Opinion ID: 2173465
Heading Depth: 1
Heading Rank: 4

Heading: Effect of Policy Provisions respecting certain exclusions and conditions

Text: Allstate contends that its motion for summary judgment was properly granted by the Superior Court Justice, because under the terms of the policy which it issued to Wescott respecting uninsured motorist coverage it is not liable to the appellant for the following stated reasons: 1) the no-consent clause excludes coverage in the instant case, because the appellant without the written consent of Allstate made a settlement with Commercial, Brissette's insurer, in the amount of $20,000.00, the full coverage of the Brissette policy under that policy's uninsured motorist provisions: [6] 2) the appellant in making settlement with Commercial violated a condition of the Allstate policy which provided that, in the event of payment by Allstate, such person shall do nothing after loss to prejudice such [subrogation] rights; and 3) Allstate is exempted from any obligation to pay by reason of the excess-escape clause and the so-called offset or reduction clause contained in the conditions appended to the uninsured motorist coverage. [7] We disagree with Allstate on all three points. The validity of the stated policy provisions and of the appellee's contentions based thereon must be determined in the light of the requirements of 24-A M.R.S.A., § 2902 (the uninsured vehicle coverage section), which reads in part as follows: 1. No policy insuring against liability arising out of the ownership, maintenance or use of any motor vehicle shall be delivered or issued for delivery in this State with respect to any such vehicle registered or principally garaged in this State, unless coverage is provided therein or supplemental thereto for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured or hit-and-run motor vehicles, for bodily injury, sickness or disease, including death, resulting from the ownership, maintenance or use of such uninsured or hit-and-run motor vehicle. The coverage herein required may be referred to as `uninsured vehicle coverage.' 2. The amount of coverage to be so provided shall be not less than the minimum limits for bodily injury liability insurance provided for under the motorists financial responsibility laws of this State [$20,000.00].       4. In the event of payment to any person under uninsured vehicle coverage, and subject to the terms of such coverage, to the extent of such payment the insurer shall be entitled to the proceeds of any settlement or recovery from any person legally responsible for the bodily injury as to which such payment was made, and to amounts recoverable from the assets of the insolvent insurer of the other motor vehicle. There is no dispute between the parties that, but for the appellant's settlement with Commercial, Allstate under the terms of the uninsured motorist coverage of the Allstate-Wescott policy was obligated to pay Ms. Wescott as the named insured all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury, sickness or disease, including death resulting therefrom, hereinafter called bodily injury, sustained by the insured, caused by accident and arising out of the ownership, maintenance or use of such uninsured automobile;. . . . The disagreement concerns the stated limitations of the policy expressed in terms of exclusions or conditions of the insurance contract. The question at issue is, whether the Legislature in enacting the uninsured motorist legislation precluded the modified coverage argued for by Allstate. As stated in Collins v. Motorists Mutual Insurance Company, 36 Mich.App. 424, 194 N.W.2d 148 (1971), in connection with a similar statute: The most logical manner in which to ascertain the intention of the legislature is through the wording of the statute. It is only when a statute is ambiguous that a court is forced to interpret it in terms of legislative intent. Here, the meaning of the statute is clear; it provides, without uncertainty or ambiguity, that no automobile liability policy shall be issued in this state unless it provides coverage, in the statutory minimum amounts, for the protection of the persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles. The statute does not say that each insured should have access to the minimum statutory amount of insurance to compensate him for losses caused by an uninsured motorist, but that each policy of insurance shall provide such coverage. (Emphasis in original) It is a principle well recognized by this Court that a contract, including an automobile liability insurance policy, is presumed to incorporate all relevant mandatory provisions of the statutes under which it was made, as existing statutes governing the subject matter of a contract must under normal circumstances be read as a constituent part thereof. Security Insurance Group v. Emery, Me., 272 A.2d 736 (1971); Camire v. Commercial Insurance Co., 160 Me. 112, 198 A.2d 168 (1964); Sullivan v. Prudential Insurance Co., 131 Me. 228, 160 A. 777 (1932). Our Court further ruled in these cases that mandatory statutory provisions control, even when not included in the insurance contract, and, to the extent that policy terms are repugnant to the express or implied requirements of the statute, they are void and unenforceable. Concord General Mutual Insurance Co. v. McLain, Me., 270 A.2d 362 (1970). Accord: Stephens v. Allied Mutual Insurance Company, 182 Neb. 562, 156 N.W.2d 133 (1968); Gulf American Fire & Casualty Company v. McNeal, 115 Ga.App. 286, 154 S.E.2d 411 (1967); Bryant v. State Farm Mutual Automobile Ins. Co., 205 Va. 897, 140 S.E.2d 817 (1965). The obvious design of our uninsured vehicle coverage statute is to protect a responsible insured motorist against the hazards presented by the operation of motor vehicles where injuries are inflicted in an accident with an irresponsible operator who is uninsured or has fled the scene and in most instances is financially unable to furnish adequate compensation for the injuries caused in the accident. The legislative intent is to benefit all insured motorists by throwing the burden of compensating for injuries which would otherwise go without redress from the individual victim to the insurance industry for a premium. As stated in Rhault v. Tsagarakos, 361 F.Supp.202 (U.S.D.C.D.Vt.1973): The statute has fashioned the means to benefit an insured who has provided protection for others, to obtain protection for himself. Of course he pays a premium for this protection. Thus the law attempts to provide coverage in the insured's own policy, and at his premium, where it does not exist with the other operator so that he may have at least the statutory protection in all events. And the court must construe the policy and the statutory provision to achieve the primary purpose of the enactment. See also American Mutual Insurance Company v. Romero, 428 F.2d 870, 873 (10th Cir. 1970); Charest v. Union Mutual Ins. Co. of Providence, 113 N.H. 683, 313 A.2d 407 (1973). In contrast with the liberal construction to be given the remedial statute mandating uninsured motorist coverage in all liability insurance policies issued with respect to any vehicle registered or principally garaged in this State (see Clayton v. Alliance Mutual Casualty Company, 212 Kan. 640, 512 P.2d 507 (1973)), courts, in order to carry out the primary purpose of such legislation, will construe conditions and exceptions of the insurance contract, inserted therein in an attempt to limit the coverage prescribed by the statute, strictly against the insurer and liberally in favor of the insured. Farm Bureau Mutual Ins. Co. v. Waugh, 159 Me. 115, 188 A.2d 889 (1963); Michigan Mutual Liability Company v. Karsten, 13 Mich.App. 46, 163 N.W.2d 670, 672 (1968). A forfeiture, which would result if Allstate's arguments would prevail, is to be construed strictly. Its enforcement is not to be favored. North Berwick Co. v. New England F. & M. Ins. Co., 52 Me. 336, 340 (1864); Russell v. Granite State Fire Ins. Co., 121 Me. 248, 252, 116 A. 554, 556 (1922). On the other hand, by enacting the uninsured vehicle coverage statute, the Legislature has indicated a strong public policy in favor of the just compensation of accident victims. See Hawaiian Insurance & Guaranty Co. v. Mead, 14 Wash.App. 43, 538 P.2d 865, 873 (1975).