Case Title: Mikelson v. United Services Automobile Association. S.Ct. Opinion Regarding Request for Attorneys' Fees and Costs, filed 09/26/2005 [pdf], 108 Haw. 358.

Citation: 107 Haw. 192

Docket Number: 

State: hawaii

Court: Hawaii Supreme Court

Date: 2005-05-12T00:00:00Z

Document:
uawe
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IN THE SUPREME COURT OF THE STATE OF HAWAT'T

 

=--000---

 

 

MATHEW S. MIKELSON, Plaintiff-Appell
UNITED SERVICES AUTOMOBILE ASSOCIATION, Defendant-Appellant

and

 

JOHN DOES 1-25; JANE DOES 1-25; DOE CORPORATIONS 1-25;
DOE PARTNERSHIPS 1-25; and DOE GOVERNMENTAL
ENTITIES 1-25, Defendants

No. 25217

21 AWSOME

APPEAL FROM THE FIRST CIRCUIT COURT
(CIV. NO. 99-1856)

  

2
2

MAY 12, 2005

 

MOON, C.J., LEVINSON, NAKAYAMA, AND ACOBA, JJ.,
AND CIRCUIT JUDGE WONG, ASSIGNED BY REASON OF VACANCY

OPINION OF THE COURT BY ACOBA, J.
Defendant-Appellant United Services Automobile

Association (Defendant) appeals from the June 19, 2002 judgment

of the circuit court of the first circuit (the court)* in favor

of Plaintif¢-Appellee Mathew S, Mikelson (Plaintiff) relating to

underinsured motorist benefits. By this appeal, Defendant

challenges the court’s order denying Defendant’s motion for order

 

The Honorable R. Mark Browning presided.
++*FOR PUBLICATION*#*
or declaration regarding choice of law, filed on April 30, 2001,
and the court’s findings of fact, conclusions of law, and order,
filed on July 16, 2001.

For the reasons discussed herein, we hold that the
court correctly (1) applied Hawai'i law on the choice of law
question, (2) determined that Plaintiff was a resident of the
named insured’s household and, therefore, a covered person under
the subject insurance policy for underinsured motorist benefits
purposes, and (3) decided that the insurance policy exclusions

 

inapplicable. Accordingly, the June 19, 2002 judgment is
affirmed.
I.

Larry D. Mikelson (Father), father of Plaintiff,
entered into an automobile insurance plan (the Policy) in
california with Defendant. The Policy was effective from October
23, 1998 to April 23, 1999. Listed as “operators” under the
Policy were Father, Ian A. Mikelson, and Plaintiff. It is not
disputed that Father is identified as a naned insured under the
Policy. three vehicles are listed in the Policy as being
“garaged” in Redondo Beach, California.

on January 17, 1999, Plaintiff was riding a motorcycle
on Kamehameha Highway. He was carrying @ passenger on the
motorcycle and had no license or permit to operate the vehicle at
the time of the accident, As Plaintiff was approsching the
intersection of Waimea Seach Park, @ motor vehicle operated by a
Ms. Larissa Madison (Madison) made a left turn into the Park, in

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front of Plaintiff, This caused Plaintiff to collide with
Madison’s vehicle and Plaintiff fell onto the roadway, suffering

injuries. The motorcycle was not insured under any policy

 

Plaintiff had with Defendant. As a result of the accident,

Within less than

 

Plaintiff! required surgery on his right kn
thirty days, Plaintife incurred more than $17,500 in medical and
ambulance expenses.

At the time of the accident, Plaintiff was a full-time
student at the University of Hawai'i - est Oahu (West Oahu), and
Lived in the City and County of Honolulu. Plaintiff’s first
semester at West Oahu commenced in January 1999, ‘The majority of
Plaintife's personal belongings remained at Father’s home in
california. The only personal belongings Plaintiff brought with
him to Hawas‘s were clothing and his surfboard. Plaintiff
possessed a California driver’s license at the time of the
accident. The permanent address Listed on the license was his
Father's address in Redondo Beach, California. Plaintiff lived
in California during his recovery from his surgery, but he
intended to return to Hawai'i in order to continue his education
An the fall semester of 1999.

Plaintiff was not employed before or at the time of the
accident and, as a result, relied completely on Father for
financial support. This support included payment of Plaintiff's
educational and travel expenses. Plaintiff was named as a
dependent on Father’s Internal Revenue Service income tax returns

for the years 1998 and 1999.
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m.

on April 20, 1999, Plaintiff filed a civil suit against
Madison for the injuries he sustained. Plaintiff obtained
$20,000 pursuant to a settlement, release, and indemnity
agreement that was executed on June 6, 1999. This $20,000 amount
was the limit of liability under all applicable liability bonds
or policies covering Madison. The $20,000 was not sufficient to
cover Plaintiff’s medical expenses.

As a result, Father attempted to obtain benefits under
Defendant's Policy. ‘The Folicy provides for underinsured
motorist coverage for a “covered person” under the “UNINSURED
MOTORISTS COVERAGE” section of the Policy. The amount of Bodily
Injury Uninsured Motorists Coverage under the Policy is $300,000.
A “covered person” is defined as a named insured or a family
member of a named insured. A “family member" is defined as a
person related to a naned insured “by blood, marriage or adoption
who is a resident of [the named insured’s) household.” An
“underinsured motor vehicle” is defined as a motor vehicle that
is insured, but as to which the amount of such insurance “is less
than the limit of liability for Bodily Injury Uninsured Motorists
Coverage” that is applicable to a covered auto. A “covered auto”
is defined in relevant part as any vehicle shown in the

Declarations. There is neither a choice of law provision within
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the Policy? nor a clause defining “resident of (the named
insureds} household.”

According to the “GENERAL PROVISIONS” section of the
Policy, the “{Plolicy applies only to accidents and losses which

 

(2) {dJuring the policy period as shown in the

Declarations; and (2) [w]ithin the policy territory.” The

 

“policy territory” encompasses “(t]he United States of Anerica,
ite territories or possessions{.1”
ut.

The underinsured motorist coverage provision states, in
relevant part, that “Bodily Injury Uninsured Motorists Coverage
shall not apply until the limits of liability under all
applicable Liability bonds or policies have been exhausted by
payment of judgments or settlements, and proof of such is
submitted to us.” According to the court's findings of fact,
Plaintiff “exhausted” the limits of liability and has submitted
reasonable proof to Defendant showing as much.

The Folicy also contains the following contested
exclusions:

1. UNINSURED MOTORISTS COVERAGE

 

+ afendant asserts “[t]he (Policy was issued pursuant to the laws
of California,” which presunably alludes to the existence of a cholee of 1
provision within the Policy. This assertion, however, is not meritorious for
two reasons. First, Defendant ambiguously cites to the entire Policy as
support of ite aesertion. Second, during discovery Defendant was asked
through written interrogatories to “[e)xplain why the Policy does not contain
a choice of Law provision.” Defendant first cbjected to the question on the
Grounds of it being, inter alia, “vague() (end) ambiguous,” and then said
Rielitnout waiving the above Objections, the policy speaks for itself." In
Light of Defendant's failure fo point to a choice of law provision, it is
apparent that the Policy lacks auch a provision.

 

 

 

 

 

5
 

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oy

With respect to damages for bodily injury caused by an
Underinsured motor vehicle, Bodily Injury Uninsured
Motorists Coverage shall not apply until the limits of
Yability under sil applicable Liability bonds or policies
hove been exhausted by payment of judgments or settlements,
fand proof of such is submitted to Us.

 

EXCLUSIONS
R. Me do not provide Uninsured Motorists Coverage for
Property dinage of odity injury soseained by any person:

vaniel rm Gesber shen ie not

This
includes @ trailer of any type Used with that vehicle.
Xa used in this exclusion, "motor vehicle” means eny
Self-propelled venicle.

 

 

than 4 heels HBL ed
xelosie: ins act
st sr
‘the person is entitled to do 30:
G.” We do not provide Uninsured or Underinsured Motorists

Coverage for punitive oF exemplary a

 

ee
(Emphases added.)

on February 4, 1999, Defendant’s representative sent a
letter to (Father) denying coverage for Plaintiff's injuries
because “the motorcycle does not qualify as a ‘covered auto’ in
the Policy. On April 2, 1999, Defendant’ s Claims Manager
confirmed the denial of coverage through a subsequent letter.

on May 7, 1999, Plaintiff filed a complaint for
declaratory relief against Defendant seeking compensatory damages
under the Policy for Plaintiff's injuries (Civ. No. 99-1856-05).
on July 26, 1999, Plaintiff filed @ motion for summary judgment
which was denied on October 19, 1999.

on February 6, 2001, Defendant filed a motion

requesting the court to apply California law rather than Hawai'i
 

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law to the case. On April 12, 2001, a bench trial was held to
determine the sole issue of whether Plaintiff was entitled to
receive underinsured motorist benefits from Defendant. On April
30, 2001, the court issued a written order declaring it would
apply Hawai's law,

on July 16, 2001, the court issued its findings of
fact (findings) and conclusions of law (conclusions), and order.

