Nicole LEVINE v. STATE FARM MUTUAL AUTOMOBILE INSURANCE CO.
2004 ME 33
Supreme Judicial Court of Maine
March 8, 2004
Submitted On Briefs: June 26, 2003.
[¶ 22] Despite the limited authority granted by title 32, however, the statutes governing the Department of Professional and Financial Regulation empower the Board to issue warnings, impose censures or reprimands, impose civil penalties of up to $1500 per violation, and impose conditions of probation, among other things.
[¶ 23] We also reject Zegel‘s argument that the proposed consent agreement provides the parameters, or even a context for determining sanctions after the hearing. Cf. State v. Little, 527 A.2d 754, 755-56 (Me. 1987) (stating that, to promote open dialogue in plea negotiations, communications made during such negotiations are inadmissible in court pursuant to Rule 410 of the Maine Rules of Evidence).
[¶ 24] The Board‘s decision, however, fails to explain why it decided to impose the sanctions it chose. Both statute and case law require the Board to set out findings that justify its decision; we may not hypothesize about the Board‘s reasoning.
The entry is:
The Board‘s imposition of $1150 in costs and the Board‘s choice of censure with conditions of probation as a sanction are vacated and remanded for proceedings consistent with this opinion. In all other aspects, we affirm the decision of the Board.
William J. Kelleher, Esq., Taylor D. Fawns, Esq., Law Offices of William J. Kelleher, P.A., Augusta, for State Farm.
Paul S. Douglass, Esq., Lewiston, for Prudential.
Panel: SAUFLEY, C.J., and CLIFFORD, RUDMAN, DANA, ALEXANDER, CALKINS, and LEVY, JJ.
Majority: SAUFLEY, C.J., and CLIFFORD, DANA, ALEXANDER, and LEVY, JJ.
Dissent: RUDMAN and CALKINS, JJ.
SAUFLEY, C.J.
[¶ 1] We are called upon here to determine whether Maine‘s uninsured/underinsured vehicle coverage laws require underinsured vehicle policies to supplant available tortfeasor insurance coverage that is not timely sought by the injured insured. State Farm Mutual Automobile Insurance Company appeals from a judgment entered in the Superior Court (Kennebec County, Marden, J.) concluding that Nicole Levine, who was injured by the driver of an underinsured vehicle, was entitled to recover from State Farm, the underinsured vehicle insurance carrier of the driver in whose vehicle she was riding, when the coverage held by the tortfeasor became unavailable to Levine because of the passage of time before she filed her claim. It is undisputed that the tortfeasor‘s coverage was less than the State Farm policy limits and that State Farm is responsible for that amount of underinsurance. Because we conclude that State Farm is only liable for the amount by which the State Farm coverage exceeded the insurance held by the tortfeasor, we vacate the judgment.
[¶ 2] In August 1992, Nicole Levine, a passenger in a motor vehicle operated by Michael Fisher, was injured when a vehicle negligently operated by William Kruzynski collided head-on with Fisher‘s automobile, causing Levine damages later determined by a jury to total $100,000.
[¶ 3] At the time that Kruzynski injured Levine, he was insured through a North East Insurance Company policy, which provided liability coverage of $50,000 per person. Fisher and Levine were each insured by Fisher‘s State Farm policy, which contained a provision for uninsured/underinsured vehicle coverage in the amount of $100,000 per person. Levine was also insured by a Prudential Property and Casualty Insurance Company policy, which provided uninsured/underinsured vehicle coverage in the amount of $100,000 per person. Coverage under that policy is not at issue here.
