Collins v. Motorists Mutual Insurance

194 N.W.2d 148, 36 Mich. App. 424, 1971 Mich. App. LEXIS 1324

• Court: Michigan Court of Appeals
• Decided: October 19, 1971
• Docket: Docket 9808
• Status: Published

Opinions

V. J. Brennan, J.

On April 5, 1968, plaintiff’s husband was struck and killed by an uninsured motorist. At the time he was struck decedent was bending over the trunk of a vehicle in which he had been a passenger, but which was now disabled. The accident occurred in the state of Florida. The plaintiff recovered $10,000 for the wrongful death of her husband under uninsured motorist coverage issued to the owner of the vehicle decedent had been occupying. Plaintiff now seeks to recover for the wrongful death of her husband under the uninsured motorist provisions of two policies of insurance issued by the defendant, Motorists Mutual Insurance Company, to the decedent.

The defendant denies any liability, citing, first, the fact that plaintiff has already received $10,000 from the insurer of the car which decedent had been occupying (which amount is the limit of defendant’s liability under each policy), and, second, the following “other insurance” clause found in each of the policies issued to the decedent:

“Other Insurance: With respect to bodily injury to an insured while occupying an automobile not owned by the insured named in Item 1 of the declarations, the insurance hereunder shall apply only as excess insurance over any other similar insurance available to such occupant, and this insurance shall then apply only in the amount by which the applicable limit of liability of this coverage exceeds the sum of the applicable limits of liability of all such other insurance.

“With respect to bodily injury to an insured while occupying or through being struck by an ‘uninsured automobile’, if such insured is a named insured or designated person under other similar insurance available to him, then the damages shall be deemed not to exceed the higher of the applicable limits of liability of this insurance and such other insurance, and the company shall not be liable under this coverage for a greater proportion of the applicable limit of liability of this coverage than such limit bears to the sum of the applicable limits of liability of this insurance and such other insurance.

“Subject to the foregoing paragraphs, if the insured has other similar insurance available to him against a loss insured by this coverage, the company shall not be liable under this coverage for a greater proportion of such loss than the applicable limit of liability hereunder bears to the total applicable limits of liability of all valid and collectible insurance against such loss.”

Despite the fact that it accepted premiums for uninsured motorist coverage on each policy of insurance it had issued to the decedent, the defendant points out that the courts of this state have interpreted such clauses in insurance policies previously, and have ruled that the effect of such clauses is to terminate the liability of the insurer once the insured has received the maximum benefit he could have received under just one policy. Horr v. Detroit Automobile Inter-Insurance Exchange (1967), 379 Mich 562; Arminski v. United States Fidelity & Guaranty Company (1970), 23 Mich App 352, leave to appeal granted October 20, 1970, appeal dismissed by order dated June 2, 1971, 384 Mich 769.

The plaintiff argues, first, that the “other insurance” clause is inapplicable since decedent was not “occupying” an automobile at the time of his demise. Judge Wise of the Wayne County Circuit Court correctly rejected this argument. Decedent’s policies of insurance define “occupying” as “in or upon, entering into or alighting from”. In that decedent was leaning over the trunk of his friend’s automobile, and had been within it shortly before he was struck, we believe he was “occupying” the vehicle at the time of his death.¹ Since decedent was “occupying” an automobile, the “other insurance” clause is applicable to this situation, and would, under Horr and Arminshi, relieve the insurer of liability.

However, those cases, because of the dates of the accidents, were not governed by the following statute, MCLA § 500.3010 (Stat Ann 1971 Cum Supp § 24.13010), which provides in pertinent part:

“No automobile liability or motor vehicle liability policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto in limits for bodily injury or death set forth in section 504 of Act No. 300 of the Public Acts of 1949, as amended, being section 257.504 of the Compiled Laws of 1948, under provisions approved by the commissioner of insurance, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles, including owners or operators insured hy an insolvent insurer, because of bodily injury, sickness or disease, including death, resulting therefrom, unless the named insured rejects such coverage in writing as provided herein.”

The “limits for bodily injury or death set forth in” PA 1949, No 300 (MCLA § 257.504 [Stat Ann 1968 Rev § 9.2204]), as amended by PA 1955, No 222, and PA 1966, No 247, are:

“not less than $10,000.00 because of bodily injury to or death of 1 person in any one accident, and, subject to said limit for 1 person, to a limit of not less than $20,000.00 because of bodily injury to or death of 2 or more persons in any one accident.”

The plaintiff argues that this uninsured motorist statute requires all policies of automobile liability insurance to provide coverage (in the minimum statutory amounts) against uncompensated losses which result from the negligence of an uninsured motorist. She urges this Court that a policy of insurance which denies coverage where the insured has recourse to “other insurance” does not satisfy the clear mandate of the statute. Plaintiff also argues that neither Horr nor Arminshi are applicable to this case. We agree; both of those cases grew out of incidents which occurred before the effective date of our uninsured motorist statute, hence the issue here, (whether “other insurance” • clauses conflict with the statute requiring uninsured motorist coverage), was not relevant to the decision in either Horr or Arminshi, and therefore those cases are not relevant to the issue now before us.

