Juge et al v. Yee et al

Filing 53

RULING and ORDER granting 40 Motion for Summary Judgment. Signed by Judge John W. deGravelles on 6/6/2017. (EDC) (Main Document 53 replaced on 6/6/2017) (EDC). Modified on 6/6/2017 to add information regarding oral argument being cancelled.(EDC).

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
JAMES JUGE, ET AL.
CIVIL ACTION
VERSUS
NO. 15-559-JWD-RLB
DAVID YEE, ET AL.
RULING AND ORDER ON MOTION FOR SUMMARY JUDGMENT
This matter comes before the Court on the Motion for Summary Judgment (Doc. 40) filed
by Defendant Garrison Property and Casualty Insurance Company (“Garrison”). Plaintiff James
Juge opposes the motion. (Doc. 47). Garrison has filed a reply. (Doc. 48). Oral argument was
previously set for August 15, 2017 (Doc. 52) but is no longer necessary. The Court has carefully
reviewed the law, the facts in the record, and the arguments and submissions of the parties and is
prepared to rule. For the following reasons, the motion is granted.
I.

Relevant Background 
This suit arises out of a motor vehicle accident between drivers Plaintiff James Juge and

Defendant David Yee. James Juge is also suing Garrison, his insurer. The facts relevant to this
motion are not disputed. (See Defendant’s List of Material Facts to Which There is No Gennuine
[sic] Dispute, Doc. 40-2 at 1-3, and Plaintiff’s Admission of Material Facts, Doc. 47 at 1-3).
Rather, the parties contest the proper interpretation of the California Insurance Code. (Docs. 40-3,
47 and 48).
Plaintiffs James Juge, Elizabeth Juge, and J. Juge are residents of Riverside, California.
(Docs. 40-2 at 3, 47 at 2.) The plaintiffs were visiting family in Louisiana when a car collision
occurred with the defendant driver, David Yee, in the parish of West Baton Rouge, Louisiana.

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(Docs. 40-2 at 2-3, 47 at 2.) David Yee is domiciled in Katy, Texas. (Docs. 40-2 at 2, 47 at 2.)
David Yee lives with his father, Michael Yee, in Katy. (Id.)
On the date of the collision, James Juge was treated at the Lake After Hours Clinic in
Louisiana. (Docs. 40-2 at 3, 47 at 3.) The following day, the plaintiffs returned home to California,
and James Juge continued the remainder of his medical treatment in California. (Id.)
Garrison issued a policy of insurance # 01718 13 01R 7103 7 to the named insured James
Juge, which policy was delivered to him at his residence in Riverside, California. (Docs. 40-2 at
1, 47 at 1.) The Garrison policy named to insured James Juge includes “uninsured motorist
coverage with per person limits of $100,000.00 and per accident limits of $300,000.00.” (Id.)
Garrison’s policy provides that it is a “California Auto Policy.” (Id.) “The policy language of
Garrison’s policy states that ‘[t]he limits of liability (each person and each accident) under UMBI
Coverage shall be reduced by all sums: (1) Paid because of the [bodily injury] by or on behalf of
persons or organizations who may be legally responsible. This includes all sums paid under Part
A.’ ” (Docs. 40-2 at 1, 47 at 1-2.)
Regarding David Yee’s insurance, Liberty Mutual issued a policy of auto liability
insurance to named insured Michael Yee, which was delivered to his address in Katy, Texas, and
which lists David Yee as “driver” on the policy. (Docs. 40-2 at 2, 47 at 2.)
The plaintiffs James Juge, Elizabeth Juge, and J. Juge settled their claims with the
defendants Liberty Mutual and David Yee, dismissing them with prejudice from this lawsuit. (Id.)
Plaintiff James Juge’s claim against Liberty Mutual and David Yee settled for Liberty Mutual’s
“per person $50,000.00 policy limit.” (Id.)

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II.

Parties’ Arguments
A. Defendant’s Memorandum in Support (Doc. 40-3)
Defendant Garrison filed a Motion for Summary Judgment per Fed. R. Civ. P. 56. (Doc.

