                  IN THE SUPREME COURT OF IOWA
                                   No. 08–0391

                              Filed July 17, 2009


KALE SWAINSTON and STEPHANIE SWAINSTON,

      Appellants,

vs.

AMERICAN FAMILY MUTUAL INSURANCE COMPANY,

      Appellee.



      On review from the Iowa Court of Appeals.



      Appeal from the Iowa District Court for Polk County, Eliza J. Ovrom,

Judge.



      Further review of court of appeals decision affirming district court

summary judgment in favor of insurer, dismissing policyholders' claim for

uninsured motorist benefits.         DECISION OF COURT OF APPEALS

VACATED.       DISTRICT COURT JUDGMENT REVERSED AND CASE

REMANDED.



      Steven   V. Lawyer      of   Steven   V.   Lawyer   &   Associates,   P.L.C.,

Des Moines, for appellants.



      Coreen K. Sweeney and Anna W. Mundy of Nyemaster, Goode, West,

Hansell & O'Brien, P.C., Des Moines, for appellee.
                                    2

TERNUS, Chief Justice.

     The appellants, Kale and Stephanie Swainston, appeal from a district

court summary judgment ruling, holding that the appellee, American Family

Mutual Insurance Company, has no obligation to pay uninsured motorist

(UM) benefits to the Swainstons under an insurance policy issued to them by

American Family. The court of appeals affirmed the district court decision

that American Family had no liability under its policy because its UM

benefits could not be stacked on top of UM benefits recovered by the

Swainstons under a policy issued by another insurer.      Upon our further

review, we hold that American Family’s liability is governed by Iowa Code

section 516A.2(3) (2003), and this statute requires American Family to pay

up to its policy limits, subject to the Swainstons meeting the other

prerequisites of the policy.   Therefore, we vacate the court of appeals

decision, reverse the district court judgment, and remand for further

proceedings.

     I. Background Facts and Proceedings.

     In 2004 the Swainstons were passengers in a vehicle involved in a

collision when an approaching van driven by Jaime Colqul crossed the

centerline and struck the vehicle in which the Swainstons were riding.

Although Colqul was uninsured, the owner of the vehicle in which the

Swainstons were passengers had an automobile policy issued by State Farm

Mutual Automobile Insurance Company with UM limits of $250,000 per

person and $500,000 per accident.    State Farm paid the limits of its UM

coverage to the Swainstons and three other persons injured in the accident.

Kale received $195,000, and Stephanie was paid $54,000.

     At the time of the collision, the Swainstons had their own automobile

policy issued by American Family. This policy included uninsured motorist

coverage with per-person limits of $100,000 and per-accident limits of
                                      3

$300,000. The Swainstons brought this suit to recover UM benefits under

the American Family policy.

      American Family filed a motion for summary judgment, contending

Iowa Code section 516A.2 prohibited the plaintiffs’ recovery under the

American Family policy because they had already received UM benefits

under the higher limits provided by the State Farm policy. American Family

asked for judgment in its favor and a dismissal of the plaintiffs’ claim for UM

benefits.   The plaintiffs responded with their own motion for partial

summary judgment, claiming the American Family policy allowed stacking of

UM coverages, and such stacking was not prohibited by section 516A.2.

They requested a ruling from the court that American Family had coverage

for their damages up to the amount of its policy limits.

      The district court determined the American Family policy was silent as

to stacking, and therefore, pursuant to section 516A.2(3), the Swainstons’

recovery was limited to the highest single limit of applicable UM coverages.

Because the State Farm UM limits were higher than the American Family

UM limits, the court concluded the plaintiffs were not entitled to recover

under the American Family policy. The court granted summary judgment to

American Family on the plaintiffs’ claim and denied the plaintiffs’ cross-

motion for partial summary judgment.

      The plaintiffs appealed, and their appeal was transferred to the court

of appeals. The court of appeals agreed with the reasoning of the district

court and affirmed the district court’s judgment. We granted the plaintiffs’

application for further review.

      II. Legal Principles Governing Our Review.

      A. Scope of Review.         We review rulings on summary judgment

motions for the correction of errors of law. Thomas v. Progressive Cas. Ins.

