Court Opinion

ID: 9595567
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:41:47.493935+00
Date Added: 2024-06-11T18:01:28.804315
License: Public Domain

DOYLE, Justice
(concurring specially).
We concur.
*692For the sake of clarity, however, we deem it necessary to discuss certain applications of the majority holding as to SDCL 58-23-8. That statute says in part:
“Supplemental insurance coverages shall as a minimum include:..
(1) accidental death benefits of at least ten thous- and dollars * * *
(2) indemnity of at least sixty dollars per week for disability * * * The disability benefits shall be paid in full without reduction because of any benefits available under any workmen’s compensation law or similar law or from any other source;
(3) indemnity to the named insured and to any other insured * * * for medical expenses in an aggregate amount of at least two thousand dollars * * *.” (emphasis supplied)
It is, of course, the duty of the court to carry out the intent of the legislature in interpreting this section. With this objective in mind, then, we must determine the meaning of the phrases “(1) accidental death benefits,” “(2) indemnity * * * for disability,” and “(3) indemnity * * * for medical expenses.”
We will first consider the latter two phrases — indemnity for disability and indemnity for medical expenses, and whether we may perceive in the two sections a legislative intent to allow subrogation.
The critical word in the two phrases is “indemnity,” and our interpretation of the phrases will pivot that word. Couch on Insurance 2d § 1:9, states:
“Insurance, other than that of life and accident where the result is death, is a contract of indemnity by which is meant that the party insured is entitled to compensation for such loss as has been occasioned by the perils insured against, the right to recover being commensurate with the loss sustained, or with the amount specified, as in . cases of life insurance and valued policies.” (emphasis supplied)
*693A contract of indemnity, at least in the context of insurance law, means that an injured person is to recover on his loss “commensurate with the loss sustained.” It seems clear that the legislature meant just that when it enacted its section — it meant that the supplemental medical insurance policy should assure that the injured party recovers “commensurate with the loss.’’ See also 43 Am.Jur.2d, Insurance, § 1.
This being the case, we find nothing objectionable about allowing an insurer contractual subrogation in the case of medical benefits. Subrogation operates only when a party recovers twice for injuries sustained and in an aggregate amount greater than the actual injury.
In the case at hand, for example, the plaintiff incurred medical expenses in the amount of $2,603.457 Her insurance company was obligated by contract to pay $2,000. The subrogation clause required her to reimburse the insurance company if, and only if, she subsequently recovered from the tortfeasor. The reimbursement would be only in the amount which the insurance company had paid her. Thus, if the insurance company paid her $2,000 in medical benefits and she subsequently recovered $2,603.45 from the tortfeasor, she would have been required to reimburse the insurance company for $2,000. Note, however, that she would still possess $2,603.45, the exact amount necessary to. pay her medical expenses.
The decision allowing subrogation in indemnity situations is well within South Dakota precedents. As stated in the majority opinion, “ ‘It is a well settled rule of law that an insurer is entitled to subrogation, either by contract or in equity for the amount of indemnity paid.’ Parker v. Hardy, 73 S.D. 247, 248, 41 N.W.2d 555, 556.” (emphasis supplied)
A further reason for endorsing the result of the majority decision lies in a comparison of SDCL 58-23-8(2) and (3). Section (2) of that statute, which provides for indemnity for disability, states in its last sentence:
“The disability benefits shall be paid in full without reduction because of any benefits available under any workmen’s compensation law or similar law or from any other source.”
*694This section thus recognizes that the use of the word “indemnity” implies that subrogation would ordinarily be legitimate. However, it specifically denies that right with regard to the indemnity spoken of in section (2). We regard the specific inclusion of the limiting clause in (2) and the lack of such clause in (3) to be a legislative recognition that subrogation should be allowed as to medical coverage. As was recently stated in Commonwealth of Ky. ex rel. Hancock v. Ruckelshaus, 1973, D.C.Ky., 362 F.Supp. 360:
“where a particular provision appears in a statute, the failure to include that same requirement in another section of the statute will not be deemed to have been inadvertent.” 362 F.Supp. at 365.
We conclude that subrogation is proper as to the medical payments coverage demanded'in SDCL 58-23-8(3).
We now turn to the question of whether a legislative intent to allow subrogation can be perceived in section (1) of SDCL 58-23-8, which states:
“Supplemental insurance coverages shall as a minimum include:
(1) accidental death benefits of at least ten thous- and dollars payable upon the loss of life of the named insured * * *.”
It will be noted that the legislature did not use the word “indemnity” in enacting the statute but instead spoke simply of “benefits,” Furthermore, it will be noted that a life insurance contract is not normally considered to be a contract of indemnity. 43 Am.Jur.2d, Insurance, § 3, for example, states:
“a policy of 'life insurance is not a mere contract of indemnity, but is a contract to pay the beneficiary a certain sum of money in the event of death, provided certain conditions are performed by the insured.”
A life insurance policy, then, is not intended to “indemnify” or to “make whole” the beneficiary, as is a medical insurance *695policy. Instead, it is intended to guarantee the payment of a specified sum under prescribed conditions regardless of monetary loss to the beneficiary. It is our belief that when the legislature enacted SDCL 58-23-8(1) it intended to demand inclusion of a typical life insurance provision in the supplemental, insurance. Such a provision would guarantee the payment of a specified sum under certain conditions. It ’would not therefore be subject to subrogation, for to allow subrogation would effectively reduce the amount which would normally be paid under a typical life insurance policy.
We have come to this conclusion because we can see no alternative. We must look either to the commonly accepted or technical definition of a term in determining legislative intent, depending on the circumstances. See McCullagh v. Fortune, 76 N.D. 669, 38 N.W.2d 771. The technical definition of life insurance, as demonstrated above, rejects the idea of indemnity and rejects with it the idea of subrogation. The commonly accepted definition of life insurance imports an absolute right to a payment upon death and notification of the insurance company.
Furthermore, we can find nothing in the statute which would lead us to believe that the legislature intended to abandon both the traditional technical and commonly accepted meanings. It did not include the word “indemnity” in the life insurance section nor did it contain any other language tending to indicate that anything but the normal use of the term life insurance was intended.
We conclude therefore that the life insurance demanded by SDCL 58-23-8(1) is of the normal type and is not subject to subrogation, and that such insurance must be included in a supplemental insurance policy unless rejected in writing pursuant to SDCL 58-23-7.
I am authorized to state that Justice WINANS joins in this special concurrence.