Opinion ID: 2566097
Heading Depth: 5
Heading Rank: 2

Heading: Validity of the Intentional Acts Exclusion

Text: ¶41 In the alternative, Nationwide asserts that Hiatt was not covered under the policy by virtue of the policy's intentional acts exclusion. The policy states that it does not cover property damage or bodily injury caused intentionally by or at the direction of an insured (emphasis added). Nationwide argues that Hiatt's actions in grabbing and turning the steering wheel were intended to cause injury or damage and therefore were not covered. West American contends that Nationwide's intentional acts exclusion runs afoul of Utah's statutorily mandated coverage requirement. See Utah Code Ann. § 31A-22-303(1)(a)(ii)(A) (2003). We agree with West American. ¶42 The Utah legislature has enacted a comprehensive statutory scheme mandating minimum liability coverage for motor vehicles. See id. §§ 31A-22-303 to -304. This legislative enactment reflects a public policy requiring vehicle owners to carry a minimum level of liability coverage to protect innocent victims of automobile accidents. In the case of an owner's liability policy, the statute requires that the policy insure the person named in the policy and any permissive users against loss from the liability imposed by law for damages arising out of the ownership, maintenance, or use of these motor vehicles within the United States and Canada . . . in [dollar] amounts not less than the minimum limits specified. Id. § 31A-22-303(1)(a)(ii) (emphasis added). ¶43 The statute recognizes no distinction between liability arising out of negligent acts and liability arising out of intentional acts; it simply requires coverage for all liabilities imposed by law. Because the law imposes liability for damages caused negligently and intentionally, we conclude that the statute requires coverage of liability arising out of intentional, as well as negligent, acts. [6] ¶44 Our conclusion is buttressed by the fact that the statutory scheme expressly contemplates some exclusions from coverage, [7] but does not authorize exclusions from coverage for the intentional acts of otherwise covered persons. In light of the clear statutory language mandating coverage against loss from the liability imposed by law for damages arising out of the ownership, maintenance, or use of a motor vehicle and the public policy requiring minimum coverage to protect innocent victims of automobile accidents, the legislature's failure to authorize such intentional acts exclusions is dispositive. Accordingly, we hold that the intentional acts exclusion is unenforceable against accident victims up to the minimum liability limits prescribed by the statute. [8] ¶45 Our holding with respect to the limited validity of the intentional acts exclusion is consistent with our holdings regarding the validity of other exclusions in the arena of automobile liability coverage. In Allstate Insurance Co. v. United States Fidelity & Guaranty Co., 619 P.2d 329 (Utah 1980), we considered the validity of a named driver exclusion to an automobile liability insurance policy. After analyzing the then-applicable statutory scheme and concluding that the legislature had established a mandatory minimum liability coverage requirement for automobile insurance policies, we held that the exclusion was void in relation to the minimum level of liability coverage mandated by statute. Id. at 333. ¶46 Similarly, in Farmers Insurance Exchange v. Call, 712 P.2d 231 (Utah 1985), we examined the validity of a policy provision that excluded coverage for bodily injury to members of the insured's household. We held that the exclusion contravened the statutory requirement mandating minimum benefits that must be provided to all persons sustaining personal injuries in automobile accidents. In so holding, we noted that many jurisdictions interpret their mandatory insurance statutes to require liability insurance subject only to specific statutory exclusions and construe the legislative policy to require minimum coverage to victims of automobile accidents. Id. at 234. We concluded that it would be anomalous if the rights of innocent accident victims, for whose protection the Utah No-Fault Act was adopted, could be defeated by private agreements. Id. at 235. The same reasoning applies with equal force to the intentional acts exclusion at issue here. [9] ¶47 At the time of the accident and throughout the duration of this action, the statute required a minimum coverage of $25,000 for liability for bodily injury to or death of one person arising out of the use of a motor vehicle in any one accident and $15,000 for liability for property damage in any one accident. Utah Code Ann. § 31A-22-304 (2003). West American has requested reimbursement of a property damage payment to its insured of $11,514.65, along with rental car expenses of $499.70. Because the amounts at issue in this case fall within the statutory minimums, the intentional acts exclusion does not excuse Nationwide from any obligation it may have to reimburse West American for the payments it made to Speros.