Opinion ID: 1386957
Heading Depth: 2
Heading Rank: 2

Heading: Automobile Liability or Motor Vehicle Liability Policies Under the UMA

Text: The parties agree that AAID's policy with St. Paul provides automobile liability insurance. Petition for Review at 2, Response at 3. The question is whether the requirements of the UMA can be avoided when such coverage is provided by endorsement to a general comprehensive liability policy. Under Arizona statutes the UMA applies to any automobile liability or motor vehicle liability policy insuring against loss resulting from liability ... arising out of the ownership, maintenance, or use of a motor vehicle.... A.R.S. § 20-259.01(A), (B), and (C) (emphasis added). A.R.S. § 20-259.01(C) specifically provides, in pertinent part, that every such policy shall ... make available to the named insured thereunder and shall by written notice offer the insured and at the request of the insured shall include within the policy under-insurance motorist coverage which extends to and covers all persons insured under the policy, in limits not less than the liability limits for bodily injury or death contained within the policy. (Emphasis added.)
The court of appeals found the phrase automobile liability or motor vehicle liability policies ambiguous and construed the two terms within the phrase to mean the same thing  a motor vehicle policy issued under the SRA, A.R.S. § 28-1170. Gilmore, 165 Ariz. at 115, 118, 796 P.2d at 917, 920. Where statutory provisions contain no ambiguity or conflict, resort to doctrines of judicial construction is uncalled for. McKeon, 159 Ariz. at 114, 765 P.2d at 516. The language used in a statute should be construed in the sense used and understood by ordinary persons unless technical construction was clearly intended. A.R.S. § 1-213; Albert Steinfeld & Co. v. Allison Mining Co., 41 Ariz. 340, 18 P.2d 267 (1933). Courts should not strain to find ambiguity in the ordinary words of a statute. Industrial Comm'n v. Price, 37 Ariz. 245, 292 P. 1099 (1930); Parise v. Industrial Comm'n, 16 Ariz. App. 177, 179, 492 P.2d 426, 428 (1971) (lacking a clear expression of legislative intention, we will not read into the definition of a term something other than the ordinary meaning). We are hard pressed to find any ambiguity in the case before us. We believe an insurance policy that provides the named insured's only insurance against bodily injury or property damage claims caused by an accident resulting from the use of or the loading or unloading of a covered auto falls within the statutory scope of an automobile liability or motor vehicle liability policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance, or use of a motor vehicle. A.R.S. § 20-259.01(A).

