Court Opinion

ID: 6550056
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:23:47.383466+00
Date Added: 2024-06-11T15:56:05.078015
License: Public Domain

Donald L. Corbin, Judge, dissenting. I respectfully, but strongly disagree with the majority. Although there are cases which do suggest the proper reasoning to be used when strict construction of statutes would appear to mandate dual liability, Pucci v. Novel Lithographers, Inc., 29 A.D. 2d 590, 285 N.Y.S. 2d 362 (1967), the Supreme Court of Arkansas has given us guidance on the issue of strict construction. St. Paul Fire and Marine Insurance Co. v. Central Surety & Ins. Corp., 234 Ark. 160, 350 S.W. 2d 685 (1961) was a case involving Arkansas’ cancellation requirements. The employer had originally maintained a policy with Central Surety which it asked to be cancelled. St. Paul wrote the employer a new policy which went into effect on September 9. The claim arose on October 3 and Central Surety’s policy was not effectively cancelled until October 7. St. Paul contended that dual coverage existed at the time of the claim and moved to apportion the loss. Justice George Rose Smith said, in part: [T]he rule of strict construction should not be carried beyond the reason for its existence. The legislature was plainly concerned with the protection of employees, but it still permitted an accelerated cancellation date when other insurance had been procured. Double coverage is not contemplated. The Legislature was concerned about protection of its municipal employees, but to infer that the Legislature intended that the State and Home Insurance Co. both have liability for the City of Waldo’s loss, is carrying the rule of strict construction beyond the reason for its existence. The Administrative Law Judge cited as his sole authority for determining the dual liability, the very old case of Cowles v. State Insurance Fund, 67 Idaho 165, 173 P. 2d 722 (1946). There, the State of Idaho, who evidently insured private businesses, had a policy covering a logging business. The policy contained a provision that expressly stated that the policy would be in full force until cancelled by the State Fund and expressly permitted the employer to carry additional insurance. The employer secured a private policy, which also recognized the right of the employer to carry additional insurance and requested the State to cancel its policy and return the unearned premium. The State did not send out the cancellation notice as required by law and did not return the premium. A claim arose and the private carrier asked for apportionment of the loss. The Idaho court granted the apportionment, stating that the law in Idaho was definite and longstanding, that strict compliance with statutory procedures was necessary to cancel a policy. To distinguish the Cow les case from the case at bar, it is of utmost importance to note: (1) Act 469 of 1973 did not expressly authorize the City of Waldo to maintain a private plan in addition to the state plan. (2) The definite and longstanding rule of strict compliance in the State of Idaho is opposite to the rule of construction announced in St. Paul Fire and Marine Ins. Co. v. Central Surety & Ins. Corp., supra. (3) The State did not provide a contract of insurance coverage. (4) The State does not insure private industries. The monies withheld from the City of Waldo’s turn-back funds for the state plan were not in any sense of the word a “premium”. A premium as used in this sense and as defined in Webster’s New Collegiate Dictionary, 2nd Edition, is “the consideration paid for a contract of insurance.” The Commission found important to their decision that either respondent would have been solely liable if not for the presence of the other. This is true, but it does not imply that the City of Waldo was dually covered. In fact, the City rejected the offer of State Fund coverage and did not know until 1976 that the turn-back funds were being deducted. What existed between the City of Waldo and the State Fund, if anything, was a relationship created by law and not by contract. Under the statute, a fund is created by the deposit of turn-back monies (taxpayers’ monies) that ordinarily would go directly to the municipality. To avoid this withholding by the State, the municipality is required to do one of two things: (1) have an election to deny workers’ compensation benefits or (2) send a copy of its private insurance policy to the State for certification. If none of these acts are done by the municipality, then the State will withhold the monies. In fact, the City expressly refused the State coverage. It failed to send the Home policy for certification. On this failure, the State Administrator of the Fund, being charged with being assured that the Waldo employees did in fact have coverage, withheld turn-back monies from the City of Waldo. The intent of the Legislature is made clear by a partial reading of the emergency clause attached to Act 469 of 1973 which states: It is hereby found and determined by the General Assembly that Workmen’s Compensation benefits are not presently provided for employees of municipalities, while such benefits are provided for employees of the State and its agencies, departments and institutions; .... I would reverse. It is apparent from a reading of the statute and particularly the emergency clause, that the intent of the legislature was to mandate coverage to municipal employees — not to go into the insurance business. I would have no problem had we two private insurance carriers before us. They would have been entitled to apportionment. The Act was to make sure that our municipal employees were protected from loss due to injury. It was not the State’s responsibility to see that an adequate policy was presented to them for approval. The State could just go so far, politically. The members of the Legislature recognized the separate governmental status of municipalities.