Allstate Insurance Company v. Hague

• Citation: 66 L.Ed.2d 521,449 U.S. 302,101 S.Ct. 633
• Decision Date: 13 January 1981
• Docket Number: No. 79-938,79-938
• Parties: ALLSTATE INSURANCE COMPANY, Petitioner, v. Lavina HAGUE, Personal Representative of Hague's Estate
• Court: United States Supreme Court

449 U.S. 302

101 S.Ct. 633

66 L.Ed.2d 521

ALLSTATE INSURANCE COMPANY, Petitioner,

v Lavina HAGUE, Personal Representative of Hague's Estate.

No. 79-938.

Argued Oct. 6, 1980.

Decided Jan. 13, 1981.

Rehearing Denied March 2, 1981.

See 450 U.S. 971, 101 S.Ct. 1494.

Syllabus

Respondent's husband died of injuries suffered when a motorcycle on which he was a passenger was struck by an automobile. The accident occurred in Wisconsin near the Minnesota border. The operators of both vehicles were Wisconsin residents, as was the decedent, who, however, had been employed in Minnesota and had commuted daily to work from Wisconsin. Neither vehicle operator carried valid insurance, but the decedent held a policy issued by petitioner covering three automobiles owned by him and containing an uninsured motorist clause insuring him against loss incurred from accidents with uninsured motorists, but limiting such coverage to $15,000 for each automobile. After the accident, respondent moved to and became a resident of Minnesota, and was subsequently appointed in that State as personal representative of her husband's estate. She then brought an action in a Minnesota court seeking a declaration under Minnesota law that the $15,000 uninsured motorist coverage on each of her late husband's three automobiles could be "stacked" to provide total coverage of $45,000. Petitioner defended on the ground that whether the three uninsured motorist coverages could be stacked should be determined by Wisconsin law, since the insurance policy was delivered in Wisconsin, the accident occurred there, and all persons involved were Wisconsin residents at the time of the accident. The trial court, interpreting Wisconsin law to disallow stacking, concluded that Minnesota's choice-of-law rules required the application of Minnesota law permitting stacking, and granted summary judgment for respondent. The Minnesota Supreme Court affirmed.

Held : The judgment is affirmed. Pp. 307-320; 322-331.

Minn., 289 N.W.2d 43, affirmed.

Justice BRENNAN, joined by Justice WHITE, Justice MARSHALL, and Justice BLACKMUN, concluded that Minnesota has a significant aggregation of contacts with the parties and the occurrence, creating state interests, such that application of its law is neither arbitrary nor fundamentally unfair, and, accordingly, the choice of law by the Minnesota Supreme Court does not violate the Due Process Clause of the Fourteenth Amendment or the Full Faith and Credit Clause. Pp. 307-320.

(a) Respondent's decedent was a member of Minnesota's work force. The State of employment has police power responsibilities towards nonresident employees that are analogous to those it has towards residents, as such employees use state services and amenities and may call upon state facilities in appropriate circumstances. Also, the State's interest in its commuting nonresident employees, such as the respondent's decedent, reflects a state concern for the safety and well-being of its work force and the concomitant effect on Minnesota employers. That the decedent was not killed while commuting to work or while in Minnesota does not dictate a different result, since vindication of the rights of the estate of a Minnesota employee is an important state concern. Nor does the decedent's residence in Wisconsin constitutionally mandate application of Wisconsin law to the exclusion of forum law. Employment status is not a sufficiently less important status than residence, when combined with the decedent's daily commute across state lines and the other Minnesota contacts present, to prohibit the choice-of-law result in this case on constitutional grounds. Pp. 313-317.

(b) Petitioner was at all times present and doing business in Minnesota. By virtue of such presence, petitioner can hardly claim unfamiliarity with the laws of the host jurisdiction and surprise that the state courts might apply forum law to litigation in which the company is involved. Moreover, such presence gave Minnesota an interest in regulating the company's insurance obligations insofar as they affected both a Minnesota resident and court-appointed representative (respondent) and a longstanding member of Minnesota's work force (respondent's decedent). Pp. 317-318.

(c) Respondent became a Minnesota resident prior to institution of the instant litigation. Such residence and subsequent appointment in Minnesota as personal representative of her late husband's estate constitute a Minnesota contact which gives Minnesota an interest in respondent's recovery. Pp. 318-319.

Justice STEVENS concluded:

1. The Full Faith and Credit Clause did not require Minnesota, the forum State, to apply Wisconsin law to the contract-interpretation question presented. Although the Minnesota courts' decision to apply Minnesota law was unsound as a matter of conflicts law, no threat to Wisconsin's sovereignty ensued from allowing the substantive question as to the meaning of the insurance contract to be determined by the law of another State. Pp. 322-326.