Co., 749 N.W.2d 678, 681 (Iowa 2008).        “To obtain a grant of summary
                                       4

judgment on some issue in an action, the moving party must affirmatively

establish the existence of undisputed facts entitling that party to a particular

result under controlling law.” Interstate Power Co. v. Ins. Co. of N. Am., 603

N.W.2d 751, 756 (Iowa 1999).

      B. Contract Interpretation.       “When the parties offer no extrinsic

evidence on the meaning of policy language, the interpretation and

construction of an insurance policy are questions of law for the court.” Lee

v. Grinnell Mut. Reins. Co., 646 N.W.2d 403, 406 (Iowa 2002). In construing

insurance contracts, we adhere to the rule “that the intent of the parties

must control.” A.Y. McDonald Indus., Inc. v. Ins. Co. of N. Am., 475 N.W.2d

607, 618 (Iowa 1991).       Except in cases of ambiguity, that intent is

determined by what the policy says. Id.

      Statutory provisions also play a role in the interpretation of insurance

contracts, as we explained in Thomas:

            Notwithstanding the principle that the plain meaning of an
      insurance contract generally prevails, this court has recognized
      that statutory law may also affect the interpretation and validity
      of policy provisions. When a statute authorizes a contract of
      insurance, “ ‘[t]he statute itself forms a basic part of the policy
      and is treated as if it had actually been written into the policy.’ ”
      Consequently, when construing a contract provision that affects
      underinsured [or uninsured] motorist coverage, we must review
      not only the language of the policy but the terms of the UIM [and
      UM] statute, Iowa Code chapter 516A, as well.

749 N.W.2d at 682 (quoting Lee, 646 N.W.2d at 406) (citations omitted).

      C. Statutory Interpretation.         Principles of statutory interpretation

are well established.

            In construing statutes, we give effect to the legislature’s
      intention. In ascertaining legislative intent, we consider the
      language used in the statute, the object sought to be
      accomplished, and the wrong to be remedied. We consider all
      parts of an enactment together and do not place undue
      importance on any single or isolated portion.
                                      5

Mortensen v. Heritage Mut. Ins. Co., 590 N.W.2d 35, 39 (Iowa 1999) (citations

omitted).

      III. Discussion.

      It is important at the outset to have a clear understanding of two

concepts that are important in this case––stacking and other insurance

clauses.

      The concept of “stacking” coverages . . . arises where the same
      claimant and the same loss are covered under multiple policies,
      or under multiple coverages contained in a single policy, and the
      amount available under one policy is inadequate to satisfy the
      damages alleged or awarded. In essence, stacking describes the
      phenomenon of insureds . . . adding all available policies
      together to create a greater pool in order to satisfy their actual
      loss.

12 Lee R. Russ & Thomas F. Segalla, Couch on Insurance § 169:4, at 169-14

to 169-15 (3d ed. 1998) (footnote omitted) [hereinafter Couch on Insurance];

accord Mortensen, 590 N.W.2d at 38 (“Stacking is a term which refers to the

availability of more than one insurance policy, or one policy with multiple

vehicles, providing reimbursement of the losses of the insured.”); Farm

Bureau Mut. Ins. Co. of Iowa v. Ries, 551 N.W.2d 316, 318 (Iowa 1996)

(same). When an insured seeks to recover UM benefits under more than one

policy, as here, the issue is one of interpolicy stacking.    Mortensen, 590

N.W.2d at 38. “Intrapolicy stacking occurs when the insured recovers . . .

uninsured benefits for more than one vehicle under a single policy.” Id.

      Other insurance provisions are conceptually different from stacking.

            The basic difference between the concept of stacking and
      the operation of other insurance clauses can be simply stated
      as: other insurance clauses address rules for determining
      responsibility if more than one coverage is considered to apply,
      while stacking addresses whether more than one coverage which
      would otherwise be applicable should, in fact, be applied at all.
      As such, the “other insurance” clauses should only come into
      play after the determination of whether the insured has the right
      to stack coverages at all.
                                              6

Couch on Insurance § 169:9, at 169-23 (footnote omitted); accord Mortensen,

590 N.W.2d at 40 (“Stacking concerns whether more than one coverage

should be paid to an insured. Other insurance clauses, on the other hand,

apply after a determination of the applicability of stacking has been made,

and address rules of responsibility between insurance companies.” (Citation

omitted.)). 1

       “Other insurance clauses are generally of three types: (1) calling for

proration of coverage between the multiple policies; (2) stating that the policy

will be ‘excess’ to any other applicable coverage; (3) seeking to avoid any

contribution at all.”        Couch on Insurance § 169:9, at 169-23 (footnote

omitted). When an other insurance provision is of the last type, providing

that the coverage will not apply when other applicable coverage exists, “the

other insurance provision may be considered either to preclude the issue of

stacking by rendering the additional coverage inapplicable, or to represent a

policy provision which prohibits stacking.”                 Id. at 169-24; accord id.

