Case Name: Derek DIRCKS and Valerie Dircks, Appellants, v. THE TRAVELERS INDEMNITY COMPANY OF AMERICA, Appellee.
Court: Utah Supreme Court
Jurisdiction: Utah
Decision Date: 2017-10-17
Citations: 416 P.3d 376
Docket Number: No. 20160065
Parties: Derek DIRCKS and Valerie Dircks, Appellants,
v.
THE TRAVELERS INDEMNITY COMPANY OF AMERICA, Appellee.
Judges: 
Reporter: Pacific Reporter 3d
Volume: 416
Pages: 376–388

Head Matter:
Derek DIRCKS and Valerie Dircks, Appellants,
v.
THE TRAVELERS INDEMNITY COMPANY OF AMERICA, Appellee.
No. 20160065
Supreme Court of Utah.
Filed October 17, 2017
Brian S. Coutts, Scott D. Brown, Tyler Brown, Midvale, for appellants.
Beth E. Kennedy, Michael D. Zimmerman, Troy L. Booher, Nicholas E. Dudoich, Paul M. Belnap, Salt Lake City, for appellee.
Associate Chief Justice Lee authored the opinion of the Court, in which Chief Justice Durrant, and Justice Durham joined.

Opinion:
Justice Himonas filed a dissenting opinion, in which Justice Pearce joined.
Associate Chief Justice Lee, opinion of the Court:
¶ 1 This case is before us on a certified question from the federal district court. We are asked to examine the terms of Utah Code section 31A-22-305.3. The question presented is whether this provision requires that all vehicles covered under the liability provisions of an automobile insurance policy must also be covered under the underinsured motorist provisions of that policy, and with equal coverage limits. We conclude that it does, unless a named insured waives the coverage by signing an acknowledgment form meeting certain statutory requirements.
I
¶ 2 On July 11, 2012, Derek Dircks and Michael Riley suffered injuries in a car accident caused by another driver. Both Dircks and Riley were employees of Mid-State Consultants, Inc. They were in Riley's personal vehicle on an assignment for Mid-State at the time of the accident.
¶ 3 To cover his resulting medical bills, Dircks and his wife sought and received liability benefits under the third-party driver's automobile insurance policy, as well as underinsured motorist benefits under Riley's policy. But the amounts received were insufficient to cover the bills. So Dircks sought additional underinsured motorist benefits under Mid-State's commercial insurance policy with Travelers Indemnity Company of America. The policy included $1 million of liability coverage for persons driving in either a Mid-State fleet vehicle listed in the insurance policy or a vehicle owned by a Mid-State employee when used for Mid-State business. The policy also included $1 million of underinsured motorist coverage. And it purported to limit this coverage to persons driving in Mid-State fleet vehicles.
¶ 4 Travelers denied Dircks' claim on the ground that Mid-State's policy did not provide underinsured motorist coverage for Riley's vehicle. Dircks subsequently filed suit. After the parties filed cross-motions for summary judgment, the federal district court certified to us the question of whether state law requires that all vehicles for which Mid-State had purchased liability coverage be covered to the same extent under Mid-State's underinsured motorist coverage.
II
¶ 5 The Utah code requires "every resident owner of a motor vehicle" to "maintain owner's or operator's security in effect at any time that the motor vehicle is operated on a highway or on a quasi-public road or parking area within the state." UTAH CODE§ 41-12a-301(2)(a). Proof of such security may be provided by a "certificate of insurance under Section 41-12a-402 or 41-12a-403." Id . § 41-12a-401(1)(a). By statute, "[e]very policy of insurance or combination of policies purchased to satisfy the owner's or operator's security requirement" must include four specific types of insurance: "(a) motor vehicle liability coverage under Sections 31A-22-303 and 31A-22-304; (b) uninsured motorist coverage under Section 31A-22-305, unless affirmatively waived under Subsection 31A-22-305(5); (c) underinsured motorist coverage under Section 31A-22-305.3, unless affirmatively waived under Subsection 31A-22-305.3(3); and (d) except as provided in Subsection (2) and subject to Subsection (4), personal injury protection under Sections 31A-22-306 through 31A-22-309." Id . § 31A-22-302(1).
