National Union Fire Insurance Co. v. Reynolds

889 P.2d 67, 77 Haw. 490, 1995 Haw. App. LEXIS 7
CourtHawaii Intermediate Court of Appeals
DecidedFebruary 13, 1995
Docket16091
StatusPublished
Cited by17 cases

This text of 889 P.2d 67 (National Union Fire Insurance Co. v. Reynolds) is published on Counsel Stack Legal Research, covering Hawaii Intermediate Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Union Fire Insurance Co. v. Reynolds, 889 P.2d 67, 77 Haw. 490, 1995 Haw. App. LEXIS 7 (hawapp 1995).

Opinion

ACOBA, Judge.

This appeal is from an April 24, 1992, order granting summary judgment and September 23, 1992 judgment in favor of Plaintiffs-Appellees National Union Fire Insurance Company and American International Adjustment Company, Inc., (collectively National Union) and against Defendant-Appellant Robert Reynolds (Defendant) on National Union’s contention that an automobile owned by its insured was not an “underin-sured motor vehicle” under its insured’s automobile insurance policy so as to afford Defendant, insured’s passenger, “underin-sured” benefits. We agree and so affirm the order and judgment.

Summary judgment is appropriately granted ‘“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.’ ” Amfac, Inc. v. Waikiki Beachcomber Inv. Co., 74 Haw. 85, 104, 839 P.2d 10, 22 (1992) (quoting Gossinger v. Association of Apartment Owners of The Regency Ala Wai, 73 Haw. 412, 417, 835 P.2d 627, 630 (1992)).

The material facts are not in dispute.

On October 3, 1987, Defendant, a passenger in an automobile driven by Mark Smith (Smith), was injured when Smith’s au *492 tomobile collided with another vehicle. Smith was insured by National Union. National Union’s automobile insurance policy provided Smith with both liability 1 and un-derinsured motorist 2 insurance coverages. 3 Defendant filed a claim for benefits under the liability and underinsured coverages of Smith’s policy. In addition, Defendant filed a claim for benefits under the underinsured motorist provision of his own automobile insurance policy, also issued by National Union.

National Union paid Defendant the maximum amount for bodily injury benefits under Smith’s liability coverage and under Defendant’s own underinsured coverage but denied Defendant’s claim for underinsured benefits under Smith’s policy. Defendant sought to resolve the denial of underinsured coverage under Smith’s policy by requesting arbitration under the arbitration clause in Smith’s policy.

Rather than proceeding to arbitration, National Union filed a complaint for declaratory relief against Defendant, alleging that he was not entitled to underinsured benefits under Smith’s policy. National Union moved for summary judgment on the ground that Smith’s policy provisions barred recovery of such benefits because Smith’s automobile was not an “underinsured vehicle” "with respect to Smith or passengers such as Defendant and because such provisions were not void as against public policy under Kang v. State Farm Mut. Auto. Ins. Co., 72 Haw. 251, 815 P.2d 1020 (1991).

Defendant opposed summary judgment on the basis that (1) the question of coverage was subject to arbitration under the arbitration provisions of the policy, (2) the express language excluding underinsured coverage in Kang was not in the policy, and (3) a policy provision excluding a vehicle owned by the insured or regularly used by the insured or the insured’s family from underinsured coverage, a so-called “owned vehicle exclusion,” was void because a similar provision was held void under the Hawaii uninsured motorist 4 statute in Kau v. State Farm Mut. Auto. Ins., 58 Haw. 49, 564 P.2d 443 (1977). After summary judgment was granted, Defendant appealed.

I.

We consider first, Defendant’s contention that the arbitration clause in Smith’s policy required the dispute to be arbitrated. The policy in pertinent part provides:

Arbitration
If we and a covered person do not agree:
1. Whether that person is legally entitled to recover damages under this [underin-sured motorist] endorsement; or
2. as to the amount of damages; either party may make a written demand for arbitration.

(Emphasis in original.)

“Covered person ” as used in this endorsement means:
[[Image here]]
2. An [sic] other person occupying your covered auto.

It is not disputed that Defendant was a “covered person” because he was an occupant of the automobile insured under the policy. Being a covered person, Defendant could invoke the arbitration clause in any *493 dispute. Focusing on the words “legally entitled to recover damages,” he asserts that they encompass the ascertainment of under-insured motorist coverage, as opposed to a limited factual determination of the underin-sured driver’s fault.

The foregoing provision is substantially the standard form used for underinsured motorist coverage:

The standard form coverage terms for the underinsured motorist insurance state that either party may make a. written demand for arbitration in the event the claimant and the insurer do not agree:
1. Whether that person is legally entitled to recover damages under this endorsement; or
2. As to the amount of damages.

3 A. Widiss, Uninsured and Underinsured Motorist Insurance § 45.3, at 134 (2d ed. 1992). A few jurisdictions, including Pennsylvania 5 and Connecticut 6 have adopted a broad approach to such provisions by relegating all issues concerning recovery under the policy to arbitration. Annotation, What Issues are Arbitrable Under Arbitration Provision of Uninsured Motorist Insurance, 29 A.L.R.3d 328, 337 (1970) (Annotation). 7 One jurisdiction has adopted a “reasonably debatable” test, “and allow[ed] arbitration of the scope of the arbitration clause where ... the parties’ intention as to its scope is reasonably debatable.” Dunshee v. State Farm Mut. Auto. Ins. Co., 303 Minn. 473, 482, 228 N.W.2d 567, 572 (1975).

Our review indicates, however, that most courts hold that arbitration is generally limited to issues of the offending motorist’s fault or liability to the covered person, and the amount of damages resulting from the accident, leaving issues relating to policy coverage to the courts. Annotation at 339.

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Bluebook (online)
889 P.2d 67, 77 Haw. 490, 1995 Haw. App. LEXIS 7, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-union-fire-insurance-co-v-reynolds-hawapp-1995.