*1
Marcie Rae FAMILY MUTUAL INSUR-
AMERICAN COMPANY, dba American Fami-
ANCE
ly Insurance, foreign corpo- licensed to do business
ration Idaho, Defendant-Respondent.
State
No. 36311. Idaho,
Supreme Court of
Boise, May 2010 Term.
Jan. 2011. April
Rehearing Denied
II. FACTUAL AND PROCEDURAL
BACKGROUND Hill, appellant, injured Marcie in a *3 twо-car accident with Andrea Hamilton in Andrea, November who was fifteen old, talking years phone on a cell when unexpectedly turned her vehicle she left Hill’s, approaching front of who was in the opposing Hill inju- lane of traffic. suffered Although ries to her back and to her knee. treatment, she has received medical Hill pain claims that she still suffers from knee mobility and loss of for which she needs arthroscopic surgery. accident,
At the time of the Andrea’s car was covered an automobile-insurance parents, Joseph held her and Jac- queline Hamilton. The Hamiltons’ $25,000 provided up in bodily-injury for coverage. Hill had an underinsured-motor- (“UIM”) policy ist Family American (“American Company Mutual Insurance Family”), respondent, $100,000 up for per person. contained an “ex- requiring deplete haustion clause” her to all bodily-injury of the tortfeasor’s before she could collect underinsurance ben- efits. against
Hill filed suit the Hamiltons but settled for less than the Hamiltons’ $1000 $25,000 policy litigating limits rather than the ease. She then asserted a claim for an $18,000 against Family, additional American an amount that included credit for the $1000 did that she not collect from tortfeasor. American nonetheless denied the Chartered, Pocatello, Johnson Olson for yet Hill had not claim because “exhausted” argued. Appellant. L. Charles Johnson bodily-injury policy. the tortfeasor’s Hill then filed this lawsuit American Trout, Jones, Fuhrman, PA, Gledhill Family -alleging breach of contract and fraud Boise, Christopher Respondent. P. Gra- parties and the submitted cross-motions for argued. ham summary judgment. The district court granted summary judgment to American JONES, Justice. W. Family, finding that the exhaustion clause unambiguously required Hill to exhaust the I. OF THE NATURE CASE bodily-injury policy Hamiltons’ limits before case, could receive UIM benefits. The court In this an underinsured-motorist she countervailing pub- Court to invalidate an also found there to be no claimant asks this plain requiring her to exhaust lic in Idaho that overrides the “exhaustion clause” Hill language the full limits of the tortfeasor’s insurance of the contract and allows being eligible appeal, recover. On Hill contends that be- before for underinsured- statutorily insurers are now mandated motorist benefits. cause Idaho, V.ANALYSIS coverage in the exhaus- to offer UIM policy by requiring clause offends tion Is A. The Exhaustion Clause Void against the Hamil- litigate her claim her to Policy Contrary to Public eligible to receive benefits. being tons before dispositive whether issue here is APPEAL ON III.ISSUES rely Family may on an exhaustion American solely deny Hill’s UIM benefits clause to properly the district court 1. Whether just she settled for under the tort- because summary judgment granted policy limits. The thrust of Hill’s feasor’s Family on Hill’s claim for *4 appeal is that the exhaustion clause contra- UIM benefits. public policy requiring venes Idaho’s attorney entitled to 2. Whether Hill is coverage, which embodied in I.C. 41- is appeal. fees on 41-2502(1) 2502(1). requires all in- Section to offer UIM with surance carriers OF REVIEW IV.STANDARD policies.1 argues Hill this Court their adopt the doctrine of “constructive should applies Court the same stan This exhaustion” to allow her to collect UIM bene- reviewing a dard as the district court when the tortfeasors’ limits even if fits above summary judgment. grant of a motion for Estates, L.L.C., she settles for less than those limits. Ameri- Huckleberry 140 Shawver v. (2004). Family responds law 354, 360, 685, can that Idaho case 93 P.3d 691 Idaho respect creates no to UIM filing summary judg for Since cross-motions review, claims. change does not the standard of ment Court evaluates each motion on its mer Klosterman, 205, its. 134 Idaho Stafford Unambiguous- 1. The Exhaustion Clause 1118, (2000). 206, Summary 998 P.2d 1119 ly Requires Hill tо Exhaust the Tort- deposi
