Court Opinion

ID: 9542917
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:40:19.835136+00
Date Added: 2024-06-11T15:09:15.706730
License: Public Domain

BURNETT, Judge,
dissenting.
Reduced to its essence, the majority opinion holds that persons injured in an automobile accident are not entitled to uninsured motorist benefits even though the accident was caused by an uninsured motorist and there is no liability coverage available under an insurance policy on the automobile involved. I dissent.
This case provides an unfortunate example of a “Catch-22.” Two girls, Spring and Dawn Locey, were seriously injured in March, 1984, as a result of negligence by an uninsured motorist who was driving a car owned by the girls’ father. When the girls applied for liability benefits under their father’s automobile insurance policy, the insurance company said “no.” The company pointed to a “household” exclusion in the policy and told the girls there was no liability coverage applicable to them. When the girls applied for uninsured motorist benefits, the company again said “no.” This time the company pointed to the existence of the insurance policy and *30told the girls that uninsured motorist benefits were barred with respect to any “insured vehicle.” To quote a line from Joseph Heller’s novel, “That is some Catch-22!”
The irony is deepened by the fact that household exclusions later were held invalid by our Supreme Court in Farmers Insurance Group v. Reed, 109 Idaho 849, 712 P.2d 550 (1985). The Supreme Court gave Reed a limited measure of retroactivity, making it applicable to “all actions pending” on December 31, 1984, and to “all actions arising” after that date. Id. at 854, 712 P.2d at 555. The Loceys’ claim arose before December 31, 1984, and suit was filed after that date. Consequently, through no apparent fault of the Loceys or their counsel, the girls’ claim “fell through the cracks” of Reed’s limited retroactivity scheme. The girls received no liability benefits, and they received no uninsured motorist benefits even though the driver was uninsured and the vehicle was uninsured as to them. I
The tone of the majority opinion is sympathetic to the Loeey girls’ plight. However, my colleagues deem themselves constrained to reach an unjust result for two reasons. First, they suggest that the outcome is consistent with a “majority” of cases decided in other jurisdictions. Second, they contend that the outcome is dictated by broad language employed by our Supreme Court in Dullenty v. Rocky Mountain Fire & Casualty Co., 111 Idaho 98, 721 P.2d 198 (1986). I respectfully disagree on both points.
The courts of other jurisdictions have been sharply divided on the validity of insurance policy provisions which exclude uninsured motorist benefits in cases like this one. My colleagues say that such exclusions have been upheld in decisions cited from fifteen states and have been struck down in decisions from only seven states. Ante at pp. 104-105. I submit that the balance of cases is not so one-sided. The proper focus is on decisions in states that have (or had, when the decisions were rendered) statutes neither specifically providing nor specifically excluding uninsured motorist benefits in this type of case. Among these decisions, I would classify eleven as excluding benefits,1 eight as protecting benefits,2 and three more as clearly indicating that benefits would be protected if that question were presented.3 Moreover, in one of the eleven states where benefits have been excluded, subsequent decisions have cast doubt upon the outcome.4 In five more of the same eleven states, the courts that excluded uninsured *31motorist benefits also upheld “household” exclusions from liability coverage.5 In each case, the denial of uninsured motorist benefits prevented an “end run” around the household exclusion. However, such cases are of dubious value today in Idaho, where “household” exclusions have been condemned as violative of public policy. Viewing the full range of case law on this subject, I conclude that my colleagues’ decision in this case is not supported by a well-defined “majority” of decisions elsewhere.
The second rationale for today’s decision is that denial of uninsured motorist benefits is mandated by our Supreme Court’s decision in the Dullenty case. However, the issue in Dullenty had nothing to do with a “household” exclusion or an “insured vehicle” exclusion. Rather, it dealt with a contractual prohibition against “stacking” of uninsured motorist coverages which had been purchased on several vehicles. In upholding that prohibition, the Supreme Court delivered a broad dictum, quoted ante at p. 105, to the effect that Idaho’s uninsured motorist law allows insurance companies to offer coverage which extends to “less than all circumstances.” But that language does not squarely address the issue here. Uninsured motorist benefits have not been denied in this case because of “circumstances” related to the accident which gave rise to the claim. Rather, and more precisely, benefits have been denied because the insurance policy treats a vehicle as “insured” when in fact all liability coverage is barred as to the pertinent class of claimants. I do not believe such an anomaly in an insurance policy is what the Dullenty court had in mind when it said that uninsured motorist coverage may extend to “less than all the circumstances.”
Moreover, I respectfully question whether the Dullenty dictum was truly intended to give sweeping approval to all contractual limitations upon uninsured motorist benefits. The author of Dullenty, Chief Justice Shepard, later dissented when the Supreme Court upheld “anti-stacking” provisions in the uninsured motorist sections of three policies issued by a single insurer. See Hansen v. State Farm Mutual Automobile Insurance Co., 112 Idaho 663, 672, 735 P.2d 974, 983 (1987) (majority opinion by Justice Bakes, joined by Justice Donaldson and Justice McFadden, pro tern). Chief Justice Shepard noted that Hansen was factually distinguishable from Dullenty because the “anti-stacking” clause in Dullenty had been applied to coverages under policies issued by two different insurers. The Chief Justice argued that this distinction cast a different light upon the risk an insurance company fairly could be expected to underwrite. The Chief Justice, joined in his dissent by Justice Huntley, would have refused to enforce the “anti-stacking” provision in Hansen.
The point germane here is that if the Dullenty dictum had been intended as a blanket endorsement of contractual restrictions upon uninsured motorist benefits, any factual distinction between Hansen and Dullenty as to underwriting risks would have been irrelevant to the outcome of the “stacking” issue. The Chief Justice and Justice Huntley clearly did not think it was irrelevant. Indeed, the dissenting opinion stated that the “ultimate" rationale of Dul-lenty was not the sanctity of contractual restrictions but the ability of insurance companies to assess risks adequately and to charge premiums accordingly. Id. Regardless of which side was “right” in Dul-lenty and Hansen, the interplay between the two cases indicates that the Supreme Court as a whole is not taking a broad, doctrinal approach to issues arising under the uninsured motorist statute, I.C. § 41-2502. Rather’ the Court is fleshing out the meaning of the statute on a case-by-case basis, having due regard for fairness among the parties and for any long-term impact on insurance underwriting practices.
In the present case, there are no long-term underwriting implications attendant to the Loceys’ claim. Their request for uninsured motorist benefits is a transitory phenomenon, created by the unique fact *32pattern of this case and by the limited retroactivity of the Supreme Court’s decision in Reed. In the post-Reed era, claims by persons in a principal insured’s household will be resolved under the liability provisions of the insurance policy, free from any “household” exclusion. No issue like the one now before us is likely to arise in a post-f?ee<¿ case.
When the question of fairness is considered, the facts militate in favor of allowing the Loceys’ claim. I acknowledge that the insurance company has paid the policy’s liability limits to other claimants who were injured in the same accident as were the Locey girls. However, the Loceys’ claim was not denied on that basis. Liability coverage for them was denied upon a contract exclusion found repugnant to public policy. Uninsured motorist coverage was denied for the specious reason that the vehicle was “insured,” although the very policy that provided the insurance also made it inapplicable to the instant claim.
Accordingly, I would reverse the district court’s judgment insofar as it holds that no uninsured motorist coverage is available to the Locey girls under the policy on their father’s car. However, I would be constrained to disallow any “stacking” of uninsured motorist, benefits, based on the Supreme Court’s majority opinions in Dullenty and Hansen.

