Court Opinion

ID: 9766765
Source: CourtListenerOpinion
Date Created: 2023-08-29 04:58:10.903488+00
Date Added: 2024-06-11T07:30:25.862403
License: Public Domain

John A. Fogleman, Justice, concurring. I do not disagree with the result reached on this particular policy in this particular case. The closing language of the majority opinion appears to so restrict it, but earlier language is so general that it would seem to me to apply to any such policy. Certainly the precedents relied upon are not so restricted. We must constantly keep in mind the fact that uninsured motorist insurance is not liability coverage on the uninsured motorist, but is indemnity to the insured against the perils of injury by an uninsured motorist. MFA Mutual Ins. Co. v. Bradshaw, 245 Ark. 95, 431 S. W. 2d 252. See also Southern Farm Bur. Ins. v. Daniel, 246 Ark. 849, 440 S. W. 2d 582. We must also remember that the parties to the insurance contract are limited in the terms of the contract only by statute and public policy. We have said that acceptance by an insured of such a policy including uninsured motorist coverage is deemed to be approval of all reasonable conditions and limitations expressed therein which are not contrary to public policy. MFA Mutual Ins. Co. v. Bradshaw, supra. We must also remember that our statutes do not make the uninsured motorist coverage mandatory. They only require that the coverage be offered. They do not require that medical payments coverage be included or offered. Consequently, the freedom of the parties to contract with reference to medical payments is wholly unrestricted. Such payments can be limited in any way the parties see fit. As pointed out by Drummond in “Uninsured Motorist Coverage—A Suggested Approach to Consistency,” 23 Ark. L. Rev. 167, 181, the clause used in this policy says absolutely nothing about reduction of uninsured motorist coverage. The reduction under the clause before us only relieves the insurer from payment of that part of the damages which the insured may be entitled to recover from the uninsured tort-feasor which represents an amount paid or payable under medical payments coverage. The example given by Drummond at page 182 of his article is so clearly expository of the application of the policy clause we are considering, I take the liberty of quoting his language, viz: If, on the other hand, the language of the alternative policy form is utilized, the “damages which the insured may be entitled to recover from the owner or operator of an uninsured automobile” would be $30,000, and of that sum, $2,000 “represents expenses for medical services paid or payable” under the medical payments coverage. Thus, $30,000 less $2,000 is $28,000, but with an applicable uninsured motorist limit of only $10,000, A would be limited to a recovery of that amount. Drummond’s summary of the effect of the clause seems so clearly a correct interpretation that I also set it out, as follows: Thus, despite the interpretation announced by insurers and most courts, the clauses in the two uninsured motorist insuring agreement forms relative to the application of amounts paid under medical payments coverage are not parallel. The first form states clearly that the uninsured motorist insurance shall be reduced. The second states with equal clarity that legally recoverable damages shall be reduced, and the authors of this policy form presumably had the option of selecting the alternative form. Instead, they elected to say essentially this: (1) If the insured’s total damages are less than the limits of the uninsured motorist coverage, then that coverage is reduced by the amount paid under the medical payments coverage; (2) If the insured’s total damages exceed the sum of the uninsured motorist limits and the medical payments limits, there is no reduction of the former by the latter; (3) If the insured’s total damages exceed the uninsured motorist limits but are less than the combined uninsured motorist and medical payments limits, then you must determine the insured’s total damages, reduce them by the amount of medical expenses covered by the medical payments coverage, and pay the difference under the uninsured motorist coverage up to the limits of that coverage. This case comes before us on appeal from a denial of a motion for summary judgment by appellants, and an order dismissing their counterclaims. It was stipulated that Heiss was conscious for some period prior to his death which occurred within 1 Vz hours after the collision; that he left a widow who suffered mental anguish and loss of consortium; that he also left three children; that he was an engineer employed at a salary of $40,000; and that he had a life expectancy of 16.81 years. It was stipulated that Hall received various injuries, that he left surviving a widow whose life expectancy was 27.81 years and one child, and that he had a life expectancy of 14.14 years. It seems highly unlikely that the damages to either appellant would be so small as to reduce recoverable damages below the policy limits, but the application of the requisite standard should be a matter for the trial court upon remand. For various reasons, I do not consider the cases cited in the majority opinion applicable. For instance, in Stephens v. Allied Mutual Insurance Co., 182 Neb. 562, 156 N. W. 2d 133, 26 A. L. R. 3d 873 (1968), the clause was voided upon the premise that the coverage required by the statute of that state “is in the nature of a substitute liability policy,”—a premise that has been rejected by us. It is also based upon two separate and independent contractual provisions for which a separate premium is charged and collected. In the case before us the affidavit of appellee’s actuary is uncontradicted. He states that in computing the premium charged for uninsured motorist coverage under its policy the clause in question is taken into consideration, and that an increased premium rate for uninsured motorist coverage would result from payment of medical expense losses in addition to uninsured motorist coverage. This explanation is consistent with Drummond’s theory as to the effect of the clause. Furthermore, in that case the Nebraska court relied to some extent upon decisions that an insurer may not limit its liability under uninsured motorist coverage by setoffs or limitations through “other insurance” clauses, such as reduction claimed with respect to workman’s compensation or other insured motorist coverage., a position we have not taken. As a matter of fact, we have taken a contrary position as to “other insurance” coverage in MFA v. Wallace, 245 Ark. 230, 431 S. W. 2d 742, where we refused to follow decisions of federal district courts in Arkansas. We should have a consistency in the philosophy of our decisions on uninsured motorist coverage. While Wallace is certainly not controlling in this case before us, a result based upon Stephens certainly constitutes the adoption of an inconsistent philosophy. Bacchus v. Farmers Insurance Group Exchange, 106 Ariz. 280, 475 P. 2d 264 (1970) follows Stephens as a precedent. Another factor entered into Bacchus, however, in that a different policy clause was under consideration. In that policy, the medical payments were classified as advancements to be repaid in the form of a set-off against other insurance available under another provision of the same policy. There again, it is clear that separate premiums were paid for the two coverages, with no indication that either premium rate was in any respect dependent upon or related to the other coverage. In Tuggle v. Government Employees Ins. Co., 207 So. 2d 674, 24 A. L. R. 3d 1343 (Fla. 1968), decided by a 3-2 division, the Florida court emphasized the fact that the two classes of coverage “were contracted separately, with independent premiums.” I would remand the case for further proceedings consistent with Drummond’s interpretation hereinabove set out and reverse questions as to other such clauses and as to other factual backgrounds until they are really necessarily in issue.