Yamaguchi v. State Farm Mut. Auto. Ins. Co.

• Citation: 706 F.2d 940
• Decision Date: 24 May 1983
• Docket Number: No. 81-4107,81-4107
• Parties: Thelma YAMAGUCHI, individually and as Personal Representative of the Estate of Stanley Yamaguchi, deceased; and Robin Yamaguchi, minor, and Lynne Yamaguchi, minor, by Thelma Yamaguchi, their Guardian Prochein Ami, Plaintiffs-Appellees, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, an Illinois corporation, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 940

706 F.2d 940

Thelma YAMAGUCHI, individually and as Personal Representative of the Estate of Stanley Yamaguchi, deceased and Robin Yamaguchi, minor, and Lynne Yamaguchi, minor, by Thelma Yamaguchi, their Guardian Prochein Ami, Plaintiffs-Appellees, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, an Illinois corporation, Defendant-Appellant.

No. 81-4107.

United States Court of Appeals Ninth Circuit.

Submitted Aug. 10, 1982.

Decided May 24, 1983.

Henry N. Kitamura, Roy Chang, Honolulu, Hawaii, for plaintiffs-appellees.

Ronald Y.K. Leong, Kobayashi, Watanabe, Sugita & Kawashima, Honolulu, Hawaii, for defendant-appellant.

Appeal from the United States District Court for the District of Hawaii.

Before SCHROEDER, FLETCHER, and NORRIS, Circuit Judges.

FLETCHER, Circuit Judge:

This is a diversity action against an insurer to recover no-fault benefits under two Hawaii no-fault insurance policies. Defendant appeals from the trial court's granting of plaintiffs' motion for partial summary judgment of $100,000 against the defendant. 515 F.Supp. 186 (D.Haw.1981). The trial court ordered State Farm Mutual Automobile Insurance Co. (State Farm) to pay plaintiffs the $100,000 in total no-fault benefits available under two Hawaii no-fault insurance policies, each of which has an aggregate limit of coverage of $50,000. Defendant appeals on the ground that the

trial court misconstrued both the provisions of the Hawaii no-fault insurance statute, Haw.Rev.Stat. Secs. 294-1 to 294-41 (1976 and 1981 Supp.) (Chapter 294), and the terms of the applicable no-fault insurance policies. We note jurisdiction under 28 U.S.C. Sec. 1291 (1976) ¹ and reverse in part and affirm in part.

FACTS

On May 26, 1978, Stanley Yamaguchi (Yamaguchi) died as the result of an accident in Hawaii involving a 1972 Dodge station wagon in which he was a passenger. At the time of the accident, Yamaguchi was 44 years old and was employed by United Airlines at a salary of $2,854.00 a month. At the time of his death his lifetime earnings were expected to exceed substantially $115,000.

The station wagon in which Yamaguchi was killed was covered by a Hawaii no-fault insurance policy issued by National Union Fire Insurance Co. (National Union). The National Union policy had a limit of aggregate no-fault benefits of $15,000. On August 8, 1978, Thelma Yamaguchi, the surviving spouse and personal representative of the estate of Yamaguchi, received a payment of $15,000 from National Union, designated for survivors' loss.

At the time of the accident, Yamaguchi himself owned two cars, a 1971 Volkswagen and a 1970 Camaro, and two separate Hawaii no-fault insurance policies covering those cars. Each policy had been issued by State Farm and declared Yamaguchi as the "named insured." Yamaguchi paid separate premiums on each policy.

Each of the two State Farm policies provides that:

The company will pay, in accordance with the Hawaii no-fault law, no-fault benefits on account of accidental harm sustained by an eligible injured person and caused by an accident arising out of the operation, maintenance, or use of a motor vehicle as a vehicle.

Each policy defines "accidental harm" to include "death ... caused by a motor vehicle accident to a person while in ... a motor vehicle" and "eligible injured person" to include "the named insured." Each policy provides that "[n]o fault benefits shall consist of and be defined as": "(a) Medical Expenses," "(b) Rehabilitation Expenses," "(c) Work Loss," "(d) Substitute Services Expenses," "(e) Funeral Expenses," "(f) Survivors' Loss," "(g) Attorney's Fees and Costs," and "(h) Other Appropriate and Reasonable Expenses necessarily incurred as a result of accidental harm." ² Each policy states that [r]egardless of the number of persons insured, policies or self-insurance applicable, claims made or insured motor vehicles to which this coverage applies, the company's liability for all no-fault benefits to or on behalf of any one eligible injured person who sustains accidental harm in any one motor vehicle accident shall be $15,000 in the aggregate.

As endorsed, the aggregate limit of each State Farm policy is increased from $15,000 to $50,000. Each policy further limits certain types of no-fault benefits--including work loss, survivor's loss, funeral expenses, and substitute services expenses--to certain dollar amounts.

