Case Title: Willis v. Swain. S.Ct. Opinion, filed 12/15/2006 [pdf], 113 Haw. 246.

Citation: 112 Haw. 184

Docket Number: 

State: hawaii

Court: Hawaii Supreme Court

Date: 2006-10-26T00:00:00Z

Document:
‘++fOR PUBLICATION in WEST’ S HAWAI'I REPORTS and PACIFIC REPORTER

 

IN THE SUPREME COURT OF THE STATE OF HAWAI'T

 

00

 

SHILO WILLIS, Plaintiff-Appellant,

CRAIG SWAIN and FIRST INSURANCE COMPANY OF HAWAII, LTD.,
Defendants-Appellees,

and

DOF DEFENDANTS 1-100, Defendants

No. 25992

  

APPEAL FROM THE FIRST CIRCUIT couRT ©
(Civ. No, 01-1-0467-02)

OCTOBER 26, 2006
MOON, C.J., LEVINSON, NAKAYAMA, ACOBA, AND DUFFY, JJ.
OPINION OF THE COURT BY LEVINSON, J

The plaintiff-appellant Shilo Willis appeals from the
July 24, 2003 judgment of the circuit court, the Honorable Eden
Elizabeth Hifo presiding, (1) ruling in favor of Willis and
against the defendant-appeliee Craig Swain in immaterial part and
(2) dismissing all other clains.

on appeal, Willis contends that the circuit court erred
in granting summary judgment in favor of the defendant-appellee
First Insurance Company of Hawaii, Ltd. (First Insurance)
inasmuch as she was entitled to assigned claims coverage pursuant
to Hawaii's Motor Vehicle Insurance Law, Hawai'i Revised Statutes

(HRS) ch. 431, art. 10¢ (1993 6 Supp. 1998), see infra note 2.

qa
‘*7FOR PUBLICATION in WEST’ S HAMAI'T REPORTS and PACIFIC REPORTER **#
For the reasons discussed infra in section I11.8, we
vacate the circuit court’s July 24, 2003 judgment and remand for

further proceedings consistent with this opinion.

BACKGROUND

On July 1 or 2, 1998, Willis received from the
Department of Human Services (DHS) a “certificate of eligibility
for . . . motor vehicle insurance through the Hawai[']i Joint
Underwriting Plan ((JUP)] Bureau [(JUPB)]." (Capitalization
altered.) The certificate identified Willis as a recipient of an
unspecified type of “public assistance("] as of [May 12, 1992).
consisting of direct calsh] payments.” Willis was therefore
“eligible for basic motor vehicle insurance coverage at no cost,
in accordance with (HRS §} 431:10C-407(b) (2()]."? Willis

 

 

£ See Hawai'i Administrative Rules (HAR) § 27-654-8 (1994) (*EIIn
order co receive Hawai(‘]i no-fault auto insurance at no cost: (1) AM
Indi vidval shall be a recipient of financial sosistence poyments ox
supplemental security incone benefite[]")~

 

* sae, Tt Hawai'i Motor Vehicle Insurance Law, HRS ch. 431, art. 200
(Supp. 1998), provided én relevant part’

S11 143i :10c-102 Purpose.
(2) ‘The purpose of this article is to.
(a) Create’ syston of reparations for accidental harm and
lose arising from motor vehicie accidents{=)

(b) to'eifectuate this system of motor vehicle insurance and to
encourage participation by sll drivers in the motor wenicie

i2] Those persons truly economicsliy unable to afford
insurance are provided for under the public assistance
provisions of this article,

(00-103.5 Personal injury protection [(PIP)} benefits
Sofined; linsts.
(a) [PIP] benefits, with respect to any accidental harm, meant all
appropriate and expenses necessarily
incurred as a result of the accidental harm and which are

(cont snved. ..)

   

 
‘*4P0R PUBLICATION in MEST’S HAWAI'T REPORTS and PACIFIC REPORTER ***

 

81. .continued)
aubstantially comparable to the requizenents for prepaid health
Care plans -

{b) (PIP) benefits, when applied to a motor vehicle insurance
policy issued at no cost under [HRS §) 431!10c~410(3) (A
(Idisailowing premiuns "(f}or the licensed public assistance
driver, a9 defined in [H&S 8] 431:10¢~407 (by (2) (Al "Ily shall not
include benefits under subsection (a) for any person receiving
public assistance benefits.

