Title: Benzer v. Iowa Mutual Tornado Insurance Ass'n

State: iowa

Issuer: Iowa Supreme Court

Document:

216 N.W.2d 385 (1974) Joseph BENZER and Dorothy Benzer, Individually and as parents and next friends of Debra, et al., Appellee, v. IOWA MUTUAL TORNADO INSURANCE ASSOCIATION, Appellant. No. 56193. Supreme Court of Iowa. March 27, 1974. *386 Bradshaw, Fowler, Proctor & Fairgrave, Des Moines, for appellant. David F. McGuire, Cedar Rapids, for appellee. Heard before MOORE, C. J., and RAWLINGS, REYNOLDSON, HARRIS and McCORMICK, JJ. REYNOLDSON, Justice. Defendant Iowa Mutual Tornado Insurance Association (Iowa Mutual) issued an automobile policy containing uninsured motorist $10,000/$20,000 coverage to Joseph R. Benzer. On September 26, 1970 Dorothy Benzer, the insured's wife, and three of his minor children were passengers in an automobile owned by a relative and operated by that relative's wife. A collision with a vehicle driven by an uninsured motorist injured all these members of the Joseph R. Benzer family and caused injuries and one death to other occupants of the car. The automobile in which plaintiff's wife Dorothy Benzer and the minor children were riding was insured by State Farm Automobile Insurance Company's policy containing a $15,000/$30,000 uninsured motorist endorsement. Of the total $30,000 payable under State Farm's policy, three other claims, including the death claim, absorbed all except $9263.43. This sum was paid in various amounts to the four injured plaintiffs, who reserved their rights against Iowa Mutual. These parties stipulated the above apportionment was a fair and suitable division of State Farm's insurance proceeds; the plaintiffs, however, sustained serious injuries and would reasonably have presented claims and made recoveries in excess of the amounts paid by that insurer. Plaintiffs brought this declaratory judgment action seeking an adjudication they are entitled to recover under the uninsured motorist coverage of the policy issued by Iowa Mutual, and for specific performance. Iowa Mutual sought to avoid paying any amount under its policy relying on the "other insurance" clause in its contract. Trial court held plaintiffs were entitled to recover from Iowa Mutual to the amount of its $20,000 uninsured motorist coverage, less the sum of $9263.43 already received from State Farm, and rendered judgment for the difference, $10,736.57. Upon Iowa Mutual's appeal, we affirm. *387 I. The "other insurance" clause Iowa Mutual relies on relevantly states in part: Iowa Mutual asserts the above clause has the "specific statutory blessing" of § 516 A. 2, The Code, found in chapter 516A, which requires uninsured motorist coverage to be offered to each insured. That section pertinently provides: It is this statute, Iowa Mutual contends, which prevents Iowa from joining the clear majority of jurisdictions which simply reject such policy clauses as invalidated by the public policy expressed in uninsured motorist coverage legislative enactments, and permit the insured to recover against two or more uninsured motorist coverage carriers to the extent of his actual damages. See, e.g., Employers Liability Assur. Corp., Ltd. v. Jackson, 289 Ala. 673, 678, 270 So. 2d 806, 809 (1972) and cases cited; Fidelity and Casualty Co. of New York v. Darrow, 161 Conn. 169, 174-181, 286 A.2d 288, 290-293 (1971) and cases cited; Patton v. Safeco Insurance Company of America, 267 N.E.2d 859 (Ind.App. 1971); Comment: The Invalidity of the "Other Insurance" Provision: A New Majority, 17 S.D.L.Rev. 152 (1972). We believe the issue in this case may be resolved without determining whether § 516 A. 2 implies all that Iowa Mutual contends for it. We have concluded the decision is controlled by the language of the company's "other insurance" clause. Before construing that provision, however, we cannot but observe Iowa Mutual is basically seeking to offset uninsured motorist coverage against uninsured motorist coverage to reduce or deny plaintiffs' claim. Had there been no such coverage on the auto in which these plaintiffs were riding, there would be no question but that their damages would have been compensated to the extent of the $20,000 uninsured motorist coverage on their family vehicle. Section 516 A. 