Nationwide Insurance v. Gode

446 A.2d 1059, 187 Conn. 386, 1982 Conn. LEXIS 536

• Court: Supreme Court of Connecticut
• Decided: June 22, 1982
• Status: Published

Opinions

Arthur H. Healey, J.

This action seeking an injunction and a declaratory judgment was reserved for the advice of this court on a stipulation of the following facts. On October 14,1979, the defendant Christopher Code, a minor child of the defendant John H. Gode, Jr., was a passenger in a car operated by Timothy Dolan which was involved in a two-car aceident in Clinton. At the time of the accident, the defendant Christopher G-ode resided in the household of the defendant, John H. Code, Jr. As a result of the aceident, Christopher Code was seriously injured and has been paid $20,000 by Timothy Dolan’s liability insurance carrier. This was the entire limit of the insurance liability policy on the Dolan automobile and is the minimum liability insurance required by General Statutes §§ 38-175b and 14-112 (a).

The damages from the injuries sustained by Christopher Code, which include the loss of sight in one eye, could exceed $20,000. At the time of the accident, the plaintiff, Nationwide Insurance Company, had in force an automobile liability policy covering the two automobiles owned by the defendant, John H. Code, Jr. A premium was paid to the plaintiff for insurance on each of the two vehicles covered under the policy. This policy provided the minimum uninsured motorist coverage in the amount of $20,000 for each person and $40,000 for each accident.

The defendant Christopher Code was within the definition of an “insured” under the insurance policy as a relative living in the household of the defendant John H. Code, Jr. On February 19, 1980, the defendants made a claim against the plaintiff for additional payments under the uninsured motorist provision of their policy. The plaintiff denied the defendants’ claim and on April 8, 1980, the defendants filed for arbitration of the claim with the American Arbitration Association. The parties have agreed to refrain from proceeding with the arbitration proceeding pending a determination of two questions by this court.¹

The questions reserved for the advice of this court are: (1) Was the Dolan vehicle “under-insured” under § 38-175e (b) (2) of the General Statutes? (2) For the purposes of determining the applicability of § 38-175c (b) (2) of the General Statutes, was the liability coverage on the Dolan automobile “less than the applicable limits of liability under the uninsured motorist portion” of the Gode policy? The determination of the second of these questions is decisive of the issues presented.

The basic issue presented is whether, under our statutes, an insured can aggregate or “stack”² the uninsured motorist coverage limits of liability-applicable to each motor vehicle covered by his policy to determine whether he can claim under-insured benefits as provided by General Statutes § 38-175c (a) and (b) (2). The defendants claim that the Dolan auto was “underinsured” in that the limit of liability on that auto was less than the “applicable limits of liability under the uninsured motorist portion” of their policy with the plaintiff. General Statutes §38-175c (b) (2). They contend that since they received only $20,000 from Dolan’s insurer and since the aggregate of their uninsured motorist coverage on both vehicles totals $40,000, they are entitled to claim an additional $20,000 as “underinsured motorist benefits.” The plaintiff claims that the defendants cannot “stack” or aggregate the limits on their two uninsured motorist coverages in order to determine any under-insured motorist benefits because the defendants are limited, by statute, to the highest level of coverage purchased on any one automobile. Since the defendants’ uninsured motorist coverage on both automobiles was for the same amount as the liability coverage on the at-fault vehicle, i.e., $20,000, the plaintiff alleges that no underinsured motorist claim will lie.

General Statutes § 38-175c, as amended by Public Acts 1979, No. 79-235, provides in relevant part: “(a) Every such policy shall provide insurance, herein called uninsured motorist coverage, in accordance with such regulations, with limits for bodily injury or death not less than those specified in subsection (a) of section 14-112, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles or of insured and underinsured motor vehicles .... (b) .... (2) For the purposes of this section, an ‘underinsured motor vehicle’ means a motor vehicle with respect to which the sum of the limits of liability under all bodily injury liability bonds and insurance policies applicable at the time of the accident is less than the applicable limits of liability under the uninsured motorist portion of the policy against which claim is made under subdivision (1) of subsection (b) of this section.”³ The 1979 amendment to the statute added subsections (b) (1) and (2) and the reference to the underinsured motor vehicle coverage contained in § 38-175c (a). The purpose of this amendment was to remedy the “anomalous situation” which we noted in Roy v. Centennial Ins. Co., 171 Conn. 463, 475, 370 A.2d 1011 (1976), and Simonette v. Great American Ins. Co., 165 Conn. 466, 471, 338 (1973),⁴ where an injured party could find himself in a better position if the tortfeasor had no liability insurance than if he had only the statutory minimum amount. See also State Farm Mutual Automobile Ins. Co. v. Murphy, 38 Ill. App. 3d 709, 348 N.E.2d 491 (1976) (injured insured not able to recover under his uninsured motorist coverage because tortfeasor’s insurer had paid out limits of liability to other injured victims). The legislative history behind Public Acts 1979, No. 79-235 elucidates this legislative intent.