 

‘The court concluded, inter alia, that: (1) Plaintifé w
“resident” of Father’s household at the time of the accident
because (a) the Policy is ambiguous in its definition of the term
“resident” and (b) “actual residence under a conmon roof with the
named insured is not an absolute requirement to be considered
‘zesident’ of the household”; and (2) inasmuch as “the Policy
purports to create two distinct classes of ‘covered persons’:

(a) the named insured and his or her family members; and (b) any
other person “occupying” the “covered auto[,]” Plaintiff ‘was not
required to be occupying or operating a ‘covered auto!” in order
to “collect uninsured benefits.”

‘The court also determined that three of the Policy's
exclusions were inapplicable. First, the court concluded that
the “less than four wheels exclusion” was inapplicable because
(2) such exclusion was “void as against public policy” to the
extent that the exclusion “attempts to Limit [Plaintiff’s]
entitlement to (underinsured motorist] coverage” and is

inconsistent with Dines v. Pac, Ing. Cou, Ltd., 78 Hawai'i 325,
‘***F0R PUBLICATION®#*
ET

93 P.2d 176 (1995); and (2) the “exclusion of only [uninsured
motorist] coverage, but not [underinsured motorist] coverage in
{efendant’s) less than four wheels exclusion . . . is either (a)
‘a clear indication that [the exclusion] applies to [uninsured],
but not [underinsured motorist] coverage or (b) creates an
ambiguity, which requires that the Policy be construed against
(Defendant) and resolved in [Plaintiff's] favor, and therefore
applies to {an uninsured motorist], but not (underinsured
motorist] coverage.”

Second, the court decided that the “reasonable belief
exclusion” was inapplicable because (1) the exclusionary language
is “susceptible of at least three interpretations” and such
ambiguity must be “strictly construed against [Defendant] ":

(2) Plaintitt’s “alleged traffic violations are irrelevant to the
determination of eligibility for (underinsured motorist] coverage
under the Policy” as “there is no indication that the .
Legislature intended the denial of [underinsured motorist]
benefits as punishnent for traffic violations”; (3) the exclusion
was “unenforceable as against public policy” inasmuch as
Defendant “could and should have clearly communicated .

through precise and unambiguous language” its “desire(] to
exclude coverage for any person who was not legally operating 2
vehicle under Hawaii law” if Defendant intended this
“iimitations” and (4) Defendant's “exclusion of only [uninsured]
coverage but not [underinsured motorist] coverage in (the]

reasonable belief exclusion. . . is either (a) a clt

 
 

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—_—SSSSSSSSSSSSSSSsSsSs
indication that [the exclusion] applies to [uninsured] but not

[underinsured motorist] coverage, or (b) creates an ambiguity,

 

which requires that the Policy be construed against [Defendant]
and resolved in [Plaintiff’s] favor, and therefore the exclusion
applies to uninsured}, but not [underinsured motorist]
coverage.”

‘Third, the court concluded that the “owned vehicle”
exclusion was void because (1) such exclusions are “invalidated
where an injured individual solely seeks [uninsured] or
(underinsured motorist] coverage and not any liability benefits
as an insured claimant under a personal or family member's
policy”; (2) such exclusion is “repugnant to (Hawai'i Revised
Statutes (HRS) $] 431:10C-301(b) (4)? inasmuch as Plaintiff “has
only sought [underinsured motorist] coverage and not both
(uninsured motorist] and liability coverage under the same
policy”? and (3) the “exclusion of only [uninsured motorist]
coverage, but not [underinsured motorist] coverage in
[Defendant's] owned vehicle exclusion . . . is either (a) a clear
indication that [the exclusion] applies to [uninsured], but not

[underinsured motorist] coverage or (b) creates an ambiguity,

 

» RS § 431:20C-301(b) (4) (Supp. 2004) provides, in relevant par

 

(b) A motor vehicle insurance policy shall include:

(4) Coverage for loss resulting from bodily injury or
death suffered by any person legally entitied to recover
Ganages from oxners Or operators of underinsured motor
Vehicles, An insus

 

(Baphesis added.)
 

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eee

which requires that the Policy be construed against [Defendant)
and resolved in [Plaintiff's] favor; i.e, it must (be] construed
as applying to (uninsured motorist], but not [underinsured
motorist} coverage.”

ultimately, the court ordered that “[Plaintiff] is
entitied to (underinsured motorists coverage] under the Policy
for injuries and damages resulting from the January 17, 1999
accident, including but not Limited to whatever [underinsured

motorist] payments are determined to be due at arbitration

 

pursuant to the Policy.” On June 19, 2002, the court, based on
its findings and the above conclusions and order, entered final
judgment in favor of Plaintiff and against Defendant. Defendant
filed a notice of appeal on July 18, 2002, from this final
judgment.
Ww.

on appeal, Defendant contends that ‘the court erred in:
(2) applying Hawai'i law, rather than California laws (2) ruling
that Plaintiff is a resident of the named insured’s household:
(3) deciding that Plaintiff was 2 named insured;‘ and (4) failing
to apply the Policy exclusions. Defendant requests that this
court reverse the court's determinations that (1) Hawai'i lew

applies, (2) Plaintiff was a resident of the named insured’s

 

«insofar as we hold that the court did not err in concluding that
Plaintiff is a resident of the named insured’ s household, see discussion
Inia, and is, therefore, entitied to underinaured motorist benefits, we need
AottMasress Défencent’s Contention that the court erred in deciding that
Plaineiff was e named insured.

 

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household, (3) Plaintiff is a named insured, and (3) the Policy

exclusions are inapplicable.
v.
‘The question of the “{e}hoice of law [to be applied in
fa case] is a question of law reviewable de novo,” denking va
Whittaker Corp,, 785 F.2d 720, 724 (9th Cir, 1986) (citing In re

 

McLinn, 739 F.2d 1395, 1398 (9th Cir. 1984)). Therefore, a
choice of law issue is a question of law we review under the
right/wrong standard. See Jenkins, 785 F.2d at 7247 Ditto vw.
McCurdy, 102 Hawai's $18, $21, 78 P.3d 331, 334 (2003)
("Questions of law are reviewable de nove under the right/wrong
standard of review.” (Internal quotation marks and citation
omitted.)).

When reviewing the court’s interpretation of a
contract, “the construction and legal effect to be given a
contract is a question of law freely reviewable by an appellate
court.” Brown v, KFC Nat'l Mamt. Co., 82 Hawai'i 226, 239, 921
P.2d 146, 159 (1996) (internal quotation marks and citation
omitted).

When reviewing a circuit court’s findings of fact
and/or conclusions of law, “[t}his court reviews the circuit
court’s findings of fact under a clearly erroneous standard and
the circuit court’s conclusions of law de nove.” RGIS Inventory
Specialist v. Hawai'i Civil Rights Comm'n, 104 Hawai'i 158, 160,
86 P.3d 449, 451 (2004).

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vi.

As a preliminary matter, Plaintiff contends that
befendant’s points of error should be disregarded by this court
in accordance with Hawai'i Rules of Appellate Procedure (HRAP)
Rule 28(b) (4) (C) (2002) because (1) Defendant did not include the
contested findings and conclusions in its opening brief, and (2)
Defendant failed to “specifically identity” the findings or
conclusions that it contested.*

‘The record consists of fifteen volumes of court

 

documents. The large number of documents, incorrect citations to
the record and/or omissions of the relevant quotations of the

contested findings and conclusions place an une!

 

ssary burden
upon “both the parties compelled to respond to the brief and the
appellate court attempting to render an informed judgment.”
Housing Fin. ¢ Dev, Corp. v. Ferguson, 91 Hawai'i 81, 85, 979

P.2d 1107, 1111 (1999). Nevertheless, it is within this court’s

 

+ according to HRAP Rule 28(b) (4) (C), an opening brief must include:

[a] concise statenent of the points of error set forth in
Heparately nunberea paragraphs. Each point shall state:
the alleged error conmittea by the court or agency; (11)
jyand (444)
there in the record the alieged error was opjected to or the
anner in which the alleged error was brought to che
attention of the court or agency. ‘where applicable, gach
eo inelw (©) when tne
point involves a finding or conclusion of the court oF
Egency. She £104
sxxaxl-1

w

   

 

 

 

(Bmphases added.) Plaintiff's assertions are correct insofar as Defendant has
Incorrectly eited to the court's order denying Defendant's motion for choice
of law in its firet point of error, has cited to conclusions which are not
Felated to its third point of error, and has omitted inclusion of the
appropriate quotations of the Contested findings or conclusions.