40) and a Memorandum in Support of the Motion for Summary Judgment (Doc. 40-3). Based on
the language of Cal. Ins. Code § 11580.2, as well as the Garrison policy language regarding UM
limits, Garrison argues that it is “entitled to an offset of its $100,000.00 per person UM limits by
Liberty Mutual’s $50,000.00 liability policy covering defendant David Yee.” (Doc. 40-3 at 3.)
Garrison cites to § 11580.2 (p) (4)-(5), which states:
(4) When bodily injury is caused by one or more motor vehicles, whether insured,
underinsured, or uninsured, the maximum liability of the insurer providing the
underinsured motorist coverage shall not exceed the insured’s underinsured
motorist coverage limits, less the amount paid to the insured by or for any person
or organization that may be held legally liable for the injury.
(5) The insurer paying a claim under this subsection shall, to the extent of the
payment, be entitled to reimbursement or credit in the amount received by the
insured from the owner or operator of the underinsured motor vehicle or the insurer
of the owner or operator.
Id.
Garrison contends that this language from the insurance code as well as the policy language
of the Garrison UM policy allows Garrison to “reduce James Juge’s $100,000.00 per person UM
limits (offset) by the $50,000.00 per person liability limits covering David Yee in this collision.”
(Doc. 40-3 at 3). Therefore, Garrison argues that James Juge may collect at most $50,000.00. (Id.)
Garrison also argues that California law applies in this case. (Doc. 40-3 at 2-6.) Garrison
contends first that the Louisiana UM statute does not govern this case because the Louisiana UM
statutes only apply to UM policies delivered or issued in Louisiana, to any liability insurance
covering any accident that occurs in this state and that involves a resident of this state. (Doc. 40-3

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at 4) (citing Triche v. Martin, 2008-1220 (La. App. 1 Cir. 5/8/09), 13 So. 3d 649, 652, writ denied,
2009-1284 (La. 9/25/09), 18 So. 3d 76). Garrison cites Article 9 of the Louisiana Civil Code,
stating that the law is “clear and unambiguous” and accordingly, “no further interpretation may be
made in search of the intent of the legislature.” (Id.) Thus, Garrison concludes that because James
Juge’s policy was issued and delivered in California, and the collision did not involve a Louisiana
resident, California law should apply. (Id.)
However, Garrison argues that in the event that Louisiana law applies to the case,
Louisiana’s choice of law analysis for UM policies directs that California law should apply. (Doc.
40-3 at 4) (citing Champagne v. Ward, 2003-3211 (La. 1/19/05), 893 So. 2d 773, 780). Garrison
contends that “Book IV of the Louisiana Civil Code explains that conventional obligations are
governed by the law of the state whose policies would be most seriously impaired if its laws were
not applied to that issue.” (Doc. 40-3 at 4-5) (citing La. Civ. Code art. 3537). Further, Garrison
relies on art. 3537 which outlines the factors to ascertain which state has stronger and more relevant
policies. Article 3537 states:
(1) the pertinent contacts of each state to the parties and the transaction, including
the place of negotiation, formation, and performance of the contract, the location
of the object of the contract, and the place of domicile, habitual residence, or
business of the parties; (2) the nature, type, and purpose of the contract; and (3) the
policies referred to in Article 3515, as well as the policies of facilitating the orderly
planning of transactions, of promoting multistate commercial intercourse, and of
protecting one party from undue imposition by the other.
Garrison thus concludes that California law should govern the dispute because (1) no driver
involved in the accident is a resident of Louisiana; (2) the only contact that James Juge has with
Louisiana is that the accident occurred there; (3) James Juge is a resident of California, the
insurance policy was issued and delivered in California, and the plaintiff received all except the