St. Paul argues not only that the UMA is ambiguous but that the UMA must be construed in pari materia with the SRA and that the UMA applies only to those motor vehicle liability policies defined in and issued pursuant to the SRA. Even if we were to accept St. Paul's first contention, we would have to reject its second and third. Statutory construction, of course, encompasses more than the doctrine of in pari materia. [6] There is no magic in statutory construction and no legal legerdemain should be used to change the meaning of simple English words.... Kilpatrick v. Superior Court, 105 Ariz. 413, 421, 466 P.2d 18, 26 (1970). The cardinal rule is to determine and give effect to the legislative intent behind the statute, considering the context of the statute, the language used, the subject matter, the historical background, the effects and consequences, and the spirit and purpose of the law. Martin v. Martin, 156 Ariz. 452, 457, 752 P.2d 1038, 1043 (1988); Calvert, 144 Ariz. at 294, 697 P.2d at 687. The context of the SRA is important in this case because its definition of motor vehicle liability policy is explicitly limited to the term as ... used in this chapter. A.R.S. § 28-1170(A) (emphasis added). We have, therefore, an instruction from the legislature that counsels against using the SRA's definition of motor vehicle liability policy for the purposes of other acts such as the UMA. [7] Moreover, a companion provision to the UMA explicitly provides that the definitions of insurance policies are not mutually exclusive. A.R.S. § 20-251 reads as follows: Definitions not mutually exclusive. It is intended that certain coverages may come within the definitions of two or more kinds of insurance as set forth in this article, and the fact that such a coverage is included within one definition shall not exclude such coverage as to any other kind of insurance within the definition of which such coverage likewise reasonably is includable. Thus we reject St. Paul's contention that it did not write an automobile liability insurance or motor vehicle liability insurance policy because [i]t wrote a comprehensive general liability policy containing automobile liability insurance. Appellant's Reply Brief at 8 n. 1. A.R.S. § 20-251 clearly forbids such an interpretation. Under the operation of our statutes governing insurance, the type of policy is determined by the type of coverage provided, not by the label affixed by the insurer. [8] Otherwise, it would be a simple matter for insurers to evade the requirements of Arizona law by changing the title of the policy. The statutes are part of every insurance policy and mandate that policies providing specific types of coverage meet specific requirements. See, e.g., Sandoval v. Chenoweth, 102 Ariz. 241, 428 P.2d 98 (1967); A.R.S. § 20-1118. Therefore, the fact that AAID's policy with St. Paul is labelled as a comprehensive general liability policy does not mean it is not also an automobile liability policy under the UMA. The question is whether the coverage provided is reasonably includable within the term automobile liability or motor vehicle liability policy set forth in A.R.S. § 20-259.01. We believe policy coverage providing LIABILITY PROTECTION FOR AUTOS is within the statutory scope of an automobile liability policy no matter what label is printed at the top of the policy.
The language of the UMA further belies St. Paul's contention that the statute was only intended to apply to motor vehicle liability policies issued pursuant to the SRA. The UMA explicitly refers to automobile liability or motor vehicle liability policies. A.R.S. § 20-259.01 (emphasis added). Both common sense and the rules of statutory construction forbid equating the terms automobile liability and motor vehicle liability policies because [e]ach word, phrase, clause, and sentence must be given meaning so that no part will be void, inert, redundant, or trivial. City of Phoenix v. Yates, 69 Ariz. 68, 72, 208 P.2d 1147, 1149 (1949). Thus, even if we accepted St. Paul's invitation to construe the UMA in pari materia with the SRA, we would still have to give independent meaning to the term automobile liability policy. The term automobile liability policy must mean something different than motor vehicle liability policy when both terms are used in the disjunctive in the same sentence of the same statute. If motor vehicle liability policies, as St. Paul contends, refer to only those policies issued pursuant to and conforming with the requirements of the SRA, then automobile liability policies must refer to those issued under different circumstances. This conclusion comports with the subject matter, historical background, and spirit and purpose of the UMA. The purpose of the [UMA] statute is to afford protection to victims of financially irresponsible drivers. Calvert, 144 Ariz. at 294, 697 P.2d at 687. The statute is remedial and should be liberally construed in order to carry out the intent of the Legislature. Id. Thus, [the UMA] allows the driver to protect himself and his passengers  most often his own family and friends  from the loss by injury caused by uninsured drivers to the same extent that he protects others from the risk of his own negligence. Spain v. Valley Forge Ins. Co., 152 Ariz. 189, 192-93, 731 P.2d 84, 87-88 (1986). The offer of UIM coverage mandated by A.R.S. § 20-259.01(C) was intended to implement this protection. See Higgins v. Fireman's Fund Ins. Co., 160 Ariz. 20, 22-23, 770 P.2d 324, 326-27 (1989); see also State Farm Mut. Auto. Ins. Co. v. Wilson, 162 Ariz. 251, 253-54, 782 P.2d 727, 729-30 (1989) (discussing history and objectives of UIM legislation); Spain, 152 Ariz. at 191-94, 731 P.2d at 86-89 (discussing history and purpose of UM legislation). In the present case, AAID purchased automobile liability insurance to protect itself from the claims of those injured by the negligence of AAID's corporate employees operating automobiles within the scope of their duties. AAID extended this liability protection to its employees, as insureds, by special endorsement. It follows that the named insured was entitled to the statutorily required opportunity to purchase UIM coverage to protect itself and its covered employees from underinsured drivers to the same extent that its liability insurance protected others from the negligence of its employees. Spain, 152 Ariz. at 192-93, 731 P.2d at 87-88. We emphasize the importance the legislature has given to UM and UIM coverage in a state where many if not most drivers are under- or uninsured despite mandatory insurance laws. As we have noted, the UMA was passed in explicit recognition that automobile insurance, while mandatory, is nonetheless unavailable in all too many cases; and where it is available, as in this case, it is often inadequate to fully compensate the injuries incurred. Wilson, 162 Ariz. at 253-54, 782 P.2d at 729-30; 2 A. WIDISS, UNINSURED & UNDERINSURED MOTORIST INSURANCE § 35.2, at 47 (comment) (2d ed. 1990). Professor Couch also points out that the liberal purpose behind the UM statutes ... serve[s] as rationale for creating whatever fund is necessary to compensate the innocent injured party. 12A COUCH ON INSURANCE § 45.628, at 83 (2d ed. 1981). Arizona courts have expressly recognized and endorsed these principles for nearly thirty years. Sandoval, 102 Ariz. 241, 428 P.2d 98; Carpenter v. Superior Court, 101 Ariz. 565, 422 P.2d 129 (1966); Jenkins v. Mayflower Ins. Exch., 93 Ariz. 287, 380 P.2d 145 (1963); Geyer v. Reserve Ins. Co., 8 Ariz. App. 464, 467, 447 P.2d 556, 559 (1968). In that time, the legislature has never indicated that these principles should not inform our interpretations of the SRA or UMA. Given this background, we believe it would be inconsistent with the purposes of the UMA to restrict the words of the statute requiring offer of UIM coverage to only those motor vehicle liability policies mandated by the SRA. We therefore reject St. Paul's claim that UIM coverage must be offered only to those who are already required to purchase automobile liability insurance that must conform to the SRA. [9] We addressed the relationship between the SRA and the UMA in Calvert, where we stated: The legislature intended the [SRA] to protect the general public against the individual, financially irresponsible motorist. On the other hand, the [UMA] compels the carriers to provide economic protection for the insured individual against the financially irresponsible segment of the driving public. The former is for the public in general and the latter for the individuals who have the foresight to protect themselves against the public. Calvert, 144 Ariz. at 296, 697 P.2d at 689 (emphasis in original) (citation omitted). We believe the UMA's application to automobile liability policies means that those who purchase non-owned automobile liability insurance must be given the opportunity to exercise foresight by protecting themselves against underinsured motorists.