 

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discretion to address Defendant's as:

 

rted points of error
despite nonconformance with HRAP Rule 28(b)(4)(C). See Sprague
wi Cal, Pac, Bankers & Ins, Ltd., 102 Hawai'i 189, 196, 74 P.3¢
12, 19 (2003), Even though Defendant incorrectly cited to the
court's order regarding Defendant’s choice of law motion,
Defendant’s other errors are harmless insofar as Defendant has
primarily referred to the court's July 16, 2001 findings and
conclusions.

vir.

A

As to the conflict of law issue, Plaintiff relies on

Peters v. Peters, 63 Haw. 653, 660, 634 P.2d 586, 591 (1981), and
asserts that “there is a presumption that Hawaii law applies
unless another state’s law ‘would best serve the interests of the
states and persons involved.'” This court has “moved away from
the traditional and rigid conflict-of-laws rules in favor of the
modern trend towards @ more flexible approach looking to the
state with the most significant relationship to the parties and
subject matter.” Lewis v. Lewis, 69 Haw. 497, 499, 748 P.2d
1362, 1365 (1988) (citing Peters, supra). This flexible approach
places “[p]rimary emphasis . . . on deciding which state would
have the strongest interest in seeing its laws applied to the
particular case.” Id. Hence, this court has said that the
interests of the states and applicable public policy reasons
should determine whether Hawai'i law or another state’s law
should apply. See Peters, 63 Haw. at 667-68, 634 P.2d at 595.

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oe

“the preferred analysis, [then] in our opinion, would be an
ssessment of the interests and policy factors involved with a
purpose of arriving at a desirable result in each situation.”
da at 664, 634 P.2d at 593.

In this regard, Plaintiff’s reliance on Abramson vs
Aetna Cas. & Sur. Co., 76 F.3d 304 (9th Cir. 1996), and Lemen ve
Allstate Ins. Co., 93¢°F. Supp. 640, 643 (D. Haw. 1995), is
persuasive. In Abramson, plaintiff, a New Jersey resident, was
riding a bicycle in Hawai'i when he was fatally injured by a car
driven by an underinsured motorist. 76 F.3d at 305. Plaintift’s
estate sought underinsured motorist benefits from an insurance
policy that contained an anti-stacking provision. Id. Applying
Hawai'i law, the Hawai‘ federal district court found the anti~
stacking provision invalid. Id.

Relying on Peters, the Ninth Circuit Court of Appeals
affirmed the district court’s ruling and stated that “Hawali’s
choice-of-law approach creates a presumption that Hawaii law
applies unless another state’s law would best serve the interests
of the states and persons involved.” Id. (internal quotation
marks and citations omitted). In balancing the interests of
Hawai'i and New Jersey, the Ninth Circuit noted that “Hawaii's
governing automobile accidents-which is especially strong given
the number of non-resident drivers in the state-is not outweighed
by any other state’s interests.” Id, (emphases added). The
Ninth Circuit also approved the district court's finding that

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ees

“New Jersey's interests in the insurance contract did not control
the choice-of-law analysis because of the lack of any negotiation

over the terms of the contract and the parties’ expectations that

 

the contract would cover the insured as he travelled throughout
the United States and Canada.” Id. Applying this same balancing
of interests to the instant case, there is a strong interest in
applying Hawai'i law to protect non-resident college students
attending institutions within this state buttressed by the
adhesionary nature of the Policy and the Policy’s applicability
throughout the United States.

Insofar as Lemen is factually similar to the case at
bar, it is persuasive.‘ In Lemen, the plaintiff sustained
injuries in an automobile accident in Hilo, Hawai'i which led to
her claim of underinsured motorist benefits under her father’s
policy. 938 F. Supp. at 641. Her father's policy, issued and

delivered in Alaska, insured two of father’s vehicles, both of

 

+ defendant argues that “reliance (upon Langa] is not well-founded”
because the case "aiatakenly Used the wrong section of the Restatenent(,]” $
Las, wnich pertains to conflicts of law in tart actions, as opposed to § 168,
which"provides che standard for contracts disputes. See Restatement (Second),
EeConfiset of las (Bestatensnt) $8185, 166° (2004). while it as true that §
{is nas discussed in the fetere decision, st was not adopted as Hawai't’s
approach to conflict of Lew matters. Seg 63 Haw. at 662-64, 63¢ P.2d at 592-
So Rather, this court cited to § 145 to note the “most significant
Felationship” approach to conflicts of law. See id. at 662, 624 P.2d at 592.
Both §§ 145 and 188 address the “most significant relationship” approach. See
Restatement $6145, 188

In addition to the “most significant relationship” approach,
Beters referred to two other theories ~-"governmental interests” and Professor
Fefier's approach, See 63 Haw. st 662-64, 654 P-20 at 592-95. Upon surveying
these three approaches, this court oltinately adopted the view that an
assessment of the interests and policy factors involved with a purpose of
arriving at a desirable result should be determinative. Id. at 664, 634 P.24
at 593.” Hence, the Lesen court's subsequent characterization of the Peters
Gecision as being “guided by the Restatenent (Second) of Conflict of Laws §
{4s (sia) [,)" 996 F. Supp. at €43, Le not binding upon this court.

 

 

 

 

 

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os

Id. The pick-up truck that the

 

which were located in Al
plaintiff was driving at the time of the accident was registered
in her name but was not insured. Id, The plaintiff, a resident
and citizen of Alaska, was attending the University of Hawai'i at
Hilo at the time of the accident. Id.

Pursuant to Peters, the United States District Court

for the District of Hawai‘! (“district court”) in Lemen

 

determined that Hawai'i had “a stronger interest in seeing ite
laws applied” for several reasons. 938 F. Supp. at 643. First,
according to the district court, the plaintiff's accident
occurred in Hawai'i. Id. Second, notwithstanding the fact that
the plaintiff was @ resident of Alaska at the time of the
accident, she was Living in Hawai'i while attending the
University of Hawai'i as a full-time student. id. Third, the
fact that the plaintiff's truck was uninsured at the time of the
accident was irrelevant because under Hawai'i law underinsured
motorist coverage “follows the insured person and not the insured
Id. (citing Daves v. Fizst Ins. Co. of Hawaii, Ltd

77 Hawai'i 117, 123-24, 883 P.2d 38, 44-45 (1994); Allstate Ins.
Co. vs Moran, 59 Haw, 44, 47-48, 575 P.2d 477, 479-80 (1978);
and Allstate Ins, Co, v. Hirose, 77 Hawai'i 362, 366, 884 P.2d

1138, 1142 (1994) (parentheticals omitted). Fourth, the district

 

vehicle,

court determined that this court “has articulated a strong
interest in protecting the rights of persons within the state to
recover benefits pursuant to automobile insurance policies.” Id.

at 644 (citing Methven-Abreu v, Hawaiian Ins, § Guar, Cou Ltda,
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73 Haw, 385, 395-96, 834 P.2d 279, 285 (1992); DeMello v. Firat
Ins. Co. of Hawaii, Ltd, 55 Haw. 519, 523-24 6 n.d, 523 P.2d
304, 306-07 6 n.4 (1974).

‘The district court eschewed application of Alaska law
because doing so “would frustrate Hawaii's state policy to
protect persons injured within its boundaries.” Id, at 644. The
defendant insurer’s assertion that “the law of the state where an
insurance contract is made governs,” id., was rejected in light
of insurance policy language stating that “during the premium
period, . . . [the] policy applies to losses to the auto,
accidents and occurrences within the United States of America,
its territories or possessions or Canada, or between their
ports.” Id, at 644 n.5. Hence, the district court concluded the
defendant's insurance policy was such that it was “foreseeable
that an insured family member might temporarily live out-of-state
and suffer a car accident, thereby subjecting [the defendant] to
the law of a foreign state.” Id. at 644. Based on the
foregoing, the Lemen court applied Hawai'i law.

B.

Similarly in the case at bar, the accident occurred in

 

Hawai'i, At the time of the accident, Plaintiff was living in
Hawai'i and was attending West Oahu as 2 full-time student. The
district court's determination that Hawai'i has a strong interest
in protecting those injured within its borders is consistent with
this court's interpretation of Havai'i’s underinsured motorist
statutes. Hawai'i’s underinsured motorist statute, HRS §

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ee
431:10¢-301 (b) (4) (1993 & Supp. 1998), is intended “to provide

protection, through voluntary insurance, for persons who are
injured by underinsured motorists whose liability policies are
inadequate to pay for personal injuries caused by motor vehicle
accidents.” Tayi wt 1 90 Hawai's 302,
307-08, 978 P.2d 740, 745-46 (1999) (quoting the legislative
history of HAS § 431:10C-301). Because the purpose of Hawai'i’s
underinsured motorist statute is to protect persons, this court
has held that under Hawai's lew, insurance “follows the insured’s
person.” Dawes, 77 Hawai'i at 123, 883 P.2d at 44. California's
law, denying coverage when “the vehicle involved in a given
accident” is not “as described in the policy for which the claim
is made," Hartford Cas. Ins. Co. v. Cancilla, 34 Cal. Retr. 24
302, 307 (Cal. Ct. App. 1994), would thus “frustrate Hawaii's
state policy to protect persons injured within its boundaries.”
Lenen, 938 F. Supp. at 644.

