Arredondo v. Avis Rent a Car System, Inc.

2001 UT 29, 24 P.3d 928, 418 Utah Adv. Rep. 3, 2001 Utah LEXIS 54, 2001 WL 290314

• Court: Utah Supreme Court
• Decided: March 27, 2001
• Docket: 990351
• Status: Published

Opinions

DURRANT, Justice:

1 1 Eddie, Noe, and Orilyn Arredondo filed a complaint against Kai Walston, Ortrud Walston, Avis Rent A Car System, Inc., and Continental Casualty Company. The Arre-dondos sought to recover damages for injuries arising from an accident allegedly caused by Kai Walston's negligent and reckless driving of a car that his mother, Ortrud Walston, rented from Avis, The Arredondos also sought a judgment declaring that the insurance policy Ortrud Walston purchased from Avis and Continental provided liability insurance coverage for Kai Walston in this case. The Arredondos filed a motion for partial summary judgment on the declaratory judgment issue, and Avis and Continental filed a cross-motion for partial summary judgment: on the same matter. The trial court granted Avis and Continental's cross-motion and dismissed Continental from the case, as it was not a party to any of the Arredondos' other claims. The court then directed entry of final judgment on the issue under rule 54(b) of the Utah Rules of Civil Procedure.¹ The Arredondos appeal the trial court's entry of partial summary judgment and subsequent dismissal of Continental as a party. We affirm.

BACKGROUND

12 "In reviewing a grant of summary judgment, we view the facts and all reasonable inferences drawn therefrom in the light most favorable to the nonmoving party.... We state the facts in this case accordingly." Tretheway v. Miracle Mortgage, Inc., 2000 UT 12, ¶ 2, 995 P.2d 599 (citations omitted).

T3 Ortrud Walston rented a 1996 Chevrolet Lumina from Avis on April 17, 1996. As part of the written rental agreement executed by Ortrud Walston (the "rental agreement"), she purchased liability insurance, which the Pathfinder Insurance Company provided to her as a renter of an Avis vehicle. The Pathfinder policy was designated as "primary" coverage and provided coverage to Ortrud Walston as well as certain other potential drivers of the rental car, namely, the renter's spouse, employer, "a regular fellow employee incidental to business duties{,] or someone who appears at the time of rental and signs an additional driver form." The Pathfinder policy would only apply to these other potential drivers, however, if Ortrud Walston gave them permission to drive the car and they were "at least 25 years old and . capable and validly licensed driver[s]." Additionally, the agreement extended liability insurance coverage under the Pathfinder policy to a non-permitted driver "where the law extends coverage to a non-permitted driver." The policy covered "up to the minimum financial responsibility limits required by applicable law." ²

T4 As another part of the rental agreement, Ortrud Walston opted to purchase additional liability insurance, which Continental provided. The Continental Policy was designated as "excess" or "additional" coverage and provided up to $1,000,000 of lability coverage. It purported to apply only to "those persons[ ] renting a car from Avis ... who have agreed in writing to accept additional lability insurance" and to "any authorized driver of the car ... as such drivers are described in the rental agreement."

15 On April 19, 1996, two days after Or-trud Walston rented the car and purchased the Pathfinder and Continental policies, her seventeen-year-old son, Kai Walston, was driving the car on Jordan Canal Road in Taylorsville, Utah, when, allegedly, as a result of his negligent and reckless driving, the car struck Eddie Arredondo, who was riding a bicycle along the roadway. Eddie Arre-dondo suffered extensive injuries, resulting in over $350,000 in medical expenses.

T6 The Arredondos filed a complaint against Kai Walston, Ortrud Walston, Avis, and Continental. The complaint included allegations of negligence, negligence per se, and recklessness. The Arredondos also sought a judgment declaring that the Continental policy provided liability insurance coverage for Kai Walston in this case. The Arredondos filed a motion for partial summary judgment on the declaratory judgment issue, arguing that, although Kai Walston was not covered by the terms of the Continental policy, Utah law required that policy to cover him to the same extent as the named insured because he was a blood relative of the named insured and lived in her household. Avis and Continental filed a cross-motion for partial summary judgment, contending that Utah law only demanded such coverage from policies purchased to satisfy the statutory security requirement and that, in this case, only the Pathfinder policy was purchased to meet that obligation. The trial court granted Avis and Continental's cross-motion and dismissed Continental from the case, as it was not a party to any of the Arredondosg other claims. The court then directed entry of final judgment on the issue under rule 54(b) of the Utah Rules of Civil Procedure. The Arredondos appeal the trial court's entry of partial summary judgment and subsequent dismissal of Continental as a party.

DISCUSSION

T7 A trial court may properly grant a motion for summary judgment only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Utah R.Civ.P. 56(c). We review the trial court's summary judgment ruling for correctness. Price Dev. Co. v. Orem City, 2000 UT 26, ¶ 9, 995 P.2d 1237.