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first day of his medical treatment in California; and (4) California has a more substantial interest
in the uniform application of its insurance laws. (Doc. 40-3 at 5-6.)
B. Plaintiff’s Opposition (Doc. 47)
The plaintiff opposes the Motion for Summary Judgment filed by Garrison. (Doc. 47).
Plaintiff cites to § 11580.2 (p) (4)-(5), arguing that the California statute only applies where the
bodily injury is caused by the underinsured motor vehicle. (Id. at 4.) Plaintiff then states that David
Yee’s insurance policy was exhausted and plaintiff James Juge, “was not entirely compensated for
his injuries in this accident.” (Id.) Plaintiff contends that Garrison is “not entitled to any ‘offset’
for any payments made to the plaintiffs by the defendant, Liberty Mutual, regarding the matter.”
(Id.)
The plaintiff argues that Garrison’s policy summarizes § 11580.2 (h) of the California
Insurance Code. This subsection of the Code states:
An insured entitled to recovery under the uninsured motorist endorsement or
coverage shall be reimbursed with the conditions stated herein . . . nor shall payment
under this section to the insured be delayed or made contingent upon the decisions
as to liability or distribution of loss costs under other bodily injury liability
insurance . . . Any loss payable under the terms of the uninsured motorist
endorsement or coverage to or for any person may be reduced: . . . (2) By the
amount the insured is entitled to recover from any other person insured under the
underlying liability insurance policy of which the uninsured motorist endorsement
or coverage is a part, including any amounts tendered to the insured as advance
payment on behalf of the other person by the insurer providing the underlying
liability insurance.
Id. Garrison’s policy states under subsection “A”: “2. [t]he limits of liability (each person and each
accident) under UMBI Coverage shall be reduced by all sums: 1. Paid because of the [bodily
injury] by or on behalf of persons or organizations who may be legally responsible. This includes
all sums paid under Part A.” (Doc. 47 at 5.)

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James Juge argues that the law clearly states that if the insurance company makes a
payment to the insured without determining which party is at fault, the insurer is entitled to an
offset if another party is legally responsible for the damages sustained by its insured. (Id.) Plaintiff
then argues that Garrison has not tendered any payments to the plaintiffs regarding the
uninsured/underinsured policy, and thus is not entitled to recover any amounts pursuant to either
the Garrison policy, or California law. (Id. at 5-6.) Plaintiff contends that defendant Garrison’s
theory that it is entitled to an offset for the sum paid by Liberty Mutual to the plaintiffs is “not
analogous with California law” and that if the court were to apply the offset, the court would reduce
James Juge’s policy to $50,000.00. (Id. at 6-7.)
The plaintiff concludes by citing Garrison’s insurance policy, which states that Garrison
“will pay compensatory damages which a covered person is legally entitled to recover from the
owner or operator of an uninsured motor vehicle or underinsured motor vehicle because of [bodily
injury] sustained by a covered person and caused by an auto accident.” (Id. at 6.) The plaintiff
states that James Juge was a covered person at the time of the accident, and his injuries arose out
of an automobile accident wherein the liability insurance was underinsured for the injuries that
James Juge sustained. (Id.) Garrison is only entitled to an offset, plaintiff argues, if James Juge
caused damages in this accident, or if James Juge received payment from Garrison on David Yee’s
behalf, and the plaintiff further argues that neither of these two situations occurred. (Id. at 7.)
C. Defendant’s Reply (Doc. 48)
Defendant Garrison filed a reply memorandum in support of its Motion for Summary
Judgment. (Doc. 48). Garrison argues first that the plaintiff misstates California law, as California
law does not distinguish between uninsured and underinsured motorist coverage. (Id. at 1) (citing
Cal. Ins. Code § 11580.2, “[f]or the purposes of this section, uninsured and underinsured motorist

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coverage shall be offered as a single coverage.”) Garrison then contends that the plaintiff’s entire
cause of action against Garrison relies on allegations that defendant David Yee was underinsured,
and that plaintiff contradicts himself when he states first that an offset only applies where the
bodily injury is caused by the underinsured motor vehicle, and then that David Yee’s insurance
policy did not entirely compensate James Juge for his injuries from this accident. (Id. at 2.)
Garrison argues that the plaintiff’s assertions about David Yee’s motor vehicle “is the definition
of ‘underinsured’ and as stated above, California law does not differentiate between uninsured and
underinsured motorist coverage.” (Id.)
Garrison concludes by stating that “it is clear from California case law that a UM insurer
is allowed a dollar-for-dollar credit for the underinsured vehicle.” (Doc. 48 at 2) (citing Elliot v.
Geico Indem. Co., 231 Cal. App. 4th 789, 800, 180, Cal. Rptr. 3d 331, 339 (2014)). Garrison argues
that plaintiff misstates California law by believing that Garrison would only receive an offset if
Garrison itself tendered money to James Juge. (Doc. 48 at 2.) Garrison concludes by stating that
plaintiff is only entitled to “recover the UM benefits set out by the Garrison policy and California
law.” (Id.)
III.