1 sets a minimum amount of insurance which must be offered for the insured's protection. Section 516 A. 2 specifies the legislation shall not be construed as requiring coverage which exceeds the minimum amount: it does not set a limit on the maximum protection. See Deterding v. State Farm Mutual Automobile Ins. Co., 78 Ill.App.2d 29, 32, 222 N.E.2d 523, 525 (1966); Patton v. Safeco Insurance Company of America, supra, 267 N.E.2d at 863. Section 516 A. 2, by equating "insurance" with "benefits" arguably could be construed as expressing only a legislative intent to prohibit the pyramiding of separate coverages to recover more than the actual damages. See generally Transportation Insurance Company v. Wade, 11 Ariz.App. 14, 461 P.2d 190 (1969); Sturdy v. Allied Mutual Insurance Co., 203 Kan. 783, 457 P.2d 34 (1969); Collins v. Motorist Mutual Insurance Company, 36 Mich. *388 App. 424, 194 N.W.2d 148 (1971); Protective Fire and Casualty Company v. Woten, 186 Neb. 212, 181 N.W.2d 835 (1970). II. A statute applicable to a contract of insurance enters into and forms a part thereof in the same manner as if it had been actually written or copied therein and in construing the terms of the policy, the statute is to be read in connection therewith, in the light of the purpose and intent of the statute. Williamson v. Massachusetts Bonding & Insurance Co., 142 Conn. 573, 576-577, 116 A.2d 169, 171 (1955); 43 Am.Jur.2d, Insurance § 262, p. 321; 44 C.J.S. Insurance § 302, pp. 1214-20; see Bates v. Nelson, 240 Iowa 926, 933, 38 N.W.2d 631, 635 (1949). Thus the "other insurance" provision of Iowa Mutual's policy should be construed in light of the broad intent and purpose of the legislation which required the company to offer the uninsured motorist coverage. We initially note the title of chapter 516A: "Protection Against Uninsured or Hit-And-Run Motorists." The coverage which must be offered to every insured is "for the protection of persons insured under such policy * * *." Section 516 A. 1, The Code. See Rodman v. State Farm Mutual Automobile Ins. Co., 208 N.W.2d 903, 910 (Iowa 1973); Markham v. State Farm Mutual Automobile Ins. Co., 326 F. Supp. 39, 43 (W.D.Okla.1971), rev'd on other grounds, 464 F.2d 703 (10 Cir. 1972) (parent-child immunity doctrine). Other courts have observed these cases are more easily resolved if it is kept in mind the protection is for the insured, not the uninsured motorist. In Horne v. Superior Life Insurance Company, 203 Va. 282, 285, 123 S.E.2d 401, 404 (1962) the Virginia court said: For similar language, see Travelers Indemnity Company v. Wells, 209 F. Supp. 784, 790-791 (W.D.Va.1962); MFA Mutual Ins. Co. v. Bradshaw, 431 S.W.2d 252, 255 (Ark.1968); Gordon v. Maupin, 469 S.W.2d 848, 851 (St.L.Mo.App.1971); Nationwide Mut. Ins. Co. v. Harleysville Mut. Cas. Co., 203 Va. 600, 603, 125 S.E.2d 840, 843 (1962). III. In interpreting Iowa Mutual's "other insurance" clause we are not only mindful of the public policy evident in chapter 516A, The Code, but also our rule that where insurance contracts are ambiguous, require interpretation, or are susceptible to two equally proper constructions, the court will adopt the construction most favorable to the insured. Rich v. Dyna Technology, Inc., 204 N.W.2d 867, 872 (Iowa 1973). Other of our rules more specifically apply. An insurer, having affirmatively expressed coverage through broad promises, assumes a duty to define any limitations or exclusionary clauses in clear and explicit terms. Roach v. Churchman, 431 F.2d 849 (8 Cir. 1970), dismissing appeal from remand, 457 F.2d 1101 (8 Cir. 1972); Jackson v. Continental Casualty Company, 266 F. Supp. 782 (S.D.Iowa 1967), aff'd, 400 F.2d 285 (8 Cir. 1968); Wilson v. State Farm Mutual Automobile Ins. Co., 256 Iowa 844, 846-848, 128 N.W.2d 218, 220 (1964). A contract of insurance should be interpreted from the viewpoint of an ordinary person, not a specialist or expert. Rodman v. State Farm Mutual Automobile Ins. Co., supra, 208 N.W.2d at 906; Qualls v. Farm Bureau Mutual Insurance Company, 184 N.W.2d 710, 712 (Iowa 1971); Bates v. United Security Insurance Company, 163 N.W.2d 390, 397 (Iowa 1968). *389 The interpretive problem in this case centers in the phrase, "available to such insured." "Available" has