 

 

§{)431:10c~301 Required motor vehicle policy coverage.
(a) An insurance policy covering 2 motor vehicle shall provide
(1) Coverage specified in {HRS §) 431;10C-304{ (*Gotigation
te pay ELF benefits"). )
(b) A meio: Vehicle insurance policy shail include:
i4j Coverage for loss resulting from bodily injury ((BI))
Suffered by any person legally entitled to recover
Ganages from ownere or operators of underinsured moter
Venicles. An insurer nay offer the underinsured motorist
TUTMN | coverage required by this paragraph in the sane manner
a5 uninsured motorist ((UM)] coverage: provided that the offer
Of both shail:

 

 

ici Provide for written rejection of the coverage

igi An'insurer shai offer the insured the opportunity to purchase

{0M “coverage "these offers are to be made when s motor
Yenicie insurance policy 1# fir8e applied for or sesued
el If UN) coverage » : . is rejected, pursuant to

[subsection ib!
(2) Tne offers required by (subsection }(d) are not required to be
ase:

(3) fhe weieeen rejections required by [subsection }(b) shall be
presumptive evidence of the insured’ s decision to reject the
Sptions,

 

$11 143i:10¢~-403 (suPB}‘s duties. The [JUFB] shall promptly assign
ich claim and application, and notify the clainant or applicant
Sf the identsey and address of the assignee cf the claim or

 

 

 

Gpplication. . . s The assignee, thereafter, has rights and
cbisgations | In‘che" case of financial’ inability of a motor
Yeniele insurer |‘ . to perform its obligations, as if the

 

Besignee had written the Spplicable motor vehicle insurance polley
fof lawfully obligated itself to pay motor vehicle insurance
benefit

 

Afscations

 

$1 ya3i:100~407 cr

iwi

 

(continued:
S#0POR PUBLICATION in WEST'S HAWAI'T REPORTS and PACIFIC REFORTER *#*

 

#1. scontinued)
(2) The [JUP] shall provide (PIP) benefits... , at the
option of the owners, for
(a) ALL Licensed’ drivers . . . who are receiving
Public assistance benefits consisting of direct cash
Payments... j provided that the licensed drivers
peimare the sole registered ounere of the motor
vehscies co be insured ss {cl

 

Each’ category of driver/owner under subparagraph(] (A)
«may secure motor vehicle insurance coverage through the
jade} atthe inaivicsai”s option... Any person becoming
Ligible for (JUP] coverage under subparagraph Al shall first
exhaust ali paid coverage under any motor vehicle insurance
Policy then in force before becoming eligibie for (JUF)
Soveraa

 

 

 

A ceititicate snail be issued by (DKS) indicating that the
person is a bona fide public ascistance recipient ar defined
In subparagraph (A). The certificate shall be Geaned = policy
for the purposes of [the Insurance Code, HRS ch. 431} - +
ana
(3) Onder the [JUP), the required motor vehicle policy coverages
= provided in’ {HRS S} ¢31:10c~301 shall be offered by every,

 

insurer to each eligible spplicant assigned by the (JUPB}. Tn
adaition, (Us) coverage!) shall be offered
in conformance with’ (HRS §) ¢31:10¢-301 "= for each clase

except that defined in paragraph (2)(Al |. |

$1 143i:10¢-408 Assigned clains.

(a) Each person sustaining accidental harm . . . may, except a:
provided in subsection (b), obtain the motor vehicle insurance
Benefits though the (028) whenever:

(2) Ne insurance benefits under motor vehicle insurance
policies are applicable to the accidental harm, [or]

(2) No such insurance benefite applicable to the accsdental
harm can be identified|.]

ici Any person eligibie for benefits under (HRS ch. 431, art, 10C,

pt. IV" (°[JUP}")], and who becomes eligible to file a claim or an

faction against the mandatory (81) Usability... poliely), shally

‘pon the (JUPB)'s determination of eligibility, be entitled to:

(1) The foli [21] benefits as if the victim hed been covered as
an insured at the tine of the accident producing the
SGeldental harms and

(2) The rights of claim and action against the insurer, assigned
under [HRS $] £31:10c-403, wlth reference to the mandatory,
[Bt] itabsiity policy for’ accidental harm

Any claims of an eligitie accigned claimant against . | | (the)

mandatory (81) lisbiiity ..- policly)  » . shall be filed with

tthe ingurer assigned and shall be subject to’ail applicable

Conditions and provisions of (ARS ch. 431, art. 10¢, pt, IV

([OUP]"), suppts. A (*Fareieipation and fdministrstion”) and @

(Continued...)

