Court Opinion

ID: 9800980
Source: CourtListenerOpinion
Date Created: 2023-08-31 08:44:37.160792+00
Date Added: 2024-06-11T09:50:16.345292
License: Public Domain

Robinson, J.,
¶ 33.
dissenting. The Legislature has directed that:
No policy insuring against liability arising out of the ownership, maintenance or use of any motor vehicle may be delivered or issued for delivery 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 *269or operators of uninsured, underinsured or hit-and-run motor vehicles ....
23 V.S.A. § 941(a). In light of this requirement, the enforceability of the “owned-vehicle” and “covered-vehicle” exclusions turns on our understanding of the statutory definition of “underinsured motor vehicle.” The statute provides, in relevant part, that “a motor vehicle is underinsured to the extent that . . . the available liability insurance has been reduced by payments to others injured in the accident to an amount less than the limits of the uninsured motorist coverage applicable to the insured.” Id. § 941(f)(2).
¶ 34. In applying this statute in the context of a single-car accident and a UM/UIM policy that contains the exclusions at issue, it is difficult to avoid circular reasoning on either side of the issue. Assume a passenger in a car with $300,000 single limit liability and UM/UIM coverages.10 And assume a single-car accident in which the driver is at fault and several passengers are injured such that only $100,000 in liability coverage is available to cover our hypothetical injured passenger’s $500,000 in damages. When determining whether the actually available liability insurance is less than the applicable UIM coverage, such that the car is underinsured as defined by statute, the starting point determines the end point. If we begin with an assumption that the host policy does not provide $300,000 UIM insurance to the injured passenger in this case, so that it is not “applicable to the insured,” then the available liability insurance ($100,000) is not less than the limits of the applicable UIM insurance ($0). If, on the other hand, we assume that the host-vehicle policy UIM coverage does apply *270to the passenger, then the available liability coverage ($100,000) is substantially less than the applicable UIM coverage ($300,000). At some level, the “gap analysis” that is central to deciding this case does not add value to our consideration; it just validates the assumption we start with.
¶ 35. Nevertheless, I conclude that the trial court has the better end of the argument for several reasons. First and foremost, the plain language of the statute keys on “the uninsured motorist coverage applicable to the insured.” 23 Y.S.A. § 941(f)(2) (emphasis added). It does not refer to the “portable UIM insurance” purchased by or for the insured, but instead calls for comparison of available liability coverage to all applicable UIM coverage. The majority’s reasoning relies heavily on its assertion that the statute defining an underinsured motor vehicle calls for a comparison of the available liability insurance to the injured passenger’s “own” UIM inshrance, or the insurance purchased by the passenger, but not to UIM coverage applicable to the passenger through the host-vehicle policy. The majority acknowledges that the Legislature replaced a limits-to-limits comparison for determining whether a vehicle is underinsured with an analysis that considers how much an injured party can actually recover on a single-limit policy as compared with the available UIM coverage. Ante, ¶ 20. Citing legislative history suggesting that the Legislature made this change in response to a case in which the injured plaintiffs recovery was less than the limits of her own portable UIM coverage, the majority asserts that the statute’s requirement of a comparison between actual recovery and UIM limits is confined to portable UIM coverage. In considering the UIM coverage available to the injured passenger in this case, the majority argues, we can only consider the coverage purchased by the injured passenger.
¶ 36. This distinction does not derive in any way from the text of the statute; rather, it is an additional qualification judicially grafted on to the statute. State v. O’Neill, 165 Vt. 270, 275, 682 A.2d 943, 946 (1996) (“It is inappropriate to read into a statute something which is not there unless it is necessary in order to make the statute effective.”). The policy language in this case defines an “insured person” for purposes of UIM motorist coverage to include “any person occupying, but not operating, a covered auto.” There is no question that if the tortfeasor in our hypothetical was the driver of a second car, our hypothetical passenger *271would be entitled to $800,000 UM/UIM coverage through the host-vehicle policy. Under these circumstances, the majority’s definition of “applicable” UIM coverage to include only portable UIM coverage purchased by (or presumably on behalf of) the passenger is squarely at odds with the plain language of the statute. Daniels v. Elks Chib of Hartford, 2012 VT 55, ¶ 33, 192 Vt. 114, 58 A.3d 925 (stating that Court “will generally give a statute its plain meaning”).