§ 169:32, at 169-73 (“The insurer may also avoid stacking by using an ‘other

insurance’ or ‘excess escape’ clause which is unambiguous . . . .” (Footnote

omitted.)).

       With these concepts in mind, we turn to the Iowa statute that has

been interpreted to allow insurers to include either stacking or antistacking

provisions in the UM coverage of their policies. See Iowa Code § 516A.2. 2

       A. Section 516A.2.          Iowa Code section 516A.2(1) requires that UM

coverage be afforded, “whether alone or in combination with similar coverage

       1Admittedly,  our prior cases have not been entirely consistent in distinguishing
between the concept of stacking—the availability of multiple coverages––and other insurance
provisions addressing the priority of coverage when multiple coverages are available. See,
e.g., Mewes v. State Farm Auto. Ins. Co., 530 N.W.2d 718, 725 (Iowa 1995) (referring to
insurer’s other insurance clause as an antistacking provision).
       2Section  516A.2 also applies to underinsured motorist (UIM) coverage. Because UIM
coverage is not at issue in this case, we limit our references in this opinion to UM coverage.
                                              7

afforded [under other policies],” only in limits that would have been afforded

had the insured been injured by a motorist insured under a policy with the

minimum liability limits required by Iowa law.               Id. § 516A.2(1). 3      Because

this statute requires only minimum limits, we have construed this provision

to permit insurers to include policy terms prohibiting stacking of multiple

UM benefits.        Mortensen, 590 N.W.2d at 38–39.                  In other words, an

insurance company can prohibit interpolicy stacking by including a

provision stating that its policy does not provide coverage if the insured has

UM coverage under another policy providing at least the required minimum

limits. Similarly, an insurer can avoid intrapolicy stacking by stating that

only one limit of liability is available regardless of the number of vehicles

insured. See Couch on Insurance § 169:40, at 169-88 to 169-90 (discussing

insurers’ use of limit-of-liability provisions to prohibit intrapolicy stacking).

      While      section    516A.2(1)     allows    antistacking      provisions,     section

516A.2(2) requires the commissioner of insurance to assure the availability


      3Iowa   Code section 516A.2(1) provides in pertinent part:
      [N]othing contained in this chapter shall be construed as requiring forms of
      coverage provided pursuant hereto, whether alone or in combination with
      similar coverage afforded under other automobile liability or motor vehicle
      liability policies, to afford limits in excess of those that would be afforded had
      the insured thereunder been involved in an accident with a motorist who was
      insured under a policy of liability insurance with the minimum limits for
      bodily injury or death prescribed in subsection 11 of section 321A.1. Such
      forms of coverage may include terms, exclusions, limitations, conditions, and
      offsets which are designed to avoid duplication of insurance or other benefits.
              To the extent that Hernandez v. Farmers Insurance Company, 460
      N.W.2d 842 (Iowa 1990), provided for interpolicy stacking of uninsured or
      underinsured coverages in contravention of specific contract or policy
      language, the general assembly declares such decision abrogated and
      declares that the enforcement of antistacking provisions contained in a motor
      vehicle insurance policy does not frustrate the protection given to an insured
      under section 516A.1.
(Emphasis added.) Iowa Code section 321A.1(11), which provides the baseline for UM
coverage under section 516A.2(1), requires liability limits of $20,000 per person and
$40,000 per accident.
                                              8

of policies that provide for the stacking of UM coverages.                      Iowa Code

§ 516A.2(2). 4 We have interpreted this provision as evidencing a legislative

intent that parties may contract for policies that permit stacking of UM

benefits. Mortensen, 590 N.W.2d at 39.