[¶ 4] Kruzynski died approximately one year after the accident and no probate proceedings were filed concerning his estate until March 1999, nearly six years after his death, when Levine filed a petition for formal adjudication of intestacy and appointment of a personal representative. In her petition, Levine requested that the court appoint her, as a creditor, to serve as personal representative of Kruzynski‘s estate. The Probate Court dismissed Levine‘s petition, holding that the three-year limit for commencing probate proceedings had expired, and she was therefore barred from obtaining relief for her injuries from Kruzynski or his estate.1
[¶ 5] On January 18, 2001, more than eight years after the accident, Levine filed a direct cause of action against State Farm and Prudential, seeking recovery for the damages resulting from the 1992 automobile accident pursuant to each company‘s underinsured vehicle coverage.2 The parties have never disputed that Kruzynski‘s vehicle qualified as an “uninsured motor vehicle” pursuant to the State Farm policy because the $50,000 bodily injury liability limit contained in his policy with North East was less than the $100,000 uninsured/underinsured vehicle limit Fisher carried in his policy with State Farm.3 Moreover, Kruzynski‘s negligence undisputedly caused the motor vehicle accident and, as a result, Levine was “legally entitled” to collect damages from him.4 Thus, the sole issue presented at the jury trial held in the Superior Court concerned the amount of Levine‘s total damages resulting from the accident, which the jury calculated to be $100,000.
[¶ 7] The Superior Court granted Levine‘s Rule 58 motion and concluded that State Farm was responsible not only for the undisputed $50,000 by which Kruzynski was underinsured, but also for the $50,000 of Kruzynski‘s available insurance, which had become unavailable due only to the passage of time. This appeal followed.
II. DISCUSSION
[¶ 8] Underinsured and uninsured vehicle coverage is intended to provide financial compensation in instances where the tortfeasor “is uninsured” or “is financially unable to furnish adequate compensation for the injuries caused in the accident.” Braley v. Berkshire Mut. Ins. Co., 440 A.2d 359, 362 (Me. 1982) (quoting Wescott v. Allstate Ins., 397 A.2d 156, 166 (Me. 1979)). It was not intended to supplant the tortfeasor‘s coverage. Consistent with that purpose, the State Farm underinsured vehicle policy at issue expressly provides that it does not cover any amounts covered by “the total of the bodily injury limits of all other vehicle liability policies ... that apply to any person ... legally liable for such bodily injury.” (Emphasis omitted.) Thus, the plain language of Levine‘s coverage precludes recovery from State Farm for the amount by which Kruzynski was actually insured.
[¶ 9] Levine argues, nonetheless, that the policy contravenes Maine‘s uninsured/underinsured vehicle statute,
[¶ 10] Contrary to Levine‘s contentions, section 2902(4) does not require that the underinsured vehicle coverage carrier make all payments due from any insurer and then seek recovery from the tortfeasor‘s insurer.
[¶ 11] Moreover, the entire statutory scheme makes it evident that underinsured vehicle coverage is in the nature of gap coverage, not a substitute for primary coverage. In mandating uninsured vehicle coverage in Maine, the Legislature intended to ensure coverage when an injured party is “legally entitled to recover damages from owners or operators of uninsured, underinsured or hit-and-run motor vehicles.”
[¶ 12] Other states have reached similar conclusions. “Generally, [an underinsured vehicle coverage] carrier is entitled to offset the amount of the tortfeasor‘s liability limits.” Farmers Ins. Co. of Wash. v. Lautenbach, 93 Wash. App. 671, 963 P.2d 965, 967 (1998) (emphasis added). This is consistent with our conclusion that underinsured vehicle coverage “fills the gap left by an underinsured tortfeasor” and is designed to “permit the insured injured person the same recovery which would have been available to him had the tortfeasor been insured to the same extent as the insured actually recovered under a tortfeasor‘s policy.” Id.
[¶ 13] We conclude, therefore, that State Farm is not responsible for the amount Levine could have obtained pursuant to Kruzynski‘s policy; rather, State Farm is responsible for paying $50,000—the extent to which Kruzynski‘s vehicle was underinsured.9 See
[¶ 14] Finally, if we were to accept Levine‘s argument that the underinsured vehicle coverage carrier may not offset from its responsibility the amount of insurance held by the tortfeasor, the economic risks of injury in motor vehicle accidents would shift entirely to the underinsured vehicle coverage carrier. The expense involved in providing uninsured/underinsured vehicle coverage would increase, the cost to consumers would increase, and an insurance product originally required by the Legislature to protect against those who fail to carry adequate insurance would be treated as if it were the primary source of coverage notwithstanding the tortfeasor‘s own coverage. The Legislature neither mandated nor intended such a result.
