Opinion ID: 2331458
Heading Depth: 1
Heading Rank: 2

Heading: UIM Coverage

Text: ¶ 6. We first address the issue common to both cases: whether § 941(f) defines underinsured by comparing policy limits only without any consideration of the funds actually available from the tortfeasor's policy to pay all claims arising out of an accident. Because appellants in both cases concede that the relevant provisions of their individual policies are consistent with the terms of the governing statute, 23 V.S.A. § 941(f), we examine the statute directly to resolve the issue. ¶ 7. In construing a statutory provision, our paramount goal is to discern and implement the intent of the Legislature. Baker v. State, 170 Vt. 194, 198, 744 A.2d 864, 868 (1999); State v. O'Neill, 165 Vt. 270, 275, 682 A.2d 943, 946 (1996). When the language of a statute is plain and unambiguous, we presume that the Legislature intended the meaning expressed by that language. Baker, 170 Vt. at 199, 744 A.2d at 868. In such situations, our duty is to enforce the statute according to its terms without resort to statutory construction. Tarrant v. Dep't of Taxes, 169 Vt. 189, 197, 733 A.2d 733, 739 (1999); Sanders v. St. Paul Mercury Ins. Co., 148 Vt. 496, 504, 536 A.2d 914, 918 (1987). We have such a situation here. ¶ 8. Section 941(f) defines an underinsured motor vehicle as follows: For the purpose of this subchapter, a motor vehicle is underinsured to the extent that its personal injury limits of liability at the time of an accident are less than the limits of uninsured motorists coverage applicable to any injured party legally entitled to recover damages under said uninsured motorist coverage. We have repeatedly interpreted the statute as requiring a comparison of policy limits as they exist at the time of the accident in accordance with § 941(f)'s unambiguous plain language. See, e.g., Merkel v. Nationwide Ins. Co., 166 Vt. 311, 315, 693 A.2d 706, 708 (1997); Webb v. United States Fid. & Guar. Co., 158 Vt. 137, 141, 605 A.2d 1344, 1347 (1992); Stanhope v. Lumbermens Mutt. Ins. Co., 155 Vt. 645, 646, 582 A.2d 150, 150 (1990) (mem.). The statutory provision makes no mention of comparing UM/UIM coverage to the amounts actually available or paid to the injured insured(s) at some later point under the tortfeasor's policy. ¶ 9. Appellants argue nevertheless that we must ignore the literal terms of § 941(f) because the terms create anomalous and unfair results that are contrary to the statute's objectives. See In re Jewell, 169 Vt. 604, 606, 737 A.2d 897, 900 (1999) (mem.) (statute should not be construed in way that is at odds with its underlying purpose); Braun v. Bd. of Dental Examiners, 167 Vt. 110, 117, 702 A.2d 124, 128 (1997) (Legislature is presumed not to have intended interpretation that would lead to absurd or irrational results). According to appellants, adhering to the plain language of the statute means they would have been better off if their tortfeasors had no insurance, an anomalous result they assert the Legislature intended to resolve by enacting the UIM provision in 1980. See Merkel, 166 Vt. at 314, 693 A.2d at 708; Monteith v. Jefferson Ins. Co. of N.Y., 159 Vt. 378, 386, 618 A.2d 488, 492 (1992). We find this argument appealing, but ultimately unpersuasive for the reasons that follow. ¶ 10. The legislative history of § 941(f) shows that while the Legislature may have chosen the current language of the statute as the way to fix the anomaly that an injured motorist was better off if the tortfeasor was uninsured than if he carried some insurance, it did not appreciate how the statute would operate in accidents involving multiple victims. When introduced to the Vermont House of Representatives in 1979, UIM coverage was a new concept. As a result, much of the testimony in the early committee hearings on the matter was explanatory in nature and filled with confusion. Through the confusion emerged a consensus that the underinsurance provision should protect individuals involved in accidents with marginally insured motorists, just as the financial responsibility law protects people involved in accidents with uninsured motorists. Statement of Stewart Ledbetter on H.411 to Senate Highways and Traffic Committee, at 21 (Mar. 21, 1979); Testimony of Linda Reis on H.411 to Senate Finance Committee, at 11-12 (Mar. 25, 1980). Unfortunately, very few details about how the statute would function beyond that broad policy goal, including how the statute might operate in multiple-victim accidents, arose from the debate. The Legislature finally settled on the present language, which offers some protection against accidents with marginally insured motorists. But in some multiple-victim accidents, as Colwell and Bonanno's cases show, more compensation is available to satisfy an injured motorist's damages when the tortfeasor has no insurance at all. Section 941(f) therefore does not fully address the discrepancy between uninsured motorists and marginally insured motorists the Legislature sought to fix by enacting the statute. ¶ 11. Although the statute does not solve the entire problem of coverage against underinsured motorists, § 941(f) does not fail in its essential purpose because it offers some protection against marginally insured motorists. Legislators apparently did not contemplate the statute's operation in multiple-victim accidents because the issue never came up during the relevant legislative hearings. Thus, we cannot be certain what the Legislature would have done if it had been aware of the multiple-victim problem, and we must therefore enforce the statute's plain language. ¶ 12. Nor does interpreting the statute according to its plain language reach the