   

 

 
‘++F0R PUBLICATION in WEST'S HAWAI'I REPORTS and PACIFIC REPORTER ***

enrolled in a “certificate policy” administered by First

Insurance,’ which was effective from July 2, 1998 through July 2,

 

2. -eontinued)
(coverages and Assignment of Clains")]

 

   

S{ 1431:2106-410 Schedules:

ia} | 1. (a) For the Licensed public assistance driver, as defined in
[sas §) 431si0c~¢07 (b) (2) (A), Ao premium shall be assessed
for the mandatory sunisun (Pie) (coverage)? and ail

policies shall conform to [HRS §} <31:10c~407(b) (2) («1

Ettective July 2, 1999, April 27, 2000, and May 5, 2006, the Legislature
Snended HRS § 421:10"103-5 (a) in innaterial respects. "See 2004 Haw. Sess. L.
Reese, 58 1 and # st 265-86; 2000 Haw. Sess. L. Act é5, $8 1 and 3 at 122;
1999 Haws Ses. Ls Act 222, $§ 4 and € at 707. Effective June 28, 1989,
January i, 2002, and July i, 2006, the legislature amended HRS
$'451:100%407(b) in immaterial respects. See 2006 haw. Sess. L. Act 285, $6 ¢
Gnd? at 1191, 1173; 2001 Haw, Sess, Ls Act 157, §§ 32 and 39 at 402, 404;
$859 naw. Seas. L. Act 142, $6 3 and § at 459, ‘Effective April 19, 2001, the
legisietuce amended HRS § 431710c~#08(a) to (2) to provide for assigned Claix
benefits where "(a) (2) Inje Liabinity or (Oa) insurance Benefits...
are applicable” (new language snderscored) and In other immaterial respects.
Ses 2001 Haw. Sess. L. Act 14 at 16-17

 

 

 

2 HAR $6 16-23-68(a) (“Each insurer shall be'a nenber of the JUP.
As a condition of Licensure it shall (2) Accept’ appointment as 3
Beroicing carrier if the commissioner finds it necessary in the public
interest and that the insurer is capable of performing as 2 servicing
carrier."], ~73(a) and_(b) (1999) {concerning procedure for obtaining a
Certificate policy). HAR § 16-23-75(a) provides an relevant part

 

 

 

{DiS} shall provide « certificate of eligibility for JuP
coverage to eligible licensed arivere who ave receiving
public aesistance benefits from (DKS) or from che Supplemental
Becursey Ineane program under the Social Security Administration
and who desire basic motor vehicle insurance policy coverage under
the} SOP; previded such licensed orsvers ‘are the sole
fegiatered owners of motor vehicles to be ingured under the JUP.
The applicane shall submit the certificate eo the Servicing
Cerrier of the applicant's choice for s actor vehicle insurance
policy. Certiticates received by the servicing carrier within,
Phisty daye from the date of certification... shall be accepted
and treated a2 if [they] were payment in fuil for the requested
notor vehicle sneursnee coverages. The servicing carrier shall
Certity thie certificate whsen wiil function as a metor vehicle
Sneurance policy» -

‘Only basic motor vehicle insurance
policy coveranes, as defines 2m (HAR 68) 16-23-4( (a) (PIP and
isbility (ior i, death, and property damaged)

 

 

J, *$ (EIB). and 9
t ng ie The gricr to January

Tevelzof Uw ane OM insufance) (199911, shall be bound

(continued...)
‘*++FOR PUBLICATION in WEST'S HAWAI'T REPORTS and PACIFIC REPORTER *##
1999, Willis’s certificate policy did not include uninsured
motorist (UM) coverage, but her certificate of eligibility
stated: “If you desire... [UM] . . . coveraget] . .. ,
contact an insurance agent to assist you in obtaining thlis}
coverage upon payment of the appropriate premium.” The record on
appeal is silent as to whether Willis actually contacted First
Insurance or any other insurer regarding UM coverage.