judgment proper pleadings, is “if the Policy Insurance feasor’s tions, file, together on and admissions affidavits, preliminary A issue is to determine any, if show that there is no legal A effect of the exhaustion clause. any genuine issue as to material fact and that interpreted according contract must be to the moving judgment to a party is entitled 56(c). plain meaning of the words used if the lan law.” “This matter of I.R.C.P. guage unambiguous. is clear and Cascade liberally Court will construe the record in Glass, Auto Inc. v. Idaho Farm Bureau Ins. opposing party favor of the the motion for 660, 663, 751, Co., 141 Idaho 115 P.3d 754 summary judgment and will draw all reason (2005). ambiguous An is able inferences and conclusions favor of Co., reasonably susceptible it is to different inter party.” Arreguin v. Farmers Ins. Co., (2008). 459, 461, pretations. Armstrong v. Farmers Ins. Idaho 180 P.3d 500 (2006). 143 Idaho 139 P.3d freely The entire record is reviewed to deter freely question This Court reviews the summary ifmine either side was entitled to ambiguous. whether an insurance contract is judgment as a matter of law and to deter Prop. & Clark v. Prudential Cas. Ins. mine whether inferences drawn the dis (2003). 538, 541, 138 Idaho reasonably supported trict court are record. Potlatch Educ. Ass’n v. Potlatch Dist., 630, 634, dispute Hill that the UIM
Sch. 148 Idaho does not (2010). provision It reads: is clear. part: legally provision provides in der entitled to recover dam- 1. This relevant who are ages operators from owners or of uninsured operator's policy owner's or of motor [N]o liability vehicle insurance ... be deliv- and underinsured motor vehicles because of shall disease, delivery including for in this state with bodily injury, ered or issued respect sickness or registered prin- death, motor vehicle or resulting therefrom. cipally garaged in this state unless is 41-2502(1) (emphasis representing added I.C. provided supplemental therein or thereto ... amendment). the 2008 protection persons for the insured thereun- decisions or the constitution.” Bakk damages pay compensatory We will L.L.C., Spring-Wareham, er v. Thunder person insured is bodily injury which an (2005). the owner to recover from legally entitled vehi- an underinsured motor operator contract an insurance Whether cle— public policy “is to be determined from all and circumstances of each case.” facts Putzier, Ins. Co. v. Foremost only pay will under We (1980). addition, liability any bodily limits of under after the “analogous involving general cases the same liability policies have been ex- bonds or principles may be looked to the court in judgments or by payment of set- hausted conclusion.” Smith satisfactory arriving at a tlements. Serv., Hosp. v. Idaho boilerplate in language This the insurance industry, jurisdictions number of other and a virtually wordings to found identical that, is correct E.g. Liberty v. Am. Robinette unambiguous. yet, only as of Idaho case law has held that (S.D.Miss. Ins. F.Supp. *5 legislature “[n]either the Idaho nor Ins., 1989); v. Nationwide 317 Birchfield pub courts have declared that there exists a (1994). 