Court Opinion

ID: 9852095
Source: CourtListenerOpinion
Date Created: 2023-09-24 05:24:20.430171+00
Date Added: 2024-06-11T09:22:21.878564
License: Public Domain

N. J. Kaufman, J.
(dissenting). I have no quarrel with the majority’s notation that a "contract is enforceable unless considerations of equity and justice or of public policy dictate otherwise”. The majority does not dispute that plaintiffs father, an owner of three automobiles, paid three times for uninsured motorist coverage in three different policies of insurance with the same insurer but is not allowed to collect any benefits beyond the face amount of any one policy. Thus, without passing *784on the majority’s public policy argument, it is still necessary to closely examine the contract in terms of "considerations of equity and justice”. Such an examination is particularly appropriate in the case of an insurance contract. In Zurich Insurance Co v Rombough, 384 Mich 228, 232-233; 180 NW2d 775 (1970), the Supreme Court quoted California Supreme Court Justice Tobriner with approval from Gray v Zurich Insurance Co, 65 Cal 2d 263, 269-270; 54 Cal Rptr 104; 419 P2d 168 (1966):
" 'In interpreting an insurance policy we apply the general principle that doubts as to meaning must be resolved against the insurer and that any exception to the performance of the basic underlying obligation must be so stated as clearly to apprise the insured of its effect.
" 'These principles of interpretation of insurance contracts have found new and vivid restatement in the doctrine of the adhesion contract. As this court has held, a contract entered into between two parties of unequal bargaining strength, expressed in the language of a standardized contract, written by the more powerful bargainer to meet its own needs, and offered to the weaker party on a "take it or leave it basis” carries some consequences that extend beyond orthodox implications. Obligations arising from such a contract inure not alone from the consensual transaction but from the relationship of the parties.
" 'Although courts have long followed the basic precept that they would look to the words of the contract to find the meaning which the parties expected from them, they have also applied the doctrine of the adhesion contract to insurance policies, holding that in view of the disparate bargaining status of the parties we must ascertain that meaning of the contract which the insured would reasonably expect. ’ ” (Emphasis added.)
Clearly, where a consumer is faced with a lack of "meaningful choice”, courts have an obligation to give careful scrutiny to assailed provisions in an *785adhesion-type contract. See generally, White and Summers, Uniform Commercial Code, West Publishing Co, 1972, pp 112-119, 128-130.
Michigan requires that owners of automobiles registered in this state carry no-fault personal protection automobile insurance as a prerequisite to operation. MCLA 500.3101; MSA 24.13101. Uninsured motorist protection is no longer required by law, as MCLA 500.3010; MSA 24.13010 (which mandated uninsured motorist coverage) was repealed by 1972 PA 345. Nevertheless, it is frequently purchased by auto owners in their desire to have full insurance coverage. Commonly, uninsured motorist provisions contain an "other insurance” clause.1
The majority has found that the "other insurance” clause is unambiguous. They assert that the clear and plain import of this clause is to limit the risk assumed by the insurer for the additional premiums to insuring additional vehicles. Thus, the intention manifested by the policy is to limit the insurer’s liability which they find was agreed to by the parties and should be enforced.
I am not convinced that this was the "meaning of the contract which the insured would reasonably expect”. Plaintiffs insurance contract also contains an "exclusions” clause.2 An examination of the effect of combining the "exclusions” and "other insurance” clauses suggests the possibility of an unconscionable result. To fully protect himself, the insured must retain policies on each automobile owned. Yet, should an accident occur, the insured is limited to the face value of the policy for the vehicle involved. Thus, the insured is *786paying additional premiums without an increase in the dollar amount of coverage. It may be argued that the effect of such a procedure would be to allow the insurer to stack premiums (a windfall profit, in effect) by extracting more money than necessary to cover a given liability amount, where the insured’s damages are greater than the face amount of any one uninsured motorist provision. As this Court should try to avoid unconscionable results, I would construe the contract against the draftsman, especially in light of the statutory requirement of no-fault insurance and the favored position of insurance companies. I therefore dissent. See Blakeslee v Farm Bureau Mutual Insurance Co of Michigan, 388 Mich 464; 201 NW2d 786 (1972), Boettner v State Farm Mutual Insurance Co, 388 Mich 482; 201 NW2d 795 (1972). If such a result works an injustice to the insurer, it, in contrast to the insured, can always petition the insurance commission for a rate adjustment. An insured has no place to turn for redress.
An additional matter of disagreement arises from the majority’s reliance on Arminski v United States Fidelity & Guaranty Co, 23 Mich App 352; 178 NW2d 497 (1970), leave granted, October 20, 1970, appeal dismissed by order dated June 2, 1971, 384 Mich 769. I believe Arminski is based on an incorrect reading of the Supreme Court’s holding in Horr v Detroit Automobile Inter-Insurance Exchange, 379 Mich 562; 153 NW2d 655 (1967). .
In Horr, two insurers were involved and the "other insurance” clause was used to prorate the coverage between the insurers. In attempting to determine the intent of the contracting parties, the Supreme Court gave a literal meaning to the "other insurance” clause. Arminski involved a single insurer and two uninsured motorist provisions contained in a single contract. In Arminski, *787this Court also gave a literal meaning to the "other insurance” clause but without any consideration of the purpose of that clause or the intent of the contracting parties.
In United States Automobile Association v Doktor, 86 Nev 917, 919-920; 478 P2d 583, 584 (1970), the Nevada Supreme Court construed an "other insurance” clause substantially similar to the one in the present case. The Court stated:
"Its purpose is twofold — to prorate the loss and to fix the limit thereof. Obviously, there is no purpose in prorat'ion unless the 'other insurance’ was written by another company, since that provision is designed to preclude payment of a disproportionate amount of a loss shared with another company. Deterding v State Farm Mutual Automobile Ins Co [78 Ill App 2d 29], 222 NE2d 523 * * * (1966); Safeco Ins Co of America v Robey, 399 F2d 330 (8 Cir 1968); Woolston v State Farm Mutual Ins Co, 306 F Supp 738 (WD Ark 1969); cf Government Employees Ins Co v Sweet, 186 So 2d 95 (Fla App, 1966).” (Footnote omitted.)
A similar conclusion was reached by the Illinois Supreme Court in Glidden v The Farmers Automobile Insurance Association, 57 Ill 2d 330, 336; 312 NE2d 247, 250 (1974), under facts similar to ours:
"The apparent purpose of 'other insurance’ clauses is to make certain that one company does not pay a disproportionate amount of a loss which is to be shared with another company. There is no purpose in proration unless the 'other insurance’ is written by another company. The clause has no meaningful purpose when applied to coverage issued by one company to one insured.”
See also Cammel v State Farm Mutual Automobile Insurance Co, 86 Wash 2d 264; 543 P2d 634 (1975).
*788Our Supreme Court applied the "other insurance” clause in Horr exactly as Dokter and Glidden suggest.
Thus, since the purpose for the "other insurance” clause is not present in the instant case— because only one insurance company is involved— it should not be used to limit plaintiffs recovery. Logic impels me to disregard Arminski’s myopic interpretation of the Supreme Court’s holding in Horr. Therefore, I would reverse the declaratory judgment in favor of defendant and remand for proceedings consistent with this opinion.

 The “other insurance” clause is designed to prevent the insured from cumulating recoveries under several different policies.

 The "exclusions” clause is designed to limit the liability of an insurer when the insured owns more than one automobile.