Grimes v. Concord General Mutual Insurance

422 A.2d 1312, 120 N.H. 718, 1980 N.H. LEXIS 383

• Court: Supreme Court of New Hampshire
• Decided: November 13, 1980
• Docket: 79-360
• Status: Published

Opinions

BROCK, J.

This appeal involves a petition for declaratory judgment (RSA 491:22) by which the plaintiff, Jerry H. Grimes, seeks a judicial determination of the extent of his insurance coverage under a single Family Combination Automobile Policy issued to him by the defendant, Concord General Mutual Insurance Company. The Trial Court {King, J.), after denying a motion for summary judgment filed by the defendant, transferred three questions of law to this court pursuant to RSA 491:17. The questions are as follows:

“1. Whether the New Hampshire Motor Vehicle Financial Responsibility Act permits the automobile insurance carrier to reduce uninsured motorist benefits available to the insured by offsetting them with medical payment benefits paid to the insured under the policy.

2. Whether the plaintiff is entitled to stack the uninsured motorist benefits contained within the single insurance policy.

3. Whether the plaintiff is entitled to stack the medical payment benefits available to each person contained within the single policy.”

The facts giving rise to this action are undisputed. On July 13, 1976, the plaintiff, while operating one of his two automobiles, was injured in an accident. Following the accident, the plaintiff, with the acquiescence of the defendant, negotiated a settlement in the amount of $10,000 with the insurance carrier for the operator of the other car. This sum represented the limits of the other operator’s liability coverage, and because it was insufficient to pay the plaintiff’s medical expenses, the plaintiff sought to recover additional sums under his own insurance policy.

The plaintiff’s policy provided coverage for two vehicles owned by him, one of which he was operating at the time of the accident. Each vehicle was covered by uninsured motorist protection in the amount of $20,000 per person and $40,000 per occurrence, with a separate premium charged for each car. In addition, each vehicle was covered for medical payment benefits of $2,000 and had liability coverage in the amount of $50,000/$100,000, with separate premiums being charged for each car for each class of coverage.

In response to the plaintiff’s demand, the defendant paid the plaintiff $2,000 under the medical payment portion of the policy and $8,000 under the uninsured motorist provisions of the policy. Relying upon a clause in the policy, the defendant claimed the medical payments as a credit against uninsured motorist benefits. The parties agree that the defendant may apply the $10,000 paid to the plaintiff by the other driver’s insurance carrier as a credit against the uninsured motorist benefits. See Vigneault v. Travelers Ins. Co., 118 N.H. 75, 79, 382 A.2d 910, 913 (1978).

Dissatisfied with the position taken by the defendant, the plaintiff filed a petition for declaratory judgment asserting three points: (1) that the defendant is not permitted to reduce uninsured motorist benefits by offsetting them with the medical payment benefits; (2) that the plaintiff can “stack” the uninsured motorist coverage provided for each automobile for total uninsured motorist benefits of $40,000/$80,000, with the defendant being able to claim credit for the $10,000 liability settlement with the other driver’s insurance carrier; and (3) that the plaintiff can “stack” the medical payment benefits for a total of $4,000 medical payment coverage. These three claims led the trial court to transfer the three questions of law previously set out.

The first question transferred, whether the carrier can reduce its insured’s uninsured motorist benefits by offsetting them with medical benefits paid him, was recently answered in the negative in Bertolami v. Merchants Mutual Ins. Co., 120 N.H. 308, 414 A.2d 1281 (1980). The limits of liability clause applicable in the instant case is identical to the one at issue in Bertolami. There we held that the clause violates statutory law, RSA 268:1, 268:15-a, and was therefore void. Bertolami, supra at 312-13, 414 A.2d at 1283. The answer to the first question is therefore “no.”

The second question presented is whether the plaintiff is entitled to stack the uninsured motorist benefits contained within a single policy that insures two cars, one of which the plaintiff was operating when the accident occurred. Although this issue has been extensively litigated elsewhere, see generally N.H. Bar Ass’n CLE Handbook, Uninsured Motorists, J. F. Davis at 87-112 (1980), this is an issue of first impression in this State. The plaintiff asserts that Courtemanche v. Lumbermens Mutual Cas. Co., 118 N.H. 168, 385 A.2d 105 (1978), is dispositive of the issue, while the defendant relies on Eckert v. Green Mt. Ins. Co. Inc., 118 N.H. 701, 394 A.2d 55 (1978), as controlling authority. Neither of these cases is directly on point, however. Eckert addressed the question of intra-policy stacking of medical payment benefits while the issue here is uninsured motorist benefits. Courtemanche, on the other hand, dealt with uninsured motorist benefits but on an inter-policy basis as applied against “other insurance” provisions in the policy. Here, we are concerned with the effect that a “Limits of Liability” clause has on intra-policy stacking of uninsured motorist benefits. The relevant portion of the limits of liability clause contained within the uninsured motorist section of the policy, which is separate and distinct from the limits of liability clause contained within the medical payments section, reads:

