Wayne DINES, Petitioner-Appellant, v. PACIFIC INSURANCE COMPANY, LTD., Respondent-Appellee.
No. 17433.
Supreme Court of Hawai‘i.
April 13, 1995.
Reconsideration Denied April 24, 1995.
893 P.2d 176 | 78 Hawai‘i 325
Dissenting Opinion Amended April 13, 1995. Majority Opinion Amended April 17, 1995.
Glenn J. Stanford and Gary W.K. Au Young, on the briefs, Honolulu, for respondent-appellee Pacific Ins. Co., Ltd.
Before MOON, C.J., and KLEIN, LEVINSON, NAKAYAMA and RAMIL, JJ.
LEVINSON, Justice.
The petitioner-appellant Wayne Dines appeals the order of the second circuit court denying his petition to compel arbitration with his automobile liability insurance carrier, the respondent-appellee Pacific Insurance Company, Ltd. (Pacific), regarding his claim for uninsured motorist (UM) benefits. The outcome of Dines‘s appeal turns on whether, under Hawai‘i law, a named insured under an automobile liability insurance policy, who is injured by a hit-and-run driver, can be entitled to UM benefits thereunder when the named insured is operating a motorcycle at the time of his accident. Because we hold that the named insured can, we reverse the circuit court‘s order denying Dines‘s petition to compel arbitration and remand this matter to the circuit court for the entry of an order granting Dines‘s petition.
I. BACKGROUND
On May 5, 1993, Dines allegedly lost control of his motorcycle when a driver of an unidentified automobile failed to yield the right-of-way at an intersection. Dines reported the accident to his automobile liability insurer, Pacific, by way of a certified letter mailed on June 3, 1993, and claimed UM benefits. Pacific received the letter on June 4, 1993,1 but refused to accept Dines‘s claim.
At the time of the accident, Dines was the named insured under two relevant liability insurance policies. The first was issued by Progressive Companies (Progressive) and covered his motorcycle. Progressive‘s motorcycle policy contained bodily injury liability limits of $35,000.00 per person but did not include any optional UM coverage because Dines had expressly rejected it. The second, issued by Pacific, covered Dines‘s two automobiles and included UM coverage with limits of $250,000.00 per person and $500,000.00 per accident. Pacific‘s automobile policy included an arbitration agreement that provided that if Pacific and Dines could not agree on “[w]hether [Dines] [was] legally entitled to recover damages . . . [or] [a]s to the amount of damages[,] either party [could] make a written demand for arbitration.”
On June 30, 1993, Dines demanded that Pacific arbitrate his UM claim pursuant to the arbitration agreement. Pacific refused. Pursuant to
II. STANDARD OF REVIEW
A petition to compel arbitration is reviewed de novo, “using the same standard employed by the trial court and based upon the same evidentiary materials as were before [it] in determination of the motion.” Koolau Radiology, Inc. v. Queen‘s Medical Center, 73 Haw. 433, 439-40, 834 P.2d 1294, 1298 (1992) (citations and internal quotation marks omitted). We therefore apply the “right/wrong” test to the circuit court‘s order denying Dines‘s petition.
A. The Controlling Statute As Affected By Applicable Legal Principles
As of May 5, 1993 (the date of Dines‘s accident), UM coverage under Pacific‘s automobile policy was governed by the terms of
Required motor vehicle policy coverage.
. . .
(b) A motor vehicle insurance policy shall include:
. . .
(3) With respect to any motor vehicle registered or principally garaged in this State, liability coverage . . . for bodily injury or death . . . for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury . . . resulting therefrom; provided, however, that the coverage required under this paragraph shall not be applicable where any named insured in the policy shall reject the coverage in writing[.]
Thus, as the named insured under Pacific‘s automobile policy, pursuant to which Dines had opted and paid premiums for $250,000.00 of personal UM coverage,
Put differently, and as a general proposition, UM statutes such as
. . . Ideally, the purpose is to place those injured in the same position they would have occupied had the tortfeasor carried liability insurance. . . .
8C Appleman, Insurance Law and Practice § 5067.45, at 41–46 (1981) (footnotes omitted) (quoted with approval in Dawes v. First Ins. Co. of Hawai‘i, Ltd., 77 Hawai‘i 117, 122-23, 883 P.2d 38, 43-44, reconsideration denied, 77 Hawai‘i 489, 889 P.2d 66 (1994)) (footnotes omitted) (brackets and ellipses in original)).
Being a remedial statute,
It is a cardinal principle of UM insurance that
“[a]n insured or an insured vehicle must be involved in the accident in order to collect under the UM endorsement.” 12A J. Couch, Cyclopedia of Insurance Law § 45:634, at 127 (R. Anderson and M. Rhodes 2d ed. 1981) . . . (emphasis added). This is because “[t]he uninsured motorist policy is personal to the insured[,]” Palisbo v. Hawaiian Ins. & Guar. Co. Ltd., 57 Haw. 10, 15, 547 P.2d 1350, 1354 (1976) (emphasis added), or, put differently, the
UM coverage follows the insured‘s person. Accordingly, [t]he nature of uninsured motorist insurance is such that an insured is covered whether or not he or she is injured while in a vehicle which is insured under the policy. . . . [A]n insured under the policy . . . [is] entitled to recover uninsured motorist insurance benefits . . . even though she [is] injured while operating a vehicle not covered by the policy. Allstate Ins. Co. v. Morgan, 59 Haw. 44, 47-48, 575 P.2d 477, 479-80 (1978). . . .