Summary Judgment Standard
“The court shall grant summary judgment if the movant shows that there is no genuine

dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a). If the mover bears his burden of showing that there is no genuine issue of fact, “its
opponent must do more than simply show that there is some metaphysical doubt as to the material
facts . . . [T]he nonmoving party must come forward with ‘specific facts showing that there is a
genuine issue for trial.’ ” See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
586–587, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986) (internal citations omitted). The non-mover's

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burden is not satisfied by “conclusory allegations, by unsubstantiated assertions, or by only a
‘scintilla’ of evidence.” Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (citations
and internal quotations omitted). “Where the record taken as a whole could not lead a rational trier
of fact to find for the non-moving party, there is no ‘genuine issue for trial.’ ” Matsushita Elec.
Indus. Co., 475 U.S. at 587. Further:
In resolving the motion, the court may not undertake to evaluate the credibility of
the witnesses, weigh the evidence, or resolve factual disputes; so long as the
evidence in the record is such that a reasonable jury drawing all inferences in favor
of the nonmoving party could arrive at a verdict in that party's favor, the court must
deny the motion.
International Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1263 (5th Cir. 1991).
IV.

Analysis
A. Choice of Law
Because the plaintiffs are domiciled in California, the defendant is domiciled in Texas, and

the collision occurred in Louisiana, there arises an issue of which law should govern the conflict.
The Supreme Court of Louisiana has found that “the appropriate starting point in a multistate case
. . . is to first determine that there is a difference between Louisiana's UM law and the UM law of
the foreign state, and then to conduct a choice-of-law analysis, as codified in Book IV of the Civil
Code, to determine which state's law applies to the interpretation of the UM policy.” Champagne
v. Ward, 2003-3211 (La. 1/19/05), 893 So. 2d 773, 786.
The California Insurance Code allows for offsetting UM limits. Cal. Ins. Code § 11580.2
(p) (4). Louisiana law does not allow for offsets of UM limits. La. Rev. Stat. § 22:1295. If
Louisiana law were to apply, therefore, Garrison would not be entitled to an offset. Although
plaintiff has not argued that Louisiana law should govern the dispute, both Louisiana law and a
choice of law analysis determine that California law governs the dispute.

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Louisiana Civil Code Book IV governs Conflict of Laws. Under Book IV, Title VI governs
conventional obligations. In Title VI, Article 3537 states that, as a general rule, “an issue of
conventional obligations is governed by the law of the state whose policies would be most
seriously impaired if its law were not applied to that issue.” The article then details which factors
determine the strength and relevance of the states’ policies, including: (1) the pertinent contacts of
each state to the parties (including the place of negotiation, formation, and performance of the
contract and the domiciles of the parties); (2) the nature, type, and purpose of the contract; and (3)
the policies referred to in Article 3515. La. Civ. Code. art. 3537. “The objective of those provisions
is to identify the state whose policies would be most seriously impaired if its laws were not applied
to the issue at hand.” Champagne, 893 So. 2d at 786 (citing to La. Civ. Code arts. 3515 and 3537.)
However, Article 3537 “applies in the absence of an effective choice of law by the parties.”
La. Civ. Code art. 3537, comment (a). Article 3540 provides the more specific rule governing
instances where the parties have selected the applicable law. La. Civ. Code art. 3540, comment
(b). Article 3540 states that “[a]ll other issues of conventional obligations1 are governed by the
law expressly chosen or clearly relied upon by the parties, except to the extent that law contravenes
the public policy of the state whose law would otherwise be applicable under Article 3537.” La.
Civ. Code art. 3540 & art. 3540, comment (a). “To be recognized under [Article 3540], the
contractual choice of law must either be express or implied.” La. Civ. Code art. 3540, comment
(e). “It is express when it is literally declared in the contract; it is implied when, on the basis of the

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This article applies generally to issues other than form and capacity. La. Civ. Code art. 3540, comment (a). Form
and capacity are governed by La. Civ. Code arts. 3538 and 3539, respectively. Nevertheless, Article 3538 provides
that “[a] contract is valid as to form if made in conformity with,” among other things, “the law governing the
substance of the contract under Articles 3537 or 3540,” unless “for reasons of public policy the law governing the
substance of the contract under Article 3537 requires a certain form,” in which case “there must be compliance with
that form.” La. Civ. Code art. 3538.