502, 38, 503 The Ark. 875 S.W.2d policy applicable lic to underinsured motorist prece explicitly clause creates a condition v. Meckert Transamerica Ins. coverage.” benefits, entitling Hill to cover dent to UIM 597, 600, 217, Idaho 108 701 P.2d 220 payment a age only if she settles or receives (1985); accord Erland v. Nationwide Ins. policy limits. See Mar for the tortfeasor’s 133, 131, 286, Inc., 604, 136 Idaho 288 Wyreless Sys., v. oun 141 Idaho (2001). indicated, (“A (2005) repeatedly The Court 614, 974, 114 condition P.3d 984 however, occur, the sole reason there was no not certain to precedent is an event public policy regarding coverage clear UIM occur, performance but which must before regulate was because “Idaho statutes do not (quotation under a contract becomes due.” omitted)). v. Andrae coverage.” underinsured motorist Mgmt. Prog. Idaho Counties Risk Under 2. Exhaustion Clauses UIM Insur- writers, 33, 36, 195, 145 Idaho 198 They ance Contracts Are Void Because Meckert, (2007) (citing 108 Idaho at Policy Violate Idaho State Public 220). rejected public policy P.2d at We have Next, this Court must determine challenges policies only be related to UIM public the exhaustion clause violates whether require cause “our statutes do not an auto Quiring v. question law. policy, which is mobile insurer to include underinsured vehi 560, 566, Quiring, Idaho coverage cle in its or even to offer (1997). “liberty The of contract is not an to its insureds.” Farmers Ins. right, upon and unlimited but absolute 345, 347, Buffa, Co. v. 119 Idaho public contrary always subservient to the (1991); Nationwide Mut. see also D.B., J.F. v. welfare.” 116 Ohio St.3d Scarlett, 820, 822, v. Ins. Co. 116 Idaho (citation omitted). (2007) 879 N.E.2d (1989) (same). 142, 144 P.2d will declare void courts not hesitate to “[T]he 2008, however, public policy provi Legislature did be- contractual gin require UIM clearly injury which tend to the of the insurers to offer cover- sions 41-2502(1) 17A C.J.S. Contracts way.” age. § to ex- public in some It amended I.C. (2010). applied by pressly require companies to offer § 218 “The usual test insurance provisions policies. Act dеtermining whether a contract of such with automobile courts § antagonistic and is to the of March eh. fends 183,183. may only Sess. Laws Insureds now public interest is whether the contract has tendency they writing. toward such an evil.” Stearns refuse this do so 41-2502(2)). (codified Williams, Id. § The P.2d at I.C. added). protec- requires amendment insurers to offer (emphasis “Public vehicles,” statutes, against “underinsured motor may found and set forth in the tion policy. with limits at Hill’s insurance Absent an assertion defined as vehicles insured statutory bodily contrary, presumes minimum for to the this Court that the least at the 2008 Idaho Sess. Laws was submitted to the Di- injury or death.2 41-2503(2)). (codified comport I.C. rector and was found to at 184 at Reichert, policy. Legislature accordingly protect Foreign intends to Am. Ins. Co. v. carrying poli- drivers Idaho’s citizens from statutorily required policy Legislature empowered lev- The has the Director
cies above the
els but who have insurance insufficient to
to invalidate an insurance
for a num-
reasons, including
compensate their tort victims.
ber of
because it contains
inconsistent,
“any
ambiguous, misleading
or
Legislature apparently
enacted the
clauses,
exceptions
or
and conditions which
First,
amendment
for two reasons.
deceptively
purported
affect the risk
to be
most obvious is the threat that underinsured
general coverage
assumed in the
of the con-
pose
public safety.
motorists
Idahoans
tract,
unfairly prejudicial
or which are
to the
injuries
suffering catastrophic
from drivers
41-1813(2).
holder.”
Hill
I.C.
does
carrying
insufficient
could find
not contend that the Director failed to review
themselves without redress if
have no
disapproved
her
with American
policy.
Family.
Second,
coverage,
without UIM
Idahoans
injured by
totally
The Dissent contends that the Court
uninsured driver some-
injured by
simply
times recover more than those
should
defer to the Director and hold
Many
policy comports
public policy,
underinsured drivers.
drivers in Ida-
injured by
ho
underinsured motorists had
but
the fact
the Director
they purchased
little recourse if
approved
merely
uninsured-
these contract terms
cre
*6
(“UM”) policies
presumption
motorist
but had no UIM ates a
valid and is
coverage,
policies provided
since those
no not conclusive.
v. State
Hansen
Farm Mut.
