Court Opinion

ID: 9763251
Source: CourtListenerOpinion
Date Created: 2023-08-29 02:39:41.429373+00
Date Added: 2024-06-11T07:29:40.199910
License: Public Domain

CLIFFORD, J.,
with whom ALEXANDER, J., joins, dissenting.
[¶21] Without the policy provision at issue in this case, Norfolk & Dedham could not accurately address the risk to which it is exposed in the uninsured motorist part of its policy, and on which it could base a reasonable premium. That provision limits the risks arising from injuries to a determinable number of persons, i.e. the named insureds under the policy and resident family members of the named insureds, and protects the insurer from risks that are unascertainable. In my view, the provision is reasonable, comports with our uninsured motorist statute, and is not contrary to our case law precedent. Accordingly, I respectfully dissent.
[1122] Butterfield’s uninsured motorist coverage with Norfolk & Dedham is limited to damages from injuries sustained by an insured. Brandy was not a resident of Butterfield’s household and was not an insured under his Norfolk & Dedham policy. Brandy was a named insured under her own automobile policy, and the $50,000 uninsured motorist limits of that policy have already been paid. Moreover, Brandy was living with her mother at the time of her death, and was an insured under her mother’s automobile liability policy. The $50,000 of uninsured motorist coverage under that policy has already been paid as well.
[¶ 23] The purpose of uninsured motorist coverage is “to provide recovery for injuries that might not otherwise be compen-sable because of financially irresponsible drivers.” Brackett v. Middlesex Ins. Co., 486 A.2d 1188, 1190 (Me.1985). In Wescott v. Allstate Ins., 397 A.2d 156 (Me.1979), we said that the legislative intent of the statute 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.” Wes-cott, 397 A.2d at 166. The uninsured motorist statute “afford[s] to each owner of an automobile liability insurance policy a minimum standard of protection against the uninsured motorist.” Dufour v. Metro. Prop. & Liab. Ins. Co., 438 A.2d 1290, 1292 (Me.1982). Uninsured motorist coverage exists not to increase the exposure of insurers to indeterminable risks, but to allow policyholders a minimum of coverage against uninsured motorists.
[¶ 24] We have previously upheld exclusions or language limiting the scope of policy coverage with regard to uninsured motorists even in the absence of similar statutory exclusions or limitations. See Bourque v. Dairyland Ins. Co., 1999 ME 178, ¶¶ 8-10, 741 A.2d 50, 52-53 (upholding exclusion for “owner of a private passenger vehicle from the policy’s definition of relative,” and thus precluding recovery by the stepson of an insured under uninsured *868motorist coverage); Brackett, 486 A.2d at 1190-91 (upholding policy language excluding coverage for injuries sustained by an insured while on a motorcycle); Lane v. Hartford Ins. Group, 447 A.2d 818, 820 (Me.1982) (upholding policy exclusion for “a farm type tractor or equipment designed for use principally off public roads” as not in contravention of public policy); Dufour, 438 A.2d at 1292-93 (upholding policy language limiting the maximum recovery to $50,000 per person). We concluded that these restrictions were not repugnant to the public policy expressed by our uninsured motorist statute, 24-A M.R.S.A. § 2902(1) (2000).
[¶ 25] Moreover, we have avoided interpreting the uninsured motorist statute so broadly as to subject insurers to unforeseen risks and consumers to higher costs. In Levine v. State Farm Mut. Auto. Ins. Co., 2004 ME 33, ¶ 14, 843 A.2d 24, 29, for example, we rejected the insured’s argument and allowed an insurer providing uninsured motorist coverage to offset its responsibility against the tortfeasor’s policy amount, thus avoiding increases in the risks sustained by the insurance carrier and the cost of insurance for the consumer.
[¶ 26] The common sense provision in the Norfolk & Dedham policy at issue permits recovery only to named insureds under the policy or resident family members of the named insureds. Brandy qualifies as neither. This limitation allows the insurer to assess and calculate the risk, and to charge a reasonable premium to cover that risk. Restrictions similar to the one in Norfolk & Dedham’s policy have been upheld in most states in which they have been challenged. In Valiant Ins. Co. v. Webster, 567 So.2d 408 (Fla.1990), a passenger died as a result of the negligence of an uninsured driver. Id. at 409. The passenger’s father, as a survivor of his son’s estate, filed a claim for damages under his own uninsured motorist policy. Id. The Florida Supreme Court held that the uninsured motorist statute “does not require coverage for anyone who may be entitled to recover consequential damages as a survivor under the wrongful death statute when the decedent himself had neither liability nor uninsured motorist coverage under the policy.” Id. at 411. Like the passenger in Valiant Insurance, the decedent in this case did not have coverage under Norfolk & Dedham’s policy.
[¶ 27] In Gaddis v. Safeco Ins. Co. of Am., 58 Wash.App. 537, 794 P.2d 533 (1990), the Washington Court of Appeals recognized that holding insurers liable for claims by insureds arising from the injuries or death of those not covered by the insurance policy exposed insurers to increased risks. Id. at 537. The court stated in denying the claims: ‘We do not perceive that such broad coverage of losses arising from death or injury to noninsured persons was expected or intended by the average reasonable purchaser of insurance.” Id.