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surrounding circumstances, especially the provisions of the contract or the conduct of the parties,
it is evident that the parties have clearly relied upon the law of a particular state.” Id.
Here, the insurance policy in dispute is a “California Auto Policy.” (Docs. 40-2 at 1, 47 at
1.) Regarding the conduct of the parties, the policy was issued and delivered in California. (Id.)
Both parties rely upon California Insurance Code § 11580.2 to make their arguments. (Docs. 40-3
at 2-6, 47 at 4-5.) Neither party argues that Louisiana law should apply, but rather both contend
that California law applies in their favor. (Id.) Garrison maintains that § 11580.2 supports its
argument and thus that Garrison is entitled to an offset. (Doc. 40-3 at 3.) Plaintiff James Juge
argues that the statute is applicable favorable to him, and that Garrison is not entitled to an offset.
(Doc. 47 at 5-6.) Thus, California law was “expressly chosen” and “clearly relied upon by the
parties” for their arguments. La. Civ. Code. art. 3540.
Regarding Article 3537, relying on California law to govern this case does not contravene
Louisiana’s public policy. Under the factors which determine the strength and relevance of the
states’ policies, California would be more seriously impaired if its laws were not applied. Neither
party to the accident was a resident of Louisiana. (Doc. 40-3 at 6.) James Juge’s relevant contacts
in Louisiana are minimal: the collision occurred in Louisiana and his first day of medical treatment
was in Louisiana. (Id. at 6.) Conversely, the relevant contacts with California are much more
substantial: (1) the Juge’s are residents of California (Doc. 40-2 at 3), (2) the insurance policy in
question was issued and delivered in California (Id. at 1), (3) the insurance policy denotes itself a
“California Auto Policy” (Id.), and (4) James Juge received all except his first day of medical
treatment in California (Id. at 3.)
Looking at the “strength and pertinence of the relevant policies” of the state, Louisiana has
less of a substantial interest in the application of insurance remedies than does the insurance-

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providing state when the out-of-state parties are transitorily within the borders of Louisiana.
Champagne, 893 So. 2d at 789. Because the plaintiffs are residents of California who were visiting
family in Louisiana, they were indeed transitorily in the state. (Docs. 40-2 at 2-3, 47 at 2.)
California’s “substantial interest in the uniform application of its laws governing insurance
contracts” for its residents is stronger than Louisiana’s interest in applying its law to out-of-state
residents who are transiently in the state. Id.
Additionally, under La. Rev. Stat. § 22:1295 (a) (1) (iii), the Louisiana UM statute only
applies to “any liability insurance covering any accident which occurs in this state and involves a
resident of this state.” The facts of this case are clear: there are no Louisiana residents. (Docs. 40
at 2-3, 47 at 2.) Thus, the Louisiana UM statute does not govern this dispute. See Triche, 13 So.
3d 649, 652 (the insurance policy was not issued in Louisiana, the policy was not issued for
coverage in Louisiana, and the accident did not occur in Louisiana, thus Louisiana UM statutes
did not apply).
Moreover, when resolving a conflict under choice-of-law, “[a]lthough a few cases apply
the law of the accident state, the vast majority apply the law of the state in which the insured
automobile is principally garaged, usually the state in which the insured is domiciled and/or the
policy was delivered.” Symeon C. Symeonides, Choice of Law 496 (2016). James Juge was issued
his insurance policy in California. (Docs. 40-2 at 1, 47 at 1.) James, Elizabeth, and J. Juge are all
domiciles of California. (Doc. 40-2 at 3.) Again, California’s interest in its policies being carried
out is stronger than Louisiana’s interest in applying its laws, and further, because the policies were
issued in California and the plaintiffs are domiciled in California, the California Insurance Code
governs.
B. Cal. Ins. Code § 11580.2 (p)