absurd result that appellants suggest. Indeed, some states have made the very same language choice that Vermont did, but with awareness of what the effect would be in some multiple-victim scenarios. As in Vermont, mandated UIM coverage became the law in states across the country because of the perceived inadequacies and inequities of UM coverage. The states faced complex policy decisions in determining the extent to which they wanted to require insurers to provide UIM coverage. Two general views of UIM coverage developed. The first, often called excess coverage, deems a tortfeasor underinsured when the injured party's damages exceed the tortfeasor's liability coverage See, e.g., Kothrade v. Am. Family Mut. Ins. Co., 462 N.W.2d 413, 415 (Minn. Ct.App.1990) (construing Minn.Stat. § 65B.43, subd. 17, which defines underinsured motor vehicle as having liability policy that is less than the amount needed to compensate the insured for actual damages); see 3 A. Widiss, Uninsured and Underinsured Motorist Insurance § 35.2, at 206-110 (rev.2d ed.2001) (citing statutes in which UIM coverage is determined by comparing limits of tortfeasor's liability insurance to claimant's damages). States requiring insurers to provide this broader type of coverage intended to indemnify injured insureds for all of their damages not compensated by the tortfeasor's coverage. See State Farm Mut. Auto. Ins. Co. v. Messinger, 232 Cal.App.3d 508, 283 Cal. Rptr. 493, 500 (1991). ¶ 13. A variant of excess coverage statutes requires insurers to provide UIM coverage to the extent that the amount actually available to the injured party from the tortfeasor's policy was less than the UIM coverage limits stated in the injured party's policy. See, e.g., Florestal v. Gov't Employees Ins. Co., 236 Conn. 299, 673 A.2d 474, 478-79 (1996) (comparing Conn. Gen.Stat. § 38a-336 with § 38a-336a); see also Colonial Ins. Co. v. Tumbleson, 873 F.Supp. 310, 313 (D.Alaska 1995) (construing Alaska Stat. § 28.20.445(h)); Leetz v. Amica Mut. Ins. Co., 839 P.2d 511, 513 (Colo.Ct.App.1992) (construing Colo.Rev. Stat. § 10-4-609(4)); Motorists Mut. Ins. Co. v. Andrews, 65 Ohio St.3d 362, 604 N.E.2d 142, 144-46 (1992) (construing Ohio Rev.Code Ann. § 3937.18(A)(2)). ¶ 14. On the other hand, many states, including Vermont, required insurers to provide more narrow gap coverage intended only to place the insured in the same position as if, at the time of the accident, the tortfeasor had liability coverage equal to the insured's UIM coverage. Messinger, 283 Cal.Rptr. at 501; see, e.g., Allstate Ins. Co. v. Gillaspie, 668 A.2d 757, 759 (Del.Super.Ct.1995) (construing Del. Code Ann. tit. 18, § 3902(b)(2), which defines underinsured motor vehicle as having liability coverage less than claimant's UM/UIM coverage); Alguila v. Safety Ins. Co., 416 Mass. 494, 624 N.E.2d 79, 81 (1993) (construing Mass. Gen. Laws ch. 175, § 113L(2), which defines underinsured motor vehicle as having liability coverage less than insured's UIM coverage); see 3 A. Widiss, supra, § 35.2, at 193-200 (contrasting statutes, including § 941(f), that compare tortfeasor's liability policy limit with insured's UIM policy limit to statutes that compare insured's UIM policy limit with amount of tortfeasor's liability insurance actually available to injured insured). This type of scheme requires UIM coverage only if the tortfeasor's stated liability limits are less than the insured's UIM coverage at the time of the accident. Messinger, 283 Cal.Rptr. at 501. ¶ 15. While we recognize that § 941(f) does not fully address the problem of UIM benefits in multiple-victim accidents, in view of the number of choices available to solve the problem of underinsured motorists generally, this is an inappropriate case for the Court to fashion the particular remedy Colwell and Bonanno seek, even if we agreed that one was warranted. Whether § 941(f)'s language should reflect the excess coverage policy other states have adopted, as Colwell and Bonanno essentially argue, or remain a gap coverage provision, is not a decision for this Court to make. The Legislature must determine whether a problem in this area exists, and if so, what is the best way to solve it. ¶ 16. Appellants also claim that construing § 941(f) in a manner that prevents them from recovering the difference between the money actually available from the tortfeasor and the stated amount of their UIM coverage denies them the benefits of the coverage for which they paid. We do not agree. Appellants concede that their insurance policies are consistent with the mandates of the financial responsibility law. See Sanders, 148 Vt. at 507-08, 536 A.2d at 921 (insurance policy meets consumer's expectations if policy complies with statutory requirements in every respect). Moreover, the fact that they paid premiums for a certain level of UIM coverage does not mean that they failed to obtain the benefit of their bargain simply because they were not compensated to the level of the UIM coverage stated in their policies. [T]he benefit that the policy-holder receives from UM/UIM coverage is protection against the probability of deficient recovery from the tortfeasor, not guaranteed receipt of payment equal to the UM/UIM coverage. Travelers Cos. v. Liberty Mut. Ins. Co., 164 Vt. 368, 375, 670 A.2d 827, 831 (1995) (emphasis added). ¶ 17. In sum, we hold that the plain language of § 941(f) controls the definition of underinsured. We therefore answer the certified question in Colwell's case in the negative. In Bonanno's case, we affirm the superior court's judgment denying Bonanno's claim against his insurer API because his UIM policy limits do not exceed the liability limits of the tortfeasor's policy.