¶ 6 This case concerns the required terms and scope of underinsured motorist coverage in a policy purchased to satisfy a vehicle owner's insurance requirements. The key operative provision is Utah Code section 31A-22-305.3. Section 305.3 states that "[u]nderinsured motorist coverage under Subsection 31A-22-302(1)(c) provides coverage for a covered person who is legally entitled to recover damages from an owner or operator of an underinsured motor vehicle because of bodily injury, sickness, disease, or death." Id. § 31A-22-305.3(2)(a) (emphasis added). Covered person , in turn, is defined to include "any person occupying or using a motor vehicle referred to in the policy." Id. § 31A-22-305(1)(d); id. § 31A-22-305.3(1)(a). And section 305.3 mandates that "the limits of underinsured motorist coverage shall be equal to the lesser of the limits of the named insured's motor vehicle liability coverage or the maximum underinsured motorist coverage limits available by the insurer under the named insured's motor vehicle policy" unless the named insured signs an acknowledgment electing "coverage in a lesser amount." Id. § 31A-22-305.3(3)(b).
¶ 7 The parties offer differing views of the implications of these provisions. Dircks interprets them to mandate parallelism between underinsured motorist coverage and liability coverage within the same policy-both in terms of the persons and vehicles covered and the liability limits. And Dircks claims that he is entitled to underinsured coverage in the underlying case because Mid-State never signed an acknowledgment limiting its underinsured motorist coverage.
¶ 8 Travelers offers two grounds for rejecting Dircks' approach. First it says that section 305.3 does not apply to vehicles that Mid-State had no statutory obligation to insure (like those not owned by Mid-State). And second Travelers asserts that the Mid-State policy properly excludes the unowned vehicles in question from coverage for underinsured motorist purposes.
¶ 9 We reject both of Travelers' arguments and generally agree with Dircks' conception of the statutory scheme.
A
¶ 10 Travelers first seeks to avoid any application of section 305.3 to vehicles not owned by Mid-State. It notes that this provision is addressed to "[u]nderinsured motorist coverage under Subsection 31A-22-302(1)(c) ." UTAH CODE§ 31A-22-305.3(2)(a) (emphasis added). And it indicates that section 302, in turn, speaks of insurance "purchased to satisfy the owner's or operator's security requirement of Section 41-12a-301." Id . § 31A-22-302(1).
¶ 11 Travelers emphasizes that Mid-State did not own Riley's vehicle. And it insists that it accordingly had no obligation to insure that vehicle under section 302. In Travelers' view, it follows that section 305.3 does not apply to the underinsured motorist provisions of the Mid-State policy because those provisions were not "purchased to satisfy" a statutory "security requirement" under section 302.
¶ 12 We disagree. Travelers' threshold point is correct. Mid-State had no legal duty to purchase any insurance for unowned vehicles. But it does not follow that section 305.3 does not apply to the insurance policy in question. Section 305.3 applies to any "policy . purchased to satisfy the owner's or operator's security requirement."Id. § 31A-22-302(1) (emphasis added). And the applicability of section 305.3 accordingly turns entirely on the scope of the term policy in section 302. For Travelers to succeed, we must read the term narrowly to encompass only the specific insurance coverage in a policy that is purchased to satisfy the security obligation. But there is nothing in the text that indicates the statute applies only to those portions of a policy.
¶ 13 A "policy" is "[a] document containing a contract of insurance." Policy , BLACK'S LAW DICTIONARY (9th ed. 2009). And the insurance document at issue in this case is clearly identified as a single policy. It is labeled with a single policy number throughout. There is even a section in the document that allows the insurance provider to list "supplemental policies," which are each "a separate policy containing its complete provisions." (Emphasis added). But that section was left entirely blank.
¶ 14 That indicates that the Travelers policy in question was a "policy . purchased to satisfy the owner's or operator's security requirement." UTAH CODE§ 31A-22-302(1). And that conclusion defeats Travelers' first argument. For that reason we conclude that section 305.3 applies to the entire insurance document understood as a "policy" even if some of the provisions in the policy were not themselves purchased to satisfy the insured's statutory security requirement.