¶ 37. Moreover, the majority reads far more into the legislative history than it actually supports. I wholly agree that the Legislature amended § 941(f) in direct response to our decision in Colwell v. Allstate Insurance Co., 2003 VT 5, 175 Vt. 61, 819 A.2d 727. But there is nothing in the legislative history to support the majority’s contention that the shift from a limits-to-limits comparison to a comparison between UIM limits and actually available insurance given multiple claims applies with respect to an individual’s portable UIM coverage but not to coverage pursuant to a host-vehicle policy. In Colwell, the injured plaintiff was apparently driving her car, so that the host-vehicle coverage and her portable coverage were one and the same. There is no discussion in the decision about a distinction between the coverage applicable to an individual through the host vehicle and that applicable by virtue of portable coverage based on a vehicle not involved in the accident. In analyzing the statute, which defined an underinsured vehicle with reference to the gap between the tortfeasor’s liability limits and the “limits of uninsured motorists coverage applicable to any injured party,” this Court concluded that it called for a limits-to-limits comparison. Id. ¶8 (emphasis added). In particular, we explained that Vermont had adopted a “gap coverage” scheme pursuant to which UIM coverage was available to fill the gap between the liability coverage and the limits of “the insured’s UIM coverage.” Id. ¶ 14. We did not limit the comparison to the insured’s portable UIM coverage to the exclusion of the insured’s UIM coverage through the host-vehicle policy; nor did we suggest that a distinction exists between the different types of available UIM coverage.
¶ 38. As the majority points out, the Legislature sought to reverse the outcome of Colwell, rejecting a pure limits-to-limits comparison with a comparison between the UIM coverage applicable to the insured and the coverage actually available in the context of a single-limit liability policy and multiple claimants. *272Like this Court in Colwell, the Legislature focused on the impact of multiple claims against a single-limit liability policy in ascertaining whether an individual is underinsured. The Legislature never discussed a distinction between an individual’s portable UIM coverage, and the UIM coverage available through the host vehicle, or suggested that its shift from a limits-to-limits comparison applied only to the former. The legislative history cited by the majority simply provides no basis for the majority’s conclusion that the Legislature intended anything other than what it said when it defined a motor vehicle as underinsured “to the extent that . . . the available liability insurance has been reduced by payments to others injured in the accident to an amount less than the limits of the uninsured motorist coverage applicable to the insured.” 23 V.S.A. § 941(f)(2) (emphasis added).
¶ 39. The majority takes too narrow a view of the purpose underlying the statute governing UIM coverage. The majority notes our explanation in Hubbard v. Metropolitan Property & Casualty Insurance Co., 2007 VT 121, ¶ 9, 182 Vt. 501, 944 A.2d 891, that UM/UIM policies are intended to “restore the insured to the position [the insured] would have been in had the other driver carried equally responsible insurance coverage.” Ante, ¶ 26. But it then concludes that the only insurance relevant to determining the level of “responsible insurance coverage” carried by the passenger is the passenger’s own, portable UIM. Id. As noted above, if our hypothetical passenger were injured by an uninsured tortfeasor driving a different car, our passenger would be entitled to $300,000 UM/UIM coverage through the host-vehicle policy. But the majority suggests that if the tortfeasor in this hypothetical is the driver of the car in which passenger is riding, the passenger will be limited to the $100,000 liability insurance recovery — far less than the level of “responsible insurance coverage” otherwise applicable to the passenger. The notion that the host vehicle’s own policy could provide so much less UM/UIM coverage to a passenger injured by the driver of that vehicle than to a passenger injured by the driver of a different vehicle is incongruous.
