Truck Insurance Exchange v Rutherford

Exchange appealed summary judgment to Rutherford in his underinsured motorist claim arguing coverage should be reduced by anything paid or should have been paid by the workers compensation insurer. The Court reversed. It held that neither Rutherford’s argument for double recovery nor Exchange’s argument that workers compensation benefits reduces the limits of coverage is consistent with Utah statute as the term “secondary “ has specialized meaning in insurance law (namely that payment is only due after primary insurance has been exhausted) and that meaning was carried into Utah Code 31A-22-305.3(4)(c)(i) and thus Exchange is only liable for Rutherford’s claim in excess of the amount paid by workers compensation. It rejected Exchange’s argument that 305.3(4)(c)(iii) allows it to reduce the coverage amount as the statutory scheme as a whole allows for complete recovery by claimant with 2/3 of income damages are covered by workers compensation and the other 1/3 by the underinsured motorist policy here and this both provides complete recovery and prevents double recovery. It held Court precedent did not answer the question presented here and that rejecting Rutherford’s claim for double recovery was consistent with general insurance law, noted the collateral source rule does not apply as the benefits are going to Rutherford, not the wrongdoer why injured him and the fact the insurance code is to liberally construed does not apply as the meaning of the statute is clear.