¶ 15 In so holding we also reject the dissent's contrary arguments. First, we see nothing "senseless" about the statutory scheme as interpreted herein. See infra ¶ 40. This statutory framework promotes transparency.
It does so by requiring insurers to offer either two separate insurance policies (one that satisfies the insurance requirements and an additional policy for excess insurance) or a single policy that includes an acknowledgement that excess coverage within the policy does not get the full benefits of the insurance code. That provides clarity for policyholders. And it protects consumers from being misled or confused by insurance companies-who stand in a position of great power because consumers have no choice but to come to them to purchase a policy to satisfy the requirements articulated in section 41-12a-301.
¶ 16 Perhaps it is true that "sophisticated consumers" are those most likely to be protected by the statute as structured. See infra ¶ 51. But we see no reason to deem such consumers to fall beyond the legislature's reach. Even sophisticated consumers are at the mercy of insurance providers. And these consumers-like insurance companies themselves-are entitled to a fair construction of our statutory scheme.
¶ 17 Second, unlike the dissent we do not find ambiguity in the terms of the statute. Justice Himonas asserts that the reference to a "policy or combination of policies purchased to satisfy the owner's or operator's security requirement," UTAH CODE§ 31A-22-302, could be understood to mean either of two things: (a) a "policy or combination of policies [in whole or in part ] purchased to satisfy the owner's or operator's security requirement"; or (b) a "policy or combination of policies [to the extent they are ] purchased to satisfy the owner's or operator's security requirement." Infra ¶ 48. And the dissent insists that either of these readings would add a "substantive term[ ]" to the statute. Infra ¶ 50.
¶ 18 But that is not correct. The "in whole or in part" formulation doesn't add a substantive term. It reinforces the plain language of the statute. A policy that is purchased "in part" to satisfy an owner's or operator's security requirement is one that is "purchased to satisfy" the security requirement. The same goes for a policy that is purchased "in whole" to do so. The "purchased to satisfy" modifier, in other words, encompasses any and all policies that are purchased even in part to satisfy the security requirement.
¶ 19 This is not "ipse dixit ." See infra ¶ 45. It is a conclusion that follows from the natural meaning of the statutory text as we understand it. Section 302 regulates at the "policy" level (not the insurance coverage level). And it applies to any "policy . purchased to satisfy the owner's or operator's security requirement." UTAH CODE§ 31A-22-302 (emphasis added). The operative question, then, is whether the particular policy in question is one that was "purchased to satisfy" the statutory requirement. This is a binary question. Either the policy was purchased to satisfy a security requirement or it was not. And we see no way to classify a policy that is necessary to satisfy statutory security requirements as one that was not purchased to satisfy those requirements. The fact that the policy does more than just satisfy those requirements does not mean that it was not "purchased to satisfy the owner's or operator's security requirement." It just means that it was also purchased for other reasons.
¶ 20 That conclusion is reinforced by our analysis in Arredondo v. Avis Rent A Car System, Inc. , 2001 UT 29, 24 P.3d 928. In Arredondo we interpreted parallel language in Utah Code section 31A-22-302, which required "personal injury protection" for "[e]very policy of insurance . purchased to satisfy the owner's or operator's security requirement of Section 41-12a-301." Id. ¶ 9. The question in Arredondo was whether this provision was limited only to the "primary" policy expressly fulfilling statutory security requirements or also applied to a separate policy providing "excess" or "additional" coverage. Id. ¶ 16. We held that "excess" or "additional" coverage policies were not properly understood as "purchased to satisfy" statutory security requirements-only "primary" policies counted. Id . And we based that holding on an inquiry into whether the policy was necessary to fulfill the statutory requirements.
