American States Insurance Co. v. Utah Transit Authority
699 P.2d 1210
Utah
1985
Check Treatment

*1 1210 13(i). judgment Accordingly, Rule by

have been barred the statute of limita- tions. is reversed. $236.49 party ruling

Neither has cited Cali Because of our on the effect of a In the absence of set-off, fornia law on this issue.1 need not reach the issue of we appropriate applicable to the references Rigby’s any. obligation, if foreign jurisdiction, law of a that law will appellant. Reversed. Costs to presumed be the same as Utah law. be Utah, 583 P.2d 82 Crompton, Booth v. C.J., HOWE, HALL, DURHAM and (1978); Maple Maple, v. 566 P.2d ZIMMERMAN,JJ., concur. (1977). 1229 City v. Telluride Power

Salt Lake

Co., 607, (1932), 82 Utah 17 P.2d 281 held

that if had a counterclaim that a defendant by

otherwise would have been barred limitations, statute of the counterclaim COM- INSURANCE STATES AMERICAN against plaintiffs could be set-off corporation, PANY, Plain- Indiana an claim, notwithstanding the of limi statute Appellant, tiff and analysis tations. The Court’s was based on Comp.Laws of Utah section 6578 part: which in relevant AUTHORITY, a Utah TRANSIT UTAH district, When cross-demands have existed be- Defendant public transit persons tween under such circumstances Respondent. that, brought if one had an action No. 18945. other, against the a counterclaim could up, have been set the two demands shall of Utah. Supreme Court compensated they be deemed so far as 6, 1985. March equal each other.... Ostler, See also Stewart Livestock v.Co. 529, (1943); Annot.,