In the senate proceedings,⁵ Senator James J. Murphy, Jr., commented: “Mr. President, what this bill does is require that hereafter, when one has purchased uninsured motorist coverage, that if that coverage exceeds any insurance coverage which a responsible party has in causing injuries, that once the liability insurance of the so-called responsible or negligent party has been exhausted, if there is additional coverage under one’s uninsured motorists plan, then payment under that program would be triggered and allow for the greater recovery for the insured . . . .” 22 S. Proc., Pt. 5, 1979 Sess., p. 1354. In the house of representatives, Representative Silvio A. Mastrianni stated: “Mr. Speaker, the present law requires automobile liability policies provide a minimum uninsured motorist protection in the amount of $20,000 per person and $40,000 per accident. The law further states, Mr. Speaker, an insured may purchase higher limits of uninsured motorist protection not to exceed the limit of bodily injury liability coverage purchased on the policy. An uninsured vehicle is generally defined as a vehicle to which no bodily injury bond or policy applies at the time of the accident. Mr. Speaker, this bill requires coverage be provided against the underinsured motorist. It also requires [the] insurance company of an innocent driver to pay up to the full amount of the uninsured motorist coverage when the at fault driver’s insurance has been exhausted and a deficiency remains. Mr. Speaker, I move the passage of this bill as amended by Senate Amendment ‘A.’ ” 22 H. R. Proc., Pt. 16, 1979 Sess., p. 5341.⁶ While the legislative purpose may be clear upon an examination of these comments, we can find no indication in the amendment’s history as to the legislature’s view concerning the “stacking” of coverages.

We now turn to the actual language of the statute, which, the plaintiff claims, is determinative of the issues presented. The plaintiff points to the legislature’s selective use of singular and plural terms contained in the definition of “underinsured motor vehicle” to support its argument. The plaintiff contends that § 38-175c (b) (2)’s use of the phrase “sum of the limits of liability under all . . . insurance policies applicable” (emphasis added) to describe the yardstick against which the insured’s uninsured motorist coverage is measured clearly implies a singular, non-aggregated meaning to the phrase “applicable limits of liability under the uninsured motorist portion of the policy against which claim is made . . .” which describes that coverage. The plaintiff concludes by stating: “If the statutory language had said ‘policies,’ the position advocated by defendants herein might have some slight credibility. Since ‘policy’ is singular, however, it is apparent that the wording is designed to carry out the intent of the legislature and of the proponents of the bill as previously noted; namely, that ‘under-insured’ coverage refers only to the purchase of higher limits of coverage, and not to the purchase of multiple policies with minimum coverage. When the language of the statute is clear and unequivocal, there is no need for statutory construction.”

We cannot agree with the plaintiff. “In interpreting the meaning of a statute, we attempt to determine the intent of the legislature as expressed by the common and approved usage of the words in the statute. General Statutes § 1-1 (a); Waterbury Teachers Assn. v. Furlong, 162 Conn. 390, 406, 294 A.2d 546 [1972] ; Hartford Electric Light Co. v. Water Resources Commission, 162 Conn. 89, 100, 291 A.2d 721 [1971]. General Statutes §1-1 (f) provides that £[w]ords importing the singular number may extend and be applied to several persons or things and words importing the plural may include the singular.’ ” Winchester v. Connecticut State Board of Labor Relations, 175 Conn. 349, 359, 402 A.2d 332 (1978). In the interpretation of statutory provisions, ££ £the application of common sense to the language is not to be excluded.’ ” United Aircraft Corporation v. Fusari, 163 Conn. 401, 410-11, 311 A.2d 65 (1972) ; see Wiegand v. Heffernan, 170 Conn. 567, 582, 368 A.2d 103 (1976); Sillman v. Sillman, 168 Conn. 144, 148, 358 A.2d 150 (1975). Therefore, under §1-1 (f), the term “policy,” as it appears in § 38-175c (b) (2) could reasonably and logically be interpreted to include the plural term “policies.”