been defined as capable of use for the accomplishment of a purpose; immediately utilizable; that it is accessible or may be obtained; at disposal. Duncan v. United States, 368 F.2d 98, 102 (5 Cir. 1966); see Garrison Independent School District v. McDuffie, 414 S.W.2d 492, 496 (Tex.Civ.App.1967). One scholar has characterized the word as one often used because it is flexible, or despite its flexibility. D. Mellinkoff, The Language of the Law 21 (1963). As used here, we believe "available to such insured" is ambiguous and subject to the interpretation an ordinary layman would give it. IV. Iowa Mutual implies because the host's primary insurance was "available" to these plaintiffs, it owes them nothing under the coverage it sold. For authority for its contentions Iowa Mutual cites two California decisions, Kirby v. Ohio Casualty Insurance Company, 232 Cal. App. 2d 9, 42 Cal. Rptr. 509 (1965) and Grunfeld v. Pacific Automobile Insurance Company, 232 Cal. App. 2d 4, 42 Cal. Rptr. 516 (1965). Those decisions turned on the rigid constraints of the statutory exemption in California's uninsured motorist law: Iowa has no similar statutory provision. Nor are we convinced the company finds the support it claims in Burcham v. Farmers Insurance Exchange, 255 Iowa 69, 121 N.W.2d 500 (1963). That case has been distinguished from the type of case presented here. See Gordon v. Maupin, supra, 469 S.W.2d at 851, n. 5. The decision was filed before chapter 516A was enacted. In Burcham the insured's damages were fully paid within the limits of the uninsured motorist coverage on the auto in which he was riding. Each of the insurance carriers involved had a limit of $5000 uninsured motorist coverage. Plaintiff settled with the "other" company for $3700. Thus is was held he could not collect again from his own carrier. In 255 Iowa at 74-76, 121 N.W.2d at 502-503, we said: In the case sub judice plaintiffs are not seeking double recovery but merely one recovery within the limits of the lower uninsured motorist coverage. We cannot interpret Burcham to deny them this right. Assuming the other occupants of the auto in which these plaintiffs were riding had won the race to the courthouse and taken all the primary insurance, plaintiffs according to their insurer, would have nothing coming from their own policy. *390 What we said in a related context in Union Ins. Co. (Mutual) v. Iowa Hardware Mut. Ins. Co., 175 N.W.2d 413, 417 (Iowa 1970) bears on our interpretation of the ambiguity in the "other insurance" clause before us: V. Plaintiffs point to the logic of the authorities holding the words "available to such insured" (or language of like import using the word "available") means actually available, not simply theoretically "available" in a mass race to the courthouse. When the Arizona court was confronted with similar language, it said, in Kraft v. Allstate Insurance Company, 6 Ariz.App. 276, 279, 431 P.2d 917, 920 (1967): Under almost identical facts the court in Travelers Indemnity Company v. Wells, supra, 209 F. Supp. at 790 reasoned: The same rationale was applied in Gordon v. Maupin, supra, 469 S.W.2d at 850, and approved in Fidelity and Casualty Co. of New York v. Darrow, supra, 161 Conn. at 180-181, 286 A.2d at 293. Travelers Indemnity Company v. Wells, quoted supra, was reversed by the Fourth Circuit Court of Appeals, 316 F.2d 770 (4 Cir. 1963), in which decision the Circuit Court made an Erie-type conjecture relating to the manner the Virginia Supreme Court of Appeals would have determined the law of the case. The conjecture was wrong. When the Virginia court ultimately confronted the issue, it rejected the reasoning and the result of the Circuit Court decision: We are persuaded the logic of the cases quoted above applies here. Construed with the broad protective design of the legislature before us and in conformance with the above rules, we believe the language of Iowa Mutual's "other insurance" clause permits the company to avoid paying plaintiffs' damages only to the extent those damages were in fact paid by "other (primary) insurance," limited, of course, by the maximum payment specified in the uninsured motorist coverage. We conclude trial court reached the right result. The case is affirmed. Affirmed.