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1. Cal. Ins. Code § 11580.2 (p) Governs
The significant issue in this case is whether § 11580.2 (p) controls, and if so, how courts
have interpreted it in similar contexts. Both parties agree that § 11580.2 (p) is pertinent in this case.
(Docs. 40-3 at 2, 47 at 4.) However, plaintiff also relies on § 11580.2 (h), arguing that it is nearly
identical to Garrison’s insurance policy and thus that Garrison is not entitled to an offset. (Doc. 47
at 5.) The language of subsection (p) as applied to these facts would allow the insurer to benefit
from an offset, while the language from (h) would not.
Regarding the conflict between § 11580.2 (h) and (p), the Court finds that subsection (p)
controls in this case. The language of § 11580.2 (p) is clear and unequivocal, as it provides that it
applies only when bodily injury is caused by an underinsured motor vehicle, and “[i]f the
provisions of this subdivision conflict with subdivisions (a) through (o), the provisions of this
subdivision shall prevail.” Hartford Fire Ins. Co. v. Macri, 4 Cal.4th 318, 324, 14 Cal. Rptr. 2d
813, 816, 842 P.2d 112, 115 (Cal. 1992). See also Holcomb v. Hartford Casualty Ins. Co., 230
Cal. App. 3d 1000, 1006-07, 281 Cal. Rptr. 651 (1991) (“the Legislature . . . expressly provided
that the provisions of subdivision (p), if in conflict with subdivisions (a) through (o) of section
11580.2, shall prevail. Thus we are not required . . . to resolve inconsistencies between the various
subdivisions of § 11580.2 . . . because . . . the Legislature has subordinated them to the provisions
of subdivision (p).”)
Because the language of the statute is so unambiguous, no further interpretation is
necessary, and § 11580.2 (p) governs this dispute. See Cal. Civ. Code art. 13 (“[w]ords and phrases
are construed according to the context and the approved use of the language”); Cal. Code of Civ.
P. § 1858 (“[i]n the construction of a statute or instrument, the office of the Judge is simply to
ascertain and declare what is in terms or in substance contained therein, not to insert what has been

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omitted, or to omit what has been inserted”); Antonin Scalia & Bryan A. Garner, Reading Law:
The Interpretation of Legal Texts 70 (2012) (“[o]ne should assume the contextually appropriate
ordinary meaning [of a statute] unless there is reason to think otherwise”).
2. Applicability of § 11580.2 (p)
The amount in compensation that James Juge is entitled to is based on the application of §
11580.2 (p) and the jurisprudential interpretation of the California Insurance Code. Regarding the
purpose behind Cal. Ins. Code § 11580.2, the court in Viking Ins. Co. v. State Farm Mut. Auto. Ins.
Co. provided:
In short, “the fundamental purpose of section 11580.2 is to provide the insured with
the same insurance protections he would have enjoyed” had the “tortfeasor carried
liability limits equal to [i]nsured's underinsured motorist limits.” (Rudd [v.
California Casualty Gen. Ins. Co., 219 Cal. App. 3d 948, 268 Cal. Rptr. 624, 55
Cal. Comp. Cases 114 (4th Dist. 1990)]) “Section 11580.2 is not designed to place
the insured in a better position than he would have occupied had the other driver
carried such insurance.” (Id. at p. 954; italics in original.)
17 Cal. App. 4th 540, 548, 21 Cal. Rptr. 2d 590 (3d Dist. 1993).
Additionally, § 11580.2 (p) (2)-(3) provides the circumstances under which the
subsection applies. The provisions state:
(2) “Underinsured motor vehicle” means a motor vehicle that is an insured motor
vehicle but insured for an amount that is less than the uninsured motorist limits
carried on the motor vehicle of the injured person.
(3) This coverage does not apply to any bodily injury until the limits of bodily injury
liability policies applicable to all insured motor vehicles causing the injury have
been exhausted by payment of judgments or settlements, and proof of the payment
is submitted to the insurer providing the underinsured motorist coverage.

Id.
Looking first to Cal. Ins. Code § 11580.2 (p) (2), the definition of an “underinsured motor
vehicle” fits the bill for David Yee. He was an insured driver, but was insured for less than James

