Court Opinion

ID: 9519428
Source: CourtListenerOpinion
Date Created: 2023-08-07 01:16:20.121179+00
Date Added: 2024-06-11T12:44:21.870278
License: Public Domain

VERNON R. PEDERSON, Surrogate Judge,
dissenting.
In Hughes v. State Farm Mut. Ins. Co., 236 N.W.2d 870, 885 (N.D.1975), a majority of this court said that a policy of insurance is an adhesion contract and for that reason concluded “it must be construed most strongly against the insurance company.” Calling the language that excluded coverage unambiguous and clear, this court, nevertheless, voided the exclusion for public policy reasons. That prompted me to dissent.
The majority in this case does not say that this insurance policy is an adhesion contract nor that public policy voids the clear language of the exclusion.
Ordinarily, this court’s opinions in insurance policy cases have said that only the language that is ambiguous is construed strongly against the insurance company. If the language was deemed to be clear, the words were applied according to the sense or meaning of those words. Some of the cases which covered at least the period of the 1950’s through the 1980’s are: Schmitt v. Paramount Fire Ins. Co., 92 N.W.2d 177 (N.D.1958); Universal Underwriters Ins. Co. v. Johnson, 110 N.W.2d 224 (N.D.1961): Stetson v. Blue Cross of North Dakota, 261 N.W.2d 894 (N.D.1978); and Walle Mut. Ins. Co. v. Sweeney, 419 N.W.2d 176 (N.D.1988). There have been some notable exceptions. Hughes, supra, for example.
I believe that the time has come for this court to state that insurer-insuree obligations arise, at least in part, out of the relationship. There are circumstances in which a clearly stated exclusion in an insurance policy can be just as unconscionable as one which is ambiguous and, as in Bekken v. Equitable Life Assur. Soc., 70 N.D. 122, 293 N.W. 200 (1940), no words and no contract can still result in a relationship which creates obligations that are enforceable. Whether the interpretation relies upon the words “reasonable expectations,” or “equitable estoppel,” or “public policy” should not be that significant. See Mills v. Agrichemical Aviation, Inc., 250 N.W.2d 663 (N.D.1977), and Auto-Owners Ins. Co. v. Jensen, 667 F.2d 714 (Ca.1981). See also Farmers Cooperative Ass’n of Churches Ferry v. Cole, 239 N.W.2d 808 (N.D.1976).