Frank v. Allstate Insurance Co.

727 P.2d 577

• Court: Supreme Court of Oklahoma
• Decided: July 31, 1986
• Docket: 60014
• Status: Published

Opinions

OPALA, Justice.

The issues presented are: [1] whether the terms of the medical payment coverage of the automobile insurance policy are ambiguous insofar as they afford benefits on each of two vehicles when only one was in the accident giving rise to the claim; and, if they are not found to be ambiguous, [2] whether — as a matter of public policy — the insured is entitled to aggregate the limits of medical payment benefits afforded for each vehicle.

According to the stipulated facts, Gary B. Frank [insured] and his deceased wife, Linda Frank, owned two automobiles and were the named insureds of an automobile insurance policy issued by Allstate Insurance Company [Allstate] which covers both vehicles. Separate premiums were paid for medical payment coverage on each vehicle.¹ While occupying one of their cars, insured and his wife were struck by a vehicle driven by an admittedly negligent uninsured motorist. Linda Frank died as a result of the accident. Insured suffered personal injuries and incurred medical expenses that exceeded his policy limits for medical payment coverage on the vehicle he was occupying when the accident occurred. Allstate tendered the full amount of- its liability limit for medical payment coverage on that vehicle. Upon Allstate’s refusal to allow insured’s claim to the medical payment benefits on his other vehicle — which was not involved in the accident — the insured brought this action.

Allstate’s denial of liability for the additional coverage is based upon the following terms of the policy:

“COVERAGE CC — Automobile Medical Payments Insurance

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Limit of Allstate’s liability

Regardless of the number of automobiles insured, only one of the limits of liability stated in the declarations as applicable to ‘each person’ is the total limit of Allstate’s liability for all expenses incurred by or for each person as the result of any one accident. Further, if the accident involves an owned automobile, then the limit stated in the declarations as applicable to that automobile shall be the total limit of Allstate’s liability for each person.

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GENERAL CONDITIONS

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3. Insurance On Two or More Automobiles

When two or more automobiles are insured by this policy, the terms of this policy shall apply separately to each,....”

Insured contends that when the limit of liability clause is read in conjunction with the general condition an ambiguity arises, which if construed against Allstate, would entitle him to “stack” his medical payment coverage purchased on each vehicle protected by the policy.

The quoted limit-of-liability clause states plainly that Allstate’s liability for payment of medical expenses is limited to the amount of coverage purchased for and applicable to the insured’s “owned automobile” involved in the accident. The general condition, also quoted above, provides that the terms of the policy shall apply separately to each automobile insured by the policy. A reading of this condition in conjunction with the limitation clause does not compel us to conclude that the second vehicle’s coverage limit may be applied cumulatively. Unless ambiguous, an insur-anee policy should be construed according to its terms as any other contract.²

While the insured did pay an additional premium for the medical payment coverage for his other vehicle, that premium was for an additional and separate risk of loss which did not occur. Allstate would have become contractually liable for the extra coverage only if the insured’s second vehicle had been involved in an accident. Hence, we conclude that, under the facts of this case, the policy terms in question clearly and unambiguously preclude the stacking of medical payment coverage.

Lastly, insured argues that Oklahoma’s public policy that authorizes the stacking of uninsured motorist [UM] coverage should apply also to medical payment coverage. We have held that, where multiple premiums have been paid, the extent of UM coverage available to an insured is the aggregate limit of the coverages purchased on each vehicle.³ The UM coverage stacking rule is based upon the public-policy mandate of 36 O.S.1981 § 3636, the statute that specifically governs UM protection. There exist no statutory or other public-policy requirements which would provide a basis for either invalidating or modifying the medical payment provisions of the insurance policy here in contest. The matter must simply rest on contract between the insurer and its insured.

The policy under scrutiny provides the insured with both UM and medical payment coverage. Although both types of protection entitle him to receive benefits because of bodily injury, medical payment coverage remains manifestly distinct from the statutorily-mandated UM protection. Entitlement to medical payment coverage does not depend on whether bodily injury is sustained as a result of an uninsured motorist’s negligence, and insurance companies are not legally required to offer that form of coverage to their insureds.

Clearly, the circumstances surrounding an insured’s bodily injury determine the types of coverage from which an insured may benefit. The mere fact that both medical payment and UM coverage can provide compensation for the same class of harm — bodily injury — does not authorize our extension of the specific legislative mandate for UM coverage to medical payment protection.

We hold that, under the facts of this case, the insured is not entitled to stack the medical payment coverage on both his vehicles.⁴ Our decision is consistent with the vast majority of other jurisdictions that have dealt with the stacking of medical payment coverage under similar conditions.⁵

The trial court’s judgment is affirmed.

DOOLIN, V.C.J., and LAVENDER, HARGRAVE and SUMMERS, JJ., concur. SIMMS, C.J., and HODGES, WILSON and KAUGER, JJ., dissent.

1 . The general terms of the policy with respect to medical payment coverage provide as follows:

"COVERAGE CC — Automobile Medical Payments Insurance

Allstate will pay all reasonable expenses for necessary medical, dental, surgical, x-ray, ambulance, hospital, professional nursing and funeral services, pharmaceuticals, eyeglasses, hearing aids and orthopedic and prosthetic devices to or for an insured who sustains bodily injury caused by an accident; provided, however, that such insured incurs these expenses, and the above items are actually rendered or furnished, within one year from the date of accident."

2 . Carraco Oil Company v. Mid-Continent Casualty Company, Okl., 484 P.2d 519, 521 [1971].

3 . Keel v. MFA Insurance Company, Okl., 553 P.2d 153 [1976] and State Farm Mutual Automobile Insurance Company v. Wendt, Okl., 708 P.2d 581 [1985].

