Butterfield v. Norfolk & Dedham Ins. Co.

• Decision Date: 30 September 2004
• Citation: 2004 ME 124,860 A.2d 861
• Parties: Gregory L. BUTTERFIELD v. NORFOLK & DEDHAM MUTUAL FIRE INSURANCE CO.
• Court: Maine Supreme Court

860 A.2d 861

2004 ME 124

Gregory L. BUTTERFIELD v. NORFOLK & DEDHAM MUTUAL FIRE INSURANCE CO.

Supreme Judicial Court of Maine.

Argued October 14, 2003.

Decided September 30, 2004.

Thimi R. Mina (orally), McCloskey, Mina & Cunniff, L.L.C., Portland, for plaintiffs.

Paul S. Douglass (orally), Paul S. Douglass, P.A., Lewiston, for defendant.

Panel: SAUFLEY, C.J., and CLIFFORD, RUDMAN, DANA, ALEXANDER, CALKINS, and LEVY, JJ.

RUDMAN, J.

[¶ 1] Norfolk & Dedham Mutual Fire Insurance Co. appeals from a judgment entered in the Superior Court (Cumberland County, Humphrey, J.) in favor of Gregory L. Butterfield, on three counts of Butterfield's five-count complaint. Norfolk argues that the court erred by holding that provisions of the automobile insurance policy, issued by Norfolk, violate Maine's uninsured motorist statute, 24-A M.R.S.A. § 2902(1) (2000), impermissibly limiting Gregory's recovery to injury or damages sustained by persons named in the contract. We disagree and affirm the judgment.

[¶ 2] This case presents a narrow, yet important, question. Previously, we have held that when an uninsured motorist policy tracks the language in Maine's uninsured motorist statute, liability extends to cover not only named insureds, but any individual for whom a named insured is legally entitled to bring a claim for damages caused by an uninsured motorist. Jack v. Tracy, 1999 ME 13, 722 A.2d 869. The Superior Court addressed the question that necessarily follows: may an insurer use limiting language in an uninsured motorist policy, restricting its coverage to claims brought by named insureds, for injuries sustained by named insureds? We now hold that insurers may not limit uninsured motorist coverage by adding restrictive language to their uninsured motorist policies.¹

I. BACKGROUND

[¶ 3] Gregory's twenty-one-year-old daughter, Brandy, died in an automobile accident. Both the vehicle in which Brandy was a passenger and the driver of the other vehicle were uninsured. Gregory is a named insured on an automobile insurance policy issued by Norfolk. He filed a claim with Norfolk for all damages he was legally entitled to recover due to the death of Brandy. Norfolk denied Gregory's claims, citing language in his policy that limited uninsured motorist recovery to injuries sustained by "insured persons," or family members within the policy's definition. The policy defines family members as persons related by blood, marriage, or adoption, who reside with the insured. Thus, because Brandy did not reside with Gregory, she was not a named insured under his policy. Gregory sought a declaratory judgment that Norfolk was liable.

II. DISCUSSION

[¶ 4] "[W]e look first to the plain meaning of the statutory language as a means of effecting the legislative intent." State v. Shepley, 2003 ME 70, ¶ 12, 822 A.2d 1147, 1151 (quoting Pennings v. Pennings, 2002 ME 3, ¶ 13, 786 A.2d 622, 627) (internal quotation and citation omitted). "Unless the statute itself discloses a contrary intent, words in a statute must be given their plain, common, and ordinary meaning, such as [people] of common intelligence would usually ascribe to them." State v. Vainio, 466 A.2d 471, 474 (Me.1983). An insurance policy incorporates all the relevant mandatory provisions of the statute pursuant to which the policy was drafted. Skidgell v. Universal Underwriters Ins. Co., 1997 ME 149, ¶ 7, 697 A.2d 831, 833. The interpretation of section 2902(1) is a question of law, which we review de novo. See State v. McLaughlin, 2002 ME 55, ¶ 5, 794 A.2d 69, 72

.

[¶ 5] Maine law requires that any automobile insurance policy, insuring against liability, include coverage for "the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured, underinsured or hit-and-run motor vehicles, for bodily injury, sickness or disease, including death, resulting from the ownership, maintenance or use of such uninsured, underinsured or hit-and-run motor vehicle." 24-A M.R.S.A. § 2902(1). We have held that:

In contrast with the liberal construction to be given the remedial statute mandating uninsured motorist coverage in all liability insurance policies issued with respect to any vehicle registered or principally garaged in this state ... courts, in order to carry out the primary purpose of such legislation, will construe conditions and exceptions of the insurance contract, inserted therein in an attempt to limit the coverage prescribed by the statute, strictly against the insurer and liberally in favor of the insured.

