Court Opinion

ID: 7826016
Source: CourtListenerOpinion
Date Created: 2022-09-07 18:07:08.061097+00
Date Added: 2024-06-11T16:30:51.810855
License: Public Domain

Robert H. Dudley, Justice, dissenting. In March 1992, appellant Alice Fimpel purchased an automobile insurance policy from appellee State Automobile Mutual Insurance Company covering a Nissan automobile. She rejected first party no-fault coverage, did not pay a premium for the coverage, and signed a form in compliance with Ark. Code Ann. § 23-89-403 (1987) rejecting the coverage. The policy provides that, if the policyholder acquires a new vehicle, it will have the same coverage as the vehicle it replaced. Later, she replaced the Nissan with an Oldsmobile. In March 1994, the insurance company renewed the policy and the renewed policy reflected that the Oldsmobile was the covered vehicle. The insurance company did not propose no-fault coverage for the substituted vehicle. Fimpel never withdrew her rejection of the no-fault coverage, and she never paid a premium for such coverage. On July 24, 1994, Fimpel’s Oldsmobile was struck by an unidentified car which was driven by an unknown person. She was injured in the accident and incurred medical expenses of $6,417.44. She submitted a claim for first party no-fault medical coverage. The insurance company refused to pay because she had rejected the coverage when she applied for the policy in 1992. Fimpel sued the insurance company. There was no material dispute about the facts, and both parties moved for summary judgment. The trial court granted summary judgment in favor of the insurance company because the Oldsmobile had been substituted for the Nissan, the terms of the policy provided that a substituted vehicle would have the same coverage as the original vehicle, the terms of the policy remained the same, Fimpel had rejected the coverage when she applied for the policy, and the policy was not contrary to public policy. The majority opinion reverses the trial court and holds that the insurance company must pay the claim. I dissent. The majority opinion admits that Ark. Code Ann. § 23-89-203 provided, in 1994, that rejection was effective for no-fault policy renewals and admits that the policy provided that a substituted vehicle would have the same coverage as the vehicle it replaced. It tacitly admits that the parties to an insurance contract have the right to make their own contract and that legal effect must be given to all provisions and language contained in an insurance contract that are not contrary to a statute or public policy. See Shelter Gen. Ins. Co. v. Williams, 315 Ark. 409, 867 S.W.2d 457 (1993). Even so, the majority opinion holds that Fimpel’s rejection did not apply to the substituted vehicle because of public policy set forth in two uninsured motorists cases, American Nat’l Property & Casualty Co. v. Ellis, 315 Ark. 524, 868 S.W.2d 469 (1994), and Lucky v. Equity Mut. Ins. Co., 259 Ark. 846, 537 S.W.2d 160 (1976). In those uninsured motorists cases we held that, when parties to an insurance contract agree to a policy endorsement which has the effect of substituting coverage of one automobile for another, the transaction constitutes new insurance. American Nat’l Property & Casualty Co. v. Ellis, 315 Ark. at 524, 868 S.W.2d at 470; Lucky v. Equity Mut. Ins. Co., 259 Ark. at 848, 537 S.W.2d at 162. In American Nat’l Property & Casualty Co. v. Ellis, we said that the holdings required insurers to offer uninsured motorist coverage to the insured when vehicles were substituted even though the insured had previously rejected such coverage. 315 Ark. at 524, 868 S.W.2d at 470. However, the wording of the statute involving uninsured motorist coverage, which was construed in the two above cited cases and relied upon in the majority opinion, and the wording of the statute involving no-fault coverage, which is at issue in this case, is profoundly different. Section 23-89-403(b), a part of the uninsured motorist statute discussed in the two cited cases, does not mention policy renewal. It only provides that rejection of this coverage “shall continue until withdrawn in writing by the insured.” Id. In American Nat’l Property & Casualty Co. v. Ellis, we construed this language to mean that insurers had to offer uninsured motorist coverage to the insured in the event the insured substituted vehicles even though the insured had previously rejected such coverage. Id. at 524, 868 S.W.2d at 470. But, unlike the language of the uninsured motorists statute, the no-fault insurance statute in effect in 1994 provided, “After the rejection, unless the named insured requests coverage in writing, the coverage need not be provided in, nor supplemental to, a renewal policy.” Ark. Code Ann. § 23-89-203(b) (Repl. 1992). In its ruling, the trial court astutely recognized the difference in the language of the uninsured motorist coverage statute and the no-fault coverage statute and ruled that the insured’s reliance on American National Property & Casualty Co. v. Ellis and Lucky v. Equity Mutual Insurance Co. was misplaced. Even though the above emphasized language in the no-fault coverage statute applies to both supplemental and renewal policies, the majority opinion states that it is ambiguous because the statute “does not precisely embrace renewals when vehicles have been substituted.” The accuracy of this statement is questionable, but even if it should be correct and even if there is some ambiguity about the legislative intent expressed in the no-fault coverage statute in effect in 1994, it was laid to rest by Act 527 of 1995. The act specifically states that its purpose is “to clarify” the statutes “to indicate that once an insured has rejected certain automobile insurance that the insurer should not be required thereafter to notify the insured of the availability of the rejected coverage at such time as the coverage not rejected is renewed . . . [or] substituted.” Act 527 of 1995, § 6 (emergency clause). It changes the wording of subsection (b) to provide as follows: (b) After a named insured or applicant for insurance rejects this coverage, the insurer or any of its affiliates shall not be required to notify any insured in any renewal, reinstatement, substitute, amended, or replacement policy as to the availability of the coverage. Act 527 of 1995, § 2 (to be codified as Ark. Code Ann. § 23-89-403(b)). It is the settled law of this court that it is permissible to rely on an act that was not in effect at the time of an incident if the act is merely for clarification. Pledger v. Baldor, 309 Ark. 30, 827 S.W.2d 646 (1992); cf. Nathaniel v. Forrest City Sch. Dist. No. 7, 300 Ark. 513, 780 S.W.2d 539 (1989). It is manifest from the unmistakable language of the 1995 act that the trial court was correct in its ruling and should be affirmed. The cardinal rule in construing and interpreting statutes is to give effect to the legislative intent. Southwest Elec. Power Co. v. Carroll Elec. Coop. Corp., 261 Ark. 919, 554 S.W.2d 308 (1977). It is also a cardinal rule of construction that legislative intent is to be first determined from the language used in the statute. Arkansas State Highway Comm’n v. Mabry, 229 Ark. 261, 315 S.W.2d 900 (1958). The basic rule of construction and interpretation to which all other construction and interpretation guides defer is to give effect to the legislative intent. McCoy v. Walker, 317 Ark. 86, 876 S.W.2d 252 (1994). The legislative intent is clear in this case. The majority opinion refuses to acknowledge it and refuses to acknowledge the public policy set and expressed by the General Assembly. This error causes the majority to violate the separation of powers doctrine, for it is the province of the legislative branch, and not the judicial branch, to set public policy. Arkansas Louisiana Gas v. Hardin, 206 Ark. 593, 176 S.W.2d 903 (1944).