¶ 40. Although this Court’s opinion in Hubbard provides fodder for both sides of the debate, the analytical approach-endorsed by this Court in Hubbard provides more support for the trial court’s approach than for the majority’s. Faced with the question of whether the “owned-vehicle” exclusion with respect to UIM coverage was enforceable against the UIM claim of a passenger who *273sought to stack the host vehicle’s UIM coverage with the passenger’s own portable UIM coverage, this Court did not, as the majority does in this case, rule that the only relevant UIM coverage for the purpose of assessing whether the vehicle was underinsured was the passenger’s own portable UIM insurance. Instead, this Court actually compared the limits of the available liability insurance to the UM/UIM coverage that would be available through the host policy if the exclusion did not apply, and concluded that there was no gap. Id. ¶ 14. We concluded that the owned-vehicle exclusion was “not at all inconsistent with the statute where, as here, the driver’s liability and the insured passenger’s UM/UIM coverages under the same . . . policy are equivalent.” Id. We went on to explain that “[s]ince no gap in coverage can occur, the statute’s purpose is neither defeated nor impinged upon by enforcement of the exclusion.” Id. We noted:
A different result could obtain if the driver’s liability insurance was less than the UM/UIM coverage in the same policy, since the owned-vehicle exclusion would arguably frustrate the statutory purpose by purporting to make the UM/UIM coverage unavailable to fill the gap between the owner’s inadequate liability coverage and the UM/UIM protection purchased by the owner for the benefit of the insured passenger.
Id. ¶ 14, n.4.
¶ 41. Hubbard did not involve liability coverage compromised in amount by multiple claimants, and did not implicate § 941(f)(2). Although we upheld the contractual exclusions in Hubbard, our reasoning in that case points to the opposite outcome in this case. If we compare the available liability coverage in this case — mindful of the Legislature’s instruction that we should look at the actually available coverage in light of reductions in available coverage on account of payments to others injured in the accident — to the UM/UIM coverage that would be available to the hypothetical passenger if the exclusion did not apply, there is a gap in this case. The exact same methodology that we applied in Hubbard requires that we not enforce the contractual exclusion in this case. In fact, this is exactly the scenario contemplated in our footnote in Hubbard — the driver’s liability insurance here is less than the UM/UIM coverage in the same policy, and application of the exclusions would frustrate the statutory purpose by purport*274ing to make the UM/UIM coverage unavailable to fill the gap between the owner’s inadequate liability coverage and the UM/ UIM protections “purchased by the owner for the benefit of the insured passenger.” Id.
¶ 42. Finally, I am mindful of “the broad remedial purpose underlying the UM/UIM requirement.” Colwell, 2003 VT 5, ¶ 23 (citing Montieth v. Jefferson Ins. Co. of N.Y., 159 Vt. 378, 382, 618 A.2d 488, 490 (1992)). While the remedial purpose underlying the statute does not provide any basis for departing from the plain language of the statute, it is a relevant factor in the face of ambiguity in the statute. Although, as noted above, I do not find this statute ambiguous, to the extent that it is, maxims of statutory interpretation call for a broad construction consistent with the remedial purpose underlying the statute. Town of Killington v. State, 172 Vt. 182, 191, 776 A.2d 395, 402 (2001) (stating we construe remedial statutes liberally to accomplish their remedial purpose).
¶ 43. The majority cites numerous cases from other jurisdictions in support of its contrary conclusion, and suggests that its view is in line with “the overwhelming majority of states” that have considered the issue. Ante, ¶ 28. But the cases cited by the majority offer no support for this assertion because the law applied in those cases is not on all fours with Vermont’s statute, and the issue before those courts was different. The only case cited by the majority in which the applicable statute requires “gap coverage” for underinsured motorists lacks the particular feature of Vermont law that impels me to vote to affirm the trial court’s judgment in this case: a statute that defines “underinsured motorist” not with reference to the limits of liability of the tortfeasor’s policy as compared with the available UIM coverage, but, rather, with reference to the difference between the actual liability coverage available in light of payments to others injured in the accident and the UM/UIM coverage available to a claimant. 23 V.S.A. § 941(f)(2); see Mercury Indem. Co. of Ill. v. Kim, 830 N.E.2d 603, 605 (Ill. App. Ct. 2005) (“[T]he term ‘underinsured motor vehicle’ means a motor vehicle ... for which the sum of the limits of liability under all bodily injury liability insurance policies ... is less than the limits for underinsured coverage provided the insured . . . .” (emphasis added) (citing 215 Ill. Comp. Stat. 5/143a-2(4) (2000))). The Kim decision provided solid support for this Court’s ruling in Hubbard, but offers nothing to address the distinct legal and factual context of this case.
