Court Opinion

ID: 9687120
Source: CourtListenerOpinion
Date Created: 2023-08-24 16:16:26.093653+00
Date Added: 2024-06-11T18:18:24.366689
License: Public Domain

Shanahan, J.,
concurring.
The district courts’ decisions that the household exclusion in the automobile omnibus clause is contrary to the public policy of this state raise several concerns regarding Nebraska’s kaleidoscopic collection of statutes regarding liability insurance coverage for motor vehicles, their drivers, and their passengers.
The district courts’ decisions are based on the public policy doctrine: A court may refuse to enforce a contractual provision *752that violates law or public policy. The People v. Wiersema State Bank, 361 Ill. 75, 197 N.E. 537 (1935). Fundamental to the district courts’ decisions is the definition or characterization of “public policy.” As the court observed in Alderman et al. v. Alderman et al., 178 S.C. 9, 22-23, 181 S.E. 897, 902 (1935):
“Public policy has been aptly described by one of our judges as ‘a wide domain of shifting sands.[’]” . . . The term in itself imports something that is uncertain and fluctuating, varying, with the changing economic needs, social customs, and moral aspirations of a people.... For that reason it has frequently been said that the expressive (expression?) public policy is not susceptible of exact definition. But for purposes of juridical application it may be regarded as well settled that a state has no public policy, properly cognizable by the Courts, which is not derived or derivable by clear implication from the established law of the State, as found in its Constitution, statutes, and judicial decisions____
“ ‘It is the duty of the Legislature to make laws and of the Court to expound them, . . . the subjects in which the Court undertakes to make the law by mere declaration (of public policy) should not be increased in number without the clearest reasons and the most pressing necessity.’ ” [Quoting from Magee v. O’Neill, 19 S.C. 170, 45 Am. Rep. 765 (1883).]
In a somewhat similar expression, the court stated in Julien v. Model B., L. & I. Asso., 116 Wis. 79, 91, 92 N.W. 561, 565 (1902):
When we leave constitutional limitations out of view, the will of the legislative branch of the government, when expressed, is the highest evidence of public policy. To judicially condemn its expressed will, when exercised within constitutional limitations, would be the plainest kind of usurpation. Baron Parke, in Egerton v. Brownlow, 4 H. L. Cas. 122, 123, expressed the same idea substantially thus: “It is the province of the statesman and not of the lawyer to discuss, and of the legislature to determine what is best for the public good, and to provide for it by proper enactments. It is the province of the judge *753to expound the law, to declare public policy as he finds it in the unwritten and written law. Public policy is a proper ground for a decision only in the sense of the policy of the law, not in the sense of mere judicial notions as to what is best for the public good. An act [speaking of an act inter partes] is properly said to be illegal when it is contrary to the principles of established law.”
See, also, Griffith v. Mutual Protective League, 200 Mo. App. 87, 105, 205 S.W. 286, 291 (1918):
The public policy of a State is to be found as expressed in its Constitution and laws, and in the decisions of its highest court, and not from general considerations of the supposed public interests and policy of the State beyond what such sources of information make known to the court.
Thus, the potency of public policy comes from moral, economic, institutional, and other social considerations. James A. Henderson, Jr., Judicial Reliance on Public Policy: An Empirical Analysis of Products Liability Decisions, 59 Geo. Wash. L. Rev. 1570(1991).
Perhaps cognizant of the foregoing attempts to define “public policy,” this court has condemned certain actions that violate Nebraska’s public policy; for example, see, Schriner v. Meginnis Ford Co., 228 Neb. 85, 421 N.W.2d 755 (1988) (an employee had a cause of action against an employer for discharging the employee, who had reported the employer’s involvement in odometer fraud, which was a violation of Neb. Rev. Stat. § 60-2301 et seq. (Reissue 1984 & Cum. Supp. 1986) and which was punishable as a felony), and Ambroz v. Cornhusker Square Ltd., 226 Neb. 899, 416 N.W.2d 510 (1987) (an employer’s discharge of an employee who refused to take a polygraph examination prohibited by the Licensing of Truth and Deception Examiner’s Act, Neb. Rev. Stat. § 81-1901 et seq. (Reissue 1981 & Cum. Supp. 1984) was a violation of Nebraska’s public policy). In the realm of insurance, however, courts must be especially careful when basing their decisions on public policy, because “ ‘ [insurance is a matter of contract, not sympathy.’ ” Howard v. Blue Cross Blue Shield, 242 Neb. 150, 160, 494 N.W.2d 99, 105 (1993) (quoting St. Paul Fire & Marine *754Insurance Company v. Purdy, 129 Ga. App. 356, 199 S.E.2d 567 (1973)). Moreover, in an area so pervasively regulated, “it is not the function of the judiciary to second-guess the wisdom, policy, or expediency of legislative enactments.” State v. Two IGT Video Poker Games, 237 Neb. 145, 150, 465 N.W.2d 453, 458 (1991).
