Debra DOWELL, et al., Appellants, v. SAFE AUTO INSURANCE COMPANY, Appellee.
No. 2005-SC-000153-DG.
Supreme Court of Kentucky.
Dec. 21, 2006.
208 S.W.3d 872
In my view, the statute mandates that the policy application fairly present uninsured motorist coverage as an “opt out,” rather than an “opt in” choice as presented by Globe‘s application. Merely because the policy uses the language “reject” beside of the box that was checked does not cure the defect in the policy which, viewed as a whole, presents the coverage as an “opt in” choice, suggesting that it is additional rather than basic coverage. Accordingly, I must respectfully dissent.
WINTERSHEIMER, JJ., joins this dissenting opinion.
WINTERSHEIMER, Justice, dissenting.
I must respectfully dissent from the majority opinion because I disagree with the analysis and rationale provided therein. Summary judgment for Globe American was incorrect.
In my view, the application misled Moore to think that she had already purchased all the insurance that was required by law and that the uninsured motorist coverage was nothing more than another type of added coverage that she could purchase at her option similar to the underinsured motorist coverage that was lumped into the same provision in the application. I recognize that pursuant to
Therefore, the trial judge erred in granting summary judgment to Globe American.
LAMBERT, C.J., joins this dissenting opinion.
Kevin C. Burke, Dan E. Siebert, Siebert & Johnson PLLC, Louisville, Counsel for Appellants.
Robert L. Steinmetz, Frost Brown Todd LLC, Louisville, Counsel for Appellee.
Opinion of the Court by Chief Justice LAMBERT.
This Court granted discretionary review of the Court of Appeals decision, wherein it affirmed a grant of summary judgment in favor of Appellee, Safe Auto Insurance Co. (Safe Auto). Debra Dowell and Tamatha Hasting, Appellants, seek reversal of the Courts below. The issue is whether Safe Auto must pay pursuant to the uninsured motorist coverage of the Dowell insurance policy for damages caused by a hit and run driver.
On April 19, 2001, while driving her vehicle insured by Safe Auto, Dowell was
As required by law, Ms. Dowell had her own automobile insurance policy. She was insured by Safe Auto and she paid the additional premium required for uninsured motorist (UM) coverage. Both Ms. Dowell and Ms. Hasting made claims for UM benefits under the Dowell policy with Safe Auto for injuries sustained in the accident. Safe Auto acknowledged that UM coverage was in effect, and also that Appellants were “insureds” under the policy since both Dowell and Hasting were “occupying” an insured vehicle. Safe Auto likewise assumed, for summary judgment purposes, the facts alleged by Appellants i.e., that the unidentified motorist caused property damage and that Appellants were injured. Appellants acknowledged that they do not know the identity of the hit and run driver, nor do they know whether he or the vehicle had liability insurance.
Safe Auto denied coverage. It contended that Dowell and Hasting could not prove, as required by Part V of the policy, that “no bodily injury liability bond or policy applie[d]” to the unidentified hit and run driver or the vehicle he was driving. It is undisputed that neither the police nor Appellants have discovered the negligent motorist‘s insurance coverage status because he fled the scene and remains unidentified.
Both Dowell and Hasting brought litigation against Safe Auto in the Jefferson Circuit Court. In due course Safe Auto sought a motion for summary judgment on the coverage issue. The trial court rendered an opinion and order granting Safe Auto‘s motion for summary judgment on May 29, 2003. In its opinion and order, the trial court held that our UM statute1 does not require insurers to provide coverage for hit and run vehicles, and that insurers have no obligation to indemnify an insured for injuries caused by an unidentified motorist where liability insurance status cannot be determined. It also held that the Safe Auto policy did not provide UM coverage in hit and run accidents.
Appellants appealed to the Court of Appeals. In its opinion, that court affirmed the trial court‘s summary judgment in favor of Safe Auto. The Court of Appeals held that the trial court correctly discovered no coverage for Appellant‘s claims because the policy did not specifically cover accidents involving unidentified drivers, and that the UM statute does not require insurers to provide such coverage. The Court of Appeals relied on our recent decision in Burton v. Farm Bureau Ins. Co., 116 S.W.3d 475 (Ky.2003)2 to hold that Appellants had failed to dem-
This case involves construction of Kentucky Statutes and a written insurance contract. In such circumstances our review is de novo and we have no obligation of deference to the lower courts.4 “It is well established that construction and interpretation of a written instrument are questions of law for the court.”5 We will consider the views of the United States District Court for the Western District of Kentucky on the issue before us as instructive.6
Litigation over uninsured motorist coverage, and specifically the hit and run feature of it, is not new to this Court. Throughout our jurisprudence we have been called upon to address such issues many times, and interpret several different insurance policies. Our case law will be discussed and applied to this case, but we note that insurance policies are constantly evolving, and we must frequently construe new policy language. So it is with this case. The insurance policy at issue here must be reviewed within the framework of our decisions, but with the understanding that those decisions do not address the specific language we are called upon to examine here.