2. The Due Process Clause of the Fourteenth Amendment did not prevent Minnesota from applying its own law. Neither the "stacking" rule itself nor Minnesota's application of it to these litigants raised any serious question of fairness. Nor did the Minnesota courts' decision to apply this rule violate due process because that decision frustrated the contracting parties' reasonable expectations. The decision was consistent with due process because it did not result in unfairness to either litigant, nor because Minnesota had an interest in the plaintiff as resident or the decedent as employee. Pp. 326-331.

Mark M. Nolan, St. Paul, Minn., for petitioner.

Andreas F. Lowenfeld, New York City, for respondent.

Justice BRENNAN announced the judgment of the Court and delivered an opinion, in which Justice WHITE, Justice MARSHALL, and Justice BLACKMUN joined.

This Court granted certiorari to determine whether the Due Process Clause of the Fourteenth Amendment ¹ or the Full Faith and Credit Clause of Art. IV, § 1,² of the United States Constitution bars the Minnesota Supreme Court's choice of substantive Minnesota law to govern the effect of a provision in an insurance policy issued to respondent's decedent. 444 U.S. 1070, 100 S.Ct. 1012, 62 L.Ed.2d 750 (1980).

I

Respondent's late husband, Ralph Hague, died of injuries suffered when a motorcycle on which he was a passenger was struck from behind by an automobile. The accident occurred in Pierce County, Wis., which is immediately across the Minnesota border from Red Wing, Minn. The operators of both vehicles were Wisconsin residents, as was the decedent, who, at the time of the accident, resided with respondent in Hager City, Wis., which is one and one-half miles from Red Wing. Mr. Hague had been employed in Red Wing for the 15 years immediately preceding his death and had commuted daily from Wisconsin to his place of employment.

Neither the operator of the motorcycle nor the operator of the automobile carried valid insurance. However, the decedent held a policy issued by petitioner Allstate Insurance Co. covering three automobiles owned by him and containing an uninsured motorist clause insuring him against loss incurred from accidents with uninsured motorists. The uninsured motorist coverage was limited to $15,000 for each automobile.³

After the accident, but prior to the initiation of this lawsuit, respondent moved to Red Wing. Subsequently, she married a Minnesota resident and established residence with her new husband in Savage, Minn. At approximately the same time, a Minnesota Registrar of Probate appointed respondent personal representative of her deceased husband's estate. Following her appointment, she brought this action in Minnesota District Court seeking a declaration under Minnesota law that the $15,000 uninsured motorist coverage on each of her late husband's three automobiles could be "stacked" to provide total coverage of $45,000. Petitioner defended on the ground that whether the three uninsured motorist coverages could be stacked should be determined by Wisconsin law, since the insurance policy was delivered in Wisconsin, the accident occurred in Wisconsin, and all persons involved were Wisconsin residents at the time of the accident.

The Minnesota District Court disagreed. Interpreting Wisconsin law to disallow stacking, the court concluded that Minnesota's choice-of-law rules required the application of Minnesota law permitting stacking. The court refused to apply Wisconsin law as "inimical to the public policy of Minnesota" and granted summary judgment for respondent.⁴

The Minnesota Supreme Court, sitting en banc, affirmed the District Court.⁵ The court, also interpreting Wisconsin law to prohibit stacking,⁶ applied Minnesota law after analyzing the relevant Minnesota contacts and interests within the analytical framework developed by Professor Leflar.⁷ See Leflar, Choice-Influencing Considerations in Conflicts Law, 41 N.Y.U.L.Rev. 267 (1966). The state court, therefore, examined the conflict-of-laws issue in terms of (1) predictability of result, (2) maintenance of interstate order, (3) simplification of the judicial task, (4) advancement of the forum's governmental interests, and (5) application of the better rule of law. Although stating that the Minnesota contacts might not be, "in themselves, sufficient to mandate application of [Minnesota] law," ⁸ 289 N.W.2d 43, 49 (1978), under the first four factors, the court concluded that the fifth factor-application of the better rule of law-favored selection of Minnesota law. The court emphasized that a majority of States allow stacking and that legal decisions allowing stacking "are fairly recent and well considered in light of current uses of automobiles." Ibid. In addition, the court found the Minnesota rule superior to Wisconsin's "because it requires the cost of accidents with uninsured motorists to be spread more broadly through insurance premiums...