On February 10, 1998, Willis was a passenger in an
uninsured vehicle owned and operated by Swain when Swain
rear-ended another vehicle, injuring Willis.‘ Even after her
certificate policy expired on July 2, 1999, Willis “continued to
see [her] doctor(] for the injuries [that she) sustained th:the

+ collision” and “to incur medical bills . . . relat{ing to}
and ar(ising] out of the . . . collision." At some point after
the accident, Willis filed an “application for benéfits under the

Hawaif']i Assigned Claims Plan," which the JUPB assigned to

 

continved)
2 added.)

 

 

It is undisputed that, until the accident, Willis believed swain's

vehicle to be insured.

 

+ Nevertheless, in her response to First Insurance's requ
admissions, Willis “adait{ted) that medical treatment that [she] received as 3
Fesuit of {her] involvenent in the subject accident was paid for by the
(Dis). The record on appeal is silent as to how much of the cost was borne
by DHS. Consequentiy, the circsit court, on remand, must undertake further
fact-finding. See intra section Iv.

 

«Willie's certificate policy would have been governed by HAS
§ 431:20c-409, whereas her later “assigned claim" sought "last resget™
coverage under HRS § {31:10C-408. A concise clarification of the JUP's two
Gistinet functions is provided by WAR § 16-23-67 (1998)

(a) The [90P) is intended to provide motor vehicle insurance
and optional edditionei insurance ins convenient and expeditious
anner for . «+ persone who otherwise are in good faith entitied

(eont noe...)
{FOR PUBLICATION in WEST'S HAWAI'I REPORTS and PACIFIC REFORTER +4

 

First Insurance on August 11, 1999.
on December 28, 1999, First Insurance informed Willis
that it would grant her no benefits pursuant to the assigned
claim because, Firet Insurance maintained, she was covered under
her certificate policy on the date of the collision. (Citing HRS
§.431:10C-408.) Accordingly, on February 9, 2001, Willis filed a
complaint in the circuit court of the first circuit, the
Honorable Eden Elizabeth Hifo presiding, praying, inter alia, for
damages from First Insurance for “breach of contract,” “bad faith
refusal to pay Liability coverage,” “misrepresentation,” and
“unfair and deceptive acts or practices." (Capitalization
omitted.) On March 31, 2003, First Insurance moved for stmmary
judgment. In its menorandum in support, First Insurance argued

that.

[tine Certificate Policy issued to [willis] expiicitly
states that (UM) coverage is available to certiticate
policyholders by contacting an insurance agent and paying
the "appropriate preniua.”” [Willis] did net elect to
purchase [il] coverage during the time chat she woe a First
Uneurance certificate policyholder. The current claim by
waits) Le nothing lest than a deliberste attempt to
obtain free (OM coverage) when [Willis] elected not to
purchase such coverage,

 

 

 

(continues)
to, but unable to obtain, moter vehicle insurance and optional
Sdditionsl insurance thecugh ordinary methods. Inaurers will pool
their losses and bona fide expenses nder [the] JUP co prevent’ the
Imposition of any inordinate burden on any particular insurer

(b) Another part of the JUP consists of the assignment
thereto of clsine of victins for whom no policy is applicable,
Such as the hiteand-run victim who se not covered by’ 8 moter
Yehicle insurance policy. The losses and expenses under the
assigned clains program are provrated among and shared by ai2
hotor vehicle insurers and seif-ineurers.

See alee HAR 6 16-2:

 

 

70 (299) ("ALI costs incurred in the operation of

  

ihe [abEe) ano the cperation ef the (JOF] shail be allocated fairly and
Equitably enong the GUP menbers."), “85. (“The Commissioner ehall snmuaily
prorete among. . - all insurers all costs and claims paid under the

Sseigned claims progean.")
‘#ATOR PUBLICATION An WEST'S HAWAI'T REPORTS and PACIFIC REPORTER *#*

Willis responded:

Jf the legislature had intended to exclude the bodily injury
(i) coverage in the aesigned clains policy, it wold bare
done so just Like it did under (HRS) 431;10{c) "109-8 where
it specifically exclude 2 person from receiving (pereons!
anjury protection (IPIP(}} benefits in a cervificace policy.
cade pitine Key elenent that the legisisture intended aay
Eat people should have coverage, snd for that ressen chey
specifically stated in the statute that it had to be