Part V of the Dowell policy, Uninsured/underinsured Motorist Coverage, creates the insuring agreement:
Subject to the limits of liability, if you pay a premium for Uninsured Motorist Coverage, we will pay for damages, other than punitive or exemplary damages or attorney fees, which an insured person is entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury:
- physically sustained by an insured person
- caused by accident; and
- arising out of the ownership, maintenance, or use of an uninsured motor vehicle.
For purposes of this review, the case turns on whether “Uninsured Motor Vehicle,” as defined in the policy, covers the other vehicle involved in the accident.7 Said otherwise, was the hit and run vehicle an uninsured motor vehicle under the Dowell policy?
Uninsured motor vehicle means a land motor vehicle or trailer of any type:
- to which no bodily injury liability bond or policy applies at the time of the accident;
- to which a bodily injury liability bond or policy applies at the time of the accident, but the bonding or insuring company:
- denies coverage; or
- is or becomes insolvent; or
- to which bodily injury liability bond or policy applies at the time of the accident, but its limit of liability for bodily injury is less than the minimum limit of liability for bodily injury required under the Kentucky Motor Vehicle Reparations Act.8
Under Kentucky law uninsured motor vehicle coverage is mandatory, and it may not be eliminated unless rejected in writing by the insured.9 While an “uninsured motor vehicle” is not explicitly defined in
However, the statute includes the phrase “subject to the terms and conditions of such coverage” to “recognize that individual insurers may, by contractual definitions, provide coverages and terms and conditions in addition to those required by the statute.” 12 Most insurance policies include hit and run vehicles within the definition of uninsured motor vehicle.13 However, as our cases illustrate, insurance companies are at liberty to define what an “uninsured motor vehicle” is, so long as they do not violate the statute. Safe Auto argues that when it defined “uninsured motor vehicle” in its policy, it purposefully and unambiguously left out “hit and run” vehicles. Whether its attempt to leave out this traditional coverage was effective is the crux of this case.
Under Part V of the Dowell policy, an uninsured vehicle is a motor vehicle “to which no bodily injury liability bond or policy applies at the time of the accident.” This critical language is not included in
Appellants argue that the word “applies” is not defined by Safe Auto, and as such, the word must be given its plain and ordinary meaning. According to Webster‘s
In Allen v. Safe Auto Ins. Co., 332 F.Supp.2d 1044 (W.D.Ky.2004),15 the United States District Court, construing identical language to that before us here, determined that Safe Auto had narrowly tailored its coverage to include only the minimum required by
The uncertainty associated with the word “applies” is further exacerbated by other language in the Safe Auto policy. Following the definition of “uninsured motor vehicle,” Safe Auto identifies nine exclusions from coverage. The policy provides that the definition of “uninsured motor vehicle” does not include any vehicle or equipment:
- Owned by, or available for regular use by the insured;
- Owned by or operated by a self-insurer under any applicable vehicle law, except a self-insurer that is or becomes insolvent;
- Owned by any governmental unit or agency;
- Operated on rails or crawler treads;
- Designed mainly for use off public road, while not on public roads;
- While used as a residence or premises;
- Shown on the declarations page of this policy;
- Not required to be registered as a motor vehicle; or
- That is an underinsured motor vehicle
Thereafter, the policy identifies fifteen additional exclusions applicable to both uninsured and underinsured motorist coverage. None of those twenty-four exclusions disclose that injury inflicted by a hit and run vehicle is not covered. Safe Auto could have used an unambiguous definition of a hit and run vehicle in its exclusions section, or simply excluded “hit and run vehicle,” but it did not.
The language added by Safe Auto “to which no bodily injury liability bond or policy applies at the time of the accident” is not contained within
Safe Auto argues that it is unknowable whether the tortfeasor had liability insurance because he absconded. Consequently, it contends that Appellants cannot sustain their burden of proof to establish that the tortfeasor was an uninsured motorist. Generally, plaintiffs have the burden of proving each element of their claims. As previously explained however, the use of the word “applies” in the policy makes it clear that since the tortfeasor cannot be located, his actual insurance status is not controlling. In any event “applies” should be given the meaning that most favors Appellants.17 As a matter of law, since the hit and run driver cannot be located, no insurance policy “applied” at the time of this accident. As such, Appellants met their burden to show that there was no applicable liability insurance, and the burden shifted to Safe Auto to prove otherwise. This was the holding in Motorists Mutual Ins. Co. v. Hunt18 as follows:
Since the absence of insurance upon the offending vehicle and its driver is a condition precedent to the applicability of the uninsured driver endorsement, we hold that the burden of proving such absence is upon the claimant. However, we must keep in mind that proving a negative is always difficult and frequently impossible and that, consequently, the quantum of proof must merely be such as will convince the trier of facts that all reasonable efforts have been made to ascertain the existence of an applicable policy and that such efforts have been proven fruitless. In such an event, and absent any affirmative proof by petitioner (the insurance company), the inference may be drawn that there is in fact no insurance policy in force which is applicable.
