Claude v. Guaranty Nat. Ins. Co., 03-0554.

• Citation: 679 N.W.2d 659
• Decision Date: 12 May 2004
• Docket Number: No. 03-0554.,03-0554.
• Court: United States State Supreme Court of Iowa
• Parties: Melissa H. CLAUDE, as Administrator of the Estate of John D. Mahoney and as Administrator of the Estate of Elizabeth A. Mahoney, Appellant, v. GUARANTY NATIONAL INSURANCE COMPANY, d/b/a Orion Auto Insurance, Inc., Appellee.

679 N.W.2d 659

Melissa H. CLAUDE, as Administrator of the Estate of John D. Mahoney and as Administrator of the Estate of Elizabeth A. Mahoney, Appellant, v. GUARANTY NATIONAL INSURANCE COMPANY, d/b/a Orion Auto Insurance, Inc., Appellee.

No. 03-0554.

Supreme Court of Iowa.

May 12, 2004.

John D. Jordan of Payer, Jordan, Mahoney, Jordan, Quinn, Hunziker & Rhodes, L.L.P., Boone, for appellant.

Timothy A. Clausen and Justin L. Seurer of Klass, Stoik, Mugan, Villone, Phillips, Orzechowski, Clausen & Lapierre, L.L.P., Sioux City, for appellee.

TERNUS, Justice.

The plaintiff's petition seeking uninsured motorist benefits for the deaths of her parents was dismissed on the defendant insurer's motion for summary judgment. The district court ruled the decedents' injuries were not caused by a "hit-and-run vehicle" because there was no "actual physical contact" between the decedents' vehicle and the vehicle of the alleged uninsured motorist, as required by the policy definition of "uninsured motor vehicle." The court concluded the policy requirement of physical contact did not violate public policy even where, as here, there was independent evidence that an unknown motorist caused the accident. The district court also rejected the plaintiff's equal protection challenge to Iowa Code section 516A.1 (2001), which authorizes the physical-contact requirement when a claim for uninsured motorist coverage is based on the conduct of a hit-and-run driver. Upon consideration of the plaintiff's arguments on appeal, we affirm the district court's ruling.

I. Background Facts and Proceedings.

On October 28, 2001, John and Betty Mahoney were killed in a motor vehicle accident when their van collided with an oncoming semi. The Mahoney vehicle entered the path of the semi in an attempt to avoid a head-on collision with a speeding car that was passing the semi in a no-passing zone.

The driver of the passing car did not stop and was never identified. Five disinterested persons witnessed the accident, however, and reported that the unknown vehicle forced the Mahoney van off the road, causing the Mahoneys to lose control of their van and collide with the semi.

The Mahoneys' adult daughter, Melissa Claude, submitted a claim on behalf of her parents' estates to the defendant, Guaranty National Insurance Company, d/b/a Orion Auto Insurance Inc., (Orion) to recover uninsured motorist (UM) benefits under a policy issued by Orion to Betty Mahoney. That policy provided coverage for "damages for bodily injury which an insured person is legally entitled to recover from the owner or operator of an uninsured motor vehicle." An "uninsured motor vehicle" was defined in the policy to include

(C) A hit-and-run vehicle whose operator or owner is unknown and which strikes:

(i) You [an insured person].

(ii) A vehicle which you are occupying.

(iii) Your insured car.

There must be actual physical contact with the hit-and-run vehicle.

(Emphasis added.) Orion denied coverage because there was no physical contact between the Mahoney van and the unknown vehicle as required by the insurance contract.¹ The plaintiff filed this action, seeking uninsured motorist benefits. In response to a request for admissions, the plaintiff admitted there was no physical contact between the Mahoney van and the car driven by the alleged tortfeasor. Concluding the material facts were not in dispute, the district court sustained Orion's motion for summary judgment on the basis the unknown motorist was not operating an uninsured motor vehicle as defined in the policy. This appeal followed.

II. Scope of Review.

Our review of a ruling on a motion for summary judgment is for correction of errors of law. Lee v. Grinnell Mut. Reinsurance Co., 646 N.W.2d 403, 406 (Iowa 2002). Where the moving party has shown that no genuine issue of material fact exists and the party is entitled to judgment as a matter of law, summary judgment is appropriate and will be affirmed. Id. Where, as here, the material facts are not disputed, our only task on appeal is to determine whether the district court correctly applied the law. Id.