Finally, while the Policy lacks @ choice of lew
provision, the Policy does contain a geographical area provision
that is substantially similar to the geographical area provision
in the defendant's policy in Lenen.’ Because the Policy
affirmatively acknowledges that the terms and conditions therein
apply “to accidents and losses” which occur anywhere within the

United States, it is foreseeable “an insured family member . . -
> As previously mentioned, Defendant's Policy states that

n(einie policy Sppiies only to accidents and losses which occur: (1) [gluring

the policy period as shown in the Oeclarations; and (2). (w)Sthin the policy

Eereitory "the “policy territory” 1s defined as encompassing “[t)he United

States of America, ite territories or possessions 1”

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temporarily liv[ing] out of state [may] . . . suffer a car
accident,” Lemen, 938 F. Supp. at 644, and thereby may be
subjected to the laws of other states - including those of

Hawai'i.

 

Defendant contends that this court adopted and,
therefore, should apply the conflict of laws test set forth in
State v. Bridges, 83 Hawai'i 187, 925 P.2d 357 (1996). Under
this test, Defendant contends the appropriate law is determined
“by considering the domicile of the parties, the situs of the
transactions, and the interest of the forum in applying its own
law.” Id. at 195, 925 P.2d at 365 (internal quotation marks and
citation omitted).

In Bridges, the defendants were arrested in California
by California police officers in a “sting” operation involving a
drug transaction between the defendants and the Honolulu Police
Department. 83 Hawai'i at 188-91, 925 P.2d at 358-61. The issue
posed in Bridges was “under what circumstances will evidence
obtained in [California] (the situs state) be suppressed in a
criminal prosecution in [Hawai'i] (the forum state)[.]” Id. at
194, 925 P.2d at 364. Noting that the issue was “novel,” this

court set forth two methods by which to adjudicate the issue:

 

(2) conflicts of law interest analysis; and (2) exclusionary rule
analysis. Id, at 194-95, 925 P.2d at 364-65. This court then

adopted and applied the exclusionary rule analysis as “the better

19
‘**4FOR PUBLICATION*#*
approach.” Id, at 195, 925 P.2d at 365. Therefore, Defendant's

reliance on interest analysis is not supported by Bridges.
Defendant also relies on Roxas v. Marcos, 89 Hawai'i

91, 969 P.2d 1209 (1998), Lesser v. Houghey, 88 Hawai'i 260, 965

P.2d 802 (1998), and California Fed, Sav, & Loan Assoc, v, Bell,

6 Haw. App. 597, 735 P.2d 499 (1987). Each one of these ca

 

however, is also distinguishable. foxas did not adjudicate a
conflict of laws issue. See Roxas, 69 Hawai'i at 117 n.16, 969
P.2d at 1235 n.16 ("None of the parties address the issue of
choice of law in their briefs.”). Lesser applied the forum non
conveniens doctrine which establishes the appropriate forum site,
whereas @ question involving conflict of laws addresses the
appropriate law to be applied. See Lesser, 8@ Hawai'i at 262,
965 P.2d at 804 (“This court has previously described the
doctrine of forum non conveniens as the discretionary power of a
court to decline to exercise a possessed jurisdiction whenever st
appears that the cause before it may be more appropriately tried
elsewhere.” (Internal quotation marks and citation omitted.)).

Finally, citing Bell, Defendant contends that
Restatement (Second) of Conflict of Laws § 188 (1971) is
controlling. While the Intermediate Court of Appeals (ICA) made
reference to the Restatenent in Bell, 6 Haw. App. at 604-05, 738
P.2d at 504-05, the ICA decided the underlying choice of law
issue utilizing Professor Leflar’s “choice-influencing
considerations” approach referred to in Peters. See id. at 605-
07, 735 P.2d at 505-06.

20
 

*FOR PUBLICATION*#*

 

It should be noted, however, that Professor Leflar’s
“choice influencing considerations” approach was not adopted by

this court in Beters. Beters indicated there are three generally
(2) the

 

accepted approaches to modern conflict of laws analysis

 

“governmental interests” approach advanced by Professor Currie,
(2) “the most significant relationship” test embodied in the
Restatement (Second) of Conflict of Laws (1971); and (3) the
“choice-influencing considerations” approach articulated by
Professor Leflar.’ 63 Haw. at 662-63, 634 P.2d at 592-93 (1981).
Peters did not expressly adopt one approach over another.
Rather, this court concluded as said before that “[t]he preferred
analysis . . . would be an assessment of the interests and policy
factors involved with a purpose of arriving at a desirable result
in each situation.” Id. at 664, 634 P.2d at 593.
D.
In light of the foregoing, we conclude that the court

was correct in applying Hawai'i law to the case at bar.

+ the “governmental interests” approach considered “the governmental

interests of the states whose laus sight be applicable, but with a basic
preference of the forun's ovn law.” peters, 63 Haw. at 662, 63¢ P.2d at 592.

 

+ professor Leflar set forth “fundamental policy factors... which
are deened to underile sll choice-of-law decision(s).” gatern, 63 law, at
663, 634 F.2d at 592-83. These policy factors include

 

(a) predictability of result,
(2) maintenance of interstate order,

(3) Sinplitication of the Judicial task,
(4) advancenent of the forun’s governmental interests, and
(5) application of the better rule of le

 

Lda at 663, 636 P.24 at 593.
21
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vant.
‘The court found and it is undisputed between the

parties on appeal that Father is a “named insured” under the

Policy and that, as Father's son, Plaintiff is related by blood
to a named insured. The parties disagree, however, on whether
plaintiff satisfies the further requirement of being a “covered
person”; that is, a resident of father’s household, inasmuch as
at the tine of the accident Plaintiff was not present where his

Father’ s household was located.

 

Defendant asserts that this court defined a resident of
a named insured’s household in AIG Hawaii Ins, Co. v. Estate of
Garaang, 74 Hawai'i 620, 651 P.2d 321 (1993), and Kok vs Pac.
Ins. Coss Ltd., 51 Haw. 470, 462 P.2d 909 (1969). In Caraana,
the defendant Vilanor, while 2 passenger in a truck driven by
defendant Godinez, shot and killed defendant Carsang while
caraang operated another vehicle. 74 Hawai'i at 625, @51 P.2d at
324. ‘The vehicle Godinez was driving was insured under an
autonobile insurance policy issued to Bonifacio and Cathy
Godinez. Id. at 623, 851 P.2d at 323. The insurance policy
defined a “family member” as “a person related to [the named
insureds) by blood, marriage or adoption who is a resident of
[the named insureds’] household, including a ward or foster
child.” id. at 629, €51 P.2d at 326. Apparently pursuant to
this definition, this court held that Godinez “was not a fanily
menber of a named insured” because although “Godinez was related
by blood to Bonifacio,” Godinez was living with his natural

22
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SSeS

mother at the time of the shooting. Id. at 629-30, 851 P.2d at
326. However, Caraang is inapposite because the case does not
address the situation of an out-of-state student.

While Kok also did not directly address the situation
of an out-of-state student, this court indicated that based on
the facts and circumstances of a particular case, military duty

51 Haw. at 472,

 

may constitute a period of temporary absenc
462 P.2d at 911. In Kok, the father of the named insured sought
uninsured motorist benefits under the named insured’s insurance
policy. 51 Haw. at 470, 462 P.2d at 910. While confirming the
proposition that “actual residence under a common roof is not an
absolute requirement,” id, at 471, 462 P.2d at 911, this court
held that because the father made “no showing of temporary
‘absence, no showing that (the father] ever lived at named
insured’s residence, [and] no showing of support beyond two meals
a day,” the father was not a resident of the named insured’ s
household. Id. at 472, 462 P.2d at 911. Citing to cases from
other jurisdictions, it was noted that a “temporary absence while
on military duty does not change prior and continuing residence
with parents(.]” Id, (citation omitted). As Plaintiff points
out, this court has not decided whether and under what
circunstances @ child who attends school in another state is
considered to be temporarily absent from the household.
mK,

It has been said that “[a] resident of a household is

one who is a menber of a family who lives under the same roof.”

23
 

**FOR PUBLICATION:

 

Crossett v, St. Louis Fire & Marine Ins. Co., 269 So. 2d 869, 872
(Ala, 1972) (internal quotation marks and citation omitted). The
term “residence,” however, “emphasizes menbership in a group
rather than an attachment to a building.” Id, As such, courts
have determined that whether a child remains 2 member of a
household when he or she lives apart from the family’s home while
attending an educational institution depends on the facts and

circumstances of each case. See, edi, ids In Crossett, the

 

Alabama court said, “{o]rdinarily when a child is away from home
attending echool, he remains a member of the family household,
land the question of when he cease(s) to be such is one which must
be determined from all of the facts and circumstances as revealed
by the evidence.” Id, (internal quotation marks and citation
omitted) .