Construing a statute similar in all material respects to HRS § . . . 431:10C-301(b)(3), the Connecticut Supreme Court aptly elaborated upon these general principles as follows:
. . . [R]equired uninsured motorist coverage is “person oriented.” [T]he public policy embodied in [the UM statute] directs that uninsured motorist coverage be provided to insureds when they are not occupants of insured vehicles as well as when they are.
Our uninsured motorist insurance statute . . . provides coverage for “persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles. . . .” (Emphasis added.) The coverage attaches to the insured person, not the insured vehicle. Thus, . . . an injured party may receive the benefits of a policy even though not occupying a vehicle insured under that policy. . . .
An insured‘s status at the time of the injury, whether passenger, pedestrian, or driver of an insured or uninsured vehicle, is irrelevant to recovery under the statutorily mandated coverage. The coverage is portable: The insured and family members . . . are insured no matter where they are injured. They are insured when injured in an owned vehicle named in the policy, in an owned vehicle not named in the policy, in an unowned vehicle, on a motorcycle, on a bicycle, whether afoot or on horseback or even on a pogo stick or in a rocking chair on [one‘s] front porch. Uninsured motorist statutes place no geographical limits on coverage and do not purport to tie protection against uninsured motorists to occupancy of an insured vehicle. Uninsured motorist protection is coverage for persons, not for vehicles.
Harvey v. Travelers Indem. Co., 188 Conn. 245, 248, 250, 449 A.2d 157, 159-60 (1982) (citations and internal quotation marks omitted) (emphasis added). Dawes, 77 Hawai‘i at 123-24, 883 P.2d at 44-45 (emphasis added and some emphases deleted) (brackets in original).
Consistent with the foregoing authority, the following propositions are established elements of this state‘s insurance law: (1) UM insurance coverage is personal to the named insured; (2) the public policy underlying
B. Plain Language Of Pacific‘s Automobile Policy
The insuring agreement of the UM coverage section of Pacific‘s automobile policy obligated Pacific to Dines as follows:
A. [Pacific] will pay compensatory damages which an insured is legally entitled to recover from the owner or operator of
an uninsured motor vehicle because of bodily injury: 1. Sustained by an insured; and
2. Caused by an accident.
The owner‘s or operator‘s liability for these damages must arise out of the ownership, maintenance or use of the uninsured motor vehicle.
B. Insured as used in this Part means:
1. You and any family member.
2. Any other person occupying your covered auto.4
C. ”Uninsured motor vehicle” means a land motor vehicle . . . of any type:
. . .
3. Which is a hit-and-run vehicle whose operator or owner cannot be identified and which hits:5
a. you or any family member;
b. a vehicle which you or any family member are occupying; or
c. your covered auto.
(Bold in original.)
“[Insurance] policies are subject to the general rules of contract construction; the terms of the policy should be interpreted according to their plain, ordinary, and accepted sense in common speech unless it appears from the policy that a different meaning is intended[.]” Dawes, 77 Hawai‘i at 121, 883 P.2d at 42 (quoting First Ins. Co. of Hawai‘i, Inc. v. State, 66 Haw. 413, 423, 665 P.2d 648, 655 (1983)). Moreover, “[insurance] policies are to be construed in accord with the reasonable expectations of a layperson.” Id. (quoting Sturla, Inc. v. Fireman‘s Fund Ins. Co., 67 Haw. 203, 209, 684 P.2d 960, 964 (1984)).
Nevertheless, as the voided portions of Pacific‘s automobile policy illustrate, see supra notes 4 and 5,
“. . . the rule is that policies are to be governed by statutory requirements in force and effect at the time such policies are written. . . . Such provisions are read into each policy issued thereunder [] and become a part of the contract with full binding effect upon each party.” AIG Hawai‘i Ins. Co., Inc. v. Estate of Caraang, 74 Haw. 620, 633, 851 P.2d 321, 328 (1993) (citations and internal quotation marks omitted). Consequently, “[w]hen the terms of an insurance contract are in conflict with statutory language, the statute must take precedence over the terms of the contract.” Sol [v. AIG Hawai‘i Ins. Co.], 76 Hawai‘i [304,] 307, 875 P.2d [921,] 924[, reconsideration denied, 76 Hawai‘i 353, 877 P.2d 890 (1994).]
Id. at 121-22, 883 P.2d at 42-43 (footnote omitted); see also Methven-Abreu, 73 Haw. at 395-96, 834 P.2d at 285; National Union Fire Ins. Co. v. Olson, 69 Haw. 559, 563-64, 751 P.2d 666, 669 (1988); Walton v. State Farm Mut. Auto. Ins. Co., 55 Haw. 326, 328, 518 P.2d 1399, 1400-01 (1974); Columbia Casualty Co. v. Hoohuli, 50 Haw. 212, 214-15, 437 P.2d 99, 102 (1968).