Co.,
663, 667-68,
benefits if the underinsured tortfeasor had at Auto. Ins.
735
(1987).
974,
course,
required
least the minimum
amount of insur- P.2d
978-79
Of
even if
coverage.
ance
As this Court observed bе-
the Director has reviewed the terms in this
Legislature implemented
case,
fore the
the UIM
the insurance
here was executed
mandate, many
“may
Legislature
drivers in this state
before the
amended the Code to
position
require
well be in a better
if a
coverage.
tortfeasor
insurers to offer UIM
carries no insurance whatsoever rather than Director could not have known about the
carrying
by Legislature’s
the minimum
public-policy
mandated
new
decisions at
statute,”
and that “the matter
that time.
deserves
legislative attention.” Blackburn v. State
Nearly every jurisdiction with a stat
Co.,
Farm Mut. Auto. Ins.
utory UIM mandate similar to Idaho’s has
425,
(1985);
Longworth,
697 P.2d
430
see also
contrary
found exhaustion clauses to be
(stating
Before further, however, necessary Co., 155, sue Pa.Super. it is to note Aetna 442 Cas. & Sur. 1346, 1348(1995); Department Rutgers Director of the of In 658 A.2d Cas. Ins. Vassas, 163, 162,166 presumably surance approved the terms in Co. v. 139 N.J. 652 A.2d required public highways carrying 2. The minimum amount of insurance is in Idaho without $25,000 $50,000 per person per accident. statutory liability minimum amount of insurance. 49-117(18). Subject I.C. to some limited ex- 49-1428(1). §Id. ceptions, nobody may operate a motor vehicle on
625
Exch.,
(1995);
Co.,
507,
881,
Pa.Super.
Mann v. Farmers
Ins.
108 Ins.
451
680 A.2d
(1992)
620,
(1996).
648,
overruled
Nev.
Co.,
grounds by White v. Cont’l Ins.
on other
Conversely, nearly every state that has
But
119 Nev.
rejected the constructive-exhaustion doctrine
Co.,
253 Neb.
see Ploen v. Union Ins.
has done so because a
express-
statute either
(rejecting
pub
N.W.2d
ly
expressly required
allowed or
UIM cover-
challenge).3
comport
lic
These cases
age to be conditioned on an exhaustion clause
majority position
with the overall
nationwide
like the one at issue here.5 The Idaho stat-
and,
that exhaustion clauses are void
under
ute, by comparison, simply requires
insur-
doctrine,4
the constructive-exhaustion
do not
ance
delivered or issued in Idaho to
prevent
“exhausting”
from
an insured
contain underinsurance
unless ex-
settling for an amount
tortfeasor’s
pressly rejected
writing by
the insured.
than the
limits.
Ins.
less
Farmers
(2).6
41-2502(1),
I.C.
The Idaho Code nei-
Hurley,
Cal.App.4th
v.
90 Cal.
Exch.
requires
ther
expressly permits
nor
exhaus-
(1999);
Rptr.2d
Horace Mann Ins.
tion clauses.
Adkins,
599 S.E.2d
Co.
W.Va.
This Court
carefully
must therefore
(2004); e.g.
Hampshire
Ins.
729 n.
New
requiring
evaluate whether
(Fla.Dist.Ct.
insureds to com
Knight,
Co. v.
506 So.2d
ply with UIM exhaustion clauses would
App.1987);
v. State Farm Mut.
Metcalf
Legislature’s goal
protecting
thwart
(Ky.Ct.
Auto. Ins.
944 S.W.2d
motorists
from underinsured
drivers. Be
prevent
App.1997). To
the UIM carrier
41-5202(1)
benefits,
designed
cause I.C.
to reme
paying
from
extra-contractual
how
ever,
dy
public-safety
problem
created
always
“the underinsurer
is allowed to
un
drivers,
derinsured
it is a remedial
credit
the full amount of the tortfeasor’s
statute.