       The dispute in this case centers on the third subsection of section

516A.2, which states:

       It is the intent of the general assembly that when more than one
       motor vehicle insurance policy is purchased by or on behalf of
       an injured insured and which provides uninsured . . . motor
       vehicle coverage to an insured injured in an accident, the
       injured insured is entitled to recover up to an amount equal to
       the highest single limit for uninsured . . . motor vehicle coverage
       under any one of the above described motor vehicle insurance
       policies insuring the injured person which amount shall be paid
       by the insurers according to any priority of coverage provisions
       contained in the policies insuring the injured insured.

Iowa Code § 516A.2(3).           In Mortensen, we held that, when an insurance

policy is silent with respect to the stacking of multiple UM coverages, section

516A.2(3) provides a default rule that permits the insured “to recover up to

the highest policy limit.” 590 N.W.2d at 39.

       The plaintiffs challenge our interpretation of section 516A.2(3) in

Mortensen, contending subsection (3) “creates a nonoptional prohibition of

stacking of uninsured . . . coverage in those circumstances where the

policies involved were ‘purchased by or on behalf of’ the injured individual.”

They claim this court ignored the mandatory nature of subsection (3), as well

as its limited reach.



       4Section   516A.2(2) provides:
       Pursuant to chapter 17A, the commissioner of insurance shall, by January 1,
       1992, adopt rules to assure the availability, within the state, of motor vehicle
       insurance policies, riders, endorsements, or other forms of coverage, the
       terms of which shall provide for the stacking of uninsured and underinsured
       coverages with any similar coverage which may be available to an insured.
Iowa Code § 516A.2(2).
                                       9

      The policies involved in Mortensen were both issued to the injured

party, so the applicability of the “by or on behalf of” language was not at

issue in that case. Id. at 37. In an earlier case, however, Mewes v. State

Farm Automobile Insurance Co., 530 N.W.2d 718 (Iowa 1995), this court did

consider this particular language.         In Mewes, we placed a broad

interpretation on the so-called limiting language of subsection (3)––

“purchased by or on behalf of.” 530 N.W.2d at 725. We held a policy that

provided coverage to persons based on their occupancy of the insured vehicle

as passengers was purchased “on behalf of” the passengers as contemplated

by subsection (3). Id.

      We are not inclined to overrule our Mewes decision. The legislature

chose broad language to describe the scope of this subsection––“by or on

behalf of.” Had the legislature wanted to limit the rule of this subsection to

more restricted circumstances, it could have used more definitive terms,

including only policies under which the injured person was a named insured

or member of the named insured’s household. The legislature did not do so.

Thus, our interpretation of subsection (3) is consistent with the statutory

language, as well as the legislature’s overall intent in enacting section

516A.2, which was to permit insurers to avoid the stacking of multiple UM

coverages. Id. at 724.

      We think our decision in Mortensen, that the rule of subsection (3)

applies only as a default rule, is also consistent with legislative intent. It is

apparent from the first two subsections of section 516A.2 that the legislature

intended that Iowa insureds have the option of purchasing policies that do

not allow stacking, as well as policies that permit stacking, the latter

presumably at a higher cost.     An insured’s freedom to choose the type of

coverage desired would be substantially undermined if section 516A.2(3)

were interpreted to be a mandatory rule whenever the policies were
                                             10

purchased by or on behalf of the injured person.                    Under the plaintiffs’

interpretation of subsection (3), an insured who purchased policies

permitting stacking could be deprived of the benefit of his bargain.                      The

plaintiffs suggest no reason the legislature would encourage the availability

of policies that allow as well as prohibit stacking in subsections (1) and (2)

and then impose a mandatory rule in subsection (3) that would apply

notwithstanding the terms of the insurance contract. We continue to believe

that interpreting subsection (3) to provide a default rule when the parties

have failed to address stacking in their insurance contract best effectuates

the legislative intent evidenced in section 516A.2.

