THE EMPLOYERS’ FIRE INSURANCE COMPANY et al. vs. LORI E. BAKER et al.
Rhode Island Supreme Court
MARCH 2, 1978.
383 A.2d 1005
734, 735, 736, 737, 738, 739, 740, 741, 742, 743, 744, 745, 746, 747, 748; PRESENT: Bevilacqua, C.J., Paolino, Joslin, Kelleher and Doris, JJ.
The facts in this case are uncontested. On June 15, 1974, defendant Baker, while operating a motorcycle owned by and registered to her, was injured by a van operated by an uninsured motorist. Sometime prior to the accident, defend
“Exclusions: This policy does not apply:
* * *
“Under the Uninsured Motorists Coverage,
(p) to bodily injury to an insured while occupying a highway vehicle (other than an insured automobile) owned by the named insured or by any person resident in the same household who is related to the named insured by blood, marriage or adoption, or through being struck by such a vehicle.”
Under the York policy a “highway vehicle” is defined as “a land motor vehicle or trailer.”
Additionally, Baker alleges that on the date of the accident she was a resident of the same household as her father. As of June 15, 1974, two policies issued to her father were in full force and effect, a family combination automobile policy issued by plaintiff Employers and an automobile liability and physical damage policy issued by plaintiff American. Baker has brought suit against both Employers and American under the uninsured motorist coverage of their respective policies.2 American and Employers do not
The Employers clause is located in Part IV, entitled Protection Against Uninsured Motorists, and provides as follows:
“Other Insurance: With respect to bodily injury to an insured while occupying an automobile not owned by the named insured, the insurance under Part IV shall apply only as excess insurance over any other similar insurance available to such insured and applicable to such automobile as primary insurance, and this insurance shall then apply only in the amount by which the limit of liability for this coverage exceeds the applicable limit of liability of such other insurance.”
The American clause is located in paragraph 7, entitled Conditions, applicable to uninsured motorist coverage, and provides as follows:
“7. Other Insurance: With respect to bodily injury to an insured while occupying an automobile not owned by the principal named insured, the insurance under this endorsement shall apply only as excess insurance over any other similar insurance available to such insured and applicable to such automobile as primary insurance, and this insurance shall then apply only in the amount by which the limit of liability for this coverage exceeds the applicable limit of liability of such other insurance.”
The plaintiffs, defendant York, and defendant Baker each moved for summary judgment. The trial justice who heard the motions reserved decision pending the filing of memoranda by the parties. In their memoranda plaintiffs renewed their argument that the policies they issued to Baker‘s father should be considered merely as excess coverage over the limitation of the York policy. The defendant York urged that exclusion (p) of its policy was applicable to the claim and that, therefore, there was no coverage for Baker under its policy. Finally, defendant Baker argued that exclusion (p) was invalid as contrary to the provisions of
The trial justice held that exclusion (p) of the York policy and the “other insurance” clauses in plaintiffs’ policies were void as contrary to the public policy of this state as expressed in
I
This appeal raises two questions. The first is whether an exclusion in the uninsured motorist coverage of an automobile liability policy which precludes coverage for the in
“Uninsured motorist coverage. — No policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in §31-3-7 as amended, under provisions approved by the insurance commissioner, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles and hit-and-run motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom, provided that the named insured shall have the right to reject such coverage.”
There is no question here that the insured was injured while operating a highway vehicle owned by her and that that vehicle was not insured under the York policy under which she seeks to recover. Exclusion (p) of York‘s policy clearly and unambiguously excludes uninsured motorist coverage in the factual context presented.
The exclusionary clause discussed in Murray applied to ”all insurance coverage to an insured under the policy while employed or engaged in an automobile business.” Id. In finding that exclusionary clause not repugnant to the public policy of
“Under
§27-7-2.1 an insured is entitled to uninsured motorist coverage, unless he rejects it * * * so long as he has general motor vehicle liability coverage under a policy issued to him.” Murray v. Remuck, 108 R.I. 179, 184, 273 A.2d 491, 494 (1971).
This distinction leaves us with a question of first impression in this state: is
There is a split of authority among the courts which have considered this issue. The majority view, which holds such exclusions invalid, reasons that the intent of uninsured motorist legislation is to protect persons from accidents which may not be compensable because of financially irresponsible drivers and that exclusions which restrict that coverage are violative of public policy unless specifically authorized by statute. The trend in those jurisdictions is to provide uninsured motorist coverage to all of the insured within the terms of the policy regardless of the particular vehicle occupied at the time of the injury. State Farm Automobile Insurance Co. v. Reaves, 292 Ala. 218, 292 So.2d 95 (1974); Nygaard v. State Farm Mutual Automobile Insurance Co., 301 Minn. 10, 221 N.W.2d 151 (1974).4 The minority position, which defendant York asks us to follow, is that the uninsured motorist legislation was never intended to force insurance companies to provide uninsured motorist coverage to all vehicles owned by the insured as long as one
As we said in Murray, an insurance policy is a contract between the insured and the insurer. The contract between York and Baker covered Baker as the insurer of her Ford Mustang. There is nothing in the plain language of
The second issue raised involves the construction to be given to the conflicting “other insurance” provisions in the uninsured motorist coverage clauses of the applicable policies, those issued by Employers and American. Baker has sustained a loss covered by two insurers. In anticipation of such situations, most policies contain “other insurance” clauses which purport to limit or avoid liability where other valid and collectible insurance covers the same loss.