Thus, by the plain language of the insuring agreement of the UM coverage section of the automobile policy that it issued to Dines, Pacific obligated itself: (1) to pay compensatory damages; (2) sustained by an “insured“; (3) which the “insured” is legally entitled to recover from the owner or operator of an “uninsured motor vehicle“; (4) because of bodily injury; (5) caused by an accident; (6) arising out of the ownership, maintenance, or use of the “uninsured motor vehicle.” Under the circumstances of this case, and as a
C. HRS Ch. 431:10G Does Not Diminish Or Restrict An Insurer‘s Contractual Obligation To Accord A Named Insured Full UM Coverage Under An Automobile Policy Issued Pursuant To HRS § 431:10C-301(b).
In National Union Fire Insurance Co. v. Ragil, 72 Haw. 205, 211, 811 P.2d 473 (1991), this court stated the following in the context of underinsured motorist (UIM) insurance coverage:6
[T]he Hawai[‘]i legislature drew a distinction between motorcycles and motor vehicles in enacting the no-fault insurance laws, Article 10C of HRS chapter 431[,] entitled Motor Vehicle Insurance. The legislature exempted, with limited exceptions, motorcycles from the no-fault insurance laws and created a separate section on required insurance coverage for motorcycles. In doing so, the legislature did not require insurers to offer underinsured [or, for that matter, uninsured] coverage to motorcycle owners or operators in contrast to the requirement that it be offered to motor vehicle owners or operators.7
[H]aving generally exempted motorcycle owners and operators from the provisions of Article 10C, the legislature chose to separately describe the required insurance coverage for motorcycles in Article 10C, Part V, entitled Motorcycles and Motor Scooters.8 Part V does not require insurers to offer underinsured [or uninsured] coverage. . . .
(We note Part V relating to Motorcycle[s] and Motor Scooters was replaced in 1989 by Article 10G.9 The distinction be-
tween underinsured [and uninsured] coverage for motor vehicles and motorcycles has remained intact.)
. . .
The rationale behind this disparate treatment of motorcycles and motor vehicles is obvious. Motorcycle riders consent to an inherently more dangerous risk because they are less protected on the roadways than those in automobiles. This greater risk is reflected in the higher premiums they must pay for insurance.
Id. at 210, 213-15, 811 P.2d at 476-78 (footnote omitted).
Because it focused solely on the legislature‘s distinct statutory mechanisms for insuring “motor vehicles” (HRS ch. 431:10C) and motorcycles (HRS ch. 431:10G), the Ragil court missed the point regarding the right of an automobile policy‘s named insured to derive the benefits of the UM coverage that
It is obviously a given that a motorcycle is not a “motor vehicle” within the meaning of
A named insured under an automobile policy issued pursuant to
The dissent agrees with us “(1) that
In our view, it is the dissent that is “mistaken” when it accuses us of “frustrating the legislature‘s intent” through “judicial legislation.” Just as the dissent seeks to do, we are construing statutes. The fact is that reasonable minds can differ; our divergent interpretations merely underscore the complexity of the specific issue before us and the likelihood that the legislature never even considered it.
In the course of its exhaustive recitation of the evolution of
But it is also true, although the dissent seems to forget it, that “[m]ore often than not, what passes for ‘legislative intent’ is no more than the ideas of a few individual legislators. Statements by legislators or even committee reports need not reflect the purpose which a majority of the legislators believed is carried out by [a] statute.” Yoshizaki v. Hilo Hospital, 50 Haw. 150, 153 n. 5, 433 P.2d 220, 223 n. 5 (1967). A fortiori, legislative studies by nonmembers of the legislature do not have the probative value of committee reports or debates for purposes of establishing “legislative intent.” Twentieth Century Furniture, Inc. v. Labor and Indus. Relations Appeal Board, 52 Haw. 577, 580, 482 P.2d 151, 152-53 (1971). Ultimately, therefore, “our duty in interpreting statutes is to give effect to the legislature‘s intent[,] which is obtained primarily from the language of the statute” itself. Allstate Ins. Co. v. Hirose, 77 Hawai‘i 362, 364, 884 P.2d 1138, 1140 (1994).
The bottom line is that the dissent‘s assertion that “the majority‘s analysis ignores clear statutory language and legislative intent,” dissenting opinion at 336, 893 P.2d at 187, is simply wrong. First, we have not “adopt[ed] a construction of
By the same token, we do not “completely disregard[] the distinct risk pools recognized by the legislature when it enacted a separate insurance rating system in
Nothing in the legislative history underlying
The dissent cites the enactment of
Motorcycle or motor scooter excluded from article. (a) All motorcycles and motor scooters required to be registered under chapter 286 shall be exempt from this article; provided that:
. . .
(2) In the case of accidental harm arising out of a motorcycle or motor scooter accident to any passenger of such motorcycle or motor scooter, or any pedestrian, motorcycles and motor scooters shall not be exempt from section 431:10C-301 [i.e., “[r]equired motor vehicle policy coverage“], section 431:10C-304 [i.e., “[o]bligation to pay no-fault benefits“] and section 431:10C-306 [i.e., “[a]bolition of tort liability“];
(3) In the case of accidental harm arising out of an accident involving a motorcycle or motor scooter and a motor vehicle, the owner or operator of a motorcycle or motor scooter shall
not be exempt from section 431:10C-306.
(Emphasis added.)