¶ 21 Under Arredondo a "primary" policy is understood as being "purchased to satisfy" statutory security requirements because the policy is "designed to meet the statutory security requirement." Id. ¶ 15. An "excess" policy, on the other hand, is not "purchased to satisfy" the statute because it is "unnecessary" to fulfill "those requirements." Id . ¶ 16. The key question, then, is whether the policy in question is "necessary" to fulfill the requirements of the statute. If a policy is necessary to meet the requirements of the code then it was purchased to satisfy those legal requirements. If not, the policy was not purchased to satisfy the statute.
¶ 22 That forecloses the dissent's alternative reading of the statute. The policy in question is one that was "purchased to satisfy" statutory security requirements because it was necessary to satisfy those requirements. The policy, moreover, did not cease to be "purchased to satisfy" the statutory requirements merely because it also furthered other purposes.
¶ 23 For that reason the dissent's first formulation does not add a substantive term to the statute. A policy that is necessary to fulfill statutory security requirements is already understood to have been "purchased to satisfy" those requirements-the "in whole or in part" qualifier is unnecessary. The dissent's second formulation does add a substantive term, however. There is no way to read the statutory text, without more, to apply only "to the extent" that a policy is purchased to satisfy statutory security requirements. And we reject the dissent's approach on that basis-reiterating our reluctance to infer substantive terms that are not set forth on the face of a statute.
B
¶ 24 Travelers' second argument accepts the general applicability of section 305.3 but claims that the unowned vehicles in question were properly excluded from underinsured motorist coverage in this policy. In Travelers' view, a vehicle is eligible for underinsured motorist coverage only if it is referred to in the underinsured motorist provisions of an insurance policy. Because the underinsured motorist provisions of its policy do not refer to employee-owned vehicles (but only Mid-State-owned fleet vehicles), Travelers says that persons who use or occupy those vehicles are not eligible for underinsured motorist coverage under the policy.
¶ 25 Again we disagree. By statute any person occupying or using a motor vehicle "referred to in the [automobile insurance] policy" is a "covered person" for underinsured motorist purposes. UTAH CODE§ 31A-22-305(1)(d)(i) ; id. § 31A-22-305.3(1)(a) ;. There is no question, moreover, that the vehicle in question is "referred to" in the Travelers "policy"-in the portions of the policy providing for liability coverage. And that is sufficient to trigger the coverage terms of section 305.3.
¶ 26 Section 305.3 sweeps broadly. It regulates underinsured motorist coverage for any vehicle "referred to in the policy ." Id. § 31A-22-305(1)(d)(i) (emphasis added); id. § 31A-22-305.3(1)(a). And there is no question that unowned vehicles are referred to in the Travelers policy . See supra ¶ 11-14 (noting that "policy" means the entire insurance document).
¶ 27 The reference to unowned vehicles, granted, is not in the underinsured motorist coverage provisions of the policy. But coverage for purposes of section 305.3 is triggered by a reference in the policy . And we would be altering the statutory terms of coverage if we read that to require a reference in the underinsured motorist provisions of the policy. See Arredondo , 2001 UT 29, ¶ 12, 24 P.3d 928 (refusing to read "substantive terms into the text that are not already there") (citation omitted).
¶ 28 That conclusion is reinforced by a distinction between the statutory coverage provisions for the two types of insurance at issue (underinsured motorist coverage and liability coverage). Underinsured motorist coverage, as noted, extends to any person occupying or using a vehicle "referred to in the policy." UTAH CODE§ 31A-22-305(1)(d)(i) ; id. § 31A-22-305.3(1)(a). Yet liability coverage is different. By statute, "a policy of motor vehicle liability coverage under Subsection 31A-22-302(1)(a)" must "designate by appropriate reference all the motor vehicles on which [liability] coverage is granted." Id . § 31A-22-303(1)(a)(ii)(A). Thus, liability insurance extends only to vehicles "designate[d]" for liability "coverage," id ., while underinsured motorist insurance extends to any vehicle "referred to in the policy," id . § 31A-22-305.3(1)(a). And we cannot ignore the difference in statutory coverage terms.