[¶ 28] Courts hold that provisions meant to shield insurers from unascertainable risks are reasonable and do not contravene public policy. For instance, the policy in Allstate Ins. Co. v. Hammonds, 72 Wash.App. 664, 865 P.2d 560 (1994), included a limitation identical to Norfolk & Dedham’s restriction, which limited recovery to the named insured and the named insured’s resident spouse and resident relatives. Id. at 560-61. The Allstate Insurance court noted that “‘exclusions that have been held violative of public policy generally have been those manifesting no relation to any increased risk faced by the insurer, or when innocent victims have been denied coverage for no good reason.... Where the insurer faces an increased risk ... exclusions have been upheld.’ ” Allstate Ins. Co., 865 P.2d at 563-64 (quoting Eu-*869rick v. Pemco Ins. Co., 108 Wash.2d 388, 738 P.2d 251, 253-54 (1987)). Like uninsured motorist coverage for motorcycles, uninsured motorist coverage for injuries to unknown third parties creates an increased risk to insurers. Eurick, 738 P.2d at 254; see also Mut. of Enumclaw Ins. Co. v. Wiscomb, 97 Wash.2d 203, 643 P.2d 441, 444 (1982) (concluding that “[a]n insurer is free to limit its risks by excluding coverage when the nature of its risk is altered by factors not contemplated by it in computing premiums”).
[¶29] Other states have upheld similar provisions. In Auto Club Ins. Ass’n v. DeLaGarza, 433 Mich. 208, 444 N.W.2d 803 (1989), the Supreme Court of Michigan held that “[ijnsurers may limit the risks they choose to assume and fix premiums accordingly,” provided policy limitations are clearly expressed in the policy language. Auto Club Ins. Ass’n, 444 N.W.2d at 806. The limitation in this case is clearly set out in the language of Norfolk & Dedham’s policy.
[¶ 30] In Curtis v. Allstate Ins. Co., 473 F.Supp. 315 (E.D.La.1979), aff'd, 631 F.2d 79 (5th Cir.1980), the District Court for the Eastern District of Louisiana, in determining whether a territorial restriction found in a policy was contrary to public policy, observed that:
Insurers providing [uninsured motorist] coverage must base their rates on the risk that the insured will be struck by an uninsured vehicle. It is certainly rational to exclude countries where the number of uninsured motorists is unknown or so high as to make coverage impractical. We do not find it was the legislature’s intent to prohibit all general restrictions as applied to uninsured motorist coverage.
Curtis, 473 F.Supp. at 317. Without the provision limiting recovery to injuries sustained by an insured, the number of persons whose injuries are eligible for recovery under Norfolk & Dedham’s policy is likewise unknown and makes the assessment of risk, and therefore the calculation of the cost of coverage, difficult to determine. See id.
[¶31] Contrary to the Court’s conclusion, we have not decided that our uninsured motorist statute prohibits the provision at issue here. Such a policy limitation has never been before us, and was not before us in Jack v. Tracy, 1999 ME 13, 722 A.2d 869. In Jack, Jessica Jack was killed in an auto accident in which she was a passenger in an automobile operated by Scott Tracy. Jack, 1999 ME 13, ¶ 2, 722 A.2d at 870. Jessica was fifteen years old and living with her mother. Id. Her father’s wife, Rita Rogers, was the owner of an automobile policy issued by Allstate with broadly worded uninsured motorist language that provided:
[Allstate] 'will pay damages for bodily injury, sickness, disease or death which an insured person is legally entitled to recover from the owner or operator of an uninsured auto. Injury must be caused by accident and arise out of the ownership, maintenance or use of an uninsured auto.
Id. ¶¶ 3-4, 722 A.2d at 870.
[¶ 32] Jessica’s father, as the spouse of Rogers, was an insured person under the Allstate policy, and, as an heir of Jessica, he was legally entitled to recover from Tracy, the operator of the uninsured vehicle, for the wrongful death of his daughter. Id. ¶¶ 9-10, 722 A.2d at 871; 18-A M.R.S.A. § 2-804 (1998 & Supp.2003). The Allstate policy did not limit coverage to claims brought by named insureds for injuries sustained by named insureds, as does the policy in the present case. In Jack, we did not hold that recovery by the girl’s father was mandatory under the uninsured motorist statute. Rather, the *870holding was that the statute did not preclude such recovery. Nor does our decision in Flaherty v. Allstate Ins. Co., 2003 ME 72, 822 A.2d 1159, which involved a policy with the same uninsured motorist language as in Jack, prohibit the provision in Norfolk & Dedham’s policy.
[¶ 33] Indeed, in support of our decision in Jack, we cited Auto Club Ins. Ass’n. Jack, 1999 ME 13, ¶ 12, 722 A.2d at 871-72. In Auto Club Ins. Ass’n, the Michigan Supreme Court stated that “[i]f [the insurer] intended to except wrongful death damages or to limit coverage to bodily injury sustained only by an insured person, it could 'have included limiting language in its policy of insurance.” Auto Club Ins. Ass’n, 444 N.W.2d at 806 (emphasis added).
[¶ 34] The named insured limitation in its policy allows Norfolk & Dedham, as an insurer, to better ascertain its risk in calculating premiums to be paid for the coverage offered. The decision by the Court, when taken to its logical conclusion, means that an insurer offering uninsured motorist protection is prevented from restricting in any way the scope of coverage. In my view, the Legislature did not intend our uninsured motorist statute to prevent insurers from assessing risks and limiting uninsured motorist coverage to damages arising from injury to insureds. See State v. Hart, 640 A.2d 740, 741 (Me.1994) (citation omitted) (“The Legislature is presumed not to intend an absurd result .... ”). Such a provision does not contravene the public policy behind uninsured motorist coverage in this State, and is reasonable. I would vacate the judgment.