The dissent‘s recitation of
Second, and more importantly, there is no tension between the provisions of
By the same token, and for present purposes,
When all is said and done, the dissent points to no statutory language, legislative history, or anything else that expressly delineates any exception to, or limitation of, the scope of UM coverage accorded to a named insured under a motor vehicle insurance policy issued pursuant to
IV. DINES IS ENTITLED TO CLAIM UM BENEFITS UNDER PACIFIC‘S AUTOMOBILE POLICY.
In the present matter, Dines alleges that he lost control of his motorcycle and was forced off the roadway, thereby sustaining bodily injury and damages, when a driver of an unidentified automobile failed to yield the right of way at an intersection. It is undisputed that Dines was the named insured under an automobile policy issued by Pacific. As noted above, by the plain language of the insuring agreement of the UM coverage section of the policy, Pacific has obligated itself to pay such compensatory damages sustained by Dines, insofar as he is legally entitled to recover from the owner or operator of an uninsured vehicle because of bodily injury caused by an accident arising out of the ownership, maintenance, or use of the uninsured vehicle. See supra at 328, 893 P.2d at 179.
Assuming the truth, which Pacific is free to contest in the arbitration proceedings, of Dines‘s claim, he has suffered bodily injury and damages caused by an accident14 arising
V. CONCLUSION
The arbitration agreement contained in Pacific‘s automobile policy entitled Dines, inter alia, to arbitrate the question “[w]hether [he] is legally entitled to recover damages” and the amount thereof. Because Dines‘s claim is one “which on its face is governed by the [insurance] contract,” it is “arbitrable under [the] agreement.” Koolau Radiology, Inc., 73 Haw. at 445, 448, 834 P.2d at 1300, 1302.
We reverse the circuit court‘s order denying Dines‘s petition to compel arbitration and remand this matter to the circuit court for the entry of an order granting Dines‘s petition.
RAMIL, Justice, dissenting, with whom MOON, Chief Justice, joins.
Because the majority‘s analysis ignores fundamental tenets of statutory construction
I. RULES OF STATUTORY CONSTRUCTION
As distinct from the legislative branch, the basic role of the judiciary is to interpret and apply the laws enacted by the legislature. Accordingly, in interpreting statutes, the first cardinal rule of statutory construction is that “legislative enactments are presumptively valid and should be interpreted in such a manner as to give them effect.” Richardson v. City and County of Honolulu, 76 Hawai‘i 46, 54, 868 P.2d 1193, 1201 (citation, internal quotation marks, and internal brackets omitted), reconsideration denied, 76 Hawai‘i 247, 871 P.2d 795 (1994). Absent any constitutional obstacles in applying the law, this court‘s function is “to ascertain and give effect to the legislature‘s intention to the fullest degree.” Sol v. AIG Hawai‘i Ins. Co., 76 Hawai‘i 304, 307, 875 P.2d 921, 924 (citation and internal quotation marks omitted), reconsideration denied, 76 Hawai‘i 353, 877 P.2d 890 (1994). “Courts cannot amend statutes in the guise of interpreting them, and they must presume that [the legislature] meant what it said. . . . Only unmistakable support in the history and structure of the legislation can justify a rejection of otherwise unambiguous language.” Richardson, 76 Hawai‘i at 57, 868 P.2d at 1204 (citation and internal quotation marks omitted).
In other words, when faced with a valid statute, this court is bound to interpret and apply the statute in a manner consistent with the purpose and policies determined by the legislature when it enacted that particular law. Accordingly, because the majority‘s analysis ignores clear statutory language and legislative intent to generally exempt motorcycle operators from Hawai‘i‘s motor vehicle no-fault laws, I would affirm the circuit court‘s order denying Dines‘s petition to compel arbitration.
II. DISCUSSION
The majority argues that “[t]he outcome of Dines‘s appeal turns on whether, under Hawai‘i law, a named insured under an automobile liability insurance policy, who is injured by a hit-and-run driver,1 can be entitled to UM benefits thereunder when the named insured is operating a motorcycle at the time of the accident.” Majority opinion at 326, 893 P.2d at 177 (emphases in original). The majority correctly states: (1) that
However, relying primarily on
A. Limitation On The Rule Of Liberal Construction
Although remedial statutes are to be construed liberally, this rule of liberal construction is not boundless and should not override other rules of statutory construction “where its application would defeat the intention of the legislature or the evident meaning of an act.” Sutherland Statutory Construction § 60.01 (5th ed. 1992) (footnote omitted). Statutory construction dictates that an interpreting court should not fashion a construction of statutory text that effectively renders the statute a nullity or creates an absurd or unjust result. Richardson, 76 Hawai‘i at 60, 868 P.2d at 1207. It goes without saying that a legislature does not go through the enactment process to accomplish absolutely nothing.
B. HRS Article 431:10G And Relevant Legislative History
Here,
To fully understand the purpose underlying article 10G, we begin with a thorough historical examination of Hawai‘i‘s motorcycle and motor scooter insurance provisions. Prior to the enactment of Hawai‘i‘s motor vehicle no-fault laws in the early seventies, motorcyclists and motorcycle dealers opposed the inclusion of motorcycles in the motor vehicle no-fault laws citing the negative effect on the motorcycle premium rates as a justification for the exclusion. Additionally, they maintained that because other no-fault States excluded motorcycles, so should Hawai‘i. Susan K. Claveria, Motorcycles Under The Hawaii No-Fault Law 1 (1984) (a report submitted to the legislature pursuant to House Resolution No. 391 adopted during the Regular Session of 1983). Despite this strong lobbying effort by motorcyclists and motorcycle dealers, the legislature included motorcycles under the scope of Hawai‘i‘s motor vehicle no-fault laws. Id. However, because motorcycle insurance rates were subject to greater increases over the years, the movement for the exclusion of motorcycles was revived. Id.