 

 

 

Asability coverage in 2003.[") In 1999, . . <1 used the
word “benefits("/] it did not exclude even in 1999" the Tet)
he whole purpose . . . of the no-fault low 8 vemedval oe

nature and in porpoce.
[t)ne purpose ot the assigned claims...» was

to provide the indigent the opportunity to have coverage,
And, in essence, to say thats person who has a certificate
Policy is not entitied to the assigned claims polley accis
bey in effect, punishing an individual for having nad the
certificate policy issued) ss

satus llt8S 81 421:0{ci-30i . . . very clearly says a
motor vehicle insurance policy shail include lisbiltey
Soverage. se the intent of the legislature was
be stford the indigent the opportunity to save Liabiliey
overage, and that is why. -'- in'2002 they made the
specific’ qualification in jmas’s 431:10C+408 (a) (31) which
fells us. specifically that if there is [°(nl}e liabiaiey or
{uH) Ansurance benefits, {*) . .. the assigned claim pslicy
ss applicable. (Seg aupra note 7.)

The circuit court granted First Insurance's motion and, on July

 

24, 2003, entered final judgment in favor of First Insurance and
against Willis.* Seven minutes later, Willis filed her notice of

appeal to this court,

TT. STANDARD OF i

We review the circuit court's grant or denial of sumazy
judgment ge novo. 1 7

3¢ Hawai'i 213, 221, 11-P.3a 1, 9 (2000). The sree EE
Granting @ notion for summary ‘judgeent Is sestles

Millis presumably refers to Act 14 (2092), which made nore
specific HRS § 431:10C-408 (a) (11's precondition for JUP benefits: SNe

{ui _insurance benetits ‘ere applicable to the accidental
arn” (new language underscored). See auata notes.

 

 

* emexTht SAEEUIE court's July 24, 2003 judgment farther disposed of
jfelad other clains, including [First Insurance's) crocs clels sgsicet
Swain)” and Wiilis's cleims against Swain, none of which it gersare to this
appeal.
‘+480R PUBLICATION in WEST'S HAWAI'T REPORTS and PACIFIC REPORTER *#*

{Slusmary judgeent is appropriate if the pleadings,
Gepositions, answers to interrogatories, snd
Soniseions on file, together with the affidavits, if
any, show that there ig no genuine issue es to. any
aterial fact and that the moving party is entitied to
Judgment az a matter of law. A fact se material sf
proof of that fact would have the effect of
Establishing cr refuting one of the essential elenents
of a couse of action or defense asserted by the
Parties. ‘The evidence mist be viewed in the Light
host favorable to the noteoving party.” In cther
Mords, we mist view sll of the evidence and the
Shlertntes drawn theretron inthe Light most favorable
to the party opposing the motion:

 

 

 

Ads (citations and internal quotation marks omitted)
Querubin v, Thomas, 107 Hawai'i 48, 56, 109 P.3d 689, 697 (2005)
(quoting Durette v. Aloha Plastic Recycling, Inc.,’ 105 Hawai'i
490, 501, 100 P.3d 60, 71 (2004) (quoting Simmons v. Puy, 10S
Hawai'i 112, 117-18, 94 P.3d 667, 672-73 (2004) (quoting Kahale
va City & County of Honolulu, 104 Hawai'i 341, 344, 90 P.3d 233,
236 (2004) (quoting SCI Mant. Corp, v. Sims, 101 Hawai'i 438,
445, 71 P.34 389, 396 (2003) (quoting Coon vs City & County of
Honolulu, 98 Hawai'i 233, 244-45, 47 P.3d 348, 359-60
(2002))91))-

IIT. DISCUSSION
AL The a
On appeal, Willis contends that there was no other BI
insurance for her to turn to and that the legislature intended

for her to be covered. (Quoting HRS $§ 431:10C~102, -103.5, and

 

~408, see supra note 2; Allstate Ins. Co, v. Kaneshiro, 93
Hawai'i 210, 998 P.2d 490 (2000); Estate of Doe v, Paul Revere
Ing. Co., 86 Hawai'i 262, 273, 948 P.2d 1203, 1114 (1997);
Neumann v. Ramil, 6 Haw. App. 377, 380, 722 P.2d 1048, 1051
(1986); Washinaton v. Fireman's fund Ins. Cos, 68 Haw. 192, 201,
‘"*TFOR PUBLICATION An WEST'S HAWAI'T REPORTS and PACIFIC REPORTER #*#

708 F.2d 129, 135 (1985); Sarcena v. Havaiian Ins. ¢ Guar, co.,

S7 Haw. 97, 102, 678 P.2d 1082, 1085 (1984).) (Citing HRS
$ 431:10C-407; paves v. F: i. Cou, 77 Hawai'i 117, 121, 8@3
F.2d 38, 42 (1994).) (Some citations omitted.)