In response, the defendant argues that the plaintiff’s construction of the statute could result in the victim of an uninsured motorist being placed in a position more advantageous than the one he would have been in had the tortfeasor been insured in the minimum statutory amount. The defendant is correct in this analysis; if an individual has purchased automobile liability insurance, including uninsured motorist protection, and is injured by an uninsured motorist while riding as a passenger in ap automobile whose operator has purchased similar coverage, this individual, under the plaintiffs construction of the statute, would have recourse against the operator’s uninsured motorist coverage, and against his own. If the tortfeasor in the above-described circumstances had purchased insurance in the minimum statutory amounts, the passenger-victim would have recourse to only one policy of insurance, i.e., the tortfeasor’s.

The defendant argues that the Legislature could not have intended such an anomalous result, and urges that the statute has been satisfied if the insured victim of an uninsured motorist has been compensated up to the statutory minimum amount of $10,000. Another panel of our Court has rejected just such an argument in Blakeslee v. Farm Bureau Mutual Insurance Company of Michigan (1971), 32 Mich App 115, and has held that an “other insurance” clause which reduces the liability of the insurer where an insured has recourse to another policy of insurance violates the uninsured motorist statute. We agree with the holding.

The most logical manner in which to ascertain the intention of the Legislature is through the wording of the statute. It is only when a statute is ambiguous that a court is forced to interpret it in terms of legislative intent. Here, the meaning of the statute is clear; it provides, without uncertainty or ambiguity, that no automobile liability policy shall be issued in this state unless it provides coverage, in the statutory minimum amounts, for the protection of the persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles. The statute does not say that each insured should have access to the minimum statutory amount of insurance to compensate him for losses caused by an uninsured motorist, but that each policy of insurance shall provide such coverage.

As this Court noted in Blákeslee, a number of our sister states have adopted substantially similar, and in some cases identical, uninsured motorist statutes. Many of those states have already faced the question which faces this Court now; the manner in which those states have resolved this issue has not been uniform. A number of states have held “other insurance” clauses a valid limitation on the liability of the insurer on the theory that:

“The design and purpose of the uninsured motorist insurance statute was to provide protection only up to the minimum statutory limits for bodily injuries caused by financially irresponsible motorists. The statute was not designed to provide the insured with greater insurance protection than would have been available had the insured been injured by an operator with a policy containing minimum statutory limits.” Maryland Casualty Company v. Howe (1965), 106 NH 422, 424 (213 A2d 420, 422).²

This reasoning does not impress us. The statute, and therefore the legislative intent, is both clear and certain. Furthermore, we see no evil in a situation which on some occasions gives an injured party a greater opportunity to receive full compensation for injuries he has suffered.

Had the Legislature intended “to provide protection only up to the minimum statutory limits” it could easily have so provided in the statutory scheme.³ The Legislature having made no such provision, we believe that: “There appears no latitude in the statute for an insurer limiting its liability through ‘other insurance’ * * # clauses”. Sellers v. United States Fidelity & Guaranty Co. (Fla, 1966), 185 So2d 689, 690.

The “other insurance” clause, being in violation of the uninsured motorist statute, must therefore be “read out” of the policy, and the policy deemed to include the coverage mandated by statute. MCLA § 500.3012 (Stat Ann 1957 Rev § 24.13012); Oatis v. Dairyland Insurance Co. (1969), 20 Mich App 367. The decedent having purchased two policies of insurance from the defendant, and not having waived the statutorily-required uninsured motorist coverage as provided in the statute, the defendant insurer is liable to his estate in an amount up to $10,000 for each policy. We reverse and remand for trial on the issue of damages.

As with the other states which have held that “other insurance” clauses are impermissible in this context, we also hold that “it was not intended by the [Legislature] that an insured shall receive more from such coverage than his actual loss, although he is the beneficiary under multiple policies.” Moore v. Hartford Fire Insurance Company Group (1967), 270 NC 532, 543 (155 SE2d 128, 136). In this regard, the key phrase in the statute is “legally entitled to recover damages from owners or operators of uninsured motor vehicles”. If an insured’s loss has been totally compensated by other insurance, he is no longer “legally entitled” to recover damages.

Reversed and remanded.

Quinn, J., concurred.

1 See Pagan v. Motor Vehicle Accident Indemnification Corporation (1966), 51 Misc 2d 664 (273 NYS2d 740), where the Supreme Court oí New York, New York County, held that an individual who was outside of, but in contact with, a disabled vehicle was “in or upon or entering into or alighting from” that vehicle. See also Motor Vehicle Accident Indemnification Corporation v. Oppedisano (1964), 41 Misc 2d 1029 (246 NYS2d 879).

2 For other cases reaching the same result on similar grounds see Anno: 28 ALR3d 551, 557.

3 At least one state, California, has done just that; see Grunfeld v. Pacific Automobile Insurance Company (1965), 232 Cal App 2d 4, 7 (42 Cal Rptr 516, 518).