1.
In 1985, the state senate introduced Senate Bill No. 309 to “remove motorcycles and motor scooters from the requirements of Chapter 294” (hereafter also cited as Hawai‘i‘s no-fault laws). Sen.Conf.Comm.Rep. No. 49, in 1985 Senate Journal, at 876. In Senate Conference Committee Report No. 49 (1985), the legislature commented:
This bill would allow persons to operate motorcycles and motor scooters on public streets without the necessity of obtaining and maintaining no-fault motor vehicle insurance. However, in order to afford protection to the general public from the negligent or reckless operation of motorcycles and motor scooters, the bill would require insurance coverage for bodily injury to others . . . and property damage insurance. . . .
In effect, the bill would allow persons to operate motorcycles and motor scooters without insurance coverage for personal
injuries to themselves, or for their wage loss or medical expenses. Further, an owner or operator of a motorcycle or motor scooter who is involved in an accident with an insured motor vehicle would not be able to collect no-fault benefits from the insurer of the insured motor vehicle. Your Committee recognizes the problem faced by owners and operators of motorcycles and motor scooters with respect to high no-fault insurance premium rates. This bill is intended to afford some measure of relief to such persons.
Id. (emphasis added). See Hse. Conf.Comm.Rep. No. 49, in 1985 House Journal, at 925.
Motorcyclists and motorcycle dealers lobbied strongly for the passage of this bill. They cited that the inclusion of motorcycles in Hawai‘i‘s motor vehicle no-fault program resulted in, inter alia, the marked increase in motorcycle insurance premiums, a shrinking market for motorcycle insurance, motorcycles being priced out of the reach of most consumers, and a growing number of persons operating motorcycles with no insurance coverage at all. See Senate Committee on Consumer Protection on Senate Bill 309, 13th State Legis., Regular Session (1985) (testimony of Leroy Hensley of Street Bikers United; Al Montgomery, President of Montgomery Motors, Ltd.; and John Connolly, Vice President of Yamaha of Hawaii).
In testimony supporting Senate Bill No. 309, the Hawaii Business League summarized problems associated with including motorcycles in Hawai‘i‘s motor vehicle no-fault system. Citing to a Hawai‘i no-fault study, entitled Review Of The Hawaii No Fault Law, the Hawaii Business League stated:
[W]e believe the study . . . by Tillinghast entitled, “[Review Of The Hawaii No Fault Law]” points out that the no fault insurance system has worked against motorcycles. They are actually being discriminated against. According to the report, the insurance rates for property damage coverage has [sic] increased more than personal injury coverage. This by itself is discriminatory to motorcycle riders inasmuch as their property damage is generally much smaller, however they do have higher personal injury claims.
The consultant also notes that in 1981, they cautioned that open competition in Hawaii‘s automotive insurance industry could have the potential of losing it‘s [sic] effectiveness towards the regulations of rates for “particular market segments where carriers are not interested in actively writing business.” Unfortunately, this is the case with carriers and the motorcycle industry, although there is a “take all comers” provision. Recent surveys by motorcycle dealers have revealed that very few of the carriers will provide quotes or at least realistic quotes.
We find [bill 309] desirable, inasmuch as the consultant points out that our current no fault law contains a provision that reimburses the insurer of a light weight vehicle when it collides with a heavier vehicle. This clause would apply to motorcycles. Amazingly enough we find that only $250,000 per year is paid for these kinds of cases. It would appear then that the majority of accidents incurred by motorcycles are single motorcycle accidents and, therefore, we are not dealing with the same type of situation for which no fault was enacted. If the individual is going to have an accident and it is a single vehicle accident, they should be provided with this option, since it affects no one but themselves.
Senate Committee on Consumer Protection on Senate Bill 309, 13th State Legis., Regular Session (1985) (testimony of Tim Lyons, Executive Vice President of The Hawaii Business League) (emphases added). See Review Of The Hawaii No Fault Law 12–16, 24–25 (1985).
In addition, the House heard testimony of those expressing the concerns with Senate Bill No. 309 regarding the following:
(1) maintaining the threshold amount under no-fault insurance for operators of motor vehicles, as well as for operators of motorcycles and motor scooters; (2) preventing operators of motorcycles or motor scooters from submitting claims under any no-fault policy when said operator is involved in an accident; (3) precluding owners or operators of motorcycles and motor
Hse.Stand.Comm.Rep. No. 908, in 1985 House Journal, at 1441 (emphasis added). Responding to these concerns, but recognizing that the purpose of the bill was to “remove motorcycles and motor scooter owners from [Hawai‘i‘s motor vehicle no-fault laws],” the House amended bill No. 309 by, inter alia: (1) including a provision stating that “the owner or operator of a motorcycle or motor scooter will not be exempt from Section 294-6” which sets the threshold amount for tort liability for operators of motorcycles and motor scooters; (2) precluding an owner or operator of a motorcycle or motor scooter from receiving no-fault benefits as a pedestrian; (3) precluding the operator of a motorcycle or motor scooter from receiving any benefits under any no-fault policy; and (4) deleting other provisions to exclude motorcycles and motor scooters from Hawaii‘s motor vehicle no-fault laws. Id.
