Cardin v. Royal Ins. Co. of America

Decision Date08 April 1985
Citation394 Mass. 450,476 N.E.2d 200
CourtUnited States State Supreme Judicial Court of Massachusetts Supreme Court

Gerard R. Laurence, Worcester, for defendant.

Patrick A. Fox, Worcester, for plaintiff.


LYNCH, Justice.

In this case, we are asked to decide the validity of the "regular use exclusion" in the plaintiff's uninsured motorist coverage under G.L. c. 175, § 113L. 1 The case was submitted to a Superior Court judge on a statement of agreed facts, and he granted declaratory relief for the plaintiff. The defendant sought review of this decision in the Appeals Court, and we transferred the case to this court on our own motion.

The following appears from the statement of agreed facts. On January 29, 1983, the plaintiff was involved in an automobile accident on Pleasant Street in Worcester. She suffered serious physical injuries resulting in damage to her person in excess of $50,000. The plaintiff had been a passenger in a 1972 AMC Sportabout that was owned, operated, and insured by her husband, Daniel M. Cardin.

The Sportabout was insured by the defendant. Part Five of the insurance policy written for that automobile provided coverage of up to $25,000 per person for bodily injury to others resulting from an accident for which the plaintiff's husband was legally responsible. In addition, Part Seven of that policy provided coverge of up to $25,000 per person for bodily injury to the plaintiff's husband, or to any member of his household (including the plaintiff), caused by an underinsured automobile. 2 The defendant agreed to pay the plaintiff the $50,000 maximum coverage under both of these provisions.

The plaintiff owned a 1979 Chevrolet van, separately insured by the defendant under a policy that included the same underinsurance coverage. The defendant denied liability under this provision. In doing so, the defendant relied on the following exclusion of coverage contained in the plaintiff's policy: "We will not pay to or for ... anyone injured while occupying an auto owned or regularly used by you or a household member unless a premium charge for this Part is shown for that auto on your Coverage Selections page." There was no mention of the 1972 Sportabout owned by the plaintiff's husband on the Coverage Selections page.

The plaintiff argues that the exclusion is contrary to the language and policy expressed by G.L. c. 175, § 113L. She also claims that in this case the exclusion fails to serve the purpose for which it was intended, and that it deprives her of the substantial economic value of her policy while conferring an unfair benefit on the defendant. We hold that any exclusion to uninsured motorist coverage is contrary to the language and policy of G.L. c. 175, § 113L, and is therefore unenforceable. Accordingly, we affirm the judgment of the Superior Court.

Navigating the tortuous twists of automobile insurance law poses a challenge at least equal to that faced by the uninitiated driver on his first foray into the streets of Boston. For this reason, it is important for us to distinguish what this case does and does not involve. Unlike automobile liability insurance, uninsured motorist coverage is not restricted by statute to situations "arising out of the ownership, operation, maintenance, control or use" of the insured motor vehicle. See G.L. c. 90, § 34A. The statute therefore does not limit her recovery to situations involving the motor vehicle she has insured. Instead, uninsured motorist coverage insures persons, wherever they may be, when and if they are injured by an uninsured motorist. As one court has aptly summarized: "[T]he uninsured motorists coverage was applicable if, at the time of sustaining injury, [the plaintiff] ... was occupying the [automobile] described in his policy, or was on foot, or on horseback, or while sitting in his rocking chair on his front porch or while occupying a non-owned automobile furnished for his regular use.... This so-called uninsured protection is limited personal accident insurance chiefly for the benefit of the named insured." Motorists Mut. Ins. Co. v. Bittler, 14 Ohio Misc. 23, 32-33, 235 N.E.2d 745 (1968). In accord, see, e.g., Harvey v. Travelers Indem. Co., 188 Conn. 245, 250, 449 A.2d 157 (1982); Otto v. Farmers Ins. Co., 558 S.W.2d 713, 718 (Mo.Ct.App.1977); Fernandez v. Selected Risks Ins. Co., 82 N.J. 236, 241-242 412 A.2d 755 (1980); Hogan v. Home Ins. Co., 260 S.C. 157, 162, 194 S.E.2d 890 (1973). 3

