Case Title: Clark v. State Farm Mut. Auto. Ins. Co.

Citation: 743 P.2d 1227

Docket Number: 

State: utah

Court: Utah Supreme Court

Date: 1987-10-06T00:00:00Z

Document:
743 P.2d 1227 (1987) Barbara CLARK and Alan V. Clark, the sole and only heirs of Vernon Earl Clark, deceased, Plaintiffs and Appellants, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant and Respondent. No. 19692. Supreme Court of Utah. October 6, 1987. *1228 S. Rex Lewis, Provo, for plaintiffs and appellants. Ray Phillips Ivie, Provo, for defendant and respondent. DURHAM, Justice: The family of Earl Clark appeals a summary judgment in favor of State Farm (insurer). Clark was killed by an uninsured motorist who negligently hit the motorcycle Clark was driving. Clark had not insured his motorcycle, but had purchased insurance for his car from insurer. Clark's family sued insurer, attempting to collect under an uninsured motorist clause in the insurance policy issued for the car. We affirm the summary judgment in favor of insurer. The policy issued by insurer for the car contains an uninsured motorist clause, which is limited by another clause stating that the uninsured motorist insurance does not apply if the insured is driving a vehicle owned by him or a resident of the same household and the vehicle is not an "owned motor vehicle" under the policy. The policy defines "owned motor vehicle" as vehicles described in the declarations on the policy, temporary substitutes for those vehicles, and newly acquired vehicles. The parties agree that the motorcycle was not a temporary substitute or a newly acquired vehicle. Therefore, under the terms of the contract, the uninsured motorist clause does not apply to the motorcycle. Clark's family argues that the district court judge erred in giving the contractual language its plain meaning because Utah Code Ann. § 41-12-21.1 (1981) (recodified in Utah Code Ann. §§ 31A-22-302, 31A-22-305 (1986)) creates a personal right to uninsured motorist coverage and expresses a legislative statement of a public policy that forbids exceptions to uninsured motorist coverage. This case presents us with an issue that has received considerable judicial attention, but upon which the authority is divided. See, e.g., Calvert v. Farmers Insurance Co., 144 Ariz. 291, 294-95, 697 P.2d 684, 687-88 (1985) (providing an excellent summary of appellate cases on the issue). While a significant majority of courts has accepted the argument that uninsured motorist vehicle coverage is personal and an insurer cannot restrict it without violating public policy, see, e.g., Calvert, 144 Ariz. 291, 697 P.2d 684 (1985); Otto v. Farmers Insurance Co., 558 S.W.2d 713 (Mo. Ct. App. 1977), other courts have found exclusionary clauses permissible. Holcomb v. Farmers Insurance Exchange, 254 Ark. 514, 495 S.W.2d 155 (1973); Herrick v. Liberty Mutual Fire Insurance Co., 202 Neb. 116, 274 N.W.2d 147 (1979); Employers' Fire Insurance Co. v. Baker, 119 R.I. 734, 383 A.2d 1005 (1978). We think the latter cases are more harmonious with the language of our statute and represent a better-reasoned approach. *1229 Utah Code Ann. § 41-12-21.1 (1981) provides: (Emphasis added.) We do not think that the statute, which merely requires insurers to offer uninsured motorist coverage and authorizes motorists to waive the coverage, evinces a legislative intent to allow an individual to purchase insurance on one vehicle and obtain coverage on all the other vehicles in his household. Cf. Calvert v. Farmers Insurance Co., 144 Ariz. 291, 697 P.2d 684 (1985) (finding an exclusion clause invalid under an Arizona statute, which, unlike Utah's statute, mandates uninsured vehicle coverage without possibility of waiver). The legislative requirement that the coverage be offered on any motor vehicle in the state contradicts the Clarks' argument. If the legislature had intended to require uninsured motorist coverage only on one vehicle per household, it would have drafted the statute accordingly and would not have required that insurers offer the coverage on all vehicles. We agree with the Rhode Island Supreme Court, which interpreted statutory language nearly identical to that of section 41-12-21.1 and concluded: Employers' Fire Insurance Co., 119 R.I. at 741, 383 A.2d at 1008-09; see also Bergera v. Ideal National Life Insurance Co., 524 P.2d 599 (Utah 1974) (insurance policies are contracts). Additionally, we think that the statutory provision allowing a motorist to waive uninsured motorist coverage also requires a rejection of the Clark family's position. The legislature, in drafting the statute in question, required that each insured vehicle be offered uninsured motorist coverage, but simultaneously allowed each named insured to reject the coverage. *1230 Thus, coverage was intended to rest with the vehicle and not with the named insured, since owners can opt in favor of uninsured motorist coverage on some vehicles and against it on others. The statute, as written, does not exempt uninsured motorist coverage from "other owned motor vehicle" exclusions. We agree with the Nebraska Supreme Court, which interpreted a statute containing a nearly identical waiver provision and stated: Herrick v. Liberty Mutual Fire Insurance Co., 202 Neb. 116, 118-19, 274 N.W.2d 147, 149 (1979) (emphasis added). Our holding is also in harmony with our decision in Lyon v. Hartford Accident and Indemnity Co., 25 Utah 2d 311, 480 P.2d 739 (1971), overruled on other grounds, Beck v. Farmers Insurance Exchange, 701 P.2d 795 (Utah 1985), where we found valid an excess coverage escape clause that allowed an insurer to limit the amount it paid on uninsured motorists' claims to the policy limit minus any insurance payments collected from another source. The judgment of the trial court is affirmed. HALL, C.J., STEWART, Associate C.J., and HOWE and ZIMMERMAN, JJ., concur.