       Finally, and notwithstanding supporting language in Mortensen, 5 we

disagree that subsection (3) prohibits stacking in the sense of limiting an

insured to recovery under one policy, as the plaintiffs argue.                  First of all,

subsection (3) only addresses interpolicy stacking.                       See Iowa Code

§ 516A.2(3) (referring to situations “when more than one motor vehicle

insurance policy is purchased by or on behalf of an injured insured”

(emphasis added)).        With respect to the applicability of multiple policies,

subsection (3) strikes a middle ground:              it anticipates that all applicable

coverages are available to pay the insured’s loss, but limits the insurers’
exposure under their policies to “the highest single limit for uninsured . . .

motor vehicle coverage under any one of the above described motor vehicle

insurance policies insuring the injured person.” Id. (emphasis added). The

insurers’ liability for this sum is determined by the other insurance

provisions of the policies.        Id. (stating this amount “shall be paid by the

       5We  stated in Mortensen that section 516A.2(3) provides a default rule permitting the
insured “to recover up to the highest policy limit, with no stacking of coverage.” 590 N.W.2d
at 39 (emphasis added). The latter portion of this statement is not entirely accurate, as our
discussion of the default rule in the case before us shows. Section 516A.2(3) does not make
antistacking the default rule, as subsection (3) specifically provides for the applicability of
multiple coverages, collectively subject to the highest limit of liability.
                                            11

insurers according to any priority of coverage provisions contained in the

policies insuring the injured insured”). In summary, the default rule under

subsection (3) is that an insured covered by multiple policies is entitled to

recover the highest single applicable UM limit, paid by all insurers according

to their other insurance clauses. 6

       We now examine the terms of the American Family policy.

       B. American Family Policy. In the present case, the parties disagree

on whether the American Family policy addresses stacking of UM benefits.

The plaintiffs claim a provision in the “limits of liability” section of the

American Family policy contemplates stacking and, therefore, inferentially

authorizes stacking. This section includes the following relevant statement:

“We will pay no more than these maximums [referring to the stated limits of

liability] no matter how many vehicles are described in the declarations, or

insured persons, claims, claimants, policies or vehicles are involved.” Even

though this clause refers to the involvement of multiple policies, we are not

convinced this isolated reference implies that UM coverage is available under

the American Family policy when multiple policies apply.                      Rather, this

sentence, considered as a whole, limits liability to the per-person and per-

accident maximums stated in the declarations, effectively prohibiting

intrapolicy stacking, i.e., the application of multiple limits of liability under

this policy. See generally Mortensen, 590 N.W.2d at 37 n.1 (noting a similar

provision    addresses     intrapolicy     stacking);    24   John     Alan    Appleman,


       6Although   the language in Mortensen referring to subsection (3) as prohibiting
stacking or containing a default antistacking rule is not accurate because that provision
allows recovery under multiple policies, the application of subsection (3) in Mortensen is
entirely consistent with our analysis of that provision in the present case. Even though we
stated in Mortensen that subsection (3) prohibited stacking, we held both policies that
applied to the insured’s loss in that case were available to pay his damages up to the
highest limit of one of the policies, payable in accordance with the other insurance clauses
of the policies. Mortensen, 590 N.W.2d at 40. Accordingly, we do not overrule Mortensen
today; we merely abandon the terminology used in that decision.
                                       12

Appleman on Insurance § 150.1[C][4], at 197–98 (2d ed. 2004) (noting such

provisions are “designed to prohibit intra-policy horizontal stacking”).     We

conclude this provision does not promise or prohibit interpolicy stacking.

        We next consider whether the other insurance provision in American

Family’s policy addresses stacking. The “other insurance” provision of this

policy states in relevant part:

        If there is other similar insurance on a loss covered by this Part
        [UM insurance], we will pay our share according to this policy’s
        proportion of the total limits of all similar insurance. But, any
        insurance provided under this Part for an insured person while
        occupying a vehicle you do not own is excess over any other
        similar insurance.

As noted, this provision appears in the UM coverage of the policy. Therefore,

“other similar insurance” as contemplated by this provision is other UM

coverage. Clearly, this provision addresses the situation in which more than

one policy providing UM coverage applies. It does not, however, contain an

escape clause that would “avoid any contribution at all.” Couch on Insurance

§ 169:9, at 169-23. Therefore, this provision does not address stacking as

that term is understood in the insurance context. Mortensen, 590 N.W.2d at

40 (holding similar provision did not cover stacking).