“(a) The limit of liability for family protection coverage stated in the declaration as applicable to ‘each’ person is the limit of the company’s liability for damages, including damages for care or loss of services, because of bodily injuries sustained by one person as the result of any one accident, and subject to the above provision respecting each person, the limit of liability stated in declarations as applicable to ‘each’ accident is the total limit of the company’s liability for all damages, including damages for care or loss of services, because of bodily injury sustained by two or more persons as any result of the accident.”

Generally, those jurisdictions that have allowed stacking in cases similar to this have done so for one or more of three basic reasons. The first reason given involves the double premium argument, whereby the insured is considered to have paid twice for the coverage and thus is entitled to stack it. E.g., Kemp v. Allstate Ins. Co., 601 P.2d 20, 24 (Mont. 1979). The second reason that has persuaded some courts to allow stacking is a finding that the exclusionary language that prohibits intra-policy stacking is ambiguous. Pearthree v. Hartford Ace. & Indem. Co., 373 So. 2d 267, 270-71 (Miss. 1979). The final reason relied upon by some courts ruling in favor of intra-policy stacking of uninsured motorist benefits is that their jurisdiction’s uninsured motorist statutes require such a result. E.g., Holloway v. Nationwide Mut. Ins. Co., 376 So. 2d 690, 694-95 (Ala. 1979). Because these represent the most cogent and most often cited reasons in support of intra-policy stacking of uninsured motorist benefits we will examine each separately.

The double premium argument alone, as applied to this particular case, does not persuade us to hold that the plaintiff has a right to stack his uninsured motorist benefits contained within the single policy. There are, nevertheless, several aspects of this argument that warrant consideration. The plaintiff contends that the insurance contract is one of adhesion, that he is paying double costs but not receiving any additional coverage in return, contrary to his reasonable expectations, and that this results in a windfall to the insurance company.

First, we note that RSA 268:15-a requires that uninsured motorist protection be included in every automobile liability insurance policy issued in this State on vehicles registered in this State. In that sense, the uninsured motorist clause is as much a contract of adhesion for the insurance carrier as it is for the insured.

Neither can we agree, with confidence, that the plaintiff is paying an extra premium without receiving something in return. When an insured owns two vehicles that are constantly available for use not only by him, but by members of his family and others, the risk that someone operating one of those vehicles will be involved in an accident with an uninsured motorist is obviously greater than if only one vehicle were available for use. Consequently, an insurance carrier’s exposure to that risk may be enhanced. Other courts have recognized that the second premium paid on the second car does afford some extra protection that otherwise would not exist. See, e.g., Castle v. United Pacific Ins. Group, 252 Or. 44, 448 P.2d 357 (1968); Holland v. Hawkeye Secur. Ins. Co., 230 N.W.2d 517 (Iowa 1975); Cunningham v. Western Cas. & Sur. Co., 243 N.W.2d 172, 174 (S.D. 1976), and cases cited. Cf. Pearthree v. Hartford Acc. & Indem. Co., 373 So. 2d 267, 270-71 (Miss. 1979) (court held double premium argument not dispositive by itself but held stacking allowed on ground that policy language was ambiguous).

We also reject the proposition that, as a matter of law, the payment of a double premium represents a windfall to the insurance carrier. To conclude otherwise would require that we overlook the fact that the setting of insurance rates is a “highly technical and complex” process, Appeal of Nationwide Ins. Co., 120 N.H. 90, 93, 411 A.2d 1107, 1109 (1980), which the legislature has left to the insurance commissioner, RSA 412:14, :15, whom we have recognized to be an expert in the field. Insurance Serv. Office v. Whaland, 117 N.H. 712, 717, 378 A.2d 743, 746 (1977).