III. Issues on Appeal.

The plaintiff makes three arguments in support of her position that the trial court should not have granted judgment to the defendant. First, she claims strict enforcement of the physical contact requirement is against public policy, at least under the facts of this case. Second, she contends the correlative physical-contact requirement in the uninsured motorist statute, section 516A.1, violates the Equal Protection Clauses of the federal and state constitutions. See U.S. Const. amend. XIV, § 1; Iowa Const. art. I, § 6. Finally, she asserts the district court erred in failing to apply the doctrine of reasonable expectations to permit coverage. Because the plaintiff did not raise the theory of reasonable expectations in the district court proceeding, error was not preserved on that issue and we will not address it on appeal. See State Farm Mut. Auto. Ins. Co. v. Pflibsen, 350 N.W.2d 202, 206 (Iowa 1984)

(refusing to consider reasonable expectations argument on appeal when not raised in the district court). See generally Moritz v. Farm Bureau Mut. Ins. Co., 434 N.W.2d 624, 626 (Iowa 1989) (rejecting insured's reasonable expectations challenge to physical-contact requirement).

IV. Public Policy.

The physical-contact requirement of Orion's policy finds its genesis in Iowa's uninsured motorist statute. Section 516A.1 provides in relevant part:

No automobile liability or motor vehicle liability insurance policy ... shall be delivered or issued for delivery in this state ... unless coverage is provided in such policy or supplemental thereto, for the protection of persons insured under such policy who are legally entitled to recover damages from the owner or operator of an uninsured motor vehicle or a hit-and-run motor vehicle ... because of bodily injury, sickness, or disease, including death resulting therefrom, caused by accident and arising out of the ownership, maintenance, or use of such uninsured ... vehicle, or arising out of physical contact of such hit-and-run motor vehicle with the person insured or with a motor vehicle which the person insured is occupying at the time of the accident....

Iowa Code § 516A.1 (emphasis added). In Rohret v. State Farm Mutual Automobile Insurance Co., 276 N.W.2d 418 (Iowa 1979), this court held section 516A.1 authorized a policy clause such as that found in Orion's policy requiring physical contact when the tortfeasor motorist is not identified. 276 N.W.2d at 418.

To avoid the terminal effect of this decision, the plaintiff argues the physical-contact requirement is against public policy and, therefore, unenforceable. She points out that this condition is designed to reduce "`the possibility that a motorist who loses control of his vehicle through his own negligence will be able to recover under the uninsured motorist coverage by alleging that an unknown vehicle caused the [insured's] injuries.'" Moritz, 434 N.W.2d at 627 (citation omitted). The plaintiff asserts this possibility is not present here because there are five disinterested witnesses who confirm that an unknown motorist caused the accident. Such independent corroboration was not present, she points out, in the Rohret case. Because it is present here, she claims it would be against public policy to deny recovery simply because there was no physical contact.

The flaw in this argument is that "public policy" is not determined by this court's "generalized concepts of fairness and justice" or our determination of what might be most just in a particular case. Harvey v. Care Initiatives, Inc., 634 N.W.2d 681, 686 (Iowa 2001). "`We must look to the Constitution, statutes, and judicial decisions of [this] state, to determine [our] public policy and that which is not prohibited by statute, condemned by judicial decision, nor contrary to the public morals contravenes no principle of public policy.'" In re Marriage of Witten, 672 N.W.2d 768, 780 (Iowa 2003) (citation omitted); accord Principal Cas. Ins. Co. v. Blair, 500 N.W.2d 67, 69 (Iowa 1993)

(holding family exclusion provision in homeowners insurance policy did not violate public policy, noting the insureds had not identified any statute or court case that required coverage under the circumstances present in that case).

The provision at issue here does not violate public policy because it was specifically authorized by the general assembly in section 516A.1. See Wold v. Progressive Preferred Ins. Co., 52 P.3d 155, 161 (Alaska 2002)

(holding physical-contact requirement did not violate public policy where uninsured motorist statute expressly required direct physical contact, noting statutes themselves reflect the state's public policy); Basilla v. Aetna Ins. Corp., 38 Mich.App. 260, 195 N.W.2d 893 (Mich.Ct.App.1972) (holding physical-contact requirement in automobile policy did not violate public policy where same requirement was a statutory prerequisite to recovery from the motor vehicle accident claims fund based on injuries caused by an unidentified vehicle). Therefore, contrary to the plaintiff's contention, the physical-contact requirement reflects and is consistent with the public policy of this state. Although the plaintiff is correct in asserting that the legislature's intent in requiring UM coverage was to extend insurance benefits to the victims of uninsured or unknown motorists, see Douglass v. Am. Family Mut. Ins. Co., 508 N.W.2d 665, 667 (Iowa 1993),

overruled on other grounds by Hamm v. Allied Mut. Ins. Co., 612 N.W.2d 775, 784 (Iowa 2000), this desire was implemented with certain specified restrictions, including the requirement of physical contact when the tortfeasor's identity is unknown. This court will not expand the reach of a statute where, as here, the "legislature has weighed in on the issue and [has] established the parameters of the governing public policy." Harvey, 634...