Such evidence must tend to show the student’s intention
to remain a member of the family household. See, equ ids
("[Residence] is a matter of intention and choice rather than one
of geography.” (Internal quotation marks and citation omitted.))7
Am, States Ins. Co. v. Walker, 486 P.2d 1042, 1043-44 (Utah 1971)
(affirming the trial court’s determination that the plaintiff,
who studied and lived at several places other than her father’s
household in Idaho, was still a resident of her father’s
household because she had an Idaho driver's license rather than a
Utah driver’s license, she relied on her parents for partial
financial support, she kept her books, furniture and clothing at
her father’s home, and she considered herself to be a resident of

24
**4FOR PUBLICATION®#*

Idaho); Manuel v. Am, Employers Ins. Co., 228 So. 24 321, 322
(La. Ct. App. 1969) (holding that the plaintiff, who lived forty
miles from his father’s hone while attending college, was still a
resident of his father’s household because the plaintiff kept his
permanent mailing address as his father’s home, received his mail
from his father's home, returned to his father’s home on weekends
and during vacations, and kept most of his personal belongings at
his father's home).

In Goldstein v, Prosressive Cas, Ins, Co., 553 N.W.2d
353, 354 (Mich. Ct. App. 1996), appeal denied, S68 N.W.2d 62
(1997), the plaintiff was involved in a car accident that
occurred in Michigan. The plaintiff attended college in Missouri
and his parents’ home was located in Maryland. Id. at 354-55.
Following the accident in Michigan, the plaintiff claimed auto
insurance coverage under his father’s liability policy. Id. at
354. In order to determine whether the plaintiff was a resident
of his father’s household in Maryland, the Goldstein court
identified several factors, including (1) the subjective or
declared intent of the student to remain a part of his or her
parents’ household, (2) the formality of the relationship between
the named insured and the person claiming insurance coverage
under the named insured’s insurance policy, (3) whether the place
where the person lived was the same premises as the named
insured, and (4) the existence of another place of lodging away
from the named insured for the person claiming insurance
coverage. Id, at 356. When considering the status of a child,

25
 

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the court also identified other relevant factors, including

(1) the child's mailing address, (2) whether some of the child’s

possessions were located with the parents, (3) the address listed

on the child's driver's license or others documents, (4) whether

a room was maintained for the child at the parents’ home, and

(5) the child’s financial dependency upon the parents. id.
ultimately, the Goldstein court determined that the

plaintiff was a resident in his father’s household

because (1) “the plaintiff kept the majority of his personal

possessions at his parents’ home in Maryland,” (2) the plaintite

“used his parents’ address on his Maryland driver’s license,”

” and

 

(3) the plaintiff “had his own bedroom at his parents’ hom
(4) the plaintifé was “financially dependent” on his parents who
paid for his college education and “claimed him as a dependent on
[his father's) tax returns.” Id. at 356-57.

In contrast to the foregoing, the plaintiff in Hamilton
v. State Farm Mut, Auto, Ins. Co., 364 So. 2d 215, 216 (La. Ct.
App. 1978), cert. denied, 366 So. 2d 915 (1979), was injured in
an automobile accident and sought recovery under the uninsured
motorist provision of his father’s insurance policy. Prior to
attending college, the plaintiff had resided with his parents
since birth. Id, at 217. After the first two years of college,
the plaintiff became and continued to be financially self-
supporting while living apart from his parents but in the same
state. Id, Throughout the six years the plaintiff lived away
from his parents, he visited his parents at least once a month.

26
 

‘***FOR PUBLICATION

 

Id. Just prior to his graduation, the plaintiff decided to go
into business for himself and in line with this decision, he
leased an apartment. Id.

At the time of the accident, the plaintiff had moved
758 of his belongings out of his parents’ home and into his

apartment. Id, The plaintiff's permanent address was the

 

address of his business. Id, at 218. The plaintiff adnitted
that he neither intended to reside with his parents upon
graduation, nor did he consider himself a resident of his
parents’ household. Id, at 217-18. In light of the foregoing
facts, the Hamilton court held that the plaintiff was not a
resident of his parents’ household for the purposes of uninsured
motorist coverage. Id. at 218.
x

In the case at bar, it is undisputed that most of
Plaintiff’s belongings remained at his Father's house. see
Goldstein, 553 N.W.2d at 386. Indeed, the only personal
belongings that Plaintiff brought with him to Hawai'i were his
surfboard and some clothing. It is also uncontested that
Plaintiff maintained a room in his Father’s home, and was
completely financially dependent on his Father while living in
Hawai'i. See id, at 356-57. Because of this dependency, Father
declared Plaintiff a dependent on his income tax returns. See
Morgan vy, Illinois Farmers ins, Co., 392 N.W.2d 37, 39 (Minn. Ct.
App. 1986) (relying on, inter alia, the fact that the plaintiff

 

Listed as a dependent on her parents’ tax returns was

27
 

FOR PUBLICATION’
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sufficient for the plaintiff to be considered a resident of her

parents’ household for insurance coverage). In addition, at the
time of the accident, Plaintiff had a California driver's license
that Listed his Father's address as Plaintiff's permanent
address. See Goldstein, 553 N.W.2d at 357. Therefore, it would
appear Plaintiff remained a resident of his Father's California
household while Living in an apartment in Hawai'i."

Defendant essentially asserts that Plaintiff intended
to permanently reside in Hawas's. The matters that Defendant
relies upon," however, are largely unsupported by the court’s

findings.” “In most instances the points urged either involve

 

 

* —plasntséf argues that @ letter written By a USAA repre
Fether establishes that USAA "had 2 policy of extending insurance coverag
Benefits to children of & named insured’s household who were away at school.”
Tncofar as the court did not rely on this letter, but on the findings
discussed infra, we do not consider this letter in determining that the court
Correctly concluded that Plaintiff was doniciied in Father's household and
Wes, therefore, a “resident” in thet household at the time of the eccident.

   

 

 

Sona

household, Dei
isetes "55-654

Jcting that Plaintiff was not a resident of his Father's
relies on deposition teatinony by Plaintiff thst (1) he
Tighway” ae his permanent mailing address and (2) he
Gisined legal residency in California ontil October 4, 1998 on 2 University of
fiqwat't application form. Ingofar as these matters may be considered, they
Felated te Plaintiff's address for mailing purposes and residency information
on college application foras. In light of the unchallenged findings upon
Which the court based ite conclusion that Plaintiff was a resident of his
Father's household, it cannot be concluded that for insurance coverage

purposes the court was clearly erroneous in determining that Plaintiff was
Fesident of Father's household.

  

 

 

 

   

 

the court made the following nine findings in concluding that
Plaintiff renained @ resigent of his Father's household while attending
college in Hawai'i:

 

 

4, On Janusy 17, 1999, (Plaintif#] had a Californie
driver's iicense that listed his father's... California
Sdarese as his permanent adress.

S. On January 17, 1998, (Plaintiff) was not gainfully
employed and was completely dependent on his father for

funancsal support
6. On denuary 17, 1999, (Plaintiff) maintained «
bedroom in nis father's Californie hone.

 

(continued.

 

28
 

FOR PUBLICATION**#

 

only questions of fact or are based on assertions of fact
contrary to findings of the trial court.” Campbell v, DePonte,
57 Haw. $10, $13, $59 P.2d 739, 741 (1977) (block format and
citation omitted). Defendant “has the burden of pointing out
specifically wherein the findings are clearly erroneous.” Id.
(block format, italics, and citation omitted). However,

Defendant does not challenge the court’s findings as cl

 

ely
erroneous. See ids

Perhaps the only item that relates to Defendant's
position is the court's finding that Plaintiff lived in the city
and County of Honolulu at the time of the accident. But,
inasmuch as this court has held that “actual residence under a
common roof with the named insured is not an absolute

requirement [,]” the court's determination that “(Plaintiff] was

 

4 (, , continved)

TS) on ganvary 1
412 of fie personal por
ome, incluging his ear, stere
Clothes and books.

8. "Tne only possessions [Plaintiff] brought with him
from California to Hawaii were clothing and his surf bosrd-

3. Pleinti¢#] was named as a dependent on (Father’®)
Internal Revenue Service income tax returns for the years
1998-1999.

10." [Father] was completely responsible for
[Plaintiff's] tuition, books, and other school related
expenses while (Plaintiff) attended the University of
Hawaii-weet Osho.

Ui" (Father) paid ali of (Plasntsee’s) travel
expenses for (Plaintiff's) trips to and from Hawai'i

32, “Irather) paid all of (Plaintiff's) medicsl and
accident insurance premiune before, during, and after the
tine. [Plaineiff] was injured on January 17, 1999, including
preniuns for the Policy.