Although Nebraska’s Legislature has not prescribed a program of compulsory liability insurance to protect those who use this state’s public highways and streets, registration of a motor vehicle is conditioned on a showing that the vehicle to be registered is covered by liability insurance. See Neb. Rev. Stat. § 60-302 (Reissue 1988). Also, an owner of a Nebraska-licensed vehicle must have proof of financial responsibility, as required by § 60-302, in the vehicle when operated in Nebraska. Failure to have such certificate or proof in the motor vehicle is a misdemeanor. See Neb. Rev. Stat. § 60-570 (Reissue 1988). Moreover, a driver involved in certain vehicular accidents is required to show proof of insurance. Failure to show proof of financial responsibility will lead to suspension of the operator’s license. See Neb. Rev. Stat. § 60-501 et seq. (Reissue 1988 & Supp. 1989). Thus, Nebraska owners and operators of vehicles are statutorily inculcated with the need for liability insurance coverage to protect themselves and other members of the motoring public. To the ordinary owner or operator, the standard insurance policy meets that personal and legal need. However, through smoke and mirrors, the household exclusion of the omnibus clause in the standard insurance policy presents an illusion of insurance. Take, for example, an owner of a vehicle who is riding in a vehicle which the owner has insured under a standard policy that includes the household exclusion. The driver is a member of the owner’s household, say a son or daughter, or someone operating the vehicle with the owner’s permission, such as a mechanic driving the owner home before embarking on repairs to the vehicle. As a result of the driver’s negligence, an accident occurs, and the owner-passenger is seriously injured. In view of today’s decision in these cases, the owner’s liability insurance provides no coverage for indemnification of the owner’s injury and loss.
To avoid the unfortunate result in the preceding illustration, *755courts in some states have held that the household exclusion violates public policy. Those decisions, however, are based on certain statutes that required specific insurance; for example, see Farmers Ins. Group v. Reed, 109 Idaho 849, 712 P.2d 550 (1985) (Idaho Code § 49-233 (1978) required that “[e]very owner of a motor vehicle . . . shall continuously provide insurance against loss resulting from liability imposed by law for bodily injury or death or damage to property suffered by any person caused by maintenance or use of a motor vehicle,” but the household exclusion clause left family members unprotected when another family or household member was driving; therefore, the household exclusion violated statutorily mandated insurance), and Farmers Ins. Exchange v. Call, 712 P.2d 231 (Utah 1985) (the Utah Automobile No-Fault Insurance Act mandated that all automobiles registered in Utah be covered by specific types of security in conformity with Utah’s Motor Vehicle Safety Responsibility Act, which prohibited the household exclusion clause; hence, the household exclusion clause contravened the Utah Automobile No-Fault Insurance Act).
However, an inspection of the Nebraska statutes concerning liability insurance coverage on motor vehicles culminates in uncertainty regarding specific insurance on vehicles. Section 60-302 contains no specification for the contents of an insurance certificate or policy required for registration of a motor vehicle. Absence of specification in § 60-302 should cause little surprise in view of the other Nebraska statutes pertaining to motor vehicle insurance. Neb. Rev. Stat. § 44-514(1) (Cum. Supp. 1992) states: “Policy shall mean an automobile liability policy providing all or part of the coverage defined in subdivision (2) of this section----” Section 44-514(2) then provides: “Automobile liability coverage shall include only coverage of bodily injury and property damage liability, medical payments, uninsured motorist coverage, and underinsured motorist coverage.” Thus, under § 44-514, although an automobile liability policy may include coverage for bodily injury and property damage, medical payments, and damage caused by uninsured and underinsured motorists, none of these permissible coverages are required by law. Similarly, *756§ 60-509.01 states that all liability policies delivered or issued in Nebraska must include uninsured motorist coverage, but an insured may reject uninsured motorist coverage. Likewise, the Underinsured Motorist Insurance Coverage Act, Neb. Rev. Stat. §§ 60-571 to 60-582 (Reissue 1989), requires that all motor vehicle liability policies include underinsured motorist coverage unless such coverage is rejected by the insured.