“It is
liability coverage against
statutory
a well-known canon of
the insured’s dam
con
legislation
struction that
ages.” Hamilton v. Farmers
Ins. Co.
remedial
to be
Washington,
liberally
give
107 Wash.2d
construed to
effect to the intent
(1987);
legislature.”
accord Sorber v. Am. Motorists
of the
Hobby
State v.
Horse
Instead,
Family
heavily
many jurisdictions
3. American
relies
on a Wisconsin
exhaustion."
state
case,
Danbeck v.
payments
Mut. Ins.
that the UIM carrier’s
are "offset”
*7
186,
(2001),
245 Wis.2d
627 delay at the same time claims are could have to endure needless and the insurer multiple expense litigating tortfeasors. Leslie or pending against lose benefits. his/her F.Supp.2d Transp. W.H. 338 689 v. Second, Idaho’s courts will have to contend (S.D.W.Va.2004); Accident Ins. see also Gen. unnecessary litigation merely so that Wheeler, A.2d v. 221 Conn. 603 Co. preserve UIM claimants can their benefits. (1992) (requiring the claimant to exhaust 387 Clothier, Schmidt v. 338 N.W.2d though a only one tortfeasor’s even (Minn.1983) statute); (superseded by Augus expressly required exhaustion of all statute Simonson, tine v. Mont. 940 P.2d policies). 116, 120 As this Court and the U.S. claimants, words, are better UIM other Supreme discussing Court have held in cases equipped than their UIM carriers to most estoppel judicata, collateral and reducing res efficiently against the tortfea- resolve claims repetitive unnecessary litigation legiti is a They position are in the best to deter- sor. goal, up judicial mate as it frees resources ex- mine whether it is worth the time and legitimate disputes. McCurry, Allen v. pense litigate. 90, 94, 411, 415, 449 U.S. 101 S.Ct. (1980) Legislature’s The Dissent asserts that the (stating L.Ed.2d that both any way amendment “does not in estoppel 2008 UIM judicata collateral and res conserve resources); purport procedures to address the for mak- Hosiery Parklane Co. v. ing coverage,” and there- Shore, 322, 326, 645, 649, a claim under such 439 U.S. 99 S.Ct. legisla- (1979) does not indicate that there is a (similar); fore L.Ed.2d Brown v. protecting Felsen, tive aimed at Idahoans from 127, 131, 2205, 2209, 442 U.S. 99 S.Ct. Legislature motorists. The (1979) underinsured (holding 60 L.Ed.2d that res clearly pro- UIM enacted the amendments judicata “frees the courts to resolve other being tect the citizens of this State from Inc., disputes”); Wyreless Sys., Maroun v. injuries, undercompensated for their and ex- 604, 617, (2005) substantive, impose a haustion clauses not (collateral Mock, estoppel); Hindmarsh merely procedural, obstacle in front of acci- (2002) (res 92, 94, seeking Requir- dent victims UIM benefits. Pocatello, judicata); City Anderson v. ing actually victims to exhaust the tortfea- policy limits the kind sor’s is not of UIM (collateral Pines, estoppel); see also Inc. v. Legislature contemplated.8 Bossingham, 131 Idaho (collateral (Ct.App.1998) estoppel). Apart from the remedial nature of the entirely separate UIM-mandate statute is the Promoting judiciary ultimately an efficient judicial economy. public interest in “Public public. potential benefits the all Given policy favors the resolution controversies that a claimant reasons need to through compromise and uncertainties limits, just settle for under it would be through litigation.” rather than settlement contrary principles judicial economy Compromise 15A Am.Jur.2d & Settlement require by litigation full exhaustion or settle- 5. Exhaustion clauses harm the Cobb, ment. at 482 S.E.2d 596-97. judicial economy ways. interest two First, reasons, they encourage foregoing For the now tortfeasors’ insurers we litigate against previous- UIM claimants. As hold exhaustion clauses in UIM automobile *9 mentioned, void, unenforceable, ly policies the tortfeasor’s insurer could to be and sever- against compel litigation use an exhaustion clause to аble in Idaho. To collect his or her insurer, by offering only just may proceed against to settle for under the UIM insured carrier, policy injured investigate limits. victim the UIM who must collision however, suggests Opinion, create 8. The Dissent also the Court is exhaustion clauses simply protecting myriad problems regardless accident who fail to for insureds of victims Insureds, settling policies. their read their insurance before for whether read clauses, policy Nothing may than the limits. aware of their exhaustion have to less tortfeasor’s undergo