[Plaintife) maintained almost
in hie. father's california,

felevision, and most of his

   

   

  

  

Defendant did not specifically challenge these findings as clearly erroneous
fand, therefore, this court will not disturb the court's findings. Sse RGIS

106 Wawal"t at 160, 86 Pi3d at Si (stating that "(e)his
Zourt reviews the cireuit court's findings of fact under a clearly errenscus
Standara”)

29
***FOR PUBLICATION®#*
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not required to be physically living in [Father's] California
household at the time of the January 17, 1999 accident” was
right.
xr.
‘he court also indicated that the Policy was ambiguous
because the word “resident” was not defined and because the

Policy did not “indicate whether a child away at a post

 

secondary
‘school is considered a resident of the named insures parents’
household.” Apparently in view of the absence of a definition
for “resident” or the phrase “resident of the named insured’ s

household,” the court relied on HRS § 43:

  

10c-103 (Supp. 2000),

which contains the statutory definition of the term “insured”

 

it 4s used within Hawai'i’s underinsured and uninsured motorist
statutes. Under that definition, one is considered an insured

if the person “usually” resides in the same household as the

 

 

 

Stheured" means:

(i) "the person identified by nase as insured in
notor vehicle insurance policy complying with
ection 431:10¢-301; and

(2) Aoperson residing in the sane household with «
Named insured, specitically:

Th). A-apouse or reciprocal beneficiary or
Other relative of a naned insured:
(B) Ruminor in the eustogy of a naned insured

 

 

  

A person resiae:
usually makes the person's howe in tl
wich aay inelude Feciprocal beneficiaries, ven though’ the
beracn temporarily lives elsewhere.

(Bephasia added.)

30
‘***FOR PUBLICATION**

 

named insured, although “temporarily liv[ing] elsewhere.” HRS §
491:10-103.

In this connection, Defendant asserts, based on Foote
ys Roval Ins. Co. of An., 88 Hawai'i 122, 962 P.24 1004 (1998),
and toa certain extent, Kok, that “the language of the (Plolicy

 

is not ambiguous.” Defendant's reliance on th is,

 

however, misplaced. Foote is inapposite because this court held
that the “family member” clause as it pertained to “an officer or
shareholder of a closely held corporation” is not ambiguous
because “a corporation cannot have a ‘family member” and because
extending coverage to officers or shareholders “would result in
rewriting the policy.” Foote, 68 Hawai'i at 125, 962 P.2d at
1007. Kok held that the insurance policy in that case
“unambiguously and clearly” defined an insured as “the named
insured and any relative of the named insured who is a resident
of the same household.” Kok, 51 Haw. at 470-71, 462 P.2d at 910.
‘This court neither defined the term “resident” nor the phrase
“resident of the named insured’s household” in Kok. Accordingly,
Defendant’s cases do not govern.

In light of the above, the facts and circumstances of
this case demonstrate that Plaintiff was temporarily absent from
his Father’s home while attending college in Hawai'i at the time
of the accident. Based on the findings of the court, it cannot
be said the court erred in its conclusion that Plaintiff was a
resident of his Father's, the named insured’s, household in
california.

31
‘***FOR PUBLICATION*#*

xT.
Lastly, Defendant contends that exclusions within the
Policy preclude Plaintiff’s claim. These exclusions, previously

(A) the “owned but not insured” exclusion;

 

referred to, includ
(B) the “less than four wheels” exclusions and (Cc) the
“reasonable belief” exclusion.

R,

To reiterate, exclusion No. 1 states, in relevant part,

 

that Defendant “doles] not provide Uninsured Motorists Coverage

for . . . bodily injury sustained by any person. . . wiht
occupying, or when struck by, any motor vehicle owned by you or

any family member which is not insured for this coverage under
this policy.” (Emphases added.) Defendant maintains that such
an exclusion is valid in the underinsured context pursuant to
Nat’ Union Fire Ins, Co. v. Reynolds, 77 Hawai'i 490, 889 P.2d
67 (Haw. App. 1995) and Budget Rent-A-Car Svstems, Inc. v
Coffin, 82 Hawai'i 351, 922 P.2d 964 (1996). (Emphasis added.)

On the other hand, Plaintiff argues that “owned vehicle”
exclusions have been void in Hawai'i for over two decades,
relying on Kau v, State Farm Mut. Auto, Ins. Co., 58 Haw. 49, 564
P.2d 443 (1977), Methven-Abreu v. Hawaiian Ins. & Guar. Cou
Ltd., 73 Haw. 385, 834 P.2d 279 (1992), and Lemen v. Allstate
Ins. Co., 938 F. Supp. 640 (D. Haw. 1995).

32
 

FOR PUBLICATION***

 

1.
Defendant's reliance on the cited cases for the

proposition that an “owned but not insured” exclusion is valid in
the underinsured context is not persuasive. In Reynolds, a
passenger made claims for benefits under both the insured’ s
Liability coverage and underinsured coverage. 77 Hawai'i at 492,
889 P.2d at 69. In resolving the ultimate issue of dual recovery
by the passenger, the ICA concluded that “automobile insurance
policies such as the one here may bar dual recovery under both

Liability and underinsured coverages without violating the

 

underinsured motorist statute.” Id. at 496, 889 P.2d at 73.

Also at issue in Reynolds was whether the “owned
vehicle” exclusion in the insurance policy was “void because it
is similar to the owned vehicle exclusion” in an uninsured
motorist insurance policy that vas “held void as against public
policy in Kau[.]” Id. The exclusionary language in question in
Reynolds was as follows:

DeFINrTzoNs
Throughout this policy, “you” and “your” refer to the “named
Insured” shown in the Declarations.

‘BART c! UNDERINSURED NoTORISTS COVERAGE-HAMAL

  

emer
2. caused by an accident.
The owner's or operator's Liability for these damages must
arise out of the ownership, maintenance or use of the

 

Honever, “underinsured moter vehicle” does not include any
vehicle’ or equipment?

2,” Owied by or furnished or available for the regular ut
of you or eny family member.

 

33
‘***FOR PUBLICATION*#*
a
Id. at 494-95, 889 P.2d at 71-72. First, the ICA noted that this
“court has not always found that an owned vehicle exclusion is
void as against public policy [and iJt has declined to extend Kau
to invalidate an owned vehicle exclusion in a no-fault automobile
insurance policy.” Id. at 497, 889 P.2d at 74 (citation
omitted) -

Next, in holding that Kau does not “nullif[y) owned
vehicle exclusions in. . . underinsured motorist endorsements,”
Ada, the ICA's reasoning was limited to the facts in Reynolds and
to policy reasons that disallowed dual coverage under liability

and underinsurance provisions. Id, at 498, 889 P.2d at 75.

 

Hence, Reynolds was concerned with dual coverage claims made by 4

passenger, id, at 492, 496, 889 P.2d at 69, 73, while this case

 

As concerned with a “covered person’s” claims through

underinsurance covera:

 

Lemen is illustrative of the distinction between cases
concerning dual coverage claims and claims brought solely through

underinsurance coverage. At issue in Lemen was the validity of

 

the following exclusionary language in the insurance policy:

Allstate will not pay any damages an insured person is
Tegally entitled te Fecover because of... bodily injury
or property damage sustained while in, on, getting into or
out of or when struck by am uninsured or underinsured motor
Vehicle which 1 owned by you or a resident relative,

 

 

938 F. Supp. at 643 n.2 (emphasis omitted). As discussed supra,
the federal district court of Hawai'i applied Hawai'i law and

determined that the “ouned vehicle” exclusion was void because

34
 

***FOR PUBLICATION!

 

plaintiff sought “(underinsured) coverage” from her father’s
policy with “no risk” that the underinsured coverage would be
“improperly substituted for liability in coverage.” Id. at 646.
In this regard, Reynolds did not state that all owned vehicle
exclusions were void as against public policy. Rather, the ICA
observed that this court “forecasted that in the case of
underinsured motorist coverage as in the context of the no-fault
law, not al] owned vehicle exclusions are violative of public

policy|.” 77 Hawai'd at 499, 889 P.2d at 76 (emphasis added)

 

(internal quotation marks and citation omitted).

Defendant next relies on Coffin, 82 Hawai'i 351, 922
P.2d 964 (1996), as a reaffirmation of Reynolds and the
proposition that owned vehicle exclusions are valid in the
underinsured context. The facts and reasoning in Coffin,
however, are plainly different from those in the instant case.
In Coffin, the injured individual was involved in a rental car
accident on Saddle Road on the island of Hawai'i. Id. at 352,
922 P.2d at 965. The rental contract contained a use limitation
that stated “driving on Saddle Road and Waipio Valley Access
Roads is prohibited.” Id. In upholding the use limitation, this
court relied on the plain language of HRS §§ 431:10C-104 and
431:10C-105 relating, respectively, to the conditions of
operation and registration of motor vehicles and self-insurance.
Id. at 385, 358, 922 P.2d at 968, 971. The instant case,

however, is concerned with an “owned but not insured” exclusion

35
 

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ee

instead of a use limitation. This case also relies on the

application of a different statutory provision, that is Hawaii's

  

underinsured motorist statute, HRS § 431:301(b) (4), rather than
HRS §§ 431:10C-104 and 431:10C~-105.