Although we have in the past regarded the payment of double premiums as a factor to be considered, see, e.g., Shea v. United Services Auto. Assoc., 120 N.H. 106, 411 A.2d 1118 (1980); Eckert v. Green Mt. Ins. Co., 118 N.H. 701, 705, 394 A.2d 55, 58 (1978), we do not view it as dispositive. Rather, we view it as a factor to be considered in the application of the “reasonable expectations of the insured” doctrine. See Shea v. United Services Auto. Assoc. supra. However, under the reasonable expectations doctrine the policy is interpreted “in the light of what a more than casual reading of the policy would reveal to an ordinarily intelligent insured,” Hanover Insurance Co. v. Grondin, 119 N.H. 394, 397, 402 A.2d 174, 176 (1979) (citations omitted), unless the policy is so constructed as to discourage a reasonable man from attempting to read it, Storms v. U.S. Fidelity & Guar. Co., 118 N.H. 427, 430, 388 A.2d 578, 580 (1978), or unless the parties’ prior dealings would lead the insured to form a reasonable belief that the policy provided him the claimed coverage. Karol v. New Hampshire Insurance Co., 120 N.H. 287, 290, 414 A.2d 939, 941 (1980). We do not consider, nor does the plaintiff claim, that the policy in this case constituted an “Augean stable of print” as was the case in Storms supra, or that his prior dealings with the insurer and its agents caused him to form the reasonable expectation that his policy provides the coverage he now claims that it does, as was the case in Karol. Moreover, we are convinced that the limitation of coverage clause contained within the uninsured motorist section of the policy is sufficiently clear that the “ordinarily intelligent insured” after a “more than casual reading” would understand it to limit the carrier’s liability to the amount stated in the declaration ($20,000) for injuries sustained by one person in one accident.

The final prong in the plaintiff’s argument in support of intrapolicy stacking of uninsured motorist benefits is that RSA 268: 15-a, the uninsured motorist statute, requires such a result. We disagree.

To a degree, uninsured motorist coverage is vehicle-related, Beliveau v. Norfolk & Dedham Mut. Fire Ins. Co., 120 N.H. 73, 76, 411 A.2d 1101, 1103 (1980). Moreover, the terms of the statute, “[n]o policy shall be issued . . . ,” are clearly policy-related. In this case there is one policy that provides the plaintiff with uninsured motorist benefits of $20,000/$40,000. RSA 268:15-a provides in pertinent part:

“[n]o policy shall be issued . . . unless coverage is provided therein or supplemental thereto at least in amounts or limits prescribed . . . under this chapter [$20,000/40,000] for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles____”

The insurance policy in this case provided $20,000/$40,000 uninsured motorist coverage as required by law and the statute does not mandate an intra-policy stacking of uninsured motorist benefits resulting in $40,000/$80,000 coverage. The burden of purchasing additional uninsured motorist coverage in amounts greater than $20,000/$40,000 is placed upon the insured. RSA 268:15-a I; see Beliveau v. Norfolk & Dedham Mut. Fire Ins. Co., 120 N.H. 73, 76, 411 A.2d 1101, 1103 (1980).

Plaintiff argues strenuously that the legislative intent supports his position. We can find no evidence that our legislature intended the result urged by the plaintiff, nor has he cited any such evidence. But see Courtemanche v. Lumbermens Mut. Cas. Co., 118 N.H. 168, 385 A.2d 105 (1978) (a two-policy case). Rather, the plaintiff relies on cases in other jurisdictions in support of this contention. We have, however, already taken notice of the fact that many of the uninsured motorist statutes in other states vary from our own. Beliveau v. Norfolk & Dedham Mut. Fire Ins. Co. supra. Moreover, we note that at least one state legislature has enacted an anti-stacking statute in response to a court decision in favor of intra-policy stacking. Fla. Stat. Ann. § 627.4132 (West 1977); Gillette v. State Farm Mut. Auto. Ins. Co., 374 So. 2d 525 (Fla. 1979) (holding statute constitutional); State Farm Mut. Auto. Ins. Co. v. Wimpee, 376 So. 2d 20 (Dist. Ct. of App. Fla. 1979) (applying the statute and discussing cases prior to statute). Maryland has also adopted an anti-stacking statute. Md. Ann. Code of 1957 Art. 48A § 543; Yarmuth v. Government Emp. Ins. Co., 407 A.2d 315 (Md. 1979); see also Citizens Ins. Co. of America v. Tunney, 91 Mich. App. 223, 283 N.W. 2d 700 (1979). For these reasons we decline to tread on the treacherous ground of examining the legislative intent surrounding adoption of uninsured motorist statutes in other states, particularly when our statute is clear and unequivocal.

The answer to the second question is “no.”

The last question is whether the plaintiff is entitled to stack the medical payment benefits within the single policy. The “Expenses for Medical Services” section of the policy is identical to that which we considered in Eckert v. Green Mt. Ins. Co., 118 N.H. 701, 394 A.2d 55 (1978), as is the applicable limits of liability clause. Because the plaintiff was an insured in an owned vehicle, he concedes, as he must, that Eckert is controlling unless we should decide to overrule it. This we decline to do. Only recently, in Shea v. United Services Auto Assoc., 120 N.H. 106, 108, 411 A.2d 1118, 1119 (1980), we pointed out that Eckert is still the law in this State.

The answer to the third question is “no.”

Remanded.

King, J., did not sit; Douglas, J., dissents only as to question 2; the others concur.