Court Opinion

ID: 9629689
Source: CourtListenerOpinion
Date Created: 2023-08-22 09:47:23.424229+00
Date Added: 2024-06-11T09:17:56.733552
License: Public Domain

RUDMAN, J.,
with whom CALKINS, J., joins, dissenting.
[¶ 15] Because I disagree with the way the Court frames and resolves the issue before us today, I respectfully dissent. The issue is whether State Farm’s uninsured/underinsured vehicle policy provides less coverage than is required by Maine’s uninsured/underinsured vehicle law. The Court, focusing on legislative intent, holds that State Farm’s policy does not imper-missibly limit coverage. Upon review of the plain language of the statute, however, it is clear that the insurance contract provides less coverage than is required under the law.
[¶ 16] The Court fairly recites the facts, however, I would add that Levine, being only fifteen years of age at the time of the accident, normally would be entitled to more time to bring her suit than an adult would have been. Moreover, because the tortfeasor did not die in Maine, and his death was not reported in Maine newspapers, there is no reason to believe that Levine was negligent in not bringing her suit earlier. Unaware that the tortfeasor had passed away, Levine believed that she was well within the appropriate statute of limitations for bringing suit for her injuries. I mention these facts not because they bear on the interpretation of the insurance contract or the statute, but rather to refute the implication that the equities operate against Levine.
[¶ 17] I accept the Court’s conclusion that the language of State Farm’s insurance contract denies Levine’s coverage, and turn to the issue of whether the policy’s language violates the provisions of Maine’s uninsured/underinsured vehicle law. We assume that an insurance policy incorporates all the relevant mandatory provisions of the statute pursuant to which the policy was drafted. Skidgell v. Universal Underwriters Ins. Co., 1997 ME 149, ¶ 7, 697 A.2d 831, 833. When the *30provision of a particular insurance policy conflicts with a statutory mandate, however, the statute controls. Id.
[¶ 18] Statutory interpretation always begins with the letter of the law. The express language of section 2902 is clear and unambiguous. Title 24-A, section 2902(4) is the statutory provision granting insurance companies only the right to reduce, or subrogate, the compensation they are obligated to pay parties insured under their uninsured motorist coverage. See 24-A M.R.S.A. § 2902(4) (2000). Insurance companies assert this right embodied in section 2902(4) by including “limit[s] reduction clauses” in their uninsured motorist policies. See, e.g., Tibbetts v. Me. Bonding & Cas. Co., 618 A.2d 731, 732 (Me.1992) (“ ‘[D]amages ... shall be reduced by all sums ... [p]aid because of the “bodily injury” by or on behalf of persons ... who may be legally responsible.’ ”) (quoting the Tibbettses’ insurance policy) (emphasis added). However, a limits reduction clause that extends an insurer’s subrogation rights beyond that authorized by section 2902(4) is unenforceable. See id. at 734 (holding that an insurance policy’s offset provision was unenforceable because section 2902(4) does not authorize a reduction for proceeds received from a fully insured joint tortfeasor); see also Wescott v. Allstate Ins., 397 A.2d 156, 166 (Me.1979) (“[T]o the extent that policy terms are repugnant to the express or implied requirements of [section 2902(4) ], they are void and unenforceable.”).
[¶ 19] To resolve the present appeal, therefore, one must first ascertain section 2902(4)’s parameters and, second, analyze whether State Farm’s limits reduction clause exceeds those parameters. We review the interpretation of section 2902(4), a question of law, de novo. See State v. McLaughlin, 2002 ME 55, ¶ 5, 794 A.2d 69, 72. “We look first to the plain meaning of the statutory language as a means of. effecting the legislative intent.” Coker v. City of Lewiston, 1998 ME 93, ¶ 7, 710 A.2d 909, 910. “Unless the statute itself discloses a contrary intent, words in a statute must be given their plain, common, and ordinary meaning, such as [people] of common intelligence would usually ascribe to them.” State v. Vainio, 466 A.2d 471, 474 (Me.1983).
[¶ 20] Section 2902(1) requires State Farm to provide uninsured/underinsured vehicle coverage. Section 2902(2) specifies the amount of underinsured and uninsured coverage an insurer must provide. In this case it is undisputed that the State Farm policy provided $100,000 of underinsured motorist coverage. These two subsections establish the extent of State Farm’s potential liability.10
[¶ 21] State Farm asserts that section 2902(4), which it characterizes as a “set off provision,” allows it to prospectively limit its coverage to $50,000. Section 2902(4), however, is not a set off provision. Section 2902(4) provides:
In the event of payment to any person under uninsured vehicle coverage, and subject to the terms of such coverage, to the extent of such payment the insurer shall be entitled to the proceeds of any settlement or recovery from any person legally responsible for the bodily injury as to which such payment was made, and to amounts recoverable from the assets of the insolvent insurer of the other motor vehicle.
24-A M.R.S.A. § 2902(4) (emphasis added). The plain language of this subsection *31merely creates an entitlement on the part of the insurer, to any proceeds that the insured receives from the tortfeasor, in the event, and to the extent that the insured received payment under the policy.11 This entitlement only operates after the insured has recovered under the policy, and only entitles the insurer to settlement proceeds. Thus, this section prevents an insured, from being compensated twice for her or his injuries.12 This section does not affect the primary liability of the insurer.
[¶ 22] The Court interprets this clear statutory language — “the insurer shall be entitled to the proceeds of any settlement or recovery” — to mean that the insurer is entitled to limit its underinsured vehicle coverage based on the prospect of a settlement or recovery. To understand how the Court reaches this interpretation, it is necessary to examine its discussion of the intent behind underinsured vehicle coverage.