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Juge’s UM limit (the limit carried on the motor vehicle of the injured person). (Doc. 48 at 2.)
Because California law treats “uninsured” analogous to “underinsured” for these purposes, the
section applies to James Juge. Cal. Ins. Code § 11580.2 (n).
Moreover, § 11580.2 (p) (3) applies to these facts because the limits of bodily injury
policies applicable to “all insured motor vehicles causing the injury” (Yee’s vehicle) have indeed
been exhausted by payment of settlement ($50,000.00 Liberty Mutual per person policy limit).
Cal. Ins. Code § 11580.2 (p) (3). (Docs. 40-2 at 2, 47 at 2.)
3. Interpretations of § 11580.2 (p) (4) and (5)
Garrison seeks summary judgment on the premise that Garrison owes less than the amount
James Juge claims for compensation. Based on the language of Cal. Ins. Code § 11580.2 (p) (4)(5), as well as the Garrison policy language regarding UM limits, Garrison argues that it is “entitled
to an offset of its $100,000.00 per person UM limits by Liberty Mutual’s $50,000.00 liability
policy covering defendant David Yee.” (Doc. 40-3 at 1.)
Plaintiff argues that § 11580.2 (p) (4)-(5) only applies where the bodily injury is caused by
the underinsured motor vehicle. (Doc. 47 at 4.) Plaintiff states that David Yee’s insurance policy
was exhausted and that plaintiff, “was not entirely compensated for his injuries in this accident.”
(Id.) The plaintiff contends that Garrison is “not entitled to any ‘offset’ for any payments made to
the plaintiffs by the defendant, Liberty Mutual, regarding this matter.” (Id.)
Having carefully considered the law, the facts in the records, and the arguments of the
parties, the Court finds that Garrison is entitled to benefit from an offset of the $50,000.00 paid by
liability insurance company Liberty Mutual to the plaintiffs from its $100,000.00 per person UM
limit. Accordingly, partial summary judgment is warranted.

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The California Insurance Code § 11580.2 (p) (4)-(5) states that when one or more insured,
underinsured, or uninsured vehicles causes bodily injury, the maximum liability of the insurer
providing the UM coverage “shall not exceed the insured’s underinsured motorist coverage limits,
less the amount paid to the insured by or for any person or organization that may be held legally
liable for the injury.” Also, the insurer paying a claim under this subsection is entitled to
reimbursement or credit in the amount received by the insured from either the owner or operator
of the underinsured motor vehicle, or the owner or operator’s insurer. Id.
Several courts in California have ruled regarding Cal. Ins. Code § 11580.2 (p) (4) and (5),
finding that insurers were allowed to offset their payments to insured parties. See Malone v.
Nationwide Mutual Ins. Co., 215 Cal. App. 3d 275, 278, 263 Cal. Rptr. 499, 501 (4th Dist. 1989)
(because “the insurer’s right to reimbursement . . . is pegged to the insured’s receipt of funds from
the ‘owner or operator of the underinsured motor vehicle or the insurer of such owner or operator’”,
and Malone had received $100,000.00 in her capacity as the heir to her husband’s estate and
another $100,000.00 for her own injuries from the alleged tortfeasor, Nationwide was entitled to
be reimbursed for any sums Malone received from the party responsible for her damages, both as
heir to her husband's estate and in her own right.)
Similarly, in Holcomb, the court found that because an insured who was injured while
riding as a passenger in a motor vehicle had recovered $50,000.00 from the driver’s insurer, under
which policy the UM limit was $60,000.00, the insurer of the injured passenger was entitled to
offset the $50,000.00 from the limit. 230 Cal. App. 3d at 1007. The court relied on § 11580.2 (p)
(4), stating “an insured who is injured by both an underinsured and an uninsured motor vehicle,
by virtue of section 11580.2, subdivision (p)(4), can recover no more than the limits of his