litigation Opinion policy- protracted in this be read to relieve and needless de- should having spite needing immediate medical or financial holders from to read and understand throughout policies. support. their As discussed severable, good unobjectionable parts gen- the claim in faith the attempt to resolve enforceable.”). erally the insured settled Hill will not receive a regardless of whether or, so, bargained for deal than for if can the insurer how better she she tortfeasor’s P.2d at 751. The UIM show that an underinsured tortfeasor is liable Taylor, much. exceeding policy credit for the full amount to her for an amount his carrier will rеceive policy, regardless and then off limits of the tortfeasor’s of the limits sets those Augustine, recovery. recovery. her UIM insured’s actual Rucker, 117; 121; P.2d at N.W.2d at see implement the constructive- We decline to Gorsuch, Corp. also Bethlehem Steel replace doctrine or to otherwise exhaustion (7th Cir.1984) (stating F.2d any judicially exhaustion other clauses “will the remainder of the court not enforce language. primarily pre- created This give the contract if the result will be to the much vent confusion over how settlement promisee substantially better deal than he the from the tortfeasor insured must extract for”). bargained had approaching before the UIM carrier for ben- suggested efits. Hill that courts should re- Subsequent Changes in State Law quire the settlement amount to be “reason- Designed Are the That to Protect Pub- relationship able” in the tortfeasor’s lic Can Invalidate a Contract Welfare requirement A limits. “reasonableness” Policy Provision on Public Grounds First, unnecessary for three reasons. claimant, insurer, Family American contends that since the not his or her has to Legislature only began requiring insurers to gap absorb the between the settlement and statutory offer UIM no long the tortfeasor’s limits. So protecting aimed at prejudice resulting there is no from the set- tlement, from underinsured drivers existed when Hill simply there is no need for courts to July entered into her insurance contract of determine whether the amount was “reason- 1,§ Second, 2005. See 2008 Idaho Sess. Laws at able.” the UIM claimant is in the (amending § 41-2502 183-84 I.C. effective position efficiently best resolve a claim 1, 2009). January case, reasons weighing provable facts of the applying that this Court would the statute be quick financial or medical need settle- ment, retroactively if it allowed Hill to collect UIM potential litigation. and the costs of A having benefits without settled for the tort- requirement might reasonableness obstruct feasors’ limits. pro- otherwise efficient claim resolution or long process by calling on the courts to § It is true that 41-2502 is not ret evaluate whether the settlement amount was roactive. No statute is retroactive unless the Third, asking judges “reasonable.” to deter- Legislature expressly declares that is. mine whether settlements are reasonable 73-101; Smith, I.C. Henderson v. 128 Ida parties would draw the back into court and 444, 448, 6, 10 ho “A statute goal promoting undermine the of swift claim given will not retroactive construction judicial economy. resolution and impose existing which it will liabilities not
Although Boy passage.” Hill’s exhaustion clause is at the time of its Doe v. void, Am., 427, 431, of her rest remains intact. Scouts 148 Idaho P.3d requiring (quoting City “To the extent that a term Ford v. Cald well, occurrence of a condition is unenforceable (1958)). reasons], public-policy Legislature expressly [for a court ex did not provide cuse the non-occurrence of the un 41-2502 to condition for its amendment to part apply preexisting policies. less its occurrence essential (Sec addition, agreed exchange.” plenty authority holding Restatement there is ond) (1981); interpreted according of Contracts see also that contracts are Nel Armstrong, son v. executed. the law at the time the contract is *10 1100, (1978) (“Where Serv., Inc., E.g. Hosp. 1104 a transaction Smith v. Idaho 89 696, (1965); 499, 503, composed benign is of both and offensive Idaho 698 components portions and the different are Northland Ins. Co. v. Boise’s Best Autos &
629
228, 231,
21,
Repairs,
private
24 rule
agreements
does not account
(Ct.App.1997),
grounds,
other
rev’d on
131
parties
unlikely
between
are
that
to endan-
(1998)
432,
(applying
ger
589
the
publiс
the
A
ap-
welfare.