The entry is:
Judgment vacated. Remanded to the Superior Court for entry of judgment against State Farm in the amount of $50,000, with interest and costs, if any, to be determined by the court.
RUDMAN, J., with whom CALKINS, J., joins, dissenting.
[¶ 15] Because I disagree with the way the Court frames and resolves the issue before us today, I respectfully dissent. The issue is whether State Farm‘s uninsured/underinsured vehicle policy provides less coverage than is required by Maine‘s uninsured/underinsured vehicle law. The Court, focusing on legislative intent, holds that State Farm‘s policy does not impermissibly limit coverage. Upon review of the plain language of the statute, however, it is clear that the insurance contract provides less coverage than is required under the law.
[¶ 16] The Court fairly recites the facts, however, I would add that Levine, being only fifteen years of age at the time of the accident, normally would be entitled to more time to bring her suit than an adult would have been. Moreover, because the tortfeasor did not die in Maine, and his death was not reported in Maine newspapers, there is no reason to believe that Levine was negligent in not bringing her suit earlier. Unaware that the tortfeasor had passed away, Levine believed that she was well within the appropriate statute of limitations for bringing suit for her injuries. I mention these facts not because they bear on the interpretation of the insurance contract or the statute, but rather to refute the implication that the equities operate against Levine.
[¶ 17] I accept the Court‘s conclusion that the language of State Farm‘s insurance contract denies Levine‘s coverage, and turn to the issue of whether the policy‘s language violates the provisions of Maine‘s uninsured/underinsured vehicle law. We assume that an insurance policy incorporates all the relevant mandatory provisions of the statute pursuant to which the policy was drafted. Skidgell v. Universal Underwriters Ins. Co., 1997 ME 149, ¶ 7, 697 A.2d 831, 833. When the
[¶ 18] Statutory interpretation always begins with the letter of the law. The express language of section 2902 is clear and unambiguous. Title 24-A, section 2902(4) is the statutory provision granting insurance companies only the right to reduce, or subrogate, the compensation they are obligated to pay parties insured under their uninsured motorist coverage. See
[¶ 19] To resolve the present appeal, therefore, one must first ascertain section 2902(4)‘s parameters and, second, analyze whether State Farm‘s limits reduction clause exceeds those parameters. We review the interpretation of section 2902(4), a question of law, de novo. See State v. McLaughlin, 2002 ME 55, ¶ 5, 794 A.2d 69, 72. “We look first to the plain meaning of the statutory language as a means of effecting the legislative intent.” Coker v. City of Lewiston, 1998 ME 93, ¶ 7, 710 A.2d 909, 910. “Unless the statute itself discloses a contrary intent, words in a statute must be given their plain, common, and ordinary meaning, such as [people] of common intelligence would usually ascribe to them.” State v. Vainio, 466 A.2d 471, 474 (Me. 1983).
[¶ 20] Section 2902(1) requires State Farm to provide uninsured/underinsured vehicle coverage. Section 2902(2) specifies the amount of underinsured and uninsured coverage an insurer must provide. In this case it is undisputed that the State Farm policy provided $100,000 of underinsured motorist coverage. These two subsections establish the extent of State Farm‘s potential liability.10
[¶ 21] State Farm asserts that section 2902(4), which it characterizes as a “set off provision,” allows it to prospectively limit its coverage to $50,000. Section 2902(4), however, is not a set off provision. Section 2902(4) provides:
In the event of payment to any person under uninsured vehicle coverage, and subject to the terms of such coverage, to the extent of such payment the insurer shall be entitled to the proceeds of any settlement or recovery from any person legally responsible for the bodily injury as to which such payment was made, and to amounts recoverable from the assets of the insolvent insurer of the other motor vehicle.