¶ 29 Where two statutory provisions regulate the same subject matter but use different language, the implication is that the language difference is material. ANTONIN SCALIA & BRYAN A GARNER, READING LAW: THE INTERPRETATION OF LEGAL TEXTS 170 (2012) ("[A] material variation in terms suggests a variation in meaning."). That canon defeats Travelers' argument. The code requires an express "designat[ion]" of a vehicle meant for liability coverage, UTAH CODE§ 31A-22-303(1)(a)(ii)(A), but imposes no such requirement for underinsured motorist coverage. From that we can infer that there is no requirement of express designation of a vehicle for underinsured motorist purposes.
¶ 30 For these reasons we read section 305.3 to call for underinsured motorist coverage for any person occupying or using a vehicle "referred to" in the policy-even if that vehicle is not expressly designated as subject to underinsured motorist coverage. Under our reading of the statute, a person using or occupying a vehicle covered by the liability provisions of a policy is also entitled to underinsured motorist coverage. And she is entitled to equal limits for both types of coverage unless she signs a formal acknowledgment waiving that right. Id. § 31A-22-305.3(3)(b) ("[T]he limits of underinsured motorist coverage shall be equal to . the limits of the named insured's motor vehicle liability coverage . unless a named insured rejects or purchases coverage in a lesser amount by signing an acknowledgment form.").
III
¶ 31 For the above reasons we answer the certified question in the affirmative. We conclude that any vehicle-whether owned by the policyholder or not-that is covered by a policy's liability insurance is also subject to underinsured motorist coverage under section 305.3. Thus, we hold that section 305.3 requires that any person occupying or using such a vehicle must also be covered by underinsured motorist insurance (and to the same policy limits) unless the coverage is waived by a formal acknowledgment.
The policy contains a chart listing the type of coverage in one column, the associated "covered auto symbol" in the second column, and the limits of insurance in a third column. For liability coverage, the correlating auto symbol is "1," which is described several pages later as "any auto." We do not here determine how broadly to interpret the "any auto" language because the parties agree that it encompasses at least listed Mid-State fleet vehicles and vehicles owned by Mid-State employees when used for Mid-State business.
For underinsured motorist coverage, the correlating auto symbol in the policy is "2," signifying coverage for "Owned 'Autos' Only."
See Utah Code § 41-12a-301(2)(a) (stating that "every resident owner of a motor vehicle shall maintain owner's or operator's security in effect at any time that the motor vehicle is operated on a highway or on a quasi-public road or parking area within the state") (emphasis added).
The insurance contract identifies the document as "A Custom Insurance Policy Prepared for: Mid-State Consultants Inc."
Justice Himonas correctly notes that section 302 "regulates at the level of any 'policy or combination of policies.' " Infra ¶ 48. But this is still not the regulation of insurance coverage but of policies . And the extension to the plural-policies -is of no use to the dissent (or to Travelers) in any event because Mid-State purchased a single policy and not a combination of policies.
The dissent's cited cases are distinguishable on this basis. Some statutory references to "purpose" may well leave an ambiguity as to the scope of this term. See infra ¶ 46 n.11. But section 302 does not speak of "purpose" in so many words; and it leaves no ambiguity as to its operative terms: A policy that is necessary to satisfy statutory security requirements was surely "purchased" to satisfy those requirements-even if it was also "purchased" to fulfill other needs.
This is not to say that the terms of liability coverage will be identical to the terms of underinsured motorist coverage. Liability coverage extends universally to the named insured driving any vehicle. Utah Code § 31A-22-303(1)(a). Yet section 305.3 forbids underinsured motorist coverage for a named insured who is "occupying or using a motor vehicle owned, leased, or furnished" to the insured, unless "the motor vehicle is described in the policy under which a claim is made." Id. § 31A-22-305.3(2)(b). So where a named insured owns two vehicles and purchases insurance to satisfy her security requirements for just one of those vehicles, she would be entitled to liability coverage under the policy if she were to cause an accident while driving the second (unlisted) vehicle. But she would not be entitled to underinsured motorist coverage if, while using the second vehicle, she were injured by another driver. In that sense, a person may be covered by an automobile insurance policy for liability purposes but not for underinsured motorist purposes.