more refined
contracts).
specifically
rule
to insurance
proach
only
nullify
agreements
is to
those
designed
that violate
protect
state
to
Nonetheless, regardless of when
public good,
the
object
either because the
of
41-2502(1)
enacted,
it
I.C.
is the
agreement
inherently
is
harmful or be-
responsibility not to
Court’s
enforce a con
agreement would,
cause a condition in the
in
provision
contrary
public poli
tract
that is
to
aggregate,
public.
tend to harm the
See
static,
cy.
not
may
“Public
but
Chicago, Burlington, & Quincy R.R. Co. v.
change as the relevant factual situation and
McGuire,
259,
219 U.S.
31 S.Ct.
thinking
change.”
of the times
Brown v.
263,
(1911)
328,
55 L.Ed.
339-40
(holding that
Cnty. Phys. Corp.,
Snohomish
120 Wash.2d
legislatures may
the state
nullify existing
747,
334,
duty
338
to
parties
contracts “where the
do not stand
enforcing
avoid
an invalid contract term is so
upon
equality,
public
or where the
health
strong that Idaho’s courts must raise the
demands
party
that one
to the contract shall
sponte
public
necessary.
issue
sua
protected
himself’);
be
17A C.J.S.
567,
Quiring,
This case
revolves around
provides,
respect
sion which
majority
underin-
2. Statute.
cites Idaho
(UIM)
sured
coverage,
motorist
“We will Code 41-2502 as amended in
but it is
pay
coverage only
under this
after the limits
clear that
the exhaustion clause does not
liability
injury liability
any public poli-
bodily
expressly
implicitly
under
violate
First,
cy
bonds or
that stat-
have been exhausted
declared
statute.
majority
require-
explain
cannot
how
apply
not even
to the insurance
does
ute
only applies
in this case.
It
to “the ment that an insured establish that the tort-
*13
policy or the
any
of
new
first renew-
issuance
precon-
feasor was in fact underinsured as a
any existing policy
replacement
or
of
of
al
recovering
dition to
UIM benefits violates
liability insurance with an
motor vehicle
public
the
policy requiring
compa-
insurance
ef-
January
2009.”
date on or
merely
coverage
to
nies
offer UIM
in their
after
fective
41-2502(3) (2010) (emphasis
Idaho Code
states,
liability policies.
motor vehicle
It
added).11
in
ease
policy
this
The insurance
Legislature clearly
“The
enacted the UIM
July
almost
date of
had an effective
protect the citizens of this
amendments to
January
years prior to
and one-half
three
their
being undercompensated for
State from
the
majority’s assertion that
2009.12 The
injuries____”
“Idaho’s UIM
It also refers to
policy violates some
exhaustion clause in this
protect
designed to
the
[that]
mandate
by
public policy declared
the 2008 amend-
motorists----”
public from underinsured
contrary
directly
to the
ment to the statute is
cover-
majority
The
seems to think that UIM
expressly
public policy
declared
legislature’s
coverage that
mandatory,
than
age is
rather
to which the
regarding
policies
the insurance
option
purchase.
to
The
insured has the
the
applies.