105 Utah 144 P.2d 276 (1948).

1 A.L.R.2d 13(i)

Rule of the Utah Rules of Civil adopted

Procedure law. That rule

provides part: cross “When demands persons

have existed between under such that, brought

circumstances if one had other, against

action a counterclaim up,

could have been set two demands compensated

shall be deemed so far as

they equal each Pursuant other....” rule, the amount due Bunker on the may note

Jacobsen be used as an offset

against the amount owed Jacobsen. How-

ever, Bunker is not entitled to affirmative offsetting

relief on the counterclaim limitations, applied, 1. If California law were to be defendant and an action is thereafter com- only person, person Bunker's action would be barred to the menced one such the other greater plaintiff's extent it is than the claim. pay- assert in his answer the defense of 1972) (Deering See Cal.Civ.Code 431.70 compensat- ment in that the two demands are provides part: in relevant other, they equal ed so far as each notwith- standing independent asserting that an action money Where cross-demands for have existed filing his claim would at the time of the an- persons any point between at in time when swer be barred the statute of limitations. neither demand was barred the statute of *2 carry liability vehicles to insurance that qualifications imposed by meets the Act, Safety Responsibility Allstate Insur- G, Utah, ance Co. v. USF & P.2d 329 (1980),or to be self-insured. ASI contends 31-41-5(l)(b) imposes that because section obligations a self-insurer on “all of the and LeRoy Axland, S. Larry Reed, G. Michael rights Homer, of an insurer under this act” W. and City, Salt Lake for Plaintiff and requires security equivalent it Appellant. to afford to qualified policy, obligated a a self-insurer is Paul Matthews, H. Epperson, David H. provide coverage passengers Salt to UM for in City, Lake Defendant and Respondent its vehicles the same as an owner who is HOWE, Justice: qualified policy. a insured under This con- American Insurance Plaintiff States requires tention an examination of our stat- (ASI) summary Company appeals from a ute on UM section 41-12-21.1 of Tran- judgment in favor of defendant Utah Safety Responsibility Act: (UTA) Authority denying ASI indemnifi- sit policy automobile [N]o cation from UTA for uninsured motorist insuring against resulting loss from lia- (UM) payments made to a UTA that ASI bility imposed by bodily injury law for or passenger. property damage by death or suffered Raymond undisputed. The facts are V. any person arising ownership, out of the injured riding as a Chamberlain was while vehicle, or of a maintenance use motor passenger on one of buses when the UTA’s delivered, delivery, shall be issued for motorist. bus was struck an uninsured state, respect in or renewed this with ASI, which the insurer of an automo- registered principal- motor vehicle or Chamberlain, $8,500 paid him bile owned state, ly garaged coverage in this unless UTA, coverage. policy’s under the UM policy supple- is in such or a qualified self-insurer under the Utah Auto- it, bodily in injury ment to limits for or (No-Fault No-Fault Insurance Act mobile 41-12-5, death set forth in section Act), U.C.A., 1953, 31-41-5(l)(b), paid provisions approved by filed with protection personal injury Chamberlain pro- state insurance commission for the $364.61, to indemni- benefits of but refused persons insured thereunder tection of $8,500 paid fy ASI for the it Chamberlain legally to recover dam- who are entitled ground required to on the that it was not ages operators from owners or of unin- provide coverage passengers. for its UM sured motor vehicles and hit-and-run mo- bodily injury, tor vehicles because of is wheth- The sole issue before this Court death, disease, including or re- sickness provide er UTA was UM cover- The named insured sulting therefrom. and, age passengers consequently, for its right reject such cover- shall have the insurer, primary indemnify as the ASI age, and unless the named insured re- payments it made to its own insured. coverage writing, in such quests such that it We hold was not. coverage provided in a re- need not be provisions of the ASI invokes both the supplement or a to it where newal -22, Act 31-41-1 to and those No-Fault rejected had the cov- the named insured Safety Responsibility of the Motor Vehicle policy previ- erage in connection with §Act) (Safety Responsibility 41-12-1 Act ously him the same insurer. issued to obligate provide to -41 to UTA to UM [Emphasis added.] correctly passengers. for its It subject to this points subject to the ASI contends that UTA out that UTA is made reject or have requirements provision and that it did not of the No-Fault Act section 31-41-4(3) reject coverage, as it right 31-41- UM owes and that subsections care, 5(l)(a) (b) require high duty as a common carrier owners of motor under similar statutes Precedent exists passengers. its It agency, to public jurisdictions. Arizona has held the in other 31-41-7(2) of the No- on section also relies coverage requirement inapplicable to UM UTA, claim that support of its Act in Fault ground that a self-in on the self-insurers indemnify law, ASI for must as a matter regarded as an insurance cannot be surer its in- made to coverage payments legislative is under man who alone carrier provides as follows: That section sured. Mountain provide UM date to injured is also an insured *3 person aWhen Telephone Telegraph Co. v. and States including policy, other party under Co., Casualty Surety Ariz. Aetna and 116 act, primary with this complying those (1977). 225, con P.2d 1123 California 568 policy afforded the coverage shall be of self-insurance not a a certificate siders motor vehicle out of the use insuring the liability policy of insurance motor vehicle arose. the accident of which providing exemption from a method of but Falls Insurance Co. v. coverage set security. Glens 41-12-21.1 on UM Section Freightways, 242 Cal.App.2d Consolidated automobile lia- requires that no out above (1966). Pennsylvania 774, CaLRptr. 789 delivered, 51 policy shall be bility insurance interpreted its uninsured motorists act has cov- delivery, or renewed unless issued for liability policy require the existence of a to unin- protect against to erage is a cause of action of insurance before giv- The named insured is motorists. sured required cover under the act that UM arise reject such which right en the to self-in age rejected but held that a unless providing the insurer from in turn relieves liability required not to have a sured is policy or a coverage in a renewal such Co., 456 v. Yellow Cab Johnson policy. statutory language supplement to it. The (1974). 256, Virginia has 317 A.2d 245 Pa. rights duties of explicitly addresses the that insurance underwriters held insured, and the parties, the insurer two pro are to and not self-insurers insurance. To read under a contract of coverage statutory excep under a vide UM language legislative intent that into that every requiring a UM endorsement tion applies qualified self-in- coverage to UM policy issued and delivered. insurance express clear and contort its surer would Co., Re-Insurance v. American Shelton meaning. 655, (1970). Louisi 173 820 210 Va. S.E.2d of self-insur its certificate conclusion, UTA obtained reason at the same ana arrives pos that it it demonstrated ance when to offer ing require to a self-insurer that possessed coverage and would continue to be make sessed would that UM against ability pay judgments mandatory optional it. for the self-in of the and not surer, legal entity to equivalent as there would be no That certificate serves as rejection, and requirement of which it could communicate policy satisfies the § an anomalous result could not U.C.A., 1953, that such security. 31- furnishing Legislature. intended the have been 41-5(l)(b). However, a certificate of self- Honea, La.App., 407 So.2d 503, v. Jordan negates policy of a insurance the existence (1982). only 1256 The case 27 A.L.R.4th cov requiring an offer of UM of insurance support argument found to ASI’s we have permitting rejection. A self-in erage but Transport Jersey, 169 v. New Crocker is itself, nor of offer insurance to surer cannot (1979), 498, N.J.Super. 404 A.2d 1293 tendered. A reject can it the insurance so apparently pecu under statutes held that really self-insurance not certificate of is state, must cover that self-insurers liar to insurance; policy of it insurance or holding risks as those owners the same judgments be simply an assurance that will including policies, U.C.A., 1953, 41-12-34; Guercio paid. 680, which, Corp., 40 v. Hertz 389 N.Y. N.Y.2d us to three Utah cases ASI refers (1976). proposition that the argues, 358 N.E.2d 261 Section stand for the S.2d it terms, Responsibility Act Safety clearly, by provisions can of the 41-12-21.1 its own incorporated in toto into the should be apply to self-insurers. not be made