Even if it were argued that this interpretation was not a fair reading of the statute, the plaintiff’s argument still must fail. If it is assumed, for purposes of this argument, that the legislature intended only that underinsured motorist coverage was to be determined by the uninsured motorist limits of the one “policy” against which a claim is made, since the parties have stipulated that [a]t the time of the accident, the plaintiff had in force an automobile liability policy covering the two automobiles owned by the defendant . . .” (emphasis added), the instant situation clearly falls within the statute’s scope. It is apparent that, even if the plaintiff’s interpretation of the statute is correct, it does not preclude stacking of uninsured motorist coverages under a multiple vehicle insurance policy.

A statute is to be construed by considering its legislative history, language, purpose and the circumstances surrounding its enactment. See Anderson v. Ludgin, 175 Conn. 545, 552, 400 A.2d 712 (1978), and cases cited therein. At the time of the enactment of § 38-175c (b) (1) and (2), this court had already held that the stacking of uninsured motorist coverages was allowed where the insured was covered by two or more policies and was injured by an uninsured motorist.⁷ See Safeco Ins. Co. v. Vetre, 174 Conn. 329, 335, 387 A.2d 539 (1978); Roy v. Centennial Ins. Co., 171 Conn. 463, 475, 370 A.2d 1011 (1976) ; Pecker v. Aetna Casualty & Surety Co., 171 Conn. 443, 451-52, 370 A.2d 1006 (1976) ; see also Yacobacci v. Allstate Ins. Co., 33 Conn. Sup. 229, 372 A.2d 987 (1976). “‘This is particularly true when each of the insured vehicles is separately described, the coverage granted under the policy is separately listed for each vehicle, and a separate premium is charged for the coverage afforded to each of the described vehicles.’ See also Tucker v. Government Employees Ins. Co., 288 So. 2d 238 (Fla. 1973).” Safeco Ins. Co. v. Vetre, supra, 334.

It is clear that the legislative intention behind § 38-175c (b) (1) and (2) was “that uninsured motorists coverage also will extend to underinsurance situations.” Se.e comments ,of Joseph C. Mike, commissioner on insurance, Hearings before Joint Standing Committee on Insurance and Real Estate, 1979 Sess., pp. 81-82. We cannot find, nor have we been presented with, any logical reason why the defendants should not be allowed to stack or aggregate the uninsured motorist coverages in the under-insured motorist situation which is set out in the stipulation of facts in the reservation before us. See State Farm Mutual Automobile Ins. Co. v. White, 330 So. 2d 858 (Fla. App. 1976) ;⁸ see also St. Arnaud v. Allstate Ins. Co., 501 F. Sup. 192 (S.D. Miss. 1980).

“Where two premiums are paid for two vehicles, whether in one policy or two, total coverage for the named insured is doubled since a person can reasonably expect double coverage when he pays double premiums.” Yacobacci v. Allstate Ins. Co., supra, 231. See Sturdy v. Allied Mutual Ins. Co., 203 Kan. 783, 793, 457 P.2d 34 (1969) ; Hartford Accident & Indemnity Co. v. Bridges, 350 So. 2d 1379, 1381 (Miss. 1977) ; Southern Farm Bureau Casualty Ins. Co. v. Roberts, 323 So. 2d 536, 538 (Miss. 1975) ; Kemp v. Allstate Ins. Co., 601 P.2d 20, 24 (Mont. 1979) ; Grimes v. Concord General Mutual Ins. Co., 120 N.H. 718, 724, 422 A.2d 1312 (1980) (Douglas, J., dissenting) (and cases cited therein); Esler v. United States Services Automobile Assn., 273 S.C. 259, 263, 255 S.E.2d 676 (1979); Cunningham v. Ins. Co. of North America, 213 Va. 72, 79, 189 S.E.2d 832 (1972) ; but cf. 8C Appleman, Insurance Law and Practice § 5106, p. 517 ; 8D Appleman, supra, § 5192, p. 613.