[ 8 The Continental policy does not provide coverage to Kai Walston under its own terms, and the parties do not argue otherwise. The issue before us is whether Utah law nevertheless requires the Continental policy to cover Kai Walston.

T9 At the time of the accident, the Utah Code provided, "A rental company shall provide its renters with primary coverage meeting the requirements of Title 41, Chapter 12a, Financial Responsibility of Motor Vehicle Owners and Operators Act."³ Utah Code Ann. § 31A-22-814 (1994). Title 41, Chapter 12a required, in pertinent part, that "every resident owner of a motor vehicle shall maintain owner's or operator's security in effect . at any time that the motor vehicle is operated on a highway within the state." Utah Code Ann. § 41-122-801(2)(a) (Supp. 1995). "Owner's or operator's security" was defined, inter alia, as "an insurance policy or combination of policies conforming to Section 31A-22-302" of the Utah Code. Utah Code Ann. § 41-12a-108(9) (1998). Section 31A, 22-302 provided, in relevant part, as follows:

(1) Every policy of insurance or combination of policies purchased to satisfy the owner's or operator's security requirement of Section 411-122-8301 shall include:

(a) motor vehicle liability coverage under Sections 81A-22-808 and 31A, 22-304;

(b) uninsured motorist coverage under Section 31A-22-305, unless affirmatively waived under Subsection 31A, 22-305(4); and

(c) underinsured motorist coverage under Section 31A-22-305, unless affirmatively waived under Subsection 31 A-22-305(8)(c).

(2) Every policy of insurance or combination of policies, purchased to satisfy the owner's or operator's security requirement of Section 41-12a-801 ... shall also include personal injury protection under Sections 81A-22-806 through 31A-22-309.

Utah Code Ann. § 81A-22-802(1)-(2) (1994).

1 10 The Arredondos argue the Continental policy was a "policy of insurance or [part of al combination of policies [together with the Pathfinder policy] purchased to satisfy the owner's or operator's security requirement of Section 41-122-801." Id. § 31A-22-302(1). Therefore, the argument continues, the Continental policy must provide "motor vehicle liability coverage under Sections 31A-22-3038 and 31A-22-304." Id. § 31A-22-302(1)(a). The Arredondos further contend that, to provide "motor vehicle liability coverage under Section[ ] 31A-22-803," id., the Continental policy must provide coverage to persons, such as Kai Walston, who are "related to the named insured by blood [and] who are residents of the named insured's household{[,] ... to the same extent as the named insured," id. § 31A-22-308(1)(c), regardless of the policy's own limitations on the scope of its coverage.

{11 To address the Arredondos' argument, we must first determine whether the Continental policy was a "policy of insurance or [part of al combination of policies purchased to satisfy the owner's or operator's security requirement of Section 41-12a-801." Id. § 31A-22-302(1). If it was, then we must determine whether it must, therefore, provide coverage to Kai Walston, as a blood relative of the named insured who resided in her household at the time of the accident, "to the same extent as the named insured." Id. § 31A-22-308(1)(c).

112 "'When faced with a question of statutory construction, we look first to the plain language of the statute"" C.T. v. Johnson, 1999 UT 35, ¶ 9, 977 P.2d 479 (quoting Stephens v. Bonneville Travel, Inc., 935 P.2d 518, 520 (Utah 1997)). In so doing, "'[Iwle presume that the legislature used each word advisedly and give effect to each term according to its ordinary and accepted meaning."" Id. (quoting Nelson v. Salt Lake County, 905 P.2d 872, 875 (Utah 1995)). We will not "'infer substantive terms into the text that are not already there. Rather, the interpretation must be based on the language used, and [we have] no power to rewrite the statute to conform to an intention not expressed." Id. (quoting Berrett v. Purser & Edwards, 876 P.2d 367, 370 (Utah 1994)).

113 The Arredondos argue that the correct interpretation of section 81A-22-302(1) is that any policy or combination of policies that actually satisfies the statutory security requirement was "purchased to satisfy" the requirement. We disagree. Under the Ar-redondos' interpretation, the statute would, effectively, be rewritten to govern "[elvery policy of insurance or combination of policies [that satisfies] the owner's or operator's security requirement of Section 41-12a-801." Utah Code Ann. § 314A-22-802(1). This flies in the face of this court's " fundamental duty to give effect, if possible, to every word of the statute," " Carlie v. Morgan, 922 P.2d 1, 4 (Utah 1996) (quoting Madsen v. Borthick, 769 P.2d 245, 252 n. 11 (Utah 1988), and distorts the "ordinary and accepted meaning" of the phrase "purchased to satisfy."