        We conclude, as did the district court, that the American Family policy

does not address stacking. Therefore, the default rule of section 516A.2(3)

applies. We disagree, however, with the district court’s application of that

rule.    As we noted above, the default rule of subsection (3) has two

components:      (1) it allows the insured to recover the highest limit of the

applicable coverages, and (2) the insurers’ liability for this sum is determined

by their other insurance or “priority of coverage” clauses.         Iowa Code

§ 516A.2(3). Application of these components to the undisputed facts of this

case shows that American Family does indeed have coverage under its policy

for the plaintiffs’ damages.
                                            13

       The undisputed facts show that both the American Family and State

Farm policies provide coverage to the plaintiffs for the damages they

sustained in the subject accident.            The American Family policy provided

limits of $100,000 per person and $300,000 per accident. The State Farm

policy provided coverage subject to limits of $250,000 per person and

$500,000 per accident. Therefore, “the highest single limit for uninsured . . .

motor vehicle coverage” provided by the applicable policies is $250,000 per

person and $500,000 per accident. Under section 516A.2(3), the plaintiffs

are entitled to recover up to this amount. 7

       We next consider the other insurance clauses of these policies, as

section 516A.2(3) provides that the liability of insurers having available

coverage is determined by such provisions. The record does not contain the

complete State Farm policy. Nonetheless, State Farm has already paid its

policy limits, so it is fair to assume that its policy provided primary coverage

for the plaintiffs’ UM claims.         American Family’s other insurance clause

states that, with one exception, it will pay its proportionate share of UM

benefits when there is other UM insurance that covers a particular loss. The

exception is when the insured’s UM loss occurs while occupying a vehicle the

insured does not own. In that event, the American Family UM coverage is
excess over other UM coverage applicable to the insured’s loss.                         The

undisputed facts establish that the plaintiffs were injured while occupying a

vehicle they did not own. Therefore, the American Family coverage is excess

over the State Farm coverage.



       7Although   American Family states in its brief that “the Swainstons recovered the
‘highest single limit for uninsured’ motor vehicle coverage” and consequently are prohibited
by section 516A.2(3) from any further recovery, we find nothing in the record to support this
statement. The undisputed facts show that neither of the plaintiffs recovered more than the
highest per-person limit of $250,000 and together they recovered only $249,000, an amount
substantially below the highest per-accident limit of $500,000.
                                             14

       State Farm has paid Kale Swainston $195,000 and Stephanie

Swainston $54,000.         Having recovered less than the $250,000 per person

and $500,000 per accident limits, the Swainstons have not yet reached the

limits to which they are entitled by virtue of section 516A.2(3). Therefore,

subject to proof of the uninsured motorist’s liability and the extent of their

damages, they are entitled to recover under the American Family policy up to

the per-person limits of $100,000. 8

       We conclude the district court erred in holding the UM coverage of the

American Family policy did not provide any coverage for the plaintiffs’

damages simply because the State Farm policy afforded UM benefits with

higher limits of liability.      Therefore, the court erred in granting summary

judgment to American Family on the plaintiffs’ claim for coverage. For the

same reason, the court erred in refusing to grant partial summary judgment

to the plaintiffs. The plaintiffs were entitled to a ruling that the American

Family policy provided excess UM coverage for the plaintiffs’ damages

incurred in the accident with the uninsured motorist subject to the plaintiffs’

satisfaction of the other applicable requirements of the policy.

       IV. Conclusion and Disposition.

       American Family’s policy provides UM coverage for the damages

sustained by the plaintiffs.        The district court erred in granting summary

judgment to American Family and denying partial summary judgment to the

plaintiffs. Accordingly, we vacate the court of appeals decision, reverse the


       8Under   the default rule of section 516A.2(3), an insured’s recovery will be restricted
by two sets of limits: the highest applicable limit of all policies providing coverage (here
$250,000/$500,000) and the limit of the policy under which recovery is sought (here
$100,000/$300,000). Thus, Kale, who has already been paid $195,000, can recover, at the
most, $55,000 under the American Family policy, notwithstanding American Family’s per-
person limit of $100,000, because his total recovery is limited to the highest applicable limit
of $250,000. In contrast, Stephanie has only recovered $54,000, leaving her $196,000
short of the $250,000 highest limit. Nonetheless, her potential recovery under the American
Family policy is capped at $100,000, the per-person limit of that policy.
                                    15

judgment of the district court, and remand this case for further proceedings

consistent with this opinion.

      DECISION OF COURT OF APPEALS VACATED. DISTRICT COURT

JUDGMENT REVERSED AND CASE REMANDED.