1213 ing our mandatory None of provisions leg- of the No-Fault Act. uninsured motorist of self-insurance islation and applies them to the issue the we compelled treatment are Dairyland presented. here Insurance to afford common language carriers the Utah, (1982) Smith, Corp. present P.2d 737 of the statute. policy of after precluded the rescission Appellant argues convincingly there stated the accident occurred. We policies expressed in the Utah Automobile satisfy security that a written Act, U.C.A., 1953, No-Fault Insurance Act, section requirement the No-Fault § 31-41-1, (1974), seq. et and the Motor 31-41-5(l)(a) qualifications meet must Act, Vehicle Safety Responsibility U.C.A., 41-12-5 of the enumerated in section Safe- 1953, 41-12-1, (1981), seq. apply et should ty Responsibility Act. Foster v. Salt Lake equally vehicles, operators all of motor County, 632 P.2d was an whether by policies self-insured or covered judgment. appeal summary from We there insurance, statutes should

remanded the case for trial on the merits interpreted be require self-insured com- *4 genuine as issues of fact existed with re- mon carry carriers to uninsured motorist spect county’s to the nature of the self-in- coverage. appellant Specifically, contends raised, program. surance That case but Safety Responsibility the requires Act decide, question did not the of whether provide motor protection vehicle owners to county in acting scope-of officials the their for passengers their themselves employment were covered under the self-in- against personal injuries suffered at the program. surance Allstate Insurance Co. hands of uninsured motorists who are at G, Utah, v. USF & 619 P.2d 329 People fault. on who ride Utah Transit validity exclusionary addressed the of an Authority buses or on other common carri- liability policy. endorsement to a protected. ers equally should be In- well the exclusionary We there held that en- deed, plight passengers the of on a com- excluding employee dorsement from presents mon particularly compel- carrier a coverage was void to the extent of mini- ling requiring circumstance compulsory necessary qualify mum limits coverage. uninsured motorist In the Safety Responsibility under the Act and case, passenger present injured the was an incorporation under the No-Fault Act. The owner, insured car the bulk of his employer in that case was not self-insured. damages paid own was his automobile sum, qualified In UTA as a self-insurer insurer. Absent that he would provide was not However, gone uncompensated. have to, passengers. obligated for its was It many precisely adults who ride do so buses did, furnish no-fault benefits for ASI’s addition, they cars. In because do not own insured, Raymond Chamberlain. V. UTA compose significant part children of a negligent not and thus did not owe common population serviced carriers. duty provide to Chamberlain to further cov- groups likely Both of these are far less erage. general population than the of car owners judgment The ap- is affirmed. Costs on to have uninsured motorist insurance and peal are awarded to UTA. being of higher run a much risk left with- in remedy they out if the are buses HALL, STEWART, J., C.J. and concur. riding injury-producing are in acci- involved dents with motorists. uninsured ZIMMERMAN, (concurring): Justice Appellant’s argumént certainly merit has join I majority holding with the language our as matter. The of Authority, qualified the Utah Transit law, however, self-insurer, require current not self- does obligation pro- no provide unin- vide its insured common carriers passengers uninsured motorist with however, passen- for their protection I sured motorist separately, write be- gers. Safety Respon- importance highlighting cause of the This omission in the sibility legislative inconsistency policy underly- simply Act reflect between however, as written oversight; the statute If the we must construe.

is the statute accurately not reflect the

current law does makers, changes such as those

intent of its addressed

supported by appellant should be legislature.

DURHAM, J., concurring concurs in the ZIMMERMAN,

opinion of J. Plaintiff and

STATE

Respondent, BOLSINGER,

John Charles *5 Appellant.

Defendant and

No. 17736.

Supreme Court of Utah.

April 1985.