There is no question that if the Dolan vehicle had been uninsured, the defendants, under Safeco Ins. Co. v. Vetre, could have aggregated their uninsured motorist coverages in order to make a claim for up to $40,000. In order to avoid another “anomalous” situation like that noted in Roy v. Centennial Ins. Co., supra, 475, and Simonette v. Great American Ins. Co., supra, 471, we hold that the legislature, in enacting § 38-175c (b) (1) and (2) reasonably intended that underinsured motorist coverage be accorded treatment similar to that given to uninsured motorist coverage. Therefore, § 38-175c must be interpreted to allow the defendants to stack the uninsured motorist coverages when determining their underinsured motorist benefits.⁹

This, however, is not the end of our discussion of this issue. We must still consider whether there was any effective exclusionary or limiting language in the plaintiff’s insurance policy which operated to negate the effect of § 38-175c which we have held allows an insured to stack uninsured motorist coverages when determining underinsured benefits. The plaintiff points to a clause contained in the policy entitled “LIMITS OP PAYMENT [,] AMOUNTS PAYABLE FOR UNINSURED MOTORISTS LOSSES” and specifically to section 2 which, states: “2. The insuring of more than one person or vehicle under this policy does not increase our Uninsured Motorists payment limits. Limits apply to each insured vehicle as stated in the Declarations. In no event will any insured be entitled to more than the highest limit applicable to any one motor vehicle under this or any other policy issued by us.” Id.

The plaintiff claims that § 38-175c (b) (2)’s reference to “the applicable limits of liability under the uninsured motorist portion of the policy against which claim is made . . .” incorporates the above quoted limitation clause which defines the “applicable limits.” The plaintiff argues that since the language of the policy and that of the statute are plain and consistent, its policy has effectively prevented the defendants from stacking their coverages. We do not agree.

We find that what we said in our discussions of the “other insurance”¹⁰ clauses in Safeco Ins. Co. v. Vetre, supra, and Pecker v. Aetna Casualty & Surety Co., supra, is dispositive of this issue. In those cases we held that “[a]n insurer may reduce its liability under an uninsured motorist provision only as is permitted by § 38-175a-6 (d) of the Regulations of Connecticut State Agencies, that is, the policy may provide for a reduction to the extent that damages have been paid by or on behalf of any person responsible for the injury, paid or are payable under workmen’s compensation or disability benefit laws, paid under the policy in settlement of a liability claim, or paid or are payable under any provision of the policy for direct indemnity for medical expenses or basic reparation benefits.

“Other than those exceptions, the regulations do not authorize any reduction of coverage because of ‘other insurance.’ Moreover, any provisions of a private contract of insurance which conflict with the statutes or regulations must give way to the latter. General Statutes § 38-175d. The ‘other insurance’ provisions, therefore, cannot prevent aggregation of the uninsured motorist coverage of the two policies in question.” (Footnote omitted.) Safeco Ins. Co. v. Vetre, supra, 332-33; see Pecker v. Aetna Casualty & Surety Co., supra, 450-51; State Farm Mutual Automobile Ins. Co. v. Murphy, 226 Ga. 710, 714, 177 S.E.2d 257 (1970). We have already found that the legislative intention was to put the underinsured motorist coverage on the same footing as uninsured motorist coverage. Since underinsured motorist coverage, as defined in General Statutes § 38-175c, can be determined only by reference to and in comparison with the insured’s uninsured motorist coverages, and since claim is made against an insured’s uninsured motorist coverage after it is determined that the at-fault party is underinsured,¹¹ the regulations which apply to uninsured motorist coverage must equally apply to underinsured motorist coverage. Therefore, since the regulations have the force of law; Pecker v. Aetna Casualty & Surety Co., supra, 449; and do not expressly authorize a limitation of payment provision such as that contained in this insurance policy, the clause cannot operate to prevent the defendants from stacking their coverages as they have tried to do. See also Holloway v. Nationwide Mutual Ins. Co., 376 So. 2d 690, 694-95 (Ala. 1979) (stacking of uninsured motorist coverages mandated by statute).

