Cassel v. Schacht

• Citation: 683 P.2d 294,140 Ariz. 495
• Decision Date: 29 May 1984
• Docket Number: No. 17512-PR,17512-PR
• Parties: James R. CASSEL, Jr. and Robyn Cassel, husband and wife, Plaintiffs/Appellants, v. Carl SCHACHT and Jane Doe Schacht, husband and wife, Defendants, and Progressive Casualty Insurance Company, Garnishee/Appellee.
• Court: Arizona Supreme Court

Page 294

683 P.2d 294

140 Ariz. 495

James R. CASSEL, Jr. and Robyn Cassel, husband and wife, Plaintiffs/Appellants, v. Carl SCHACHT and Jane Doe Schacht, husband and wife, Defendants, and Progressive Casualty Insurance Company, Garnishee/Appellee.

No. 17512-PR.

Supreme Court of Arizona, In Banc.

May 29, 1984.

Corey, Farrell & Bogutz by Barry M. Corey, Tucson, for plaintiffs/appellants.

Leonard Everett, P.C. by Leonard Everett, Tuscon, for garnishee/appellee.

FELDMAN, Justice.

James and Robyn Cassel petition for review of a decision from the court of appeals, Cassel v. Schacht, 140 Ariz. ----, 683 P.2d 301 (1984) which affirms the action of the trial court in quashing a writ of garnishment served upon the garnishee/appellee, Progressive Casualty Insurance Company. The only issue presented is whether the Arizona Safety Responsibility Act requires that a motor vehicle liability policy cover punitive as well as compensatory damages under the minimum coverage required by A.R.S. § 28-1170(B)(2). If so, we must hold that Progressive's exclusion of coverage for punitive damages is contrary to public policy and void at least with respect to the minimum coverage required by law. The court of appeals held that coverage for punitive damages could be excluded. We granted review because the question is an important matter of first impression in the State of Arizona. Ariz.R.Civ.App.P. 23(c), 17A A.R.S. We have jurisdiction under Arizona Constitution article 6, Section 5(3) and Section 12-120.24, 4 A.R.S.

The facts are set forth in the opinion of the court of appeals. We agree with the result reached by that court. Plaintiffs argue, and we acknowledge, that the statute does not specifically cover the issue and that A.R.S. § 28-1170(B)(2) does require all policies to cover "the liability imposed by law for damages arising out of the ownership, maintenance or use of the motor vehicle." Plaintiffs are also correct in arguing that subsection E of A.R.S. § 28-1170 does not authorize exclusion of coverage for punitive damages. However, as the court of appeals noted, the express requirement of § 28-1170(B)(2) is that the policy contain "[f]ifteen thousand dollars [coverage for] bodily injury to or death of one person in any one accident" and "thirty thousand dollars because of bodily injury to or death of two or more persons in any one accident."

Legislative intent with respect to the narrow question presented here is impossible to ascertain; it is quite likely that the legislature did not advert to this precise problem in drafting the statute. In our view, however, the problem is properly solved by consideration of legislative objectives. These are correctly summarized in the opinion of the court of appeals and in our decisions in Schecter v. Killingsworth, 93 Ariz. 273, 380 P.2d 136 (1963) and Jenkins v. Mayflower Insurance Exchange, 93 Ariz. 287, 380 P.2d 145 (1963). The Safety Responsibility Act was enacted and its provisions made a part of all motor vehicle liability policies (even those not "certified," Jenkins, supra ) with the objective of providing a fund for compensating victims of automobile accidents for their bodily injuries and property damage. Punitive damages are permitted, where appropriate, for the purpose of punishing...