Court Opinion

ID: 9549694
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:23:30.418111+00
Date Added: 2024-06-11T15:20:46.412129
License: Public Domain

MR. JUSTICE CARRIGAN,
concurring in part and dissenting in part:
I respectfully concur in part and dissent in part.
While concurring in all other aspects of the majority opinion, I respectfully dissent from the majority’s decision as to the last issue considered, the method of apportioning the loss between the two companies. The Court here applies what it characterizes as the “majority rule,” but reaches the result through interpreting provisions of the two policies rather than by settling the underlying legal issues involved.
In my view the policy provisions invoked do not govern and the Court should resolve the primary issue argued by the parties by adopting the “50-50 proration” rule followed by the Court of Appeals.
The policy provisions relied on by this Court govern contractual relations between each insurer and its respective insured, not contractual relations between the two insurance companies. Thus, although these provisions may place a ceiling on the amount for which each company may be liable to indemnify its own insured, they cannot bind a different insurance company with which there has been no negotiation of terms and from which no consideration has been received. In short there is no evidence of a contract between the two insurers regarding the proportion of the loss to be borne by each. Of course they are free to enter such a contract. But, absent any contractual arrangement, apportionment of the loss should be governed by law. The effect of the Court’s opinion is to force upon two insurance companies a contract they did not negotiate and whose terms they did not agree to accept.
The injustice of our thus forcing contracts upon insurance companies may be illustrated by a simple example. Assume that X Company’s business consists primarily of writing high limit coverage, typically at least $100,000 - $300,000 liability limits. Assume further that Y Company specializes in writing high risk, low limits coverage and never writes policies for more than the $15,000 per person - $30,000 per accident - minimum coverage required by law. In every accident jointly caused by an X Company insured and a Y Company insured the rule today adopted places a disproportionately high share of the loss on X Company. This is true even *525though it is likely that the high risk drivers insured by Y Company will be more at fault in causing the losses than the standard risk drivers insured by X Company. It seems highly unlikely that X Company would voluntarily enter into an agreement with Y Company to apportion joint losses according to respective coverage limits, for Y Company would always have minimum limits. Such a contract would be a “no win” proposition for X Company.
Insurers should be free to enter into or decline such contracts with other insurers without interference by this Court. Certainly we should not impose upon insurance companies a contract which potentially could be so grossly unfair to one of the companies.
Given the need to choose a rule for apportioning losses, I would affirm the choice made by the Court of Appeals as the rule most likely to achieve justice in most cases. This rule would require each company to contribute equally until the limits of the smaller policy were exhausted. Any unpaid portion of the loss would then be paid from the larger policy to the extent of its limits. In cases where the loss is less than either policy limit the loss would be borne on a 50-50 basis. Likewise, where the loss is no greater than twice the coverage provided in the smaller policy, the loss would be shared equally. Where the negligence of two drivers contributes to bring about a loss, there is no rational reason to assume that it is fair to apportion more of the loss to the person having more insurance coverage. Such a rule penalizes the more prudent, responsible driver who provides greater coverage than required by law and rewards the driver, often the high risk driver with a bad driving record, who purchases only the minimum coverage required.
The injustice is most apparent when the losses are high. For example, assume that P is seriously injured through the negligent driving of X and Y, each in a separate car. Assume that X and Y were equally at fault. Assume X has $15,000 coverage and Fhas $300,000 coverage. The loss is $21,000. If the so-called “majority” rules applies, 2t”s company will pay 15/315 or 1/21 of the loss: $1,000. F’s company will pay 20/21 or $20,000. Under the rule chosen by Judge Coyte’s opinion for the Court of Appeals, the rule I would adopt, each company would pay $10,500.
The inequity of the so-called “majority” view becomes more apparent as the coverage purchased by the more responsible insured increases. When applied to persons who have prudently provided “umbrella coverage” with the common limits of $1,000,000 or $5,000,000, the rule adopted by this Court today produces results that are atrocious.
While companies selling low coverage policies to high risk drivers perform a valuable and socially useful function, there is no reason to subsidize them at the expense of more careful drivers who buy higher coverage. Ideally each insurer should bear the portion of the total loss caused by its insured. Absent a rule requiring that, however, the rule adopted by the *526Court of Appeals is the more just alternative.
I am authorized to state that MR. CHIEF JUSTICE PRINGLE joins me in this dissent.