To answer the questions presented, then, we find that the defendants are entitled to aggregate or stack their uninsured motorist coverages in order to determine their underinsured benefits. Therefore, for purposes of § 38-175c (b) (2), the Dolan automobile’s liability coverage ($20,000) was less than the applicable limits of liability under the uninsured motorist portion of the policy against which claim is made (20,000 & 20,000 = 40,000) and the answer to question 2 is “yes.” It necessarily follows that we answer question 1 “yes.”

In this opinion Speziale, C. J., Petees and Aementano, Js., concurred.

1 This court has previously considered somewhat similar questions reserved for advice in Simonette v. Great American Ins. Co., 165 Conn. 466, 338 A.2d 453 (1973), and Fidelity & Casualty Co. v. Darrow, 161 Conn. 169, 286 A.2d 288 (1971). We have, where we have deemed it appropriate, exereised our discretion to entertain reservations in actions for declaratory judgments. See, e.g., Fidelity & Casualty Co. v. Darrow, supra.

2 “Stacking” refers to the ability of the insured, when covered by more than one insurance policy, to obtain benefits from a second policy on the same claim when recovery from the first poliey alone would be inadequate. See Blakeslee v. Farm Bureau Mutual Ins. Co., 388 Mich. 464, 473, 201 N.W.2d 786 (1972) ; see also Van Boozer v. Farmers Ins. Exchange, 219 Kan. 595, 608, 549 P.2d 1354 (1976); Detroit Automobile Inter-Insurance Exchange v. McMillan, 97 Mich. App. 687, 693, 296 N.W.2d 147 (1980); 7 Am. Jur. 2d, Automobile Insurance § 326; 8C Appleman, Insurance Law and Practice § 5103; Widiss, A Guide to Uninsured Motorist Coverage § 2.34a (1981 Sup.); 19 Couch, Insurance (2d Ed.) § 82.1:11 (Pocket Sup.). One court has noted that “[s] tacking is derived from the presumption that when the named insured purchases uninsured motorist coverage on more than one automobile, he intends to buy extra protection for himself and his family, regardless of whether his injury occurs in any one of his insured vehicles or elsewhere.” Travelers Ins. Co. v. Pac, 337 So. 2d 397, 398 (Fla. App. 1976); see Hartford Accident & Indemnity Co. v. Bridges, 350 So. 2d 1379, 1381 (Miss. 1977) ; Grimes v. Concord General Mutual Ins. Co., 120 N.H. 718, 721—22, 422 A.2d 1312 (1980). “Intra-policy stacking is the aggregation of the limits of liability for uninsured-motorist coverage of each car covered in one policy, whereas inter-poliey stacking involves the aggregation of coverage under more than one policy.” Taft v. Cerwonka, 433 A.2d 215, 217 n.3 (R.I. 1981); see Lumbermens Mutual Casualty Co. v. Martin, 399 So. 2d 536, 538 n.4 (Fla. App. 1981).

3 General Statutes § 38-175e (b) (1) provides: “An insurance company shall be obligated to make payment to its insured up to the limits of the policy’s uninsured motorist coverage after the limits of liability under all bodily injury liability bonds or insurance policies applicable at the time of the accident have been exhausted by payment of judgments or settlements, but in no event shall the total amount of recovery from all policies, including any amount recovered under the insured’s uninsured motorist coverage, exceed the limits of the insured’s uninsured motorist coverage.”

4 In Simonette v. Great American Ins. Co., 165 Conn. 466, 473, 338 A.2d 453 (1973), we said: “While a strong public policy argument can be advanced in support of the plaintiff’s desired expansion of the definition of ‘uninsured’ to prevent the particular anomaly presented herein, it is not the function of this court to attempt to improve legislation by reading provisions into it.”

5 In construing a statute and determining the legislative intent, we may take judicial notice of the discussions on the floor of the General Assembly although such discussions are not controlling on statutory interpretation. See Tax Commissioner v. Estate of Bissell, 173 Conn. 232, 245, 377 A.2d 305 (1977) ; Miller v. Board of Education, 166 Conn. 189, 194, 348 A.2d 584 (1974); Harris v. Planning Commission, 151 Conn. 95, 100, 193 A.2d 499 (1963).