[¶23] The Court spends little time addressing the express language of the statute, preferring to focus on the “entire statutory scheme,” the “nature of gap coverage,” the “intent of the Legislature,” as well as the rule in other states. Even if all of these sources conflict with the actual words in section 2902(4),13 they are inapplicable in the absence of ambiguous language in the statute. We have consistently held that, when interpreting statutory language, we will not resort to indicia of legislative intent other than the statute itself unless the statute is ambiguous. Home Builders Ass’n of Me. v. Town of Eliot, 2000 ME 82, ¶4, 750 A.2d 566, 569 (“Only if the statutory language is ambiguous will ‘we examine other indicia of legislative intent, such as legislative history.’ ”) (emphasis added) (quoting Coker, 1998 ME 93, ¶ 7, 710 A.2d at 910).14 The Court does not assert that any part of *32section 2902(4) is ambiguous, and therefore, its plain language must be applied. Because the section merely creates an entitlement in any proceeds or settlement, it does not reduce the extent of State Farm’s liability. State Farm’s entitlement to settlement proceeds, should such proceeds ever materialize, in no way dilutes its obligation under the statute to insure Levine to the full extent of its underin-sured vehicle coverage for bodily injury or death.
[¶ 24] The common and ordinary meaning of the phrase “the insurer shall be entitled to the proceeds of any settlement or recovery” indicates our Legislature intended that an insurer’s subrogation rights are not triggered until the injured insured receives some type of payment from the party responsible for causing the claimant’s bodily injury. See 24-A M.R.S.A. § 2902(4); Tibbetts, 618 A.2d at 734 (“Therefore, the insurer’s right of subrogation also applies only to proceeds received from, or on behalf of, the operator of the underinsured vehicle that triggered the insurer’s obligation.”); accord Deyette v. Liberty Mut. Ins. Co., 142 N.H. 560, 703 A.2d 661, 663 (1997) (“Recovery by an insured from an underinsured motorist tortfeasor triggers an insurer’s right to reduce payment under uninsured motorist coverage, even though the injured insured has not been fully compensated.”); Muir v. Hartford Accident & Indem. Co., 147 Vt. 590, 522 A.2d 236, 239 (1987) (“Section 941(e) [analogous provision to section 2902(4) ] applies only to payments a plaintiff receives from the uninsured motorist.”).
[¶ 25] I note that we previously recognized such an interpretation of section 2902(4) in dicta. Young v. Greater Portland Transit Dist., 535 A.2d 417, 420 (Me.1987). In Young, we recognized that an insurance company’s subrogation rights could be “impair[ed]” when an injured uninsured motorist is “legally entitled” to payment from the insurance company, yet the claimant is barred from asserting a cause of action against the owner of the uninsured vehicle who caused the injury because the applicable tort statute of limitations had expired. Id. This observation was implicitly premised on the notion, which I would make clear, that the insurer’s statutory subrogation rights were extinguished once the limitations period expired on the claimant’s cause of action because the company lost its subrogation rights once the claimant was unable to receive proceeds from the tortfeasor. See id. (“[T]he insurer has other means available to it to protect [its subrogation] rights. In any event, subrogation rights are generally of little practical importance in this area of the law.”).
[¶ 26] Finally, my interpretation of section 2902(4) also comports with the uninsured vehicle statute’s overall objective of ensuring that the injured insured receives full satisfaction of damages to which he or she is entitled before the insurance company’s subrogation rights are implicated. Wescott, 397 A.2d at 169 (“In view of the fact that [the uninsured vehicle statute] must be construed liberally in favor of the insured victim and strictly against the insurer, [section 2902(4) ] must be given that narrow interpretation which favors full satisfaction by the insured victim of his damages to which he is legally entitled to recover from the owners or operators of the uninsured vehicle before the right of subrogation attaches.”).
[¶27] Insurance companies have generally acknowledged section 2902(4)’s limitation on offsets by including language in their policy that only permits reductions for damages “paid” by the owner or operator of the. uninsured or underinsured vehicle responsible for causing the claimant’s *33bodily injury. See, e.g., Saucier v. Allstate Ins. Co., 1999 ME 197, ¶ 1 n. 1, 742 A.2d 482, 484 (‘“Damages payable will be reduced by ... all amounts paid by the owner or operator of the uninsured auto or anyone else responsible.’ ”) .(quoting Saucier’s insurance policy) (emphasis added). Unlike those policies, however, State Farm’s policy contravenes section 2902(4) because it attempts to create an offset for “any amount ... payable,” and for the “total of the bodily injury limits of all other vehicle liability policies or bonds that apply ” to the “legally liable” party, regardless of whether the party responsible for causing the injury pays the uninsured motorist any proceeds. (Emphasis added.)
[¶ 28] In light of the foregoing, State Farm’s subrogation rights in this case never attached because Levine never received payment from Kruzynski or Kruzynski’s liability carrier. See 24-A M.R.S.A. § 2902(4); Tibbetts, 618 A.2d at 784. State Farm is therefore not entitled to the $50,000 offset, and the limit-reduction clause contained in its uninsured motorist coverage is unenforceable to the extent that it permits an offset when the injured party does not receive payment from the party responsible for causing the claimant’s bodily injury.
[¶29] In its conclusion, the Court suggests that, if my analysis is adopted, “the economic risks of injury in motor vehicle accidents would shift entirely to the under-insured vehicle coverage carrier.” The circumstances of this case are too unique to draw sweeping conclusions from it. I note, however, that the Legislature has already shifted to the insurance industry “the burden of compensating for injuries which would otherwise go without redress from the individual victim to the insurance industry for a premium.” Wescott, 897 A.2d at 166. I would affirm the judgment entered in the Superior Court.

