from the District Court of the First Judicial District of the
State of Idaho, Kootenai County. Hon. Rich Christensen,
district court judgment is vacated and this case is
remanded with direction to invalidate the insurance
exclusion at issue. Costs on appeal are awarded to
Clark, Domanico & Chuang, P.S., Spokane, WA, attorneys
for appellant. Aaron Crary argued.
Gjording Fouser PLLC, Boise, attorneys for respondent.
Julianne S. Hall argued.
a dispute regarding underinsured motorist insurance coverage.
Appellant, Jennifer Eastman ("Eastman"), filed a
complaint, seeking a declaratory judgment that she was
entitled to underinsured motorist insurance coverage
("UIM coverage") under her auto insurance policy
(the "Policy") with Respondent, Farmers Insurance
Company ("Farmers"). The district court granted
summary judgment in favor of Farmers, ruling that an
exclusion contained in the Policy precluded UIM coverage for
Eastman's injuries. Eastman appealed the district
court's judgment. We vacated the district court's
order granting summary judgment, vacate the judgment of the
district court and remand this case for further proceedings
consistent with this opinion.
FACTUAL AND PROCEDURAL BACKGROUND
March 18, 2014, Eastman was involved in a motor vehicle
accident while traveling in a van operated by the Spokane
Transit Authority ("STA"). Eastman sustained
injuries as a result of the accident. Both the at-fault
driver and STA held insurance policies. Eastman collected
$50, 000 from the at-fault driver's insurance policy.
Additionally, Eastman collected $48, 846 in UIM coverage from
STA's insurance policy.
special damages from the accident (approximately $209, 237.60
in medical expenses, and $8, 330.56 in lost wages) exceeded
the amount that she collected ($98, 846) from the two
insurance policies. Accordingly, on April 15, 2016, Eastman
filed a claim with her insurer, Farmers, in an attempt to
collect her own UIM coverage under the Policy. Specifically,
Eastman sought her UIM coverage limit ($500, 000) minus the
$98, 846 that she had already collected from the other
denied Eastman's claim based on an exclusion within the
Policy which eliminated UIM coverage in situations where the
insured was riding in another vehicle that had UIM coverage.
The portion of the Policy which is relevant to this case is
titled "UNDERinsured Motorist Coverage." UIM
coverage under this portion is both granted and limited as
follows, in pertinent part:
Coverage C - 1 UNDERinsured Motorist
We will pay all sums which an insured person
is legally entitled to recover as damages
from the owner or operator of an UNDERinsured motor
vehicle because of bodily injury
sustained by the insured person.
Limits of Liability
a. Our liability under the UNDERinsured Motorist Coverage
cannot exceed the limits of the UNDERinsured Motorist
Coverage stated in this policy, and our maximum liability
under the UNDERinsured Motorist Coverage is the lesser of:
1. The difference between the amount paid in
damages to the insured
person by and for any person or organization who may
be legally liable for the bodily injury, and
the limit of UNDERinsured Motorist Coverage; or
2. The amount of damages established but not
recovered by any agreement, settlement, or judgment with or
for the person or organization legally liable for the
3. We will not provide insurance for a vehicle other
than your insured car or your insured motorcycle, unless
the owner of that vehicle has no other insurance applicable
to this part.
(Bold emphasis in original; italics added).
the Policy provided UIM coverage, but Farmers sought to limit
that coverage pursuant to paragraph three in its Other
Insurance provision outlined above because the STA van had
$50, 000 in UIM coverage. For ease of reference this
exclusion will be referenced hereinafter as the
"non-owned vehicle" exclusion.
21, 2016, Eastman filed a Complaint for Declaratory Judgment.
On September 1, 2016, Farmers filed a Motion for Summary
Judgment. On September 30, 2016, Eastman filed her own Motion
for Summary Judgment. In a memorandum in support of this
motion, Eastman argued, among other things,  that Farmers'
denial of UIM coverage based on the non-owned vehicle
exclusion violated Idaho public policy.
December 1, 2016, the district court issued a Memorandum
Decision and Order on the Parties' Cross-Motions for
Summary Judgment. The district court granted summary judgment
in favor of Farmers, holding in part: 1) The non-owned
vehicle exclusion was plain and unambiguous; 2) While riding
in a vehicle other than her own, Eastman was only entitled to
UIM coverage under the Policy if that vehicle had no UIM
coverage; and 3) Eastman was not entitled to UIM coverage
under her own Policy because STA had an insurance policy on
the van which included UIM coverage. The district court
recognized a public policy trend to compensate motorists for
their injuries; nevertheless, the court concluded that this
trend was not settled enough to invalidate the non-owned
vehicle exclusion within the Policy, particularly in light of
this Court's holding in Purdy v. Farmers Ins. Co. of
Idaho, 138 Idaho 443, 65 P.3d 184 (2003) which found the
precise clause at issue in this case was enforceable.
December 14, 2016, Eastman filed a Motion for
Reconsideration, which the district court denied on January
31, 2017. On February 3, 2017, the district court issued a
Final Judgment. Eastman timely filed a notice of appeal.
STANDARD OF REVIEW
appeal from the grant of a motion for summary judgment from a
declaratory judgment proceeding, this Court employs the same
standard as used by the district court originally ruling on
the motion." Mut. of Enumclaw Ins. Co. v.
Pedersen, 133 Idaho 135, 138, 983 P.2d 208, 211 (1999).
[t]he court must grant summary judgment if the movant shows
that there is no genuine dispute as to any material fact the
movant is entitled to judgment as a matter of law. All
disputed facts must be liberally construed in favor of the
nonmoving party, and all reasonable inferences from the
record must be drawn in favor of the nonmoving party. Summary
judgment is appropriate where the nonmoving party bearing the
burden of proof fails to make a showing sufficient to
establish the existence of an element essential to that
party's case. This Court reviews questions of law de
Farm Bureau Mut. Ins. Co. of Idaho v. Cook, 163
Idaho 455, __, 414 P.3d 1194, 1197 (2018) (quotations and
citations omitted). As noted, if the evidence reveals no
disputed issues of material fact, only a question of law
remains, and this Court exercises free review. See
Constr. Mgmt. Sys., Inc. v. Assurance Co. of
Am., 135 Idaho 680, 682, 23 P.3d 142, 144 (2001).
case presents the legal question of whether Idaho's
public policy, as identified in Hill v. American Family
Mutual Insurance Co., 150 Idaho 619, 249 P.3d 812
(2011), is violated by the non-owned vehicle exclusion in the
Policy. We hold that it is. The principles articulated by
this Court in Hill are equally valid in this case
and nullify the non-owned vehicle exclusion which, much like
the exhaustion clause in Hill, serve "no
purpose but to dilute Idahoans' protection against