Meanwhile, the Senate was concerned with: (1) keeping no-fault coverage intact in cases where a motorcycle rider strikes a pedestrian, or a passenger is injured; (2) continuing coverage for property damage and personal injury liability for pedestrians and riders as in no-fault; and (3) maintaining the threshold amount, under no-fault insurance, for those pedestrians or passengers injured by a motorcycle rider. Sen.Stand.Comm.Rep. No. 688, in 1985 House Journal, at 1181. Also recognizing that “the purpose of the bill was to remove motorcycle and motor scooter operators from [Hawai‘i‘s motor vehicle no-fault laws],” the Senate amended the bill by, inter alia, adding the following provision: “in case of accidental harm arising out of a motorcycle or motor scooter accident to any passenger of said motorcycle or motor scooter, or any pedestrian, motorcycles and motor scooters will not be exempt from sections 294-4, 294-6, and 294-10, Hawaii Revised Statutes.” Id.
Pondering over the long debated issue regarding the inclusion of motorcycles and motor scooters in Hawai‘i‘s motor vehicle no-fault laws and weighing the concerns of all parties involved, the legislature amended the no-fault laws and enacted
Motorcycles and motor scooters excluded from chapter.
(a) All motorcycles and motor scooters required to be registered under this chapter 286 [Highway Safety] shall be exempt from chapter 294 [Hawai‘i‘s motor vehicle no-fault laws]; provided that:
(1) No person shall drive a motorcycle or motor scooter upon any public street, road, or highway of this State at any time unless such vehicle is insured at all times under a liability insurance policy as provided in this section [
284-12.6(b) ].(2) In the case of accidental harm arising out of a motorcycle or motor scooter accident to any passenger of said motorcycle or motor scooter, or any pedestrian, motorcycles and motor scooters will not be exempt from sections 294-4, 294-6, and 294-10; and
(3) In the case of accidental harm arising out of an accident involving a motorcycle or motor scooter and a motor vehicle, the owner or operator of a motorcycle or motor scooter shall not be exempt from section 294-6. . . .
(Emphases added.) Based on the foregoing legislative history and the plain language of
In 1987, the State Insurance Commissioner proposed to recodify all statutes relating to insurance into one chapter of HRS to be known and cited to as the “Insurance Code.” See Sen.Stand.Comm.Rep. No. 848, in 1987 Senate Journal, at 1254. The legislature responded to this proposal by enacting Act 347 of 1987 that repealed many chapters in HRS and consolidated them under HRS chapter 431. 1987 Haw.Sess. L.Act 347.
In recodifying the insurance statutes, the legislature “declare[d] that the purpose of this chapter is to recodify, without substantive change, the insurance law in effect immediately prior to [July 1, 1988,] the effective date of this chapter.”
Hawai‘i‘s no-fault laws, codified in Chapter 294, were among the repealed chapters. However, the legislature recodified these laws in article 10C of the Insurance Code, known and cited as “Hawaii Motor Vehicle Insurance Law.”
However, instead of codifying the exemption of motorcycles and motor scooters from Hawai‘i‘s motor vehicle no-fault laws in one statute as in
Motorcycles and motor scooters excluded from article.
(a) All motorcycles and motor scooters required to be registered under chapter 286 [Highway Safety] shall be exempt from this article [Hawai‘i‘s motor vehicle no-fault laws]; provided that:
(1) No person shall drive a motorcycle or motor scooter upon any public street, road or highway of this State at any time unless such vehicle is insured at all times under a liability insurance policy as provided in section 431:10C-503; and
(2) In the case of accidental harm arising out of a motorcycle or motor scooter accident to any passenger of such motorcycle or motor scooter, or any pedestrian, motorcycles and motor scooters shall not be exempt from section 431:10C-301, section 431:10C-304, and section 431:10C-306;
(3) In the case of accidental harm arising out of an accident involving a motorcycle or motor scooter and a motor vehicle, the owner or operator of a motorcycle or motor scooter shall not be exempt from section 431:10C-306.
(Emphases added.) In light of the plain language of this statute and its relevant legislative history, the repeal of chapter 294, specifically
3.
In 1989, the legislature repealed HRS article 10C, part V, and recodified the motorcycle and motor scooter insurance provisions in HRS article 10G, entitled Motorcycle And Motor Scooter Insurance. The legislature expressed that the purpose of enacting article 10G was to “clarify the laws regulating motorcycle and motor scooter insurance” and essentially “protect the rights of operators and insurers alike.” Sen.Stand.Comm.Rep. No. 790, in 1989 Senate Journal, at 1103. See Hse.Stand.Comm.Rep. No. 1262, in 1989 House Journal, at 1306-07 (stating article 10G would “[c]larify the general inapplicability of the no-fault law to motorcycles and motor scooters“).
Because the legislature had already chosen to exempt motorcycles and motor scooters from Hawai‘i‘s motor vehicle no-fault laws which includes UM coverage and because article 10G only intended to clarify this policy decision, the legislature was not obligated to enact superfluous language to explain that, except as otherwise provided, Hawai‘i‘s no-fault laws as codified in article 10C were inapplicable to motorcycles and motor scooters. The general inapplicability of 10C, i.e., Hawai‘i‘s motor vehicle no-fault laws, to motorcycles and motor scooters is self-evident in light of the fact that the legislature went out of its way to enact a new statutory scheme, i.e., article 10G, for motorcycle and motor scooter insurance. Just as articles 10A (Accident And Sickness Insurance Contracts), 10B (Credit Life Insurance and Credit Disability Insurance), 10D (Life Insurance And Annuities), 10E (Property Insurance), and 10F (Surety Insurance) are generally inapplicable to article 10C (Motor Vehicle Insurance), article 10C is also inapplicable to article 10G (Motorcycle And Motor Scooter Insurance), except to the extent specifically provided.