*275¶ 44. Moreover, three of the cases cited by the majority not only apply statutes that define an underinsured motor vehicle with reference to the liability insurance policy limits, without consideration of the coverage actually available in light of payments to others, but apply statutes reflecting what the majority has described as an unqualified “excess coverage” model, as opposed to a “gap coverage” approach. Ante, ¶ 13. These decisions offer little support for the majority’s construction of our particular gap-coverage statute as impacted by § 941(f)(2). See Kang v. State Farm Mut. Auto. Ins. Co., 815 P.2d 1020, 1021 (Haw. 1991) (defining “underinsured motor vehicle” as “a motor vehicle with respect to . . . which the sum of the limits of liability of all bodily injury liability insurance coverage applicable at the time of loss to which coverage afforded by such policy or policies applies is less than the liability for damages imposed by law” (citing Haw. Rev. Stat. § 431-448(c) (1986) (since recodified as Haw. Rev. Stat. § 431:100-103(22)))); Peterson v. Colonial Ins. Co. of Cal., 686 P.2d 239, 240 (Nev. 1984) (“Uninsured motorist coverage must include a provision which enables the insured to recover any amount of damages for bodily injury from his insurer to which he is legally entitled but which exceeds the limits of the bodily injury coverage carried by the owner or operator of the other vehicle.” (citing Nev. Rev. Stat. § 687B.145(2) (1982))); Millers Cas. Ins. Co., of Tex. v. Briggs, 665 P.2d 891, 892-93 (Wash. 1983) (“An underinsured vehicle is defined by the statute as a vehicle with respect to which the sum of liability limits ‘applicable to a covered person after an accident is less than the applicable damages which the covered person is legally entitled to recover.’ ” (quoting Wash. Rev. Code § 48.22.030(1))).
¶ 45. Finally, three of the cases cited by the majority, dating from an era when statutes governing underinsured motorist coverage were less ubiquitous, apply contract exclusions without the statutory overlay that is at the heart of this case. See State Farm Mut. Auto. Ins. Co. v. Shahan, 141 F.3d 819, 823 (8th Cir. 1998) (stating underinsured motorist coverage is not statutorily required in Missouri, and is “purely optional”); Liberty Mut. Ins. Co. v. Lund, 530 N.E.2d 166, 167-68 (Mass. 1988) (construing host-vehicle insurance contract that excluded liability coverage for passengers to also deny UIM coverage to passengers in connection with injuries caused by driver’s negligence, such that passenger was not entitled to any recovery — liability or UIM — *276through host-vehicle policy); Myers v. State Farm Mut. Auto Ins. Co., 336 N.W.2d 288, 291 (Minn. 1983) (interpreting and enforcing contract with no reference to any statute). Insofar as courts in these cases merely interpreted contracts purporting to exclude UIM coverage for passengers, with no statutes potentially limiting the enforceability of the exclusions, these cases are irrelevant to the central issue here.
¶ 46. I freely admit that most courts have held that a “covered-vehicle” exclusion to underinsured motorist coverage is valid. As noted above, this Court held just that in Hubbard, 2007 VT 121. But in most, if not all of those cases, the injured passenger sought full coverage under the host vehicle’s UIM policy in addition to liability coverage, rather than simply “gap coverage” to account for the difference between the available liability coverage and the host vehicle’s UIM limits. The majority does not cite a single case in which the governing statute defines “underinsured motorist” the way Vermont’s does. This distinction makes a huge difference. One of the critical rationales underlying the decision the majority leans on most heavily is that in a regime in which “liability and underinsured motorist limits are coextensive in an insured’s policy ... a situation would not arise where that insured’s vehicle would be underinsured as to itself.” Kim, 830 N.E.2d at 611-12. This was essentially our rationale in Hubbard. See 2007 VT 121, ¶ 14 (“[Wjhere, as here, the driver’s liability and the insured passenger’s UM/UIM coverages under the same Concord policy are equivalent,” “no gap in coverage can occur.”). In contrast, in a world in which “underinsured motorist” is defined with reference to the liability payments actually available to a person injured due to the driver’s negligence, rather than the limits of the tortfeasor’s liability policy, and in which multiple claimants draw from the same single-limit liability coverage, it is very easy to imagine that a vehicle may be underinsured “as to itself.” Kim, 830 N.E.2d at 612. That’s the legal framework of Vermont’s UIM statute, and none of the cases cited by the majority purports to address this feature of Vermont law.