4 . In Aetna Casualty and Surety Company v. State Board for Property and Casualty Rates, Okl., 637 P.2d 1251, 1256-1257 [1981], the court noted that an insurer may not avoid liability by asserting excess or "other insurance" clauses that deny coverage for which an insured has paid a premium. The court also stated, albeit indirectly, that those clauses may not be used to prevent an insured from stacking medical payment coverages. Aetna presents no inconsistency with today’s pronouncement. There the court addressed the situation where an insurer might attempt to avoid liability for coverage to which an insured was previously entitled by operation of law or contract. In the case at bar the question before us is whether an insured may receive the benefits of coverage that was neither mandated by statute nor provided by the terms of the contract.

5 .See, e.g., United Services Automobile Association v. Smith, 57 Ala.App. 506, 329 So.2d 562 [1976]; Hellman v. Great American Insurance Company, 66 Cal.App.3d 298, 136 Cal.Rptr. 24 [1977]; Goodman v. Continental Casualty Company, 347 A.2d 662, 665 [Del.1975]; Sullivan v. Royal Exchange Assurance, 181 Cal.App.2d 644, 5 Cal.Rptr. 878 [1960]; Hansen v. Liberty Mutual Fire Insurance Company, 116 Ga.App. 528, 157 S.E.2d 768 [1967]; Phillips v. Inter-Insurance Exchange of Chicago Motor Club, 91 Ill.App.3d 198, 414 N.E.2d 226, 228 [1980]; Chiasson v. Whitney, 427 So.2d 470 [La.App. 5th Cir.1983]; Jones v. Allstate Insurance Company, 429 So.2d 241 [La.App. 3rd Cir.1983]; Dufour v. Metropolitan Property and Liability Insurance Company, 438 A.2d 1290, 1293 [Me.1982]; Nissenbaum v. Liberty Mutual Insurance Company, 16 Mass.App. 996, 454 N.E.2d 922 [1983]; State Farm Mutual Automobile Insurance Co. v. Scitzs, 394 So.2d 1371 [Miss.1981]; Tucker v. Aetna Casualty & Surety Company, 609 F.Supp. 1574, 1579-1580 [D.C.Miss.1985]; Hempen v. State Farm Mutual Automobile Insurance Company, 687 S.W.2d 894 [Mo.1985]; Pettid v. Edwards, 195 Neb. 713, 240 N.W.2d 344 [1976]; DeBerry v. American Motorists Insurance Company, 33 N.C.App. 639, 236 S.E.2d 380 [1977]; Wachovia Bank and Trust Company v. Westchester Fire Insurance Company, 276 N.C. 348, 172 S.E.2d 518 [1970]; Eckert v. Green Mountain Insurance Company, Inc., 118 N.H. 701, 394 A.2d 55 [1978]; Auto-Owners Mutual Insurance Company v. Lewis, 10 Ohio St.3d 156, 462 N.E.2d 396, 400 [1984]; Karabin v. State Automobile Mutual Insurance Company, 10 Ohio St.3d 163, 462 N.E.2d 403 [1984]; Pusti v. Nationwide Mutual Insurance Co., 415 Pa. 318, 203 A.2d 660 [1964]; Bishop v. Washington, 331 Pa.Super. 387, 480 A.2d 1088 [1984]; Lemoi v. Nationwide Mutual Insurance Company, 453 A.2d 758 [R.I.1982]; Nationwide Mutual Insurance Company v. Bair, 257 S.C. 551, 186 S.E.2d 410 [1972] and Rodenbough v. Grange Insurance Association, 33 Wash.App. 137, 652 P.2d 22 [1982]. Accord, Travelers Insurance Co. v. Estes, 283 Ark. 61, 670 S.W.2d 451 [1984], in which the Arkansas statute governing medical payment coverage was held to bar stacking; but see, Duckett v. Allstate Ins. Co., 606 F.Supp. 728 [W.D.Okl.1984].

Although stacking was permitted in the cases cited below, each considered medical payment provisions different from those before us today; these provisions were held to be ambiguous with respect to the insured’s entitlement to multiple coverage. See, Alabama Farm Bureau Mutual Casualty Insurance Company, Inc. v. Presley, 384 So.2d 122 [Ala.Civ.App.1980]; Dyer v. Nationwide Mutual Fire Insurance Company, 276 So.2d 6 [Fla.1973]; Government Employees Insurance Company v. Sweet, 186 So.2d 95 [Fla.App.1966]; Travelers Indemnity Company v. Watson, 111 Ga.App. 98, 140 S.E.2d 505 [1965]; Descoteaux v. Liberty Mutual Insurance Company, 125 N.H. 38, 480 A.2d 14 [1984]; Allstate Insurance Co. v. Lewis, 71 Misc.2d 628, 336 N.Y.S.2d 757 [1972]; Woods v. Nationwide Mutual Insurance Company, 295 N.C. 500, 246 S.E.2d 773 [1978]; Dhane v. Trinity Universal Insurance Co., 497 S.W.2d 323 [Tex.Civ.App.1973], aff’d., 512 S.W.2d 679 [Tex.1974]; Virginia Farm Bureau Mutual Insurance Company v. Wolfe, 212 Va. 162, 183 S.E.2d 145 [1971] and Moomaw v. State Farm Mutual Automobile Insurance Company, 379 F.Supp. 697 [S.D.W.Va.1974]. Accord, Harris v. Employers Mutual Casualty Company, 33 Colo. App. 314, 519 P.2d 1227 [1974] and Cameron Mutual Insurance Company v. Madden, 533 S.W.2d 538 [Mo.1976].