In addition to going out of its way to enact a special article for motorcycles and motor scooters, the legislature went through the complex and intricate process of developing a separate insurance rating system for motorcycles and motor scooters. See
In light of the abundant amount of history evidencing the legislative intent to remove motorcycles and motor scooters from Hawai‘i‘s motor vehicle no-fault laws, the majority‘s comment seems untenable when it asserts that nothing in
C. Overruling Ragil Was Wrong.
The majority overrules National Union Fire Insurance Co. v. Ragil, 72 Haw. 205, 811 P.2d 473 (1991). The majority argues that by focusing solely on distinct statutory mechanisms for insuring motor vehicles and motorcycles, the Ragil court lost sight of two central rules of statutory construction: (1) laws in pari materia shall be construed with reference to each other; and (2) statutory language must be read in the context of the entire statute and construed in a manner consistent with the purpose of the statutes. Majority opinion at 331, 893 P.2d at 182 (citing Richardson, 76 Hawai‘i at 55, 868 P.2d at 1202 and Methven-Abreu v. Hawaiian Ins. & Guar. Co., Ltd., 73 Haw. 385, 392-93, 834 P.2d 279, 284, reconsideration denied, 73 Haw. 625, 838 P.2d 860 (1992)). Moreover, the majority states that:
[i]t is a cardinal rule of statutory construction that courts are bound, if rational and practicable, to give effect to all parts of a statute[, a fortiori an article,] and no clause, sentence, or word shall be construed as superfluous, void, or insignificant if construction can legitimately be found which will give force to and preserve all the words of the statute.
Majority opinion at 331, 893 P.2d at 182 (quoting Methven-Abreu, 73 Haw. at 392-93, 834 P.2d at 284 (citation omitted)) (emphasis added).
However, despite their awareness of this cardinal rule, the majority completely disregards it and adopts a construction of
This line of argument renders article 10G insignificant because it seemingly limits article 10G to consumers whose only insurable interest is a motorcycle or motor scooter. Because most motorcyclists also own a motor vehicle, the majority would seem to imply that the legislature went out of its way to enact a special article for motorcycle and motor scooter insurance and a separate rating system for only a small handful of consumers whose only insurable interest is a motorcycle. See Susan K. Claveria, Motorcycles Under The Hawaii No-Fault Law 12 (1984) (stating that of registered motorcyclist who responded to her survey, 84.3% reported owning a motor vehicle with four or more wheels).
Contrary to the majority opinion, the court in Ragil was absolutely correct when it concluded that the legislature drew a distinction between motorcycles and motor vehicles and, therefore, exempted motorcycles, with limited exceptions, from Hawai‘i‘s motor vehicle no-fault laws. Ragil, 72 Haw. at 210, 811 P.2d at 476. The Ragil court stated that:
The rationale behind this disparate treatment of motorcycles and motor vehicles is obvious. Motorcycle riders consent to an inherently more dangerous risk because they are less protected on the roadways than those in automobiles. This greater risk is reflected in the higher premiums they must pay for insurance.
The majority‘s analysis completely disregards the distinct risk pools recognized by the legislature when it enacted a separate insurance rating system in
Based on the foregoing, it is apparent that the legislature did not go through the trouble of enacting a separate rating system for motorcycles and motor scooters to accomplish absolutely nothing. Therefore, contrary to the majority opinion, it is the majority, not the court in Ragil, who has lost sight of the rules of statutory construction. Majority opinion at 331, 893 P.2d at 182.
D. The Majority Misapplies The Rule Of Liberal Construction.
The majority‘s position is evidently based on the mistaken belief that the rule of liberal construction applied to
However, as stated supra at 337, 893 P.2d at 188, the rule of liberal construction is not boundless and should not override other rules of statutory construction “where its application would defeat the intention of the legislature or the evident meaning of an act.” Sutherland Statutory Construction § 60.01 (5th ed. 1992) (footnote omitted).
The majority misapplies the rule of liberal construction thereby frustrating the legislature‘s intent. Therefore, because the majority erroneously concludes that UM coverage follows a person while operating a motorcycle or motor scooter that is directly contrary to legislative intent, the majority‘s opinion today amounts to no more than judicial legislation.
III. CONCLUSION
Accordingly, because the legislature intended to exempt motorcycles from Hawai‘i‘s motor vehicle no-fault laws, this court should hold that the legislature likewise did not extend motor vehicle UM coverage to an insured who is injured while operating a motorcycle. Thus, because Hawai‘i‘s motor vehicle no-fault laws clearly exclude UM coverage from motorcycles, I would affirm the circuit court‘s order denying Dines‘s petition to compel arbitration.
893 P.2d 194
STATE of Hawai‘i, Plaintiff-Appellee, v. Nathan K. DELIMA, Defendant-Appellant.
No. 17565.
Supreme Court of Hawai‘i.
April 19, 1995.