Coftin does approve of the principle that “Liability
insurers have the same rights as individuals to limit their
Liability, and to impose whatever conditions they please on their
obligation, provided they are not in contravention of statutory
Anhtbitions or public policy.” Id. at 356, 922 P.2d at 969
(internal quotation marks and citation omitted). In accordance
with this principle, Coffin cited Reynolds as authority that

‘Hawaii's appellate courts have upheld the propriety of several

 

standard exclusions to insurance coverage.” id. However, this
court in Coftin did not state that the “owned vehicle” exclusion
was valid as to all underinsured motorist insurance policies.

Because the facts and reasoning in Reynolds and Coffin
are distinguishable from the facts in this case, Defendant's
reliance on these cases is unpersuasive.

2.

In contrast to Defendant’s arguments, the cases relied
on by Plaintiff are instructive in the instant case. In Kau, the
plaintiff, who resided with her parents, was driving a vehicle
owned and registered in the name of her mother. 58 Haw. at 49,
564 P.24 at 443. Plaintiff was involved in an accident caused by

another driver who was not insured and whose vehicle was not

36
 

FOR PUBLICATION***

 

insured. Id, Plaintiff's father, at the time, owned another
automobile which was covered by an insurance policy with
uninsured motorist coverage. Id. at 49-50, 564 P.2d at 443-44.
The mother’s car was not listed on the insurance policy. Id at
50, 564 P.2d at 443. This court in Kau determined that the
“owned vehicle” exclusion in the father’s insurance policy was

void as “violative of the . . . uninsured motorist statue.” 58

 

Haw. at 50-51, S64 P.2d at 444, At issue was the following

exclusionary language:

This (unineured motorist) insurance does not apply: « -
(p) To bodily injury to an insured while occupving ..”.'a
lend moter vehicle owned by the named inaured-oxany
Eesigent of the sane household. if such vehicle is not an
‘pumed-notor vehiciel1

An ‘ouned motor vehicle’ is defined in the policy as ‘the

 

 

c7 or trailer 3
{nclodes a temporary sobetitute automobile, a newly acquired
automobiter.1"

Ida at 50, 564 P.2d at 444 (emphases added). Because “(t]he
effect of the exclusionary clause is to deny [plaintiff] the full
protection of the statute(,]” this court struck down the clause
as “repugnant to the statute.” Id, at $1, 564 P.2d at 444.

In Methven-Abreu, the plaintiff-passenger was injured

in a one-car accident in her uninsured vehicle. 73 Haw. at 368,

 

034 P.2d at 262, At the time of the accident, plaintiff was
married and residing in the same household as her husband. Id.

Plaintiff’s husband owned another vehicle which was insured under
an insurance policy with no-fault coverage and uninsured motorist
protection. Id, Plaintiff’s husband was the sole named insured

on the policy and his vehicle was the only vehicle listed in the

37
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oe
policy. Id, This court in Methven-Abreu, considered whether an

“owned vehicle” exclusion was “void as against public policy”
in Light of Kau. Ida at 396, 834 P.2d at 285-86. At issue was
the following exclusionary language:

A. We do not provide Uninsured Motorists Coverage for
Socslly Seaury Bistained by any preson:
of when struck by, any motor

insured for this coverace under this peliev(.1
Id. at 395, 634 P.2d at 285 (emphases added). This court struck
down this exclusion as void, explaining that “[a]s an insured
under her husband’s policy, [plaintiff] was covered for purposes
of the uninsured motor benefits whether or not she was injured
while occupying a vehicle specifically declared under the
policy.” Id. at 396, 834 P.2d at 286. The Methven-Abreu court
relied on the language of the uninsured motorist statute and the
clear legislative intent that mandated the availability of
uninsured motorist coverage to “‘the insured, spouse, or minor
children of either, resident in the named insured’s
household{.1/" Id. at 397, 834 P.2d at 286 (quoting Kau, 58 Haw.
at 51, 564 P.2d at 444 (quoting Hse. Stand. Comm. Rep. No. 194,

das

 

in 1965 House Journal, at $82)). ‘The court further dismi
irrelevant the argunent that plaintiff “should be precluded from
recovering uninsured motor benefits because she was financially
irresponsible in not insuring her vehicles.” Id, at 396-98, 834
P.2d at 286.

In both Kau and Methven-Abreu, the exclusionary

language at issue is nearly identical to Exclusion No. 1 in the

38
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Policy. All three exclusions preclude (1) uninsured motorist
coverage (2) to an insured who is (3) “occupying” (4) any “notor
vehicle owned by the named insured” or (5) “any family member” or
“resident of the same household” (6) which is “not insured” under
the respective policy. See discussion supra. In light of the
similar language and the fact that Hawai'i’s legislature intended
to treat underinsured motorist coverage “in the same manner that
uninsured motorist coverage is presently treated,” Taylor, 90
Hawai's at 308, 978 P.2d at 746 (quoting Hse. Stand. Comm. Rep.
No. 1150-88, at 1248) (block format omitted), the court correctly
determined that because Defendant's “owned but not insured”
exclusion attempted to limit Plaintiff’s entitlement to
underinsured motorist coverage, the exclusion is void as against

public policy.

 

Exclusion No. 4 states, in pertinent part, that
Defendant “doles} not provide Uninsured Motorists Coverage - -
for bodily injury sustained by any person . . . {wihile oper:

- ‘ 4 wheels which 4:
insured for this coverage under this policy.” (Emphasis added.)
Here, Defendant contends the issue is the extent to which this
court overruled Nat'l Union Fire Ins, Co. v. Ragil, 72 Hawai'i
205, 811 P.2¢ 473 (1991), in Dines v. Pac, Ins Co Utd, 78
Hawai'i 325, 893 P.2d 176 (1995). In Ragil, this court held that

a motorcyclist injured by an underinsured motor vehicle is not

39
 

FOR PUBLICATION*#*
entitled to recover benefits from his or her own motor vehicle

insurance policy because the Hawai'i legislature exempted
motorcycles from the no-fault insurance requirements. 72 Hawai'i
‘at 207, 215-16, 893 P.2d at 474, 478. Defendant contends that

because the no-fault insurance policy in Dines did not include an

 

exclusion similar to the one here and in Ragil,™ Dines is
Lnapposite to the case at bar.

In Dines, the plaintiff, who was operating a motorcycle
at the time of the accident, was injured by an unidentified hit
and-run driver of an automobile. 78 Hawai'i at 326, 893 P.2d at
177, Plaintiff attempted to obtain uninsured motorist benefits
from the defendant, his motor vehicle insurance provider. Id.
The plaintife’s insurance policy lacked an exclusion similar to
the case at bar. However, the plaintiff did have a separate
motorcycle insurance policy provided by ancther defendant

insurance provider. ‘The motorcycle insurance policy,

 

however, did not include any optional uninsured motorist coverage
because the plaintiff had expressly rejected such coverage. Id.

A majority of this court held that the plaintiff
motorcyclist could recover uninsured motorist benefits from his
motor vehicle insurance policy. In overruling Ragil, the

majority stated that

[blecause [the Baail court] focused solely on the
Jegislature's distinct statutory mechaniams for insuring

 

 

   
     

“me policy exclusion in Raail stated “Ile do not provide
Liabiiity Coverage: . . 8 For the omership, maintenance or use of any
otorized sehicle having less than four wheels.” “72 Hawai'i at 210, 12 F.2
ae 475-76;

40
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‘motor vehicles" (HRS ch, £31:20C) and motorcycles (HRS ch.
aBisi0c), th

Benefits of the [uninsured motorist coveraae that ang ©
431:10C-301(b) G1 "1 nandates an_autanobile insurer to,
ifer and for which the naped inaured has paid.

Dines, 78 Hawai'i at 331, 893 P.2d at 162 (emphasis added).
Significantly, the Dines majority held that uninsured motorist
insurance coverage “attaches to the named insured’s person and
not to any particular vehicle - ‘motor’ or otherwise.” Id.
(emphasis omitted). In support of this principle, the Dines
majority looked to the policy embodied in the uninsured motorist

0C~301 (b) (3) mandates that the

 

statute, noting that “HRS § 431:
insured vehicle (ise,, the ‘covered auto" named in the policy)
need not be involved in the accident in order for the named
Insured to be entitled to collect [uninsured motorist]
benefits{.]” Id, at 328, 693 P.2d at 179. See also Daves, 77
Hawai'i at 124, 883 P.2d at 45 (1994) ("The public policy
embodied in the [uninsured motorist] statute directs that
uninsured motorist coverage be provided to insureds when they are

%  uRs § 431:10C~301 (b) (3) (Supp. 1992), which 48 the sane today a
it was when Dinss was decided states, in pertinent part:

 

 

Required motor vehicle policy coverage
(bi Amotor vebicle insurance policy shall include:
“** (3) With respect to any motor vehicle registered
or principally garaged in this state, 1iabilicy

= for bodily injury or death. for

Soverage »
fhe protection of persons insured thereunder whoare
Legally entitled te recover danaaes from owners or

‘because oF
Boatiy injury. + resulting therefrom; provided that
the coverage requized under this paragraph shall not
be applicable wnere any named insured in the policy
shall reject the coverage in writing]

(Emphases added.)