Section 60-508 of the Motor Vehicle Safety Responsibility Act provides that if an operator “had in effect at the time of such accident an automobile liability policy with respect to the motor vehicle involved in such accident,” his or her license will not be suspended following an accident. However, § 60-509 proceeds to state:
No such policy . . . shall be effective under section 60-508 unless issued by an insurance company or surety company authorized to do business in this state.... Every such policy or bond is subject, if the accident has resulted in bodily injury, sickness, disease, or death, to a limit, exclusive of interest and costs, of not less than twenty-five thousand dollars because of bodily injury to or death of one person in any one accident and, subject to such limit for one person, to a limit of not less than fifty thousand dollars because of bodily injury to or death of two or more persons in any one accident and, if the accident has resulted in injury to or destruction of property, to a limit of not less than twenty-five thousand dollars because of injury to or destruction of property of others in any one accident.
Consequently, for compliance with the Motor Vehicle Safety Responsibility Act, an insurance policy must provide certain minimum coverages to preserve the license of an owner or operator who is involved in an accident within the purview of the act.
For registration of a motor vehicle in Nebraska, § 60-302 does not require any minimum insurance coverage such as that required by the Motor Vehicle Safety Responsibility Act. Although the Legislature obviously hoped to increase the number of insured vehicles on Nebraska’s highways and streets, for some unexplained reason, the Legislature settled for *757§ 60-302 in its present form without any specificity concerning the precise type of “proof of financial responsibility.” Because § 60-302 neither includes the specific and stringent requirements of § 60-509 (contents of a policy for the Motor Vehicle Safety Responsibility Act) nor defines what is meant by “a certificate or policy of insurance,” § 60-302 produces a public misperception and the mirage of mandatory insurance coverage. In the final analysis, although § 60-302 requires individuals to show proof of financial responsibility to register their motor vehicles, the statute never defines what is meant by “financial responsibility.” This legislative deficiency eliminates any basis for ascertaining Nebraska’s public policy concerning liability insurance coverage for motor vehicles. Because Nebraska statutes contain no indication that the provisions of the Motor Vehicle Safety Responsibility Act shall apply to all automobile liability policies, nor any instruction regarding the scope of the financial responsibility required by § 60-302,1 am unable to find that the household exclusion, unfair as it is, violates Nebraska’s public policy. As one court has noted, “ ‘ “it is the duty of the Legislature to make laws and of the court to expound them, ... the subjects in which the court undertakes to make the law by mere declaration (of public policy) should not be increased in number without the clearest reasons and the most pressing necessity.” ’ ” Estep v. State Farm Mut. Auto. Ins. Co., 103 N.M. 105, 112, 703 P.2d 882, 889 (1985) (Stowers, J., dissenting) (quoting State v. Lavender, 69 N.M. 220, 365 P.2d 652 (1961)). In the absence of a legislatively expressed public policy for liability insurance coverage, what might violate public policy remains an open question. For that reason, I concur with the majority.
What is all too obvious is that the various Nebraska statutes on liability insurance coverage for motor vehicles are a series of intermittent skin grafts on an amorphous body of law with the anatomical deficiency of no backbone: Nebraska law contains no specifications concerning the particular insurance coverage that provides “financial responsibility.” It is a fact of life in the insurance industry that individuals have little, if any, leverage when purchasing insurance policies. Therefore, if the Legislature believes that the welfare of Nebraska’s citizens *758requires that all persons operating or riding in automobiles in this state be protected by liability insurance in case of a motor vehicle accident, the Legislature must statutorily express that belief as public policy in Nebraska.
White, Fahrnbruch, and Lanphier, JJ., join in this concurrence.