First Insurance counters that Willis did not qualify
for assigned claims coverage “because she was the naned insured
under her own Certificate Policy with First Insurance and
sherefore had identifiable motor vehicle insurance coverage on
the date of the subject accident.” (Quoting Neunana, 6 aw. App.
at 365-85, 722 P.2d at 1053-54; HRS § 432;100-407 (b) (3) .)

(Citing HRS § 431:10C-408(b).) First Insurance essentially

 

argues that certificate policies are not required to inelade UM
Coverage to comply with 431:10C-301(b) (4) and Willis, by
Gisregarding First Insurance's “offer of supplenental uM
coverage, forewent her eligibility for assigned benefits.
(oveting HRS $ 431:20¢-407(b) (3).) FLzst Insurance's position is

meritless,

analysis

 

The core issue as framed by the parties is whether an
SEfer and 4 tacit refusal of UM coverage render the UM coverage
“applicable” and “identiti (able) so as to relieve the assignee
insbrer under HRS § 431:10C~408, see aupra note 2, of the duty to
SonPensate the injured claimant. To address this particular
ery would require us to construe the terms “applicable” and
“icentifi{able].” In that regard, ve do not believe that the law

of this Jurisdiction or any other jurisdiction or the Uniform

10
/*EOR PUBLICATION in WEST’ S HAWAI'I REPORTS and PACIFIC REPORTER *#*

 

Motor Vehicle Accident Reparations Act (UMVARA)? or its
commentary, § 18(a) (1), (3) & omt., 14 U.L.A, 82 (2005 & Supp.
2006), are illuminating. Fortunately, we need not engage in an
exercise in statutory interpretation because an issue of fact is
cutcome-dispositive. Underlying First Insurance's argument are
two questionable premises: (1) that First Insurance indeed made
an effective offer of UM coverage; and (2) that such coverage
would have “applifed)” to Willis’s status as a passenger. in a car
that was not her own, We conclude that First Insurance did not,

as a matter of law, “offer” Willis “applicable” UM, coverage.

2. Eirst Insurance did not mak
‘coveraue!

We agree with First Insurance that it was not required
to furnish UN coverage as an element of Willie's certificate
policy. HRS § 431:10C-407(b) (3), see supra note 2, provides, in
general, that “the required motor vehicle policy coverages as

 

provided in (HRS §} 43:
to each eligible applicant assigned by the [JUPB]

0c-301 shall be offered by every insurer

However, UM
coverage is excluded from this provision when the insured is a
member of the “class defined in [HRS § 431:10C-407(b)} (2) (A),”
Aues, @ public assistance recipient. In fact, HAR § 16-23-73(a),
see supra note 3, literally prohibits the servicing carrier from

+ tn 1972 and 1972, the National Conference of Commissioners on
Uniform State Laws, under contract with the United States Department of
Transportation, drafted and promulgated the UM/ARA as "a complete and
comprehensive cysten of providing reparations for injuries and losses arising
from moter vehicie accidents,” “with the hope that uniformity would eventually
be cbtained among all the states." 14 U.LuA. 35 (2008 ¢ Supp. 2006)) H. King
Nil, Je-, The Uniform Moser Venice Resident Reparations Act, © Forum i, 2-4
(1973-93) “Wile ne Jurisdiction bat cacept ea) the {UMVARAT’ as such,” the
District of Columbia and eighteen states other than Hawai'i “have adopted some
form of ‘Wo Fault’ legisiseion.” 2€ U-L-A., gupta, at 40-42

     

    

 

 

un
 

POR PUBLICATION in WEST’ S HAMAI'T REPORTS and PACIFIC REPORTER #4
including UM coverage with a certificate policy. Except “[f]or
famed insureds who prior to January 1, 1998, elected to purchase
(uM) and/or (UIM) coverages,” an unadorned certificate policy
incorporates PIP and liability alone. Id, Unless and until the
insured can afford to and wishes to augment her certificate
policy by buying UM coverage with her own funds, she carries no
uM insurance.