6 We have also considered the comments of John Day, president of the Insurance Association of Connecticut, and of Charles Watson, president of the Independent Insurance Agents of Connecticut. See Hearings before Joint Standing Committee on Insurance and Real Estate, 1979 Sess., pp. 100-101, 124. It is interesting to note that in testimony before the Joint Standing Committee on Insurance and Real Estate, the commissioner on insurance, Joseph C. Mike, stated: “[T]he bill intends that uninsured motorists coverage also will extend to underinsurance situations. This is a poliey that we’re presently enforcing ... as best we can within the insurance department we don’t know offhand of any companies that are not in compliance with our poliey. We’d like to see this statute—the statute changed to guarantee continued cooperation. What this says is if you’re struck by an individual—under the present system if you’re struck by an individual who has no insurance, you collect on your own uninsured motorist—uninsured motorist coverage to the limits of your own coverage. Which means if you carry $100,000 coverage and you’re struck by someone you have $100,00 [sic] if they don’t have insurance. What we want to be able to say is if you’re struck by someone who has the basic limits only $20,000, you would still be able to go to your own uninsured motorists coverage for the next 80 so you’re still up to $100,000. Without this there are potential situations where you could be worse off having been hit by someone who has the basic minimum insurance than you are if you get hit by someone who has no insurance.” Hearings before Joint Standing Committee on Insurance and Real Estate, 1979 Sess., pp. 81-82.

7 The legislature is presumed to be mindful of the judicial construction of relevant legislation. Sawyer Savings Bank v. American Trading Co., 176 Conn. 185, 189, 405 A.2d 635 (1978).

8 We note that Florida has enacted an antistaeking statute since the decision in State Farm Mutual Ins. Co. v. White, 330 So. 2d 858 (Fla. App. 1976). See Fla. Stat. Ann. § 627.4132 (West Pocket Part 1981) and State Farm Mutual Automobile Ins. Co. v. Wimpee, 376 So. 2d 20 (Fla. App. 1979).

9 We want to be clearly understood as limiting our holding on the reservation before us on this appeal to cases factually similar to this case. This must be said because we anticipate a possible argument extending the analysis herein to accomplish a result that would be absurd. An example that comes to mind is the situation which would result if a plaintiff, urging stacking, was injured or killed, while in an automobile which was insured as only one of a fleet of cars. Our answer to such a situation will be given only when such a circumstance properly presents itself for review. The Rhode Island Supreme Court has noted that in these circumstances “even in those jurisdictions where intra-policy stacking for two or three vehicles is allowed, courts have uniformly denied such an extension of the stacking theory. See e.g. Holloway v. Nationwide Mutual Insurance Co., 376 So. 2d 690 (Ala. 1979) ; Ohio Casualty Insurance Co. v. Stanfield, 581 S.W.2d 555 (Ky. 1979); Linderer v. Royal Globe Insurance Co., 597 S.W.2d 656 (Mo. App. 1980) ; Continental Casualty Co. v. Darch, 27 Wash. App. 726, 620 P.2d 1005 (1980).” Taft v. Cerwonka, 433 A.2d 215, 219n (R.I. 1981).

10 An “other insurance” clause provides that if the insured has other similar insurance available to him and applicable to the accident, 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 for a greater proportion of any loss to which this coverage applies than the limit of liability hereunder bears to the sum of the applicable limits of liability of this insurance. See Pecker v. Aetna Casualty & Surety Co., 171 Conn. 443, 445-46, 370 A.2d 1006 (1976) ; Fidelity & Casualty Co. v. Darrow, 161 Conn. 169, 172, 286 A.2d 288 (1971).

11 Iii fact, underinsured motorist coverage can be viewed as the equivalent of uninsured motorist coverage to the extent that an injured insured receives less than his uninsured motorist policy limits from a minimally or lesser insured tortfeasor. See Simonette v. Great American Ins. Co., 165 Conn. 466, 475, 338 A.2d 453 (1973) (Bogdanski, J., dissenting), and Porter v. Empire Fire & Marine Ins. Co., 106 Ariz. 274, 475 P.2d 258 (1970).