Balestrieri v. Hartford Acc. & Indem. Ins. Co.

• Decision Date: 26 September 1974
• Docket Number: No. 1,CA-CIV,1
• Citation: 526 P.2d 779,22 Ariz.App. 255
• Parties: Nicholas BALESTRIERI, Appellant, v. HARTFORD ACCIDENT & INDEMNITY INSURANCE CO., Appellee. 2233.
• Court: Arizona Court of Appeals

Page 779

526 P.2d 779

22 Ariz.App. 255

Nicholas BALESTRIERI, Appellant, v. HARTFORD ACCIDENT & INDEMNITY INSURANCE CO., Appellee.

No. 1 CA-CIV 2233.

Court of Appeals of Arizona, Division 1.

Sept. 26, 1974.

Rehearing Denied Nov. 1, 1974.

Gorey & Ely by Joseph M. Bettini, Phoenix, for appellant.

Snell & Wilmer by Bruce Norton, Phoenix, for appellee.

OPINION

HATHAWAY, Chief Judge.

The question before us is whether an insurance company can contractually restrict its uninsured motorist coverage to situations in which there is physical contact between the insured and a 'hit-and-run' vehicle without violating the legislative policy of A.R.S. § 20--259.01 requiring automobile liability insurers to provide uninsured motorist coverage.

The trial court made the following findings of fact to which neither party objects:

'On January 20, 1971, Nicholas Balestrieri was traveling in a northerly direction in the center lane on Interstate Highway I--70. An unidentified vehicle changed lanes directly in front of Mr. Balestrieri's vehicle. Mr. Balestrieri swung to the right to avoid vehicle #1 and struck a street light pole. There was no contact of any kind or nature between the Balestrieri vehicle and the unidentified vehicle. The unidentified vehicle did not stop and has not subsequently been identified, nor has the driver.

At the time of the accident, a contract of insurance existed between Mr. Balestrieri and Hartford Accident & Indemnity Company (which provided for uninsured motorist coverage).'

The policy which was admitted into evidence includes a 'hit-and-run' automobile in its definition of an uninsured automobile. It defines hit- and-run automobile in part as 'an automobile which causes bodily injury to an insured Arising out of physical contact of such automobile with the insured or with an automobile which the insured is occupying at the time of the accident. . . .' ¹

The trial court ruled that plaintiff's claim was not covered by the uninsured motorist portion of the policy because there was no physical contact between the two vehicles and that the hit-and-run provisions in the policy were valid under A.R.S. § 20--259.01. Judgment was entered for the insurer and plaintiff appeals.

Defendant-insurer cites Lawrence v. Beneficial Fire & Casualty Ins. Co., 8 Ariz.App. 155, 444 P.2d 446 (1968), decided by Division One of this court, in support of its position that a non-physical contact provision is a valid exclusion from uninsured motorist coverage in this jurisdiction. However, Lawrence was decided before the enactment of A.R.S. § 20--259.01 and involved only the question of whether the non-physical contact provision was in conflict with the general uninsured motorist liability language contained elsewhere in the policy. The court held that the exclusion did not conflict with the coverage language, but merely clarified it.

Plaintiff does not argue that the policy is ambiguous or misleading as the insured argued in Lawrence. His position is that the language excluding coverage for non-physical contact accidents violates A.R.S. § 20--259.01 which requires that all automobile liability insurance policies provide uninsured motorist coverage. We therefore do not deem the Lawrence decision to be authoritative to the disposition of this appeal.

Plaintiff relies heavily upon our decision in Mazon v. Farmers Insurance Exchange, 13 Ariz.App. 298, 475 P.2d 957 (1970), in which we hold that uninsured motorist coverage which required physical contact with the uninsured automobile violated A.R.S. § 20--259.01. However, on review, our Supreme Court found error in a different area of our decision and vacated the entire case in Mazon v. Farmers Insurance Exchange, 107 Ariz. 601, 491 P.2d 455 (1971). The court expressly refused to decide the issue before us today stating:

'Since we are of the opinion that the case may be disposed of by the answer to appellant's second question, we need not discuss whether physical contact by an uninsured motorist's vehicle is or is not required, nor do we feel it necessary to determine whether a 'hit-and-run' vehicle is within the purview of § 20--259.01.' 107 Ariz. at 602--603, 491 P.2d at 456--457.

