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STATE FARM MUT. AUTO. v. POWELL

March 1, 1995

STATE FARM MUTUAL AUTOMOBILE, INSURANCE COMPANY, Plaintiff, -vs- HERBERT POWELL, Defendant.

DONETTA W. AMBROSE, U.S. DISTRICT JUDGE


The opinion of the court was delivered by: DONETTA W. AMBROSE

and

 ORDER OF COURT

 Plaintiff, State Farm Mutual Automobile Insurance Company ("State Farm"), has filed this declaratory judgment action seeking a determination on whether it is obligated to stack underinsured motorists coverage under certain policies of automobile insurance issued to Defendant Herbert Powell ("Powell"). Pending before the Court are three motions: Cross-Motions for Judgment on the Pleadings filed by both State Farm and Powell, and a Motion for Partial Summary Judgment filed by Powell. For the following reasons, all three motions will be denied.

 On May 11, 1991, Powell sustained personal injuries when he was struck by a vehicle owned by Kenneth Wagner. Mr. Wagner was insured by Nationwide Insurance Companies, and the parties agree that Powell has received the $ 25,000 liability limit available under the terms of Wagner's policy.

 Originally both State Farm and Powell agreed that on the date Powell was injured, he was insured under three separate policies of automobile insurance issued by State Farm which covered three vehicles in Powell's household. Each of these policies provided for underinsured motorist ("UIM") coverage in the amount of $ 50,000 per person and $ 100,000 per accident. Both parties also originally agreed that Powell had executed a waiver under each separate policy choosing to reject the stacking of limits of UIM coverage and that each of these three waivers were in effect on the date Powell was injured. These waivers of stacked coverage, attached to the original Complaint as Exhibits B, C and D, state as follows:

 Underinsured coverage limits.

 
By signing this waiver, I am rejecting stacked limits of Underinsured Motorist Coverage under the policy for myself and members of my household under which the limits of coverage available would be the sum of the limits for each motor vehicle insured under the policy. Instead the limits of coverage that I am purchasing shall be reduced to the limits stated in the policy. I knowingly and voluntarily reject the stacked limits of coverage. I understand that my premiums will be reduced if I reject this coverage.

 Complaint at Exh. B, C and D.

 Because Powell elected to waive stacked coverage under each of the policies, State Farm attached a "non-stacking endorsement" to each of Powell's policies. The relevant language in the endorsements dealing with applicable coverage in the event of an underinsured motorist claim is as follows:

 If there is other coverage - coverage W3

 
1. If the insured sustains bodily injury as a pedestrian and other underinsured motor vehicle coverage applies:
 
(a) The total limits of liability under all such coverages shall not exceed that of the coverage with the highest limit of liability; . . .

 State Farm argues that the non-stacking waiver executed by Powell as well as the language contained in the non-stacking endorsements precludes Powell from stacking UIM coverage among the three separate insurance policies. Powell, on the other hand, maintains that he did not waive the right to stack coverage among the three separate insurance policies ("inter-policy stacking"), but that he waived only the right to stack coverage of multiple vehicles insured under a single policy of insurance ("intra-policy stacking"). ...


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