. See Davis v. Bean, 804 F.2d 1018 (8th Cir.1986) (applying Arkansas law); Ex parte O’Hare, 432 So.2d 1300 (Ala.1983); Reid v. State Farm Fire & Casualty Co., 352 So.2d 1172 (Fla.1977); Hilyard v. Estate of Clearwater, 240 Kan. 362, 729 P.2d 1195 (1986); Smith v. Allstate Insurance Co., 483 A.2d 344 (Me.1984); Harrison v. MFA Mutual Insurance Co., 607 S.W.2d 137 (Mo.1980) (en banc); Willey v. Farmers Insurance Group, 86 N.M. 325, 523 P.2d 1351 (1974); Dairyland Insurance Co. v. Finch, 32 Ohio St.3d 360, 513 N.E.2d 1324 (1987); Parsons v. State Farm Mutual Automobile Insurance Co., 335 Pa.Super. 394, 484 A.2d 192 (1984); Holt v. State Farm Mutual Automobile Insurance Co., 486 S.W.2d 734 (Tenn.1972) (later superseded by contrary statute); and Kay v. Kay, 30 Utah 2d 94, 513 P.2d 1372 (1973), overruled on other grounds, Farmers Insurance Exchange v. Call, 712 P.2d 231 (Utah 1985).

. See Darner Motor Sales, Inc. v. Universal Underwriters Insurance Co., 140 Ariz. 383, 682 P.2d 388 (1984) (disapproving State Farm Mutual Automobile Insurance Co. v. Gibbs, 139 Ariz. 274, 678 P.2d 459 (Ct.App.1984)); Barnes v. Powell, 49 Ill.2d 449, 275 N.E.2d 377 (1971); Rodman v. State Farm Mutual Automobile Insurance Co., 208 N.W.2d 903 (Iowa 1973); State Farm Mutual Automobile Insurance Co. v. Nester, 459 So.2d 787 (Miss.1984); State Farm Mutual Automobile Insurance Co. v. Wendt, 708 P.2d 581 (Okla.1985); Bowsher v. State Farm Fire & Casualty Co., 244 Or. 549, 419 P.2d 606 (1966) (later superseded by contrary statute); Faraj v. Allstate Insurance Co., 486 A.2d 582 (R.I.1984); and First National Insurance Co. of America v. Perala, 32 Wash.App. 527, 648 P.2d 472 (1982).

. See Roach v. Central National Insurance Co. of Omaha, 60 Mich.App. 40, 230 N.W.2d 297 (1975); Guiberson v. Hartford Casualty Insurance Co., 704 P.2d 68 (Mont.1985); and Niemann v. Badger Mutual Insurance Co., 143 Wis.2d 73, 420 N.W.2d 378 (Ct.App.1988).

. In Florida, the Reid decision, fully cited at n. 1, supra, has been undercut by Jernigan v. Progressive American Insurance Co., 501 So.2d 748 (Fla.Dist.Ct.App.1987), citing Allstate Insurance Co. v. Boynton, 486 So.2d 552 (Fla.1986).

. See the Hilyard, Harrison, Finch, Holt and Kay decisions fully cited at n. 1, supra.