Allstate Ins. Co. v. Wyoming Ins. Dept.

Citation672 P.2d 810
Decision Date18 November 1983
Docket NumberNo. 83-52,83-52
PartiesALLSTATE INSURANCE COMPANY, Allstate Indemnity Company, Farmers Insurance Exchange, Truck Insurance Exchange, Mid-Century Insurance Company, State Farm Mutual Automobile Insurance Company, and State Farm Fire and Casualty Company, Appellants (Petitioners), v. WYOMING INSURANCE DEPARTMENT, J.T. Langdon, as Insurance Commissioner of the State of Wyoming, and Thomas E. Power, as Hearing Officer for the Wyoming Insurance Department, Appellees (Respondents).
CourtUnited States State Supreme Court of Wyoming

John A. Sundahl and George E. Powers, Jr., of Godfrey & Sundahl, Cheyenne, for appellants.

A.G. McClintock, Atty. Gen., Gerald A. Stack, Deputy Atty. Gen., John W. Renneisen, Sr. Asst. Atty. Gen., Kelly S. Davis, Sp. Asst. Atty. Gen., Cheyenne, for appellees.

Before ROONEY, C.J., and THOMAS, ROSE, BROWN and CARDINE, JJ.

ROSE, Justice.

On February 11, 1983 the district court affirmed administrative orders of the hearing officer for the Wyoming Insurance dated December 13, 1982 and December 28, 1982. The hearing officer's decisions upheld and affirmed an earlier order of the Wyoming Insurance Department which, on May 25, 1982, had the effect of withdrawing--for compulsory-insurance compliance purposes--the insurance commissioner's prior approval of all automobile liability-policy forms containing what is known in the insurance business as the "household exclusion clause." The policy forms in question contain household-exclusion language which excepts coverage from any loss to any insured or any spouse, relative or member of the family of an insured residing in the same household as the insured. It is stipulated that the exclusion clauses in the policies encompass persons who fall outside of and are in addition to the husband-and-wife, and parent-and-child categories, for which some courts have held that common-law immunity has traditionally existed. The hearing officer in his order of December 13, 1982, found and concluded that the household-exclusion clauses contained in the appellant insurance companies' liability policies are not excepted by statute. 1 He went on to reason that the policies therefore violate the plain language of the statutes and the public policy of the state of Wyoming as that language and public policy are contained in the compulsory insurance statute, § 31-4-120, W.S.1977, 1983 Cum.Supp., when the motor vehicle safety responsibility act, § 31-9-101, et seq., W.S.1977, (hereinafter referred to as the financial responsibility law), the compulsory insurance statute, § 31-4-120, supra, and the uninsured motor vehicles act, § 31-10-101, et seq., W.S.1977, are considered together.

The December 13 order made reference to the fact that the legislature, under the compulsory insurance statute, had directed that all motor vehicle owners in the state who operate or permit the operation of a motor vehicle must have an acceptable bond in effect or be insured against bodily-injury and property-damage liability. The automobile liability-insurance provision of § 31-4-120(a), W.S.1977, says:

"(a) No owner of a motor vehicle required to be licensed shall operate or permit the operation of the vehicle without having in full force and effect an automobile liability policy as provided by W.S. 31-9-403 * * *." 2

The hearing officer found that the household-exclusion clause had the effect of eliminating the minimum liability security which is mandated by § 31-9-405(b)(ii) and § 31-9-102(a)(x), W.S.1977 of the financial responsibility law and § 31-10-101 of the uninsured motor vehicles act, 3 and, to the extent of such minimum coverage, was void for any purposes contemplated by the compulsory insurance statute. 4 The rule of Alm v. Hartford Fire Insurance Company, Wyo., 369 P.2d 216 (1962), to which the hearing officer had reference, supra n. 4, holds that the parties have the right to embody in their insurance contracts whatever lawful terms they wish. It was his judgment that the companies remained free to include in their policies any such provisions as were not inconsistent with the public policy and the statutes of the state of Wyoming.

In response, it is the contention of the appellant insurance companies that there is in fact an exception to Wyoming's compulsory-insurance mandate which is made applicable through the provisions of § 31-9-405(b)(ii) and (c), supra n. 3, and the uninsured motor vehicles act, § 31-10-101, supra. These statutes provide in relevant part that the vehicle owner's policy of liability insurance need only insure the named and other insureds "against [or from] loss from the liability imposed by law," and that policies containing the household exclusionary clauses do in fact furnish the required coverage.