amendment
it believes that
majority’s hyperbole indicates
Second,
requires
insurance
statute
simply requiring
compa-
insurance
a statute
companies
coverage,
to
UIM
but Idaho
offer
coverage
nies to offer UIM
will somehow
41-2502(2)
grants
Code
the named insured
by
magically
under-
reduce accidents caused
right
reject
“the
either or both uninsured
(cid:127)
insured motorists.
coverage or underinsured motorist
motorist
fact,
majority opinion, not
it is the
coverage.”
the insured has the
Because
clause,
public policy
that violates
exhaustion
right
reject
coverage entirely, it is
by
expressly
declared
statute.
difficult to see how there is
41-2502(1) requires
of-
that insurers
prohibiting
entering
an
from
Code
insured
into an
coverage in
requires
insurance contract that
exhaustion
underinsured
fer uninsured and
liability policy
of the
liability
limits of the tortfeasor’s
vehicle
insurance
their motor
before the insured can collect UIM benefits.
director
provisions approved
“under
insurance,
pro-
for the
department
Third,
of
of
amendment had
even
the 2008
who
insured thereunder
persons
tection of
case,
applied
policy
to the
in
the statute
this
damages
legally
to recover
from
entitled
expressly
implicitly
does not
ex-
or
address
operators
or
of uninsured and under-
owners
any
procedures
haustion clauses or
of
bodily inju-
because of
insured motor vehicles
applicable
making
a claim under UIM
disease,
death,
ry,
including
re-
sickness or
concedes,
majority
coverage. The
“The Ida-
added.)
sulting
(Emphasis
therefrom.”
requires
expressly per-
ho Code neither
nor
policy
is that the
public
declared
statute
clauses,”
majority
mits exhaustion
and the
Insurance,
Department
not
director of the
of
identify any statutory provision
does not
Court,
authority
has the
to determine
allegedly
implicitly
even
violated
the ex-
provisions of an insurance
whether
haustion
mere-
clause. The 2008 amendment
any express
not conflict with
statuto-
ly
that do
requires
companies
insurance
to offer un-
(UIM)
ry requirement are consistent with
derinsured motorist
in their
policy. There was a time when this Court
liability
policies.
motor vehicle
It does not
authority
correctly
usurp the
any
refused to
way purport
procedures
to address the
the director.
making
coverage.
granted by
legislature
a claim under such
form,
provides:
uninsured and underinsured motor-
11. This subsection
both
coverage,
under-
and the different forms of
ist
Prior to the issuance of
new
might
coverage that
be avail-
insured motorist
replacement
any existing
the first renewal or
in Idaho.
able from insurers
liability
vehicle
insurance with
of motor
January
an effective date on or after
stated that it was
"EFFECTIVE
provided
named insured shall be
a standard
(Bold
TO 12-22-2005.”
approved by
FROM 07-19-2005
statement
the director of the de-
insurance,
original.)
partment
explaining
summary
type
v. Farmers Insurance
statute,
In Hammon
Co.
uninsured motorist
Idaho,
(1985),
that the tortfeasor was HORTON concurs. Justice liability insurance to the extent that his ist compensate plaintiff insufficient to plaintiff asked this damages. for his by following reasoning
Court to so hold Supreme Courts.
of the Arizona and Hawaii anomaly presented by “the [sic]
We noted
circumstances, particularly that a holder
decision, “should rest on mili- which factors
tating for or that decision.” Id. We
held, however, such decision legislature
should be made based stated, adequate
upon information. We
“However, questions all of such should be adequate
dealt with on the basis of informa- (little Court) by
tion of which is before this body
legislative equipped and authorized to
make such decisions.” Id. case, majority in-
In the instant has
dulged judicial legislation guise under the newly
of some ill-defined and a judicial economy.
created doctrine of prohibit decision of whether to exhaus- legisla-
tion clauses should be made
ture, Department the director of the
Insurance, information, upon adequate based Blackburn, majority
which the lacks. In this “urge[d] legislative
Court attention
inequitable results which flow from the lan- However,
guage of our statutes.” Id.
Blackburn, Hammon, Hansen, proper
Court understood its role and had