Thelma Yamaguchi sued State Farm to recover no-fault benefits for herself, her children, and the insured's estate ³ under the two State Farm policies, based on the loss of lifetime earnings of Yamaguchi. In the district court, Thelma Yamaguchi moved for partial summary judgment on her claim for $100,000 in no-fault benefits. State Farm countered with a cross-motion for partial summary judgment, asserting several reasons why Thelma Yamaguchi was not entitled to recover under the State Farm policies: (1) that Hawaii insurance law prohibits recovery of no-fault benefits under more than one insurance policy; (2) that Hawaii law prohibits the recovery of no-fault benefits in excess of $15,000 in the event of the death of the injured person; (3) that each State Farm policy limits the total recovery of no-fault benefits by the estate and survivors of a fatally injured insured person to $15,000; and (4) that recovery under the State Farm policies was limited by the terms of the policies to the difference between the benefits of the policy with the greatest no-fault benefits ($50,000) and the benefits under the primary policy ($15,000), or $35,000.

The district court rejected all of these arguments. It held that under Hawaii law Thelma Yamaguchi was entitled to recover no-fault work loss benefits under each State Farm policy in the amount of the aggregate limits of each policy. The trial court ordered recovery against State Farm in the amount of $100,000, the sum of the aggregate no-fault benefit limits of the two State Farm policies.

DISCUSSION

Defendant challenges the district court judgment on two grounds. First, State Farm claims that the Hawaii no-fault insurance statute limits the combined recovery of no-fault benefits under all applicable Hawaii no-fault insurance policies to $15,000. It argues that the Hawaii no-fault insurance law both prohibits the recovery of no-fault benefits under more than one insurance policy and in any case limits the total recovery under all applicable insurance policies by the estate and survivors of a person who dies as the result of a motor vehicle accident to $15,000. Second, State Farm contends that, even if Hawaii no-fault insurance law does not impose the $15,000 limitation, the terms of Yamaguchi's two State Farm policies do. State Farm argues that the policies limit the total recovery of no-fault benefits by the estate and survivors of a person who dies as the result of a motor vehicle accident to $15,000,

or, at least, limit further recovery to $35,000, the difference between the aggregate limit of $50,000 under the State Farm policies and the $15,000 recovered from the primary insurer. We agree with State Farm's last contention and accordingly reduce the trial court's judgment against State Farm from $100,000 to $35,000.

I. Limitations on Recovery Under Hawaii Law.

State Farm first contends that the Hawaii no-fault insurance statute prevents "policy stacking"--the recovery of no-fault benefits under more than one insurance policy. ⁴ It further asserts that the statute limits the no-fault benefits in the case of death to $15,000. ⁵

A. Prohibition Against "Policy Stacking."

Neither State Farm policy by its terms denies benefits whenever benefits are available under another policy applicable to the same accident. ⁶ State Farm contends, however, that the Hawaii statute prohibits an injured person from recovering benefits under a policy other than the policy covering the automobile he occupied at the time of the accident. It claims this to be so even where another, or secondary, policy by its own terms purports to allow such benefits. Under State Farm's interpretation of Chapter 294, an injured person is permitted to collect no-fault benefits from a policy other than a policy covering the occupied vehicle only when the occupied vehicle is not itself covered by a no-fault insurance policy.

To support its construction of Chapter 294, State Farm points to two provisions of section 294-5, the section of the Hawaii no-fault statute entitled "Payment from which insurer." Upon analysis, we conclude that neither of these provisions prohibits "policy stacking." ⁷

1. Limitation of Section 294-5(c).

Section 294-5(c) states that "[n]o payment of no-fault benefits may be made to the occupants of a motor vehicle other than the insured motor vehicle." An "insured motor vehicle" is elsewhere defined to mean "a motor vehicle ... [w]hich is insured We disagree with State Farm's reading. Throughout Chapter 294, the Hawaii legislature used the distinct terms "owner," "driver," "occupant," "operator," "insured," and "user" to signify discrete legal capacities in which a person might collect insurance benefits. ⁸ Since words used in two or more sections of a statute are presumed to be used in the same sense throughout the statute, Rodrigues v. State, 52 Haw. 156, 168, 472 P.2d 509, 518 (1970), and since a statute ought to be construed to avoid making any word superfluous, In re City & County of Honolulu Corp. Counsel, 54 Haw. 356, 374, 507 P.2d 169, 178 (1973), the use of the specific term "occupant" in section 294-5(c) indicates that that section limits an injured person's no-fault recovery only in his capacity as an "occupant." Thus, we read section 294-5(c) merely to restrict the recovery of one injured in a motor vehicle accident, to the extent he seeks recovery as an occupant of an involved vehicle and under the policies covering the various vehicles involved in the accident, to recovery under the policy covering the car he in fact occupied (provided the occupied car has...