Based on the language “to which no bodily injury liability bond or policy applies at the time of the accident,” this Court concludes that an unidentified hit and run vehicle is not excluded from the UM coverage of this policy. As such, coverage is deemed applicable to Appellants.
Accordingly we reverse the summary judgment of the trial court and remand for further proceedings consistent with this opinion.
GRAVES, McANULTY, NOBLE, SCOTT, and WINTERSHEIMER, JJ., concur.
MINTON, J., dissents by separate opinion.
MINTON, Justice, dissenting.
Relying principally upon a Webster‘s dictionary definition to find a nonexistent ambiguity, the majority quietly buries decades of precedent that held that hit and run vehicles are covered under UM policies only if the policy itself clearly says so. Because I believe that the decision we reach today will upset the settled state of our UM jurisprudence, as well as the settled expectations of both insurers and insureds, I respectfully dissent.
Under our clear precedent, the UM statute does not mandate coverage for hit and
In the case before us, it is uncontested that unlike most automobile insurance policies,3 Dowell‘s Safe Auto policy did not expressly provide UM coverage for hit and run vehicles. And it is inarguable that as plaintiffs, Dowell and Hasting had the burden of proving each element of their claim, including the requirement that Dowell‘s UM policy covered the hit and run vehicle.4 But despite their inability to show whether the hit and run vehicle was insured, and despite the fact that the UM provision of Safe Auto‘s policy did not include hit and run vehicles in its UM coverage, the majority concludes that Dowell and Hasting met their burden of proving that Dowell‘s UM policy unambiguously affords coverage for hit and run vehicles.
The majority reasons backwards: because Dowell‘s UM policy does not specifically list hit and run vehicles among the exclusions from coverage, then coverage for hit and run vehicles must be included. Although the majority does not expressly state that it is doing so, its holding reverses decades of precedent that hit and run vehicles are only covered under UM policies if the policy expressly includes, not excludes, such coverage.5 Simply put, the majority‘s startling assertion that “since the tortfeasor cannot be located, his actual insurance status is not controlling[,] [and,] [a]s a matter of law, since the hit and run driver cannot be located, no insurance policy ‘applied’ at the time of
I also believe the majority errs when it concludes that Safe Auto‘s use of the word “applies” in the definition of uninsured motor vehicle is so far outside the terms of
It is unquestioned that Safe Auto intended to provide the least coverage allowed by law, an important fact largely overlooked by the majority. Marketing minimum automobile liability insurance coverage for the cheapest premium is Safe Auto‘s pitch, as proclaimed in its ubiquitous television commercials, as well as their website.9 This approach has consumer appeal. And the majority cites to nothing suggesting that either Dowell or Safe Auto intended that the premium Dowell paid would provide more insurance than the minimum needed to operate an automobile legally in Kentucky.
Safe Auto‘s position is supported by the specific holding in Allen v. Safe Auto Ins. Co., 332 F.Supp.2d 1044 (W.D.Ky.2004),10 a recent opinion from the United States District Court for the Western District of Kentucky interpreting an insurance policy identical to the one purchased by Dowell. In Allen, the court expressly re-
Finally, I believe the majority has usurped the role of the General Assembly by announcing today that the public policy of Kentucky mandates that all hit and run drivers fall within a policy‘s UM coverage, unless that policy‘s exclusions clause explicitly mentions them. Under the majority‘s interpretation, coverage for hit and run vehicles is now to be presumed, contrary to our precedent in which non-coverage was presumed. As noted in Burton, the UM statute has been virtually unchanged for decades,12 as has our interpretation of it—until today. So I would infer from longstanding precedent that the General Assembly did not desire to make hit and run vehicles presumptively covered by UM policies.13 And I believe the majority errs when it wades headlong into this issue of public policy that is best left to the General Assembly.14
Because the majority‘s conclusion represents a total reversal of our previous holding that hit and run vehicles are included within a policy‘s UM coverage only if the policy‘s terms unambiguously so provide, and because the majority‘s construction of Dowell‘s UM policy grafts unintended and unnegotiated-for coverage onto a policy that was designed to provide only the bare minimum coverage required by the law (and nothing more), and because the majority‘s conclusion thwarts the settled intent and expectations of insurers and insureds throughout the Commonwealth, I respectfully dissent.