The insurance companies reason this way:

When the compulsory insurance statute (§ 31-4-120(a)) speaks of the automobile owner being possessed of such a public liability policy as is contemplated by § 31-9-403, supra n. 2, of the financial responsibility law, the legislature intended that the liability policy need only contain such coverage as is envisioned by the financial responsibility law taken as a whole, including § 31-9-405(b)(ii) and (c) of that act (supra, n. 3), as well as the language of the uninsured motor vehicles act, and that any exclusions which are there contained and applicable to these provisions of the statute are, therefore, applicable to the compulsory insurance statute. It follows--say the appellants--that, if insurance policies containing the household exclusion are acceptable to the financial responsibility law and the uninsured motor vehicles act, they are, therefore, certifiable for compulsory--insurance purposes. This conclusion is reached through a course of logic which goes like this: Since this court has adopted the intra-family and inter-spousal immunity doctrine, 5 the same policies which contained the household exclusionary clauses and were satisfactory for all purposes under the financial responsibility law and uninsured motor vehicles act, are also adequate for purposes of complying with the compulsory insurance statute for the reason that there is no possibility of "loss from the liability imposed by law" under either the financial responsibility law or the uninsured motor vehicles act as regards these family-household categories of individuals.

It follows, say the appellant companies, that the household-exclusion clauses of the policies are compatible with this court's immunity decisions and, therefore, with the public policy announced in the compulsory insurance statute.

The insurance companies identify these following issues for our appellate consideration:

"I. DOES THE FAMILY EXCLUSION CLAUSE VIOLATE THE PUBLIC POLICY OF THE STATE OF WYOMING AS EMBODIED IN THE MOTOR VEHICLE SAFETY-RESPONSIBILITY ACT?

"II. DOES THE FAMILY EXCLUSION CLAUSE VIOLATE THE PUBLIC POLICY OF THE STATE OF WYOMING AS EMBODIED IN THE COMPULSORY INSURANCE STATUTE?

"III. DOES THE FAMILY EXCLUSION CLAUSE VIOLATE THE PUBLIC POLICY OF THE STATE OF WYOMING AS EMBODIED IN THE UNINSURED MOTORIST ACT?"

We perceive the main issue for decision to be more succinctly stated as follows:

Does the "loss from the liability imposed by law" language of the financial responsibility law and the uninsured motor vehicles act constitute an exception to the minimum coverage mandated by the compulsory insurance statute?

For purposes of this opinion, we agree with the insurance companies that all relevant provisions of both the financial responsibility law and the uninsured motor vehicles act must be considered together when ascertaining the public policy which has been announced by the legislature through the enactment of the compulsory insurance statute. This means that the "liability imposed by law" language of both the financial responsibility law and the uninsured motor vehicles act must be taken into account when attempting to identify the public policy contained in the compulsory law. In undertaking our task, we must decide whether or not this language of the financial responsibility law and the uninsured motor vehicles act was intended to embrace inter-spousal and intra-family immunity in such a way as to effectively structure an exception to the compulsory insurance statute which contemplates that all owners of motor vehicles will be insured.

We will affirm and hold that the compulsory-insurance provisions of the Wyoming statute (§ 31-4-120, supra), when considered together with the financial responsibility law (§ 31-9-101, et seq., supra) and the uninsured motor vehicles act (§ 31-10-101, supra), identify an overriding public policy which requires that automobile public-liability and property-damage insurance policies issued in purported compliance with the compulsory insurance statute, § 31-4-120, supra, must--to the extent of such minimum liability security as is identified in §§ 31-9-405(b)(ii) and 31-9-102(a)(x), supra--cover all owners of motor vehicles who operate or permit the operation of their motor vehicles in Wyoming. Further, we will hold that no Wyoming statutes, nor any controlling Wyoming case law, make any such exceptions to the mandatory requirements of the compulsory-insurance provisions of § 31-4-120, supra, as are contemplated by the household-exclusion clauses contained in the insurance companies' policies.

In coming to these conclusions, we observe that, in Wyoming, the degree of protection afforded the motoring public and the requirements imposed on vehicle owners in order to maintain that degree of protection are embodied in the compulsory insurance statute (§ 31-4-120, supra), the financial responsibility law (§ 31-9-101 et seq., supra), and the uninsured motor vehicles act (§ 31-10-101 et seq., supra). The three acts must be considered together, keeping in mind the overriding public policy as announced in the compulsory insurance statute, the most recently enacted of the three statutes. Since the exceptions to the...

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