¶ 47. The majority suggests that the trial court’s approach would increase the liability limits of the host-vehicle policy, or would convert the host vehicle’s UIM coverage into “double-liability insurance.” See ante, ¶¶ 26-28. I don’t see why that is. Liability coverage and UIM coverage provide separate and distinct benefits under the policy. See North River Ins. Co. v. Tabor, *277934 F.2d 461, 464 (3d Cir. 1991) (describing general approaches to UIM coverage — either filling a gap or providing excess coverage — in relation to but distinct from liability coverage). When the actual liability coverage available from a third-party tortfeasor is less than the limits of the UIM coverage applicable to the passenger through the host-vehicle policy, nobody suggests that the passenger’s invocation of the host vehicle’s UIM coverage converts that coverage into “liability” coverage. The whole point of UIM coverage is to make up for a shortfall in liability coverage relative to the UIM limits. That is true whether the tortfeasor happens to be the driver of the passenger’s car, or the driver of a different car. I suspect that the oft-repeated assertion that the owned-vehicle exclusion prevents an injured passenger from getting “double-liability insurance” originated in cases, like those cited above, in which an injured passenger in a single-car accident sought UIM coverage through the host-vehicle policy above and beyond the liability coverage even though the UIM limits and the available liability coverage were the same — a very different circumstance from this case.
¶ 48. The majority also argues that the trial court’s approach would give the passenger more UIM protection than the passenger had actually purchased. Ante, ¶ 26. That is not an incongruous result. If in this case, the passenger at issue had been injured by a tortfeasor driving a different car, he would unquestionably have been entitled to $2,000,000 in UIM coverage — $1,500,000 on account of portable policies purchased by him or on his behalf, and $500,000 on account of the UIM coverage applicable to him through the host-vehicle policy. In this scenario, he clearly would have the benefit of UIM coverage greater than the amount he purchased himself, and nobody would suggest that was an anomalous result. It is not at all clear why that should change because he was injured by the driver of the car in which he was riding, rather than the driver of a different car. The notion that the total coverage available for a passenger’s injuries — liability plus UIM — is significantly less if the driver of the passenger’s own car is the negligent one is anomalous.
¶ 49. The Legislature has specifically sought to ensure that UIM coverage be available to fill the gap between the liability coverage actually available to a person injured by a negligent driver, taking into account reductions in the available liability insurance due to payments to others injured in the accident, and the limits of the *278UIM coverage applicable to the insured. The exclusions upheld by the majority in this case frustrate that purpose, and are incompatible with the express requirement of the statute. For that reason, I respectfully dissent.
¶ 50. I am authorized to state that Justice Dooley joins this dissent.

 For the sake of simplicity, I am eliminating consideration of additional, portable UIM from this hypothetical. In light of the portable UIM insurance applicable to Casey Brown, the majority concedes that the vehicle in question is underinsured as defined by the statute, although it qualifies that concession by stating that the vehicle was “underinsured for purposes of Brown’s recovery under his own policies.” Ante, ¶ 26 n.8. I interpret this qualification to mean two things. First, the vehicle is underinsured, but its UIM coverage is not available for stacking with Casey Brown’s portable UIM coverage. And, second, the reason for this is that the UIM coverage under the host-vehicle policy would not be available to Casey Brown without regard to the existence or applicability of any portable UIM coverage. That implicit conclusion, which both drives and flows from the majority’s opinion, gets to the heart of the question here. For that reason, I analyze the enforceability of the exclusions at issue without the added complication of additional, portable UIM coverage unrelated to the host vehicle.