In addition, the rule that ambiguous policy language will be construed against the insurer has no application here. 4 See Cody v. Connecticut Gen. Life Ins. Co., 387 Mass. 142, 146, 439 N.E.2d 234 (1982). The plaintiff admits that the exclusionary language is explicit and unambiguous. Normally, when there is no ambiguity, we will construe the words of an insurance policy according to their ordinary meaning. Royal-Globe Ins. Co. v. Schultz, 385 Mass. 1013, 434 N.E.2d 213 (1982). This is consistent with our long-standing policy that the rules governing the interpretation of insurance contracts are the same as those governing the interpretation of any other contract. Save-Mor Supermarkets, Inc. v. Skelly Detective Serv., Inc., 359 Mass. 221, 226, 268 N.E.2d 666 (1971). See Oakes v. Manufacturers' Fire & Marine Ins. Co., 131 Mass. 164, 165 (1881). But this is not a typical arms' length contract; it is one mandated by statute and reduced to a form standardized across the Commonwealth, allowing the prospective purchaser little or no opportunity to alter its terms or to secure more favorable terms from another insurer. In this context, it is clear that "[t]he policies underlying the principle of private autonomy ... do not apply." Dugan, The Application of Substantive Unconscionability to Standardized Terms--A Systematic Approach, 18 New Eng.L.Rev. 77, 78-79 (1982). Therefore, no matter how explicit the exclusionary language may be, it cannot prevail if it is contrary to the statutory language or the legislative policy of G.L. c. 175, § 113L. See Surrey v. Lumbermens Mut. Casualty Co., 384 Mass. 171, 173, 424 N.E.2d 234 (1981); Johnson v. Travelers Indem. Co., 359 Mass. 525, 528, 269 N.E.2d 700 (1971). As this court has held in a similar context: "The well settled principles covering the interpretation of an ordinary policy of insurance have been properly disregarded in determining the scope and extent of a compulsory motor vehicle policy in order to accomplish the legislative aim of providing compensation to those who have been injured by automobiles." Desmarais v. Standard Accident Ins. Co., 331 Mass. 199, 202, 118 N.E.2d 86 (1954). We therefore turn to an analysis of the statute and its purpose.

As we have recently stated, "[o]ur task is to interpret the statute according to the intent of the Legislature, as evidenced by the language used, and considering the purposes and remedies intended to be advanced." Glasser v. Director of the Div. of Employment Sec., 393 Mass. 574, 577, 471 N.E.2d 1338 (1984). The aim of G.L. c. 175, § 113L, is "to minimize the possibility of ... catastrophic financial loss [to] the victims of an automobile accident." 1968 Senate Doc. No. 1030, at 7. Another way of stating this policy is that the law is designed "to protect [the] public from injury caused by motorists who could not make the injured party whole," subject, of course, to the limits provided in the insured's policies. Surrey v. Lumbermens Mut. Casualty Co., supra 384 Mass. at 177, 424 N.E.2d 234. See also Harvey v. Travelers Indem. Co., 188 Conn. 245, 249, 449 A.2d 157 (1982); Descoteaux v. Liberty Mut. Ins. Co., 125 N.H. 38, 44, 480 A.2d 14 (1984). While the Legislature has set minimum coverage limits of "at least" $10,000 per person per accident, that does not mean that the legislative purpose has been met whenever that person receives the statutory minimum, regardless of her actual damages. 5

The statutory language unequivocally commands that no policy shall be issued without uninsured motorist coverage. The only limits on this coverage which the statute comprehends are that the insured be legally entitled to recover damages, that the tortfeasor be uninsured or underinsured, and that payment not exceed the monetary limit of the insured's policy. The statute does not refer to exclusions at all, and we will not sanction reductions in coverage for which the Legislature has not provided. Compare Cal.Ins.Code § 11580.2 (West Supp.1985). To do so would be "wholly inconsistent" with the broad remedial purpose of the statute, and would "permit the insurer to evade mandated coverage by erecting an artificial, arbitrary barrier to recovery." Surrey v. Lumbermens Mut. Casualty Co., supra 384 Mass. at 177, 424 N.E.2d 234. The broad language and purpose of the statute are not to be "whittled away by a myriad of legal niceties arising from exclusionary clauses." Touchette v. Northwestern Mut. Ins. Co., 80 Wash.2d 327, 335, 494 P.2d 479 (1972).

This view is consistent with decisions in many other jurisdictions interpreting exclusions to uninsured motorist coverage. See, e.g., Alabama Farm Bur. Mut. Casualty Ins. Co. v. Mitchell, 373 So.2d 1129, 1131-1135 (Ala.Civ.App.1979); Harvey v. Travelers Indem. Co., 188 Conn. 245, 249-253, 449 A.2d 157 (1982); Kau v. State Farm Mut. Auto. Ins. Co., 58 Haw. 49, 50-51, 564 P.2d 443 (1977); State Farm Mut. Auto. Ins. Co. v. Robertson, 156 Ind.App. 149, 152-154, 295 N.E.2d 626 (1973); Nygaard v. State Farm Mut. Auto. Ins. Co., 301 Minn. 10, 18-19, 221 N.W.2d 151 (1974); State Farm Mut. Auto. Ins. Co. v. Hinkel, 87 Nev. 478, 481-482, 488 P.2d 1151 (1971); Bell v. State Farm Mut. Auto. Ins. Co., 157 W.Va. 623, 627, 207 S.E.2d 147 (1974). This is also true in States whose statutes provide for approval by the equivalent of our Commissioner of Insurance. See, e.g., Chavez v. State...

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