Miller v. American Family Mutual Insurance

MEMORANDUM **

In this diversity action, appellants Jeffery and Malia Miller appeal the district court’s grant of summary judgment in favor of appellee American Family Mutual Insurance Company, as well as the district court’s order granting attorney’s fees to American Family. We affirm.

The Millers argue that an exclusion from underinsured motorist coverage in a policy issued by American Family is void under Arizona law. 1 We review the district court’s grant of summary judgment on this issue de novo. Oliver v. Keller; 289 F.3d 623, 626 (9th Cir.2002). Here, the Millers recovered the full amount of liability insurance available under the same policy. Where “the injured person recovered the full amount of the liability insurance, there is no persuasive reason to allow her to collect under the [underinsured motorist] coverage.” Demko v. State Farm Mut. Auto. Ins. Co., 204 Ariz. 497 , 65 P.3d 446, 448 (App.2003), rev. denied (2003) (internal quotation marks omitted). The Millers’ argument that the exclusion in this case is barred under Arizona law because it did not contain a “setoff’ policy fails because an Arizona court has recently validated an underinsured motorist exclusion…