. State Farm does not deny that it is liable under its underinsurance policy. The issue here is whether State Farm can prospectively limit its underinsurance coverage based on possible recovery from other drivers.

. The operative and unambiguous concept is "the event of payment." It is undeniably the fulcrum upon which the entire subsection turns. It is also undeniable that, in the case before us, the event of payment has not occurred. The Court reads the language of section 2902(4) to allow an insurer to prospectively limit coverage for any amount that an insured may be entitled to receive, irrespective of whether the insured actually receives a single cent.

. As we have previously said in Wescott v. Allstate Insurance:
24-A, M.R.S.A., § 2902(4) only assures to the insurer, once it has made payment under the uninsured vehicle coverage, entitlement or subrogation rights "to the proceeds of any settlement or recovery from any person legally responsible for the bodily injury as to which such payment was made, and to amounts recoverable from the assets of the insolvent insurer of the other motor vehicle.”
397 A.2d 156, 168 (Me.1979).

. The intentions of the Legislature with respect to the circumstances before us today are highly debatable. The Court’s result ensures that the victim of a drunk driving accident will go without compensation for her injuries because a technicality allows her insurer to avoid liability. It is doubtful that the Legislature intended the statute to have this effect. See Wescott, 397 A.2d at 166 ("The legislative intent 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.”) (emphasis added); see also Peerless Ins. Co. v. Progressive Ins. Co., 2003 ME 66, ¶6, 822 A.2d 1125, 1127 ("Overall, '[t]he uninsured motorist statute is to be construed so as to assure a person injured by an uninsured motorist that he will ... recover, from whatever source available, up to the total amount of his damages.' ”) (quoting Wescott, 397 A.2d at 167).

. See also Tibbetts v. Me. Bonding & Cas. Co., 618 A.2d 731, 733 (Me.1992) (“‘Unless the statute reveals a contrary intent, — the words "must be given their plain, common and ordinary meaning.” We will not look beyond clear and unambiguous statutory language.’”) (quoting State v. Edward C., 531 A.2d 672, 673 (Me.1987)).