This is an action brought by plaintiff insurance company seeking reimbursement from defendant Nora Kluver, one of its policyholders, for payments made under the uninsured-motorist, *311 medical payments, and collision coverages of her policy for a share of the policyholder’s damages caused by, inter alia, the negligence of an uninsured motorist. Reimbursement was sought out of the proceeds of a settlement made by defendant Kluver and two liquor vendors to discharge the vendors’ liability under the Civil Damage Act for damages defendant Kluver sustained as a result of allegedly illegal sales of liquor to the uninsured motorist. The question of law was presented, with the facts stipulated, to the district court. The trial court held that plaintiff is entitled to the proceeds of the settlement to the extent of its advancements to defendant policyholder less reasonable attorneys fees and costs incurred by her in the recovery of that sum, even though she had not been fully compensated for her injuries. We reverse.
On October 22, 1971, defendant Nora Kluver was involved in an automobile accident caused by the negligence of an uninsured motorist. Pursuant to the terms of its policy of insurance with defendant, plaintiff paid her $25,000 under her uninsured-motorist coverage, $500 under her medical-expense coverage, and $800 under her collision coverage. At the time of this settlement, defendant through her counsel notified plaintiff that a dram shop action would be commenced for the balance of her damages; that defendant did not believe that plaintiff had sub-rogation rights against that balance; and that if plaintiff wished to be represented it would have to maintain an action on its own behalf. At the same time, however, defendant executed a policy release and trust agreement, a medical payments proof of claim, and a sworn statement in proof of loss with respect to damage to her automobile.
Defendant thereafter commenced an action under the Civil Damage Act, Minn. St. 340.95 (Dram Shop Act), for injury to her person and property and, as their guardian, for injury to the means of support of her minor children caused by the alleged sale of intoxicating liquors to the uninsured motorist by the Dundas Corner Bar and the Northfield Municipal Liquor Store. Dundas *312 agreed to pay its policy limits of $25,000 in settlement of the personal injury claim of defendant Nora Kluver and $6,500 in settlement of the loss-of-means-of-support claim of her minor children. Northfield agreed to pay $10,000 (out of $100,000 policy limits) in settlement of all claims against it. It is stipulated that defendant Kluver sustained damages of $70,000 as a result of this accident.
The only issue in this case is whether an uninsured-motorist insurance carrier is entitled to the proceeds of a settlement made by parties commonly liable with the uninsured motorist, to the extent of its payment to its insured when its insured has not been fully compensated for her injuries.
The crux of this appeal involves Minn. St. 1971, § 65B.22, 1 which required drivers to obtain uninsured-motorist coverage, the operative language of subd. 3 of that section mandating that “[n]o automobile liability * * * policy of insurance * * * shall be delivered or issued for delivery * * * unless coverage is provided therein or supplemental thereto * * * for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles * *
Minn. St. 1971, § 170.25, subd. 3, 2 provides in part:
“* * * [E]very such policy * * * is subject * * * to a limit, exclusive of interest and costs, of not less than $10,000 because of bodily injury to or death of one person in any one accident * *
Minn. St. 1971, § 65B.22, subd. 6, provides as follows:
“In the event of payment to any person under the coverage required by this section and subject to the terms and conditions of such coverage, the insurer making such payment shall, to the extent thereof, be entitled to the proceeds of any settlement or *313 judgment resulting from the exercise of any rights of recovery of such person against any person or organization legally responsible for the bodily injury for which such payment is made, including the proceeds recoverable from the assets of the insolvent insurer.”
This provision is also found in the policy release and trust agreement executed by the defendant.
We should not construe the subrogation provision contained in subd. 6 as though it stood alone. If the intent of the legislature was that of providing protection for persons such as defendant Kluver by mandating uninsured-motorist coverage, that intention is thwarted by allowing subrogation in this case. One of the principles of statutory construction commonly referred to is that an absurd or unreasonable result should not be reached. Bremer v. Commr. of Taxation,
We conclude that the overall purpose of the uninsured-motorist coverage statute was to provide policyholders such as the defendant in this case recovery for personal injuries but only to the extent necessary to permit the insured to recover his actual loss and not to such an extent that he would recover more than that loss.
*314
Defendant cites several cases favoring her position in this case. In White v. Nationwide Mutual Ins. Co.
“Any insurer paying a claim under the endorsement or provision required by paragraph (b) of this section shall be sub-rogated to the rights of the insured to whom such claim was paid against the person causing such injury, death or damage to the extent that payment was made * *
The issue, as framed by the Court of Appeals, was whether payments made by or on behálf of an uninsured motorist should be applied first to reduce the liability of the insurance carrier, or first to reduce the loss of the injured party. The Court of Appeals held that such payments must first be applied to reduce the loss of the injured party, since no right of subrogation arises until the insured has received
full
satisfaction of his judgment against the uninsured driver. The court was split 2-1, the dissenter stating that “[t]he statute [quoted above] allows Nationwide subrogation ‘to the extent that payment was made * * *.’ I think it means what it says, and I respectfully dissent.”
In Raitt v. National Grange Mutual Ins. Co. 111 N. H. 397,
“* * * a right of ‘subrogation’ only as to amounts recovered from the uninsured motorist against whose liability it indemnified its insured; and not the right which the defendant asserts, based upon a literal reading of the section, to set off against the required uninsured motorist coverage up to its dollar limit any sums recovered from any source responsible for the injury including an insured motorist.” 111 N. H. 400,285 A. 2d 802 .
In State Farm Mutual Auto. Ins. Co. v. Barnette,
We are persuaded by the rationale of these cases and by our own analysis of the statute in question that the uninsured-motorist coverage statute should be construed to mean that an uninsured-motorist liability carrier does not have the right to be subrogated to the proceeds of a settlement its policyholder makes with liquor vendors allegedly liable under the Civil Damage Act for illegal sales to the uninsured motorist where the policyholder has not been fully compensated for her injuries. *316 Subrogation should be permitted to the extent necessary to avoid a double recovery by such a policyholder.
Reversed and remanded for further proceedings not inconsistent with this opinion.