Nevertheless, First Insurance contends that it
“offered” Willis supplemental UM coverage, thereby creating an
alternative to, hence disqualifying, Willis’s assigned claim. We
disagree, The sum total of the evidence that First Insurance
offered UM coverage to Willis is the statement, set forth ‘in
Willis's certificate of eligibility, that “[i]£ you desire .
(uml... coveraget] . . . , contact an insurance agent to
assist you in obtaining these coverages upon payment of the
appropriate premium.” This is at most an invitation to initiate
negotiation, not an offer.

“An offer is the manifestation of willingness to enter
into @ bargain, so made as to justify another person in
understanding that [the person's] assent to that bargain is
invited and will conclude it.” Restatement (Second) of Contracts
§ 24 (1981 & Supp. 2006). While particular words and formalities
are not required, Wong Kwai v. Dominis, 13 Haw. 471, 476 (1901),
the communication must be sufficiently definite to manifest the
maker's intent to bestow upon the addressee the power of
acceptance, see, e.a., Restatement, supra, § 24 reporter's note
gmt. ay 1 Richard A. Lord, Williston on Contracts § 4.7 (4th ed.

1990 & supp. 2006).
‘s+4F0R PUBLICATION in MEST'S MAWAI'T REFORTS and PACIFIC REPORTER ***
As a matter of law, the certificate’s “general |

expression of willingness to bargain [did] not constitute an
offer.” See Lord, supra, § 4.7. At most, First Insurance
flagged for Willis the fact that no statute or regulation
bestowed a UM component on her certificate policy and directed
her to an unspecified “insurance agent” to learn about the
requisite premiums and procedures. No reasonable reading of the
statement could elucidate (1) which insurer(s) might underwrite
Willis’s UM coverage or (2) the premiums"? or any other terms.
Compare, e.9., Zanakis-Pico v, Cutter Dodae, Inc., 98 Hawai’
309, 324 6 n.26, 325-26, 47 P.3d 1222, 1237 & n.26, 1238-39
(200215 v. Paschoal, $1 Haw. 19, 23,
449 P.2d 123, 125-26 (1968), with, e.g., Earl M. Jorgensen Co. v.
Mark Constr., Inc., 56 Haw. 466, 468, 540 F.2d 978, 962 (1975).

 

RS ch, 421, art. 10C, pt. IV.C (1993 6 Supp. 1998) (xecodified in
2005), anended by 2006 liaw. Seas. 'L. Act 269, $§ 5 anc’? at 1172-75, provides
for the insurance commissioner to svandaraize rates for JUP policies Bur does
not necessarily proninie individual insurers from offering lower rates than
those set by the’ conmissioner.

 

 

“gor further discussion of what is too uncertain to quality as an
offer, see Restatenent, gupea, § 53 ("Certainty"), which provides:

 

(2) Even though # manifestation of intention is intended to
be understood as an offer, it cannot be accepted so as to form a
Contract unless the terms of the contract are reascnably certein.

(2) The terns of 2 contract are reasonably certain sf they.
provide a basis for detersining the existence of 2 breach and for
Giving an appropriate renedy.

(3) the tact that one or nore terms of 2 proposed bargain
are lefe open of uncertain may show that a manifestation of
Untention is not intended to be understood es an effer cr as an
acceptance.

 

 

Restatenent, guora, § 26 ent. d (“Invitation of . . . offers"), supplies the
following Lilustration:

z Sit proaptiy angvers, “I Will buy your house for
£25;000 cash.” There 1s so contracts AL
dhgdestion thet an-offer be mage to him Bhi

wade a7 offer
continued...

 

 
‘**POR PUBLICATION in MEST’S HAWAI'T REPORTS and PACIFIC REPORTER **#

 

First Insurance having made no offer of UM coverage in
the first place, a fortiori, we cannot say that First Insurance
has demonstrated an “applicable” and “identifilable]” alternative
to Willis’s assigned claim. It follows inexorably that First
Insurance was not “entitled to judgment as a matter of law” on

its March 31, 2003 motion.

4. Placing financial responsibility on insurers, for

oa wi
with

policy.

