page 11-----------------------

the "named insureds," not listed drivers; we therefore affirm the superior court's grant                                                                                                                                                                                                         

of summary judgment.                                     

V.                            CONCLUSION  

                                                           The superior court's decision is AFFIRMED.                                                                                                      

                                                                                                                                                                                                      -11-                                                                                                                                                                 7275

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