Chavez v. State Farm Mut. Auto. Ins. Co., 10011

Citation87 N.M. 327,1975 NMSC 11,533 P.2d 100
Decision Date21 March 1975
Docket NumberNo. 10011,10011
PartiesClara D. CHAVEZ, Individually and as personal representative of Francisco G. Chavez, Deceased, Plaintiff-Appellee, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a corporation, Defendant- Appellant.
CourtSupreme Court of New Mexico
OPINION

STEPHENSON, Justice.

Appellant (State Farm) appeals a summary judgment rendered for Clara Chavez which pronounced invalid an exclusion of uninsured motorist coverage in an automobile insurance policy when the insured is occupying an uninsured motor vehicle owned by him at the moment of injury. The validity of that exclusion is the sole issue for decision.

While riding his uninsured motorcycle, Francisco Chavez, appellee's husband, was killed in a collision with an uninsured motorist. At the time, he had an insurance policy on another vehicle providing uninsured motorist coverage. Mrs. Chavez filed a claim under that policy which State Farm rejected, asserting that under the 'Coverage U' exclusion, Francisco was not protected against injuries inflicted by a negligent uninsured motorist while he occupied a vehicle owned by him other than the insured vehicle. The district court held this exclusion to be in violation of public policy under the New Mexico Uninsured Motorist Statute. § 64--24--105, N.M.S.A.1953. We affirm.

State Farm's major premise is that this court, in ascertaining the object of the uninsured motorist statute, can look no further than the statute itself. Since nothing therein is expressly stated regarding the scope of uninsured motorist coverage, it asserts the Legislature intended to leave it to the Superintendent of Insurance to determine the public policy behind the statute, basing this revelation upon that part of the statute which gives the Superintendent authority to promulgate rules and regulations and to approve provisions filed with him by the insurance industry. Since the exclusion in question was approved by the Superintendent, ipso facto, the provision does not violate public policy and is valid. See Willey v. Farmers Insurance Group, 86 N.M. 325, 523 P.2d 1351 (1974); cf. Owens v. Allied Mutual Insurance Company, 15 Ariz.App. 181, 487 P.2d 402 (1971). State Farm misses the mark. For the question is not whether the Superintendent approved the provision. It is whether the Legislature intended, in delegating the power of approval, that such approval would constitute a final determination as to the public policy applied in this type of situation. Furthermore, in ascertaining the legislative intent, we look not only to language used in the statute, but also to the object sought to be accomplished and the wrong to be remedied. Rodman v. State Farm Mutual Automobile Ins. Co., 208 N.W.2d 903 (Iowa 1973).

This court has twice before considered our uninsured motorist statute. See Willey v. Farmers Insurance Group, supra; Sloan v. Dairyland Insurance Company, 86 N.M. 65, 519 P.2d 301 (1974). In Sloan, we held void the excess escape clause as being contrary to the uninsured motorist statute. We note it only to point out that the statute did not say anything about excess escape clauses anymore than it says anything about the vehicle exclusion clause involved here. Had State Farm's reasoning been applied in Sloan, we would have been compelled to uphold the clause since the Superintendent of Insurance had given his blessing to that provision also.

Willey, at first glance, appears to lend some support to State Farm's argument. There, a provision restrictively defining 'uninsured motor vehicle' was upheld because 'this (uninsured motorist) statute neither authorizes nor forbids the exclusion contained in the policy sued upon, nor does it define 'uninsured motor vehicles." The definitional provision was identical to a regulation approved by the Superintendent so a majority of this court held the clause valid because it was not more restrictive than the express words of the statute. There does not appear in the opinion any consideration of the objective of the statute or how that objective meshes with the Superintendent's power to approve insurance provisions. Viewed in this light, the comment that the statute neither authorized nor forbid the exclusion is not surprising. But it is a non sequitur to urge, as does State Farm, that because the statute does not expressly forbid the exclusion it is valid. It could just as easily be said that because the statute does not expressly authorize the exclusion it is invalid. The real inquiry centers on the legislative intent behind the statute.

It is true that 'exclusionary (provisions) in insurance contracts shall be enforced so long as their meaning is clear and they do not conflict with statutory law.' Willey v. Farmers Insurance Group,supra, 86 N.M. at 326, 523 P.2d at 1352. But when an insurance provision does conflict with a statute, it is void. Atlantic National Insurance Company v. Armstrong, 65 Cal.2d 100, 52 Cal.Rptr. 569, 416 P.2d 801 (1966); Wildman v. Government Employees' Insurance co., 48 Cal.2d 31, 307 P.2d 359 (1957). Atlantic National and Wildman make clear that such provisions are void not only where they conflict with the express language of a statute, but also where they conflict with the legislative intent, absent explicit statutory expression. Willey, supra, correctly upheld the delegation of authority to the Superintendent of Insurance but, by that delegation, the Legislature did not intend to make the Superintendent's judgment final as to the validity of exclusionary provisions which strike at the heart of the clear purpose of the uninsured motorist statute. That is our function.

The object of compulsory uninsured motorist insurance is:

'* * * 'to protect persons injured in automobile accidents from losses which, because of the tortfeasor's lack of liability coverage, would otherwise go uncompensated.' (Citations omitted.) In other words, the legislative purpose in creating compulsory uninsured motorist coverage was to place the injured policyholder in the same position, with regard to the recovery of damages, that he would have been in if the tortfeasor had possessed liability insurance.' Bartlett v. Nationwide Mutual Ins. Co., 33 Ohio St.2d 50, 52, 294 N.E.2d 665,...

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