In general there are four types of “other insurance” clauses used. These are (1) the pro rata clause which provides that the insurer will pay its share of the loss in the proportion its policy limits relates to the aggregate liability coverage available; (2) the “excess” clause which provides that the insurer‘s liability is limited to that amount of the loss exceeding the limits of other available insurance; (3) the “escape” clause which provides that the insurer is not liable if other coverage is available; and (4) the “excess-escape” clause which provides that the insurer‘s liability is limited to that amount of the loss exceeding the limits of other available insurance and that the insurer is not liable when the other available insurance contains limits equal to or in excess of its own limits. The clauses relied on by both American and Employers are of the “excess-escape” type.5
This court has found the “excess-escape” clause as it applies to uninsured motorist coverage of automobile liability policies repugnant to
In view of our decision in Pickering, the trial justice held the “other insurance” provisions in question were unenforceable in their entirety. She therefore invoked the well-settled principle that in the absence of provisions to the contrary, each insurer covering the same loss is responsible for the entire loss, although the claimant may have but one satisfaction. 8 Blashfield, Automobile Law and Practice §345.8 at 473 (3d ed. 1966). Thus she concluded that each insurer was liable for its proportionate share of Baker‘s damages. We agree.
As explicated recently by the New Jersey Supreme Court in its rejection of the validity of an “excess-escape” portion of the “other insurance” clause of the uninsured motorist coverage,
“[s]ince every such policy must offer such coverage, and the statute contains no suggestion of relief from its undertaking in favor of an issuing insurer merely because another insurer had assumed the same obligation in favor of the same accident victim, the statute unambiguously grants the victim prima facie recourse to any and all policies applicable, subject to the unquestionably implicit condition that his claims in aggregate not exceed his damages.” Motor Club of America Insurance Co. v. Phillips, 66 N.J. 277, 292, 330 A.2d 360, 368-69 (1974).
The appeal of the defendant York is sustained, the appeal of the plaintiffs is denied and dismissed, the judgment appealed from is vacated, and the cause is remanded to the Superior Court for further proceedings.
MR. CHIEF JUSTICE BEVILACQUA, dissenting in part. I do not agree with my Brother Paolino‘s interpretation of
The majority of jurisdictions have held that the Legislature, in adopting uninsured motorist statutes, intended to protect innocent insured motorists who suffer damages as a result of automobile collisions involving financially irresponsible drivers. State Farm Automobile Insurance Co. v. Reaves, 292 Ala. 218, 292 So. 2d 95 (1974); Nygaard v. State Farm Mutual Automobile Insurance Co., 301 Minn. 10, 221 N.W.2d 151 (1974); Lowery v. State Farm Mutual Automobile Insurance Co., 285 So. 2d 767
In Aldcroft v. Fidelity & Casualty Co., 106 R.I. 311, 259 A.2d 408 (1969), this court, concluding that
“The legislature, in our opinion, enacted this statute [
§27-7-2.1 ] for the purpose of providing, as a matter of public policy, protection of the named insured in policies to be issued for protection against financial loss resulting from the operation of uninsured motor vehicles.” Id. at 321, 259 A.2d at 415.
In the case at bar, exclusionary clause (p) of the York policy precludes coverage for the insured if he or she is injured while occupying an uninsured vehicle owned by the named insured. To the extent that this exclusion attempts to abrogate the intent of
For the above reasons, I adopt the view espoused by the majority of jurisdictions. Accordingly, I believe that the trial justice was correct in finding that exclusion (p) in defendant York‘s policy is contrary to the public policy of this state as enunciated in
MR. JUSTICE KELLEHER, dissenting in part. Since I did not participate when the court made its ruling in Murray v. Remuck, 108 R.I. 179, 273 A.2d 491 (1971), I can with all
“No policy insuring against loss resulting from liability imposed by law * * * shall be delivered or issued for delivery in this state * * * unless coverage is provided therein * * * for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles and hit-and-run motor vehicles * * * .” (Emphasis added.)
Our uninsured motorist statute contains no requirement that the insured have any relationship at the time of the mishap with any vehicle he owns or with one that is insured by his insurer. The statute simply states that the insurer must pay once the insured has demonstrated that he has sustained personal injuries which were caused by the negligent operation of a so-called uninsured motor vehicle. This court has said that the Legislature, in enacting this statute, was concerned that a purchaser of an automobile liability policy be given the opportunity to purchase insurance coverage for economic loss resulting from bodily injuries in those instances where both the owner and operator of the responsible vehicle are uninsured. Aldcroft v. Fidelity & Casualty Co., 106 R.I. 311, 259 A.2d 408 (1969). The insured‘s status at the time of the injury as passenger, pedestrian, or driver of an insured or uninsured vehicle is totally irrelevant so far as his ability to recover under the statutorily mandated coverage is concerned. The statute in no way relates coverage to the occupancy of a particular automobile. Indeed, its
Since the York policy sought to nullify the intended reach of
While there may not necessarily be strength in numbers, the views I have just expressed find support in the majority of jurisdictions that have considered the exclusion in question in the light of similar statutory provisions. These jurisdictions have taken the position that uninsured motorist coverage, unlike casualty or collision insurance, was intended to provide a form of limited personal accident insurance protecting the person or persons insured under the policy at all times and without regard to the activity in which they were engaged at the time. Such coverage is no
I am well aware that the position I now espouse may permit a two-car family to have a free ride in that, by paying for uninsured motorist coverage issued under the policy of only one vehicle, recovery may be had for injuries arising from the operation of the other. However, the insured is entitled to obtain the coverage the Legislature has ordered the insurer to provide and for which the insured has paid an extra premium. If the situation to which I refer should be corrected, the remedy lies at the statehouse and not the courthouse.
Hanson, Curran, Bowen & Parks, A. Lauriston Parks, David P. Whitman, for plaintiffs.
William G. Gilroy (for Lori E. Baker), John F. Dolan, John W. Kershaw (for York Insurance Company), for defendants.