 

a
***FOR PUBLICATION*#*
ee

not occupants of insured vehicles as well as when they are. . .
‘The coverage is portable: The insured and family members.
axe insured no matter where they are injured, They are insured
when injured in an owned vehicle in the policy, in-an owned
vehicle not named in the policy, in an unowned vehicle, ona
motorcycle(.1'" (Emphases added.) (Quoting Harvey v, Travelers
Indem, Co., 449 A.2d 157, 159-60 (1982))). Accordingly, Dines
concluded that when a named insured is “injured by an uninsured
motorist from whom the named insured is legally entitled to
recover damages,” the named insured “is entitled to (uninsured
motorist} coverage no matter where he or she is injured, be it in
an automobile or a rocking chair on a front porch, or ona
motorcycle, a bicycle, a horse, @ pogo stick, or on foot.” Id.
at 331-32, 893. P.2d at 182-83 (footnote omitted) (emphasis
added) «

In light of the foregoing and the premise that
Hawai'i’s legislature intended to treat underinsured motorist
coverage “in the same manner that uninsured motorist coverage is
presently treated,” Tavlor, 90 Hawai‘i at 308, 978 P.2d at 746
(quoting Hse. Stand. Comm. Rep. No. 1150-88, at 1248) (block
format omitted), the court correctly determined that because
Defendant’s exclusion attempted to limit Plaintiff's entitlement
to underinsured motorist coverage, the “less than four wheels”
exclusion is inconsistent with the holding in Dines and is,

therefore, void as against public policy.

42
 

FOR PUBLICATION*#*

 

c.

As to the “reasonable belief” exclusion, Defendant
claims that Exclusion No. 7 of the Policy is applicable in the
instant case, Exclusion No, 7 states that Defendant does “not
provide [uJninsured (mJotorist coverage for property damage or
bodily injury sustained by any person . . . (uJsing a vehicle
without a reasonable belief that the person is entitled to do
80." Defendant argues that Plaintiff could not have reasonably
believed that he was entitled to operate a motorcycle because, at
the time of the accident Plaintiff was in violation of HRS SS
286-102, 286-110(e), and 286-116 (1993 and Supp. 1998) .**

As previously noted, the court concluded that the
reasonable belief exclusion was inapplicable in the case at bar
because the language of the exclusion is “susceptible of at least

three interpretations” and is therefore “ambiguous” and must be

 

"HRS § 286-102 provides, An relevant part, that:
(z) Mo_person. shall operate anv category of
soeeoaet aly Iceni

7b) & peison operating the following category or

conbination ef categories of motor vehicles ahall be

 

 

 

ro by

the examiner of drivers?

""" (2) Motercveles and motor scooterst.}
(Emphases added.)

HES § 286-110(e) states, in relevant part that

uetion permit evele of motor scooter

uring hours of darkness ox carry ay Dassenders.” (Emphases added.)

Ne $ 286-116) provides, in relevant part, ‘that

wwe aval in the’ Licensee's innediate possession at

sub tim

 

civ" tenpraste saeea

43
‘**#P0R PUBLICATION*#*
ee
wstrictly construed against [Defendant]."” Alternatively, the

other jurisdictions have referred to clauses like Exclusion No. 7
.s “permissive use” exclusions, sag, sic, laverane v. Thonaa, 758 So: 24 197,
3oo-81 ie, ce. App. 2000). (analyzing applicability of “reasonable belief”
aeepeion in Light’ of whether the driver had permission of the insured to use
SkelSktoneblie ae the time of the accident}, or “entitlement” exclusions.

Eee, ene, Goodsan 2. Bradbiry, 3 Ps. D. & C.dth 605, 607-08 (1989)

Sat, Suds Seanatrcoen sperniseive use” and “reasonable belief to entitlenent
Agee 7exclusions snd holding that “[allthough one can obtain en over’ s
Sernission to operate e venicie without being licensed, one cannot have @
Dereistaie belief cf entitlement to operate any vehicle without @ valid

 

 

   

 

 

Whether labeled a “permissive use” or an “entitlenent” exclusion,
Je held that the language ia “susceptible” of various
(eeerpretations. Murat v, Grange titual Cas Cox, 470 8.6.24 659) 663. (Ge
Soe? in dugse, the Gootesa Suprese Court held that en exclusion identical
to Exclusion ter 7 was “susceptible of three Logical and reasonable
Uncerpretations”

   

 

[(a)} that the user must be authorized by law to drive in
Giger to reasonably believe he is entitied to use e vehicley
Tid] that the user must have the consent of the owner oF
Sgpatent omer in order to reasonably believe he is entitled
Gohise the vehicle; of, [(3)] that the user must have both
SGnsene and lege! authorization in order to be entitled to
se the venicle,

470 8.8.24 at 663. See, gue, 4 » $39. NW.2d
120, 918" (rowa. 1398) texplaining that the term “entitled” in the exclusion
NeSu1d mean Legal right or authority to drive under the applicable law
“ould mee consent’ of spersigsion’ from the vehicle ower. . (1 or) both
Consent and legal entitlement”); Aetns . 7 se

B52 goes 28 377, 379 (tic, 1990) (eeating cnat “the fact thet [the driver]
FBS. that he had no’ legal right to drive, is distinguishable from the
Uspositive question under the policy exclusion of [the driver's) reasonable
BETECESE’Selng “eneitied’ to crive the vehicle based upon the permission of

 

 

the person in possession of the vehicle”); Georgia fare Bu : z
Soto beara ins’ cos, $36 8.£.28 258, 253-60 (Ga. Ce. App. 2000) (quoting
Hurst, {70 S.e-2a s¢ 663); Canadian’ tndem, Co, Hatlio, 727 F.2d 35, 37
HEE Se) app, 1986) (reasoning that tne entitlement "exclusion at issue here

 

ES EceEly aRbigueusvas shown by the divergent intezpretations given to it by
the pertics and the trial court”); and State Auto, Mut. Ins. Cov. Ellis, 700
S'w.ba 801, 802 (ky. Cts App. 1985) (noting ambiguity of the exclusionary
Longuage Because "{e)he policy does not... specify whether ‘entitled’ means
singj"Socaining permission from the ower of the vehicle or whether a valid
{icande fron the applicable state would also be required to avoid exclusion

from coverage”) «
‘Sther jurisdictions, however, have held that “entitlement”

exclusions are unambiguous. See’ Smith v. Cincinnati Ine. Cou, 763 N-.24 $99,
G05 (Inds Cea App. 2002). (stating “entitienent” exclusion is “unanbiguous”);
% Ete N,wad 226 (tien. Ce- App. 1998) (concluding that plain

HRRtge of exciusion “is not ambiguous and determining that “rational minds

 

would agree thet [tne driver], en underage, unlicensed, inexperienced driver,
tee hot entitied' to drive the automobile); end Quah Prop, & Cas, Ine. Cow
qepateraan, B65 5.420 709, 780-91 (ho. Ct. App. 1993) (concluding exciusion

SSEEESER, .Guous’ and applying “two-part analysis: (1) whether the driver

hed a subjective belief thet he or ahe was entitled to use the car, and (2)

Whether this belief was reasonable”). We express no opinion as to whether
(eontinved. -.)

 

“4
‘***POR PUBLICATION*#*

 

court also determined that the reasonable belief exclusion was
inapplicable because “(Defendant’s] exclusion of only [uninsured]

coverage, but not [underinsured motorist] coverage in

 

sonable belief exclusion” means the rt

 

(Defendant? s) ri
belief exclusion does not apply to “(underinsured motorist)
coverage, or . . . creates an anbiguityl.]”

Defendant failed to present argument as to this
alternative basis for the court’s ruling that the reasonable
belief exclusion was inapplicable and failed to sustain its
burden of denonstrating error. Therefore, this point was
“waived” on appeal pursuant to Hawai'i Rules of Appellate
Procedure Rule 28(b) (7)-

XIII.
In conclusion, for the reasons discussed, the June 19,

2002 judgment is affirmed.

on the brief:

Myles 7. Yamanoto, :
Terrance M. Revere & Tlic
Jacqueline E. Thurston

(Love Yamamoto. & Notooka) Desc Crags ce
for defendant-appel lant. !

Alan Van Etten & Mark 6.
Valencia, (Damon Key Leong

Kupchak Hastert) fer

plaintiff-appellee. pucciobcromy

 

P(. scontinues)
auch an exclusion 18 ambiguous or net anbiguous

45