Thе defendant, Allstate Insurance Company (Allstate), appeals the decision of the Superior Court {Goode, J.) in a declaratory judgment action filed by the plaintiff, Universal Underwriters Insurance Company (Universal), requesting a declaration of Allstate’s obligation to share responsibility, where there were two insurance policies covering a single accident. Allstate argues that the trial court erred when it ruled that Allstate was obligated to share defense and indemnity еxpenses with Universal on a pro rata basis. For the reasons that follow, we reverse.
The facts are not in dispute. On September 18, 1981, Thomas Semerarо was operating a 1981 Honda Accord owned by Peters Auto Leasing of Nashua. Semeraro was using the Honda as a replacement for his own motor vеhicle, a 1976 Oldsmobile, which was undergoing repairs at the time. While commuting home from work, in Lexington, Massachusetts, Semeraro ran over a pedestrian who had previously been struck by another vehicle. The pedestrian died as a result of his injuries, and Semeraro was sued by the victim’s estate.
Prior to the date of thе accident, Universal had issued a policy of insurance to the owner of the accident vehicle, Peters Auto Leasing. Universal’s policy providеd, pursuant to its “other insurance” clause, that if an owned auto was in the care, custody, or control of any person or organization other than Peters Auto Leasing (the “named insured”), the liability coverage provided in the insurance contract would be “excess.” Semeraro insured his personal motor vehicle with Allstate, and his insurance policy provided, under its “other insurance” clause, that when an insured was operating a temporary substitute automоbile, Allstate coverage would be excess over any other collectible insurance. Thus, in this case, both Universal and Allstate purport to make thеir policies “excess” over other insurance.
Universal made demand upon Allstate to provide primary coverage for the loss. Allstate deсlined on the ground that Allstate’s policy provided only excess coverage. Allstate also refused to participate in the $250,000 settlement of the undеrlying tort claim. Subsequently, Universal instituted this action seeking a pro rata indemnity from Allstate. Indemnity was also sought against Allstate for the pro rata share of the $11,606.07 сosts of defense. The case was submitted on an agreed statement of facts, resulting in the trial court’s ruling that the “excess” clauses in the two policies wеre mutually repugnant and
Allstate argues that our decision in Liberty Mutual Insurance Co. v. Home Insurance Indemnity Co.,
In Liberty Mutual we examined the validity of a clause which purported to make coverage for an insured who was оperating a non-owned vehicle “excess insurance over any other valid and collectible insurance.” Liberty Mutual, supra at 17,
Universal’s “excess clause” language makes thе risk which Universal underwrote minimal. Under the Universal policy, it remained primarily liable only when an agent of Peters Auto Leasing was operating the insured vehicles or when the lessee did not have personal coverage. In the vast majority of situations, the liability coverage provided by Universal would become “excess,” and the purchased coverage therefore minimal. Even so, Universal contends that such a result does not violate the Financial Responsibility Law.
Universal argues that Liberty Mutual should be distinguished from the present case because the offending “excess” clause in Liberty Mutual was in a policy written by an insurance carrier that was attempting to avoid providing coverage, while Universal has already made payment of $250,000 in Semeraro’s behalf. Universal further contends that it merely seeks to derive the benefit of its policy language at the expense of Allstate, not at the expense of the insured and, therefore, that the intent of the Financial Responsibility Law is not undermined by its action. We are not persuaded that violation of the clear language of the statute is permitted when the result adversely affects another insurance carrier rather than the insured. If the legislature had intended such a result-oriented proscription, it
Universal maintains that the public policy behind the Financial Responsibility Law is to provide protection to those injured by the negligence of others, and that this policy is not undermined by holding that insurers may be required to share the obligation of providing coverage for a mutual insured. The Financial Responsibility Law, however, is directed to individuals, whereas the insurance policies we are called upon to interpret today are directed to particular vehicles. Universal further contends that “other jurisdictions” have adopted its argument with respect to “excеss” insurance and their States’ financial responsibility acts. See, e.g., Western Cas. & Surety Co. v. Universal Underwriters Ins. Co.,
“The parties to an insurance contraсt may not by agreement limit the required coverage in contravention of the [Financial Responsibility Law].” Peerless Ins. Co. v. Vigue,
Reversed.