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underinsured motorist coverage reduced by the amount paid on behalf of the underinsured
motorist.” Id. at 1006.
The reimbursement between the injured insured party and the insurer is “the foundation of
section 11580.2 (p).” Hartford Fire Ins. Co. v. Macri, 4 Cal. 4th 318, 328. 842 P.2d 112, 117, 14
Cal. Reptr. 2d 813, 818 (1992). “[T]he underinsured motorist carrier gets a dollar-for-dollar credit
for all payments by third party tortfeasors to the insureds, whether the insureds are made whole or
not. In other words, a carrier providing underinsured motorist benefits never pays the full amount,
only the difference between the policy limits and all contributions by all tortfeasors to all insureds.”
Id. (citing Malone 215 Cal. App. 3d at 277; italics in original.) See Mercury Ins. Co. v.
Vanwanseele-Walker, 41 Cal. App. 4th 1093, 49 Cal. Rptr. 2d 28 (4th Dist. 1996) (“[t]he [§
11580.2 (p) (4)] statutory language is clear: an insured’s recovery under an insurance policy must
be offset by amounts received from other ‘persons or organizations legally liable for the injury’”)
(internal citations omitted). In Vanwanseele-Walker, the court stated that if the tortfeasor’s
insurance coverage limits are lower than the victim’s underinsurance limits, the victim may be
entitled to recover at most the difference between the two. 41 Cal. App. 4th at 1102. The court
ultimately held that the victim was unable to recover from the insurer, as the underinsurance limit
($100,000.00) was less than the amount paid by the tortfeasor ($466,666.67). Id. See also Elliot,
231 Cal. App. 4th at 802 (insurer was entitled to an offset under § 11580.2 (p) (4), as it “plainly
allows an offset for all contributions made by all tortfeasors to all insureds,” insured had indeed
recovered an amount in a settlement on behalf of the tortfeasor, and the statute includes payments
received from the tortfeasor’s insurance as well as the tortfeasor itself); Rudd, 219 Cal. App. 3d
948 (concluding that the insurer had a right to offset against amounts owed under the
underinsurance policy provisions the amount of worker’s compensation that insured received, but

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not on proceeds on which the employer retained a lien because the insured did not “receive” them).
Similarly, in Quintano v. Mercury Casualty Co., 11 Cal. 4th 1049, 1056, 906 P.2d 1057, 1061, 48
Cal. Rptr. 2d 1, 5 (1995), the Court stated as follows:
The insurer offering an underinsured motorist policy is only liable to the insured
for the difference between the insured's underinsured motorist policy limits and the
amount paid to the insured by the tortfeasor or his or her insurer. ([Macri,] at p.
328, 14 Cal.Rptr.2d 813, 842 P.2d 112; § 11580.2(p)(4).) The insurer offering
underinsured motorist coverage is entitled to reimbursement or credit for the
amount the insured receives from the tortfeasor or his or her insurer. (Macri, supra,
4 Cal.4th at p. 328, 14 Cal.Rptr.2d 813, 842 P.2d 112; § 11580.2(p)(5).) The
insurer's right to reimbursement or credit “is specifically limited to the underinsured
tortfeasor's policy limits and precludes the insurer from asserting additional
subrogation rights.” (Macri, supra, 4 Cal.4th at p. 328, 14 Cal.Rptr.2d 813, 842
P.2d 112, italics omitted.)
Id.
California courts have consistently held that the California Insurance Code allows for an
offset of payment under an underinsured/uninsured policy limit. When the injured party’s UM
limit is greater than the limit of the tortfeasor, the insurer of the injured is permitted to offset the
amount it owes based on whatever payments the insured has already received from the tortfeasor
or its insurer. California precedent thereby recognized that Garrison is entitled to offset its payment
to James Juge.
Here, James Juge holds a UM insurance policy with Garrison with limits of $100,000.00
per person. (Docs. 40-2 at 1, 47 at 1.) David Yee holds a policy with Liberty Mutual with the limit
of $50,000.00 per person. (Docs. 40-2 at 2, 47 at 2.) The plaintiffs settled with Yee and Liberty
Mutual for his policy limit. (Docs. 40-2 at 2, 47 at 2.) Thus, the remainder between the amount
that James Juge has received and his own UM limit is $50,000.00. Because California law, and
thus Cal. Ins. Code § 11580.2 (p) (4)-(5) govern in this case, Garrison is entitled to a credit of the

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$50,000.00 paid to James Juge, for its $100,000.00 per person UM limits. The most that James
Juge may collect from Garrison in this case, therefore, is $50,000.00.
V.

Conclusion
Accordingly,
IT IS ORDERED that the Motion for Summary Judgment (Doc. 40) filed by Defendant

Garrison Property and Casualty Insurance Company is GRANTED. Plaintiff James Juge’s
recovery against Garrison is limited to, at most, $50,000.00.
IT IS FURTHER ORDERED that the oral argument previously set for August 15, 2017
(Doc. 52) is hereby CANCELLED.
Signed in Baton Rouge, Louisiana, on June 6, 2017.

S

JUDGE JOHN W. deGRAVELLES
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

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