Finally, First Insurance makes the following public
policy argument:

(IE (i248) had been insured by af-0M) while
operating ner own vehicle, there is absolutely no question
that she would sot be entities to Assigned Claims [Bf]
coverage and that her sole recovery, if sry, would be based
on whether or not she had (UM) coverage onder her own
Certificate Folicy with Firet Insurance. Why should
free 3

 

Sifterentiy, why shoud (willie) be re!
Consequences Of choosing not to purchase [i] coverage
simply because she was riding as a passenger in someone
else's Vehicle at the tine she sustained injury?

 

 

: ner ry 408,
dehicle sccigent, If Assigned Clains coverage was trey

imeant to spply to anvone for whom there is ne’ [OM] coverage,
then the Assigned Grains Program would sake basic” (UM)
coverage . - s completely unnecessary and superfluous

There would be no point in peying s premium for (0M)

 

   

 

"1, seontinved)

(Emphases added.) See alae id, § 33 ont. © ("Incompleteness of ters is one
of the principal reasons why advertisements and price quotations are
ordinarily not interpreted a2 offers.) in the present matter, Fisst
Insurance's purportes “offer” patently contravened the certainty Fequirenent:
Sg was even more precatory than k's suggestion that s/he would consider
$20,000."

 

4
 

+4908 PUBLICATION An WEST’ § HAWAI'I REPORTS and PACIFIC REPORTER

coverage if ell one had to do was apply to the (JUPB} and
Gequest that {one’s BI] lain be aseigned to a participating

 

(Some emphases added and sone in original.) (Citing Bowers vs
‘Alamo Rent-A-Car, Inc., 88 Hawai'i 274, 965 P.2d 1274 (1998).)

First Insurance distorts Willis’s characterization of
the assigned claims program by implying that it would “create
universal (UM) coverage for anyone injured in @ motor vehicle
accident” (enphasis added). First Insurance overlooks HRS
§ 431:10C-408(b), which “disqualifie(s},” for example, a claimant
who actually owns or is the registrant of one of the motor
vehicles “(2) . . . (A) . « « involve(d] in the accident.” In
other words, UM coverage, far from “superfluous,” protects car
owners while driving or riding in their own vehicles and, hence,
is far broader than the assigned claim system, which applies only
in “residual situations,” see UMVARA § 19 cmt., 14 U.L.A, 85
(2008 & Supp. 2006).

The absurd consequence of First Insurance's proposition
would be that insurers, merely by offering, could compel even
people who do not own cars to purchase “passenger UM insurance”
and “pedestrian UM insurance” to hedge against the risk of injury
by an impecunious and uninsured or underinsured driver or ina
hit-and-run collision. Even one who does happen to own a motor
vehicle but never drives it (such as a parent of a teenage
driver) could be hamstrung by an insurer's mere offer into paying
2 monthly premium to avoid a financial catastrophe from an injury
outside the confines of the car.

In short, Willis should “be treated . . . differently,”

a5 the legislature made clear by excluding from assigned coverage

15
 

TOR PUBLICATION Sn WESE'® HAKS'E RRFORTS and PACIFIC RBFORTER “4
(1) “feyne owner or registrant” of an “involve(d)” vehicle and
(2) the knowing passenger of an uninsured vehicle but not (3) the
injured passenger of a vehicle that later turns out to be

uninsured.

Tv. concwusroN

In Light of the foregoing analysis, we hold that the
circuit court erred in avarding summary judgment in favor of
First Insurance and against Willis. Accordingly, we vacate the
circuit court's July 24, 2003 judgment insofar as it dismissed
Willis’s action against First Insurance and remand for further
Proceedings consistent with this opinion. On remand, to the
extent that the trier of fact finds that Willis’s post-July 2,
1999 medical expenses renain unpaid and her assigned claim
complies with the Motor Vehicle Insurance Law in other respects,
the circuit court shail order First Insurance to tender the

appropriate benefits under the assigned claims progran.

on the briefs:

Bradford F.K. Bliss, Go
of Lyons, Brandt, Cook

& Hiramatsu, for’ the Bt Pt

defendant-appeliee First
Insurance Company of Hawaii,

Lea. rates Ob aeaeyarrien

Fernando L. Cosio,
for the plaintiff-appellant
Shilo Willis

Vom & Das

 

16