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IN THE SUPREME COURT OF THE STATE OF IDAHO Docket No. 34404 TINA M. CHERRY, ) ) Plaintiff-Respondent, ) ) v. ) ) COREGIS INSURANCE COMPANY, an ) Illinois insurance company, doing business in ) Idaho under Certificate of Authority No. ) PC602, ) ) Defendant-Appellant. )

Rexburg, September 2008 Term 2009 Opinion No. 40 Filed: March 13, 2009 Stephen Kenyon, Clerk

Appeal from the District Court of the Seventh Judicial District of the State of Idaho, Bingham County. Honorable Jon J. Shindurling, District Judge. The district courts order on the motion to alter and amend is vacated. The district courts first order on summary judgment is affirmed. Anderson Julian & Hull, Boise, for appellant. Brian Julian argued. Goicoechea Law Offices, Pocatello, for respondent. Albert Matsuura argued. ______________________________________________ HORTON, Justice This appeal involves the interpretation of offset clauses contained in an underinsured motorist insurance (UIM) policy and the interrelationship of that policy and Idahos workers compensation laws. The district court granted summary judgment in favor of Respondent Tina Cherry (Cherry), holding that Appellant Coregis Insurance Company (Coregis) was not entitled to offset funds Cherry received from Farmers Insurance Company (Farmers) on behalf of a thirdparty tortfeasor because Cherry was required to pay those funds to the Idaho State Insurance Fund (the Fund) in order to satisfy the Funds statutory subrogation interest. Coregis timely appealed to this Court. Although we disagree with the district courts analysis and conclude that Coregis is entitled to offset the entire sum paid to Cherry by Farmers, we conclude that Coregis is entitled to an offset only for the net sum paid by the Fund to Cherry as workers compensation benefits. Accordingly, we affirm in part. 1

I. FACTUAL AND PROCEDURAL BACKGROUND Cherry was injured in an automobile accident during the course and scope of her employment as a bus driver with the Snake River School District (the School District). The School District carried a policy through Coregis which provided UIM coverage with a policy limit of $250,000. The parties stipulated that Cherry incurred damages of at least $250,000. Coregis policy contains a "Limit of Insurance" provision that provides: D. LIMIT OF INSURANCE 1. Regardless of the number of covered "autos", "insureds", premiums paid, claims made or vehicles involved in the "accident", the most we will pay for all damages resulting from any one "accident" is the LIMIT OF INSURANCE for UNINSURED MOTORISTS COVERAGE1 shown in the Declarations. 2. Any amount payable under this coverage shall be reduced by: a. All sums paid or payable under any workers compensation, disability benefits or similar law, and All sums paid by or for anyone who is legally responsible, including all sums paid under this Coverage Forms LIABILITY COVERAGE.

b.

(Emphasis original.) Following the accident, Cherry received $102,361.01 from the Fund on the condition, as provided in I.C.

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Idaho Law