Notes
Although UM coverage is generally considered part of Hawai‘i‘s motor vehicle no-fault laws, the provision governing UM coverage was not located in chapter 294 when the legislature enactedCompelling compliance with agreement; jury trial when. A party aggrieved by the failure, neglect, or refusal of another to perform under an agreement in writing providing for arbitration, may apply to the circuit court for an order directing that the arbitration proceed in the manner provided for in the agreement. . . . The court shall hear the parties, and upon being satisfied that the making of the agreement or the failure to comply therewith is not in issue, the court hearing the application shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement. If the making of the agreement or the default is in issue, the court shall proceed summarily to the trial thereof.
According to Professor William R. Vance of the Yale Law School,
The general purpose of the business of insurance is then to distribute, as directly and effectively as possible, the risks of loss from any of the innumerable perils that beset the person who is active under the conditions of modern life among a large number of those who are exposed to similar perils. Thus, for example, by the operation of a vast number of insurance contracts made with numerous insurance companies, most losses suffered in connection with maritime ventures because of perils of the sea are directly distributed among the marine adventurers who are insured. The premium paid by the adventurer measures his distributive share of the risk. The cost of this distributive risk-bearing, that is, the insurance premium, is added to the cost of carrying on the business incurred, and, by a process of price adjustment, in ever widening circles indirectly distributed through the community. The direct and immediate benefit to the individual is his ability to calculate the burden of his risk. If his venture escapes the perils to which it is exposed, he must nevertheless bear his share, in the form of a premium payment, of losses suffered by his less fortunate fellows. If he himself is unfortunate, his loss is made up to him from the contributions of others, and the burden of his risk-bearing remains still limited to his distributive share measured by the premiums paid.
William R. Vance, Handbook on the Law of Insurance 4 (3d ed. 1951).
HRS ch. 431:10G, entitled “Motorcycle and Motor Scooter Insurance,” is comprised of
Conditions of operation and registration of motorcycles and motor scooters. No person shall drive a motorcycle or motor scooter upon any public street, road, or highway of this State at any time unless such motorcycle or motor scooter is insured at all times under a liability policy as provided in section 431:10G-301.
Required motorcycle and motor scooter policy coverage. (a) An insurance policy covering a motorcycle or motor scooter shall provide insurance to pay, on behalf of the owner or any operator of the insured motorcycle or motor scooter, sums which the owner or any operator may legally be obligated to pay for injury, death, or damage to the property of others, except property owned by, being transported by, or in the charge of the insured which arise out of the ownership, operation, maintenance, or use of the motorcycle or motor scooter:
(1) Liability coverage for all damages arising out of accidental harm sustained by any one person as a result of any one accident applicable to each person sustaining accidental harm; and
(2) Liability coverage for all damages arising out of injury to or destruction of property . . . but not including property owned by, being transported by, or in the charge of the insured, as a result of any one accident.
(b) At the option of the owner, each insurer shall:
(1) Offer medical payment coverage . . . to pay all reasonable expenses incurred within one year from the date of accident for necessary medical, surgical, and dental services, and necessary ambulance, hospital, professional nursing, and funeral services;
(2) Offer an income disability plan; and
(3) Offer liability coverage in excess of the minimum coverages required by this section.
Pursuant to
We note that, although it did not do so in the circuit court, Pacific contends on appeal that Dines failed to comply with the notice provisions of this subsection. Specifically, Pacific alleges that Dines‘s attorney notified it of the May 5, 1993 accident by certified letter dated June 3, 1993, but that “[t]he return receipt indicates that PACIFIC received the . . . letter on June 7, 1993 or more than thirty (30) days after the accident.” Answering brief at 1-2 (citing to 40-42 of the circuit court record). Pacific deems this state of affairs to be “in clear violation of [HRS §] 431:10C-103(23).” Id. at 10.
Pacific‘s allegations on appeal do not necessarily establish any violation of
Pages 40 through 42 of the circuit court record, to which Pacific refers in its answering brief and which are attached as Exhibit “C” to Dines‘s petition to compel arbitration, consist of a certified letter dated June 30, 1993 from Dines‘s attorney to one of Pacific‘s adjustors, purporting to respond to a letter from the adjustor dated June 14, 1993. The accompanying “domestic return receipt” reflects that Pacific received the June 30, 1993 letter on July 7, 1993. Thus, Pacific‘s “born again” assertion on appeal that it did not receive notice of the accident until June 7, 1993 is utterly without support in the record.
Tort liability.
. . .
(b) Any owner or operator of a motorcycle or motor scooter involved in a motor vehicle accident as defined in section 431:10C-103(9) and who incurs accidental harm as defined in section 431:10C-103(1), . . . shall not have a cause of action in tort except in the following circumstances:
. . .
(2) Injury occurs to the owner or operator which consists, in whole or in part, in a significant permanent loss of use of a part or function of the body; or
(3) Injury occurs to the owner or operator which consists of a permanent and serious disfigurement which results in subjection of the owner or operator to mental or emotional suffering; or
(4) Injury occurs to the owner or operator in a motor vehicle accident in which the amount paid or accrued exceeds the medical-rehabilitative limit established in section 431:10C-308 for expenses provided in section 431:10C-103(10)(A) and (B); provided that the expenses paid shall be presumed to be reasonable and necessary in establishing the medical-rehabilitative limit.