Wescott v. Allstate Ins., 397 A.2d 156, 167 (Me.1979).

[¶ 6] Norfolk's uninsured motorist policy does not precisely track Maine's uninsured motorist law. Under Maine's uninsured motorist statute, insurance policies issued in this State must include "protection of persons insured thereunder who are legally entitled to recover damages from ... uninsured, underinsured or hit-and-run motor vehicles, for bodily injury." 24-A M.R.S.A. § 2902(1). Norfolk's policy deviates by limiting uninsured motorist coverage to damages an insured is legally entitled to recover because of bodily injury "sustained by an insured." Had Norfolk's policy tracked section 2902(1) without qualification, there is no question that Gregory would be able to recover for the death of Brandy, even though she was not a named insured under the policy. See Jack, 1999 ME 13, ¶ 12,

722 A.2d at 871-72.

[¶ 7] Norfolk relies heavily on cases from other jurisdictions, asserting that the Superior Court's holding runs counter to a majority view.² In order to understand why Norfolk's phalanx of authority is ultimately unpersuasive, a closer look into the past and present of uninsured motorist jurisprudence is helpful.

[¶ 8] Uninsured motorist coverage is a relatively recent development. "In 1955, certain auto insurance companies — in an evident effort to stave off the adoption by states of either compulsory insurance or unsatisfied judgment measures — began to offer uninsured motorist coverage in their own auto policies."³ Due to increasing costs attributed to uninsured motorists, the majority of states currently require that insurers at least offer uninsured motorist coverage.⁴

[¶ 9] States adopting uninsured motorist legislation typically used similar or identical language, which insurers have often tracked in the policies they issue. The proliferation of similarly worded uninsured motorist statutes and policies have encouraged courts and litigants to attempt to distill a majority position. The results are often misleading, however, as the cases may address different issues, and often base their holdings on legal and policy precedents that are not universally accepted.

[¶ 10] It is necessary, at the outset, to distinguish between two distinct issues. The first and primary issue is whether coverage under a particular uninsured motorist statute and policy extends to cover situations where a named insured brings a claim (usually under a wrongful death theory) based on damages caused by an uninsured motorist when the victim is not named in the policy. The second issue (before us today) is whether, having found that a particular uninsured motorist statute does extend to such claims, may an insurer refuse to insure against these claims by inserting limiting language to its uninsured motorist insurance policies. The first issue is one of scope, whereas the second asks whether the recognized scope may be contractually curtailed.⁵

[¶ 11] In most of the cases cited by Norfolk, courts are grappling with the first issue, involving scope. The resolution of this fundamental question usually turns on how the jurisdiction has historically approached the interpretation of insurance contracts and statutes. See, e.g., Allstate Ins. Co. v. Hammonds, 72 Wash.App. 664, 865 P.2d 560, 563-64 (1994)

; Gaddis v. Safeco Ins. Co., 58 Wash.App. 537, 794 P.2d 533, 536-37 (1990) (discussing that court's history of upholding insurance exclusions that bear a relationship to an increased risk borne by an insurer); Valiant Ins. Co. v. Webster, 567 So.2d 408, 410 (Fla.1990) (stating that Florida courts have "consistently followed the principle that if the liability portions of an insurance policy would be applicable to a particular accident, the uninsured motorist provisions would likewise be applicable; whereas, if the liability provisions did not apply to a given accident, the uninsured motorist provisions [did not apply]"). Thus, those courts relied upon their respective precedents and policy determinations in resolving the primary question of how far the Legislature intended uninsured motorist laws to reach.

[¶ 12] Any comparison with other jurisdictions must begin with the recognition that we have already interpreted Maine's uninsured motorist statute to extend coverage to wrongful death claims caused by an uninsured motorist, when the deceased was not an insured under the claimant's policy.⁶ Of the cases cited by Norfolk, two appear to be irrelevant;⁷ two come from jurisdictions that allow an insured to opt out of uninsured motorist coverage;⁸ another two involve insurance policies that track the states' uninsured motorist law without limiting language (posing the precise question addressed by this court in Jack);⁹ and three appear to be on point, involving similar statutes and policies, however containing decisions based on interpretations of the respective states' uninsured motorist statutes, which conflict with this Court's analysis in Jack.¹⁰ Therefore, none of these cases are particularly helpful in interpreting Maine's uninsured motorist statute.

[¶ 13] The case before us is informed by a series of cases in which we have interpreted uninsured motorist insurance contracts. In Jack we were faced with facts identical to those involved in the present case: a father sought compensation under his uninsured motorist policy for the wrongful death of his daughter at the hands of...