We therefore approach the issue of whether an insurance company can limit its hit-and-run coverage to physical contact situations as one of first impression in this jurisdiction. A.R.S. § 20--259.01(A) reads in pertinent part:

'A. On and after January 1, 1966, no automobile liability or motor vehicle liability policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle, shall be delivered or issued for delivery in this state, with respect to any motor vehicle registered or principally garaged in this state, unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in § 28--1142 (Safety Responsibility Act), under provisions filed with and approved by the insurance director, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom.'

Our first consideration is whether an insurance company is required under § 20--259.01(A) to insure against personal injury or death caused by the owners or operators of hit-and-run automobiles. In other words, is a hit-and-run automobile an 'uninsured motor vehicle' within the scope of the statute? If not, it is clear that the insurer and insured would be completely free to define or limit hit-and-run coverage since it would neither be prohibited nor required by the statute.

Courts in at least three jurisdictions, with statutes similar to § 20--259.01 providing for mandatory uninsured motorist coverage, have reasoned that hit-and-run coverage is not required under the statute and that a physical contact limitation upon the hit-and-run coverage is therefore permissible. See Olympia Roofing Company v. City of New Orleans, 234 So.2d 273 (La.App.1970); Buckeye Union Ins. Co. v. Cooperman, 33 Ohio App.2d 152, 293 N.E.2d 293 (1972); Amidzich v. Charter Oak Fire Insurance Co., 44 Wis.2d 45, 170 N.W.2d 813 (1969). In each of these decisions the courts looked upon the hit-and-run provisions of the policies (identical to that in the subject policy) as a gratuitous benefit to the insured since they operated to relieve the insured of the burden of proving that the hit-and-run vehicle was uninsured in cases where there was physical contact. The courts reasoned that the insurers were not obligated to extend their coverage even further beyond that required by statute by relieving the insured of his burden of proving non-insurance in cases where there was no physical contact.

We see no material difference between an unknown hit-and-run driver and a driver who is known but has no insurance. In either instance, the insured under an uninsured motorist endorsement is in the same position. He has suffered physical injuries but has no recourse against the person who negligently caused them.

The obvious purpose behind § 20--259.01 was to close the gap inherent in this jurisdiction's Safety Responsibility Act (A.R.S. § 28--1101 et seq.) which do not protect those injured by financially irresponsible motorists. Kraft v. Allstate Insurance Company, 6 Ariz.App. 276, 431 P.2d 917 (1967). This gap was so large in most states that by 1968 forty-six states, including Arizona, had enacted statutes providing that uninsured motorist endorsements must be included in standard automobile liability policies. Our courts have uniformly held that § 20--259.01 is to be liberally construed to effectuate this remedial purpose. Allstate Insurance Company v. Pesqueria, 19 Ariz.App. 528, 508 P.2d 1172 (1973); Geyer v. Reserve Insurance an insured was entitled under § 20--259.01 (1968).

In Porter v. Empire Fire and Marine Insurance Company, 106 Ariz. 274, 475 P.2d 258 (1970), our Supreme Court held that aninsured was entitled under § 20--259.01 to recover $7,500 under his uninsured vehicle endorsement despite the fact that the negligent driver had $10,000 in liability insurance (the minimum amount under § 28--1142 of the Safety Responsibility Act) when the $10,000 was required to be split among four injured plaintiffs leaving Porter with only $2,500 from the negligent driver's liability insurance. Although the negligent driver was literally 'insured', the court held that for purposes of § 20--259.01 he was 'uninsured' to the extent that the minimum amount under the Safety Responsibility Act, $10,000, was Unavailable to the plaintiff. It is apparent that courts of this jurisdiction are unwilling to defeat the remedial purposes of the uninsured motor vehicle statute, § 20--259.01, by a strict construction of the words 'uninsured motor vehicles.' To hold that hit-and-run automobiles are not uninsured automobiles would leave open a huge loophole which our legislature obviously intended to fill by enacting § 20--259.01. It would leave insurance companies free to exclude all hit-and-run coverage from uninsured motor vehicle endorsements. Victims of hit-and-run accidents could be left entirely unprotected, even in cases of physical contact, if insurance companies decided to eliminate hit-and-run coverage from their policies. We do not think that the legislature intended this result.

We believe that a liberal construction of § 20--259.01 demands that the words 'uninsured motor vehicles' be defined to include hit-and-run motor vehicles. In so holding, we categorically reject the reasoning of the Louisiana, Ohio and Wisconsin courts in the cases cited above.

Our decision is supported by the case of State Farm Fire and Casualty Company v. Lambert, 291 Ala. 645, 285 So.2d 917 (1973). The Alabama Uninsured Motorist Statute (Title 36, § 74 (62a) Code of Alabama 1940),...