[¶ 23] The Court spends little time addressing the express language of the statute, preferring to focus on the “entire statutory scheme,” the “nature of gap coverage,” the “intent of the Legislature,” as well as the rule in other states. Even if all of these sources conflict with the actual words in section 2902(4),13 they are inapplicable in the absence of ambiguous language in the statute. We have consistently held that, when interpreting statutory language, we will not resort to indicia of legislative intent other than the statute itself unless the statute is ambiguous. Home Builders Ass‘n of Me. v. Town of Eliot, 2000 ME 82, ¶ 14, 750 A.2d 566, 569 (“Only if the statutory language is ambiguous will ‘we examine other indicia of legislative intent, such as legislative history.‘“) (emphasis added) (quoting Coker, 1998 ME 93, ¶ 7, 710 A.2d at 910).14 The Court does not assert that any part of section 2902(4) is ambiguous, and therefore, its plain language must be applied. Because the section merely creates an entitlement in any proceeds or settlement, it does not reduce the extent of State Farm‘s liability. State Farm‘s entitlement to settlement proceeds, should such proceeds ever materialize, in no way dilutes its obligation under the statute to insure Levine to the full extent of its underinsured vehicle coverage for bodily injury or death.
[¶ 25] I note that we previously recognized such an interpretation of section 2902(4) in dicta. Young v. Greater Portland Transit Dist., 535 A.2d 417, 420 (Me. 1987). In Young, we recognized that an insurance company‘s subrogation rights could be “impair[ed]” when an injured uninsured motorist is “legally entitled” to payment from the insurance company, yet the claimant is barred from asserting a cause of action against the owner of the uninsured vehicle who caused the injury because the applicable tort statute of limitations had expired. Id. This observation was implicitly premised on the notion, which I would make clear, that the insurer‘s statutory subrogation rights were extinguished once the limitations period expired on the claimant‘s cause of action because the company lost its subrogation rights once the claimant was unable to receive proceeds from the tortfeasor. See id. (“[T]he insurer has other means available to it to protect [its subrogation] rights. In any event, subrogation rights are generally of little practical importance in this area of the law.“).
[¶ 26] Finally, my interpretation of section 2902(4) also comports with the uninsured vehicle statute‘s overall objective of ensuring that the injured insured receives full satisfaction of damages to which he or she is entitled before the insurance company‘s subrogation rights are implicated. Wescott, 397 A.2d at 169 (“In view of the fact that [the uninsured vehicle statute] must be construed liberally in favor of the insured victim and strictly against the insurer, [section 2902(4)] must be given that narrow interpretation which favors full satisfaction by the insured victim of his damages to which he is legally entitled to recover from the owners or operators of the uninsured vehicle before the right of subrogation attaches.“).
[¶ 27] Insurance companies have generally acknowledged section 2902(4)‘s limitation on offsets by including language in their policy that only permits reductions for damages “paid” by the owner or operator of the uninsured or underinsured vehicle responsible for causing the claimant‘s
[¶ 28] In light of the foregoing, State Farm‘s subrogation rights in this case never attached because Levine never received payment from Kruzynski or Kruzynski‘s liability carrier. See
[¶ 29] In its conclusion, the Court suggests that, if my analysis is adopted, “the economic risks of injury in motor vehicle accidents would shift entirely to the underinsured vehicle coverage carrier.” The circumstances of this case are too unique to draw sweeping conclusions from it. I note, however, that the Legislature has already shifted to the insurance industry “the burden of compensating for injuries which would otherwise go without redress from the individual victim to the insurance industry for a premium.” Wescott, 397 A.2d at 166. I would affirm the judgment entered in the Superior Court.
Notes
(Emphasis omitted.)2. Any amount payable under this coverage shall be reduced:
a. by any amount paid or payable to or for the insured:
(1) for bodily injury under the liability coverage ...
...
b. the total of the bodily injury limits of all other vehicle liability policies or bonds that apply to any person or organization legally liable for such bodily injury.
In the event of payment to any person under uninsured vehicle coverage, and subject to the terms of such coverage, to the extent of such payment the insurer shall be entitled to the proceeds of any settlement or recovery from any person legally responsible for the bodily injury as to which such payment was made, and to amounts recoverable from the assets of the insolvent insurer of the other motor vehicle.
397 A.2d 156, 168 (Me. 1979).
24-A, M.R.S.A., § 2902(4) only assures to the insurer, once it has made payment under the uninsured vehicle coverage, entitlement or subrogation rights “to the proceeds of any settlement or recovery from any person legally responsible for the bodily injury as to which such payment was made, and to amounts recoverable from the assets of the insolvent insurer of the other motor vehicle.”