"14 Whether a policy or combination of policies was "purchased to satisfy the owner's or operator's security requirement of Section 41-12a-801," Utah Code Anu. § 31A-22-302 (emphasis added), hinges not on whether it actually satisfies the statutory security requirement, but rather whether it was purchased for the purpose of satisfying the statutory security requirement. This interpretation better reflects the "ordinary and accepted meaning" of the language used by the legislature.

115 With this interpretation in mind, we now turn to the policies at issue in this case. On the one hand, it is clear the Pathfinder policy was purchased to satisfy the statutory security requirement. In determining the purpose for which the Pathfinder policy was purchased, it is unnecessary to look beyond the rental agreement between Ortrud Wal-ston and Avis. That agreement designated the Pathfinder policy as the "primary" policy and explicitly stated that it provided coverage "up to the minimum financial responsibility limits required by applicable law." The agreement also expressly declared that the Pathfinder policy applied to drivers other than the named insured as required by law. In short, the Pathfinder policy was clearly designed to meet the statutory security requirement, and we conclude that it was purchased to "satisfy the owner's or operator's security requirement of Section 41-122a-801."

16 On the other hand, it is just as clear that the Continental policy was not purchased to satisfy the statutory security requirement. The Continental policy, by its own terms, provided only "excess" or, in the terms of the rental agreement, "additional," coverage, ie., coverage beyond that which was already provided. Accordingly, this additional coverage merely supplemented the primary coverage from the Pathfinder policy, which, as noted above, was purchased to satisfy the statutory security requirement. Thus, the Continental policy was purchased for the purpose of providing coverage in excess of, not to satisfy, the statutory security requirement. This conclusion is further supported by the fact that, unlike the Pathfinder policy, the Continental policy limited its coverage to a set dollar amount and only purported to apply to the named insured and specific other additional insureds as designated by the rental agreement. There was no mention of complying with statutory requirements. We conclude this is because the Pathfinder policy was intended to meet those requirements, and, therefore, it was unnecessary for the Continental policy to meet those requirements as well.

1117 We also disagree with the Arredon-dos' contention that section 81¥A-22-8083(1)(c) applied to the Continental policy as it was part of a "combination of policies purchased to satisfy" the statutory security requirement. Id. § 31A-22-802(1). The two poli-cles were not purchased together for the purpose of meeting the requirement. Rather, the Pathfinder policy was purchased to satisfy the requirement, and the Continental policy was purchased to provide excess coverage to the named insured.⁴ Because we find the Continental policy was not a "policy of insurance or [part of al combination of policies purchased to satisfy the owner's or operator's security requirement of Section 41-122-801," id., we do not address the Arre-dondos' contention that such a policy must provide coverage to persons who are "related to the named insured by blood [and] who are residents of the named insured's household[,] . to the same extent as the named insured." Id. § 31A-22-308(1)(c).

CONCLUSION

[ 18 We conclude that the Continental policy was not purchased to satisfy the statutory security requirement. Accordingly, the coverage of that policy is governed by its own terms, excluding coverage of Kai Walston. We affirm the trial court's ruling granting Avis and Continental partial summary judgment and dismissing Continental.

19 Justice DURHAM and Judge ORME concur in Justice DURRANT'S opinion. T 20 Having disqualified himself, Justice WILKINS does not participate herein; Court of Appeals Judge GREGORY K. ORME sat.

1 . The rule provides, in pertinent part, as follows:

When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim, and/or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination by the court that there is no just reason for delay and upon an express direction for the entry of judgment.

Utah R.Civ.P. 54(b).

2 . At the time of the accident, the minimum limits for a motor vehicle liability policy were set out in section 31A-22-304 of the Utah Code:

Policies containing motor vehicle liability coverage may not limit the insurer's liability under that coverage below the following:

(1) (a) $25,000 because of liability for bodily injury to or death of one person, arising out of the use of a motor vehicle in any one accident; (b) subject to the limit for one person in Subsection (a), in the amount of $50,000 because of liability for bodily injury to or death of two or more persons arising out of the use of a motor vehicle in any one accident; and (c) in the amount of $15,000 because of liability for injury to, or destruction of, property of others arising out of the use of a motor vehicle in any one accident; or

(2) $65,000 in any one accident whether arising from bodily injury to or the death of others, or from destruction of, or damage to, the property of others.

Utah Code Ann. § 31A-22-304 (1994). While this section remains unaltered in the current version of the Utah Code, we recite the code provisions in effect at the time of the issuance of the policies and the accident throughout this opinion.

3 . Again, we recite the code provisions in effect at the time of the issuance of the policies and the accident. We also note that none of the sections of the Utah Code cited throughout this opinion has been substantially amended since that time.

4 . We would be faced with a different question if, for instance, neither policy, standing alone, met the statutory security requirement, but the policies taken together had been tailored to meet that requirement. In such a case, the policies could be deemed a "combination of policies purchased to satisfy" the statutory security requirement. Utah Code Ann. § 31A-22-302(1).