Colwell v. Allstate Ins. Co.

Citation819 A.2d 727
Decision Date31 January 2003
Docket Number No. 00-053, No. 00-410.
PartiesNatalie Wetmore COLWELL v. ALLSTATE INSURANCE COMPANY. Nicholas Bonanno v. Bell Atlantic Communications, Inc. and American Protection Insurance Co.
CourtUnited States State Supreme Court of Vermont

John J. Welch, Jr., Rutland, for Plaintiff-Appellant Colwell.

Geoffrey W. Crawford of O'Neill Crawford & Green, Burlington, for Plaintiff-Appellant Bonanno.

Michael H. Lipson, of counsel, of Affolter, Gannon & Flynn, Ltd., Burlington, for Defendant-Appellee Allstate Insurance Company.

Potter Stewart, Jr. and Kirsten A. Beske of Potter Stewart, Jr. Law Offices, Brattleboro, for Defendant-Appellee Bell Atlantic Communications, Inc.

James W. Coffrin and Robin A. Ober of Pierson, Wadhams, Quinn & Yates, Burlington, for Defendant-Appellee American Protection Insurance Co.

Robert A. Mello and John H. Klesch of Law Office of Robert A. Mello, South Burlington, for Amicus Curiae National Association of Independent Insurers.

Geoffrey W. Crawford of O'Neill Crawford & Green, Burlington, and David Yarnell of Kissane, Yarnell & Cronin, St. Albans, for Amicus Curiae Vermont Trial Lawyers Ass'n.



¶ 1. The common issue presented by these two consolidated appeals is whether a tortfeasor-motorist is underinsured within the meaning of 23 V.S.A. § 941(f) where the tortfeasor's liability policy limits are greater than the injured party's underinsurance limits, but are insufficient to satisfy the injured party's damages because of payments made to other victims of the same accident. The Bonanno case also asks us to decide whether a self-insured employer must provide underinsurance motorists (UIM) benefits to its employees, and if so, whether the workers' compensation exclusivity statute bars payment of those benefits to the injured worker.

¶ 2. Regarding the first issue, we conclude that the plain language of 23 V.S.A. § 941(f) entitles an injured party to UIM coverage only when the liability limits of the tortfeasor's insurance policy are less than the injured party's uninsured/underinsured (UM/UIM) limits. In the Bonanno case, we conclude that self insurers must provide UIM coverage, and that 21 V.S.A. § 622, the exclusivity provision of Vermont's workers' compensation statute, does not bar the employee from seeking UIM benefits from his self-insured employer.

I. Facts and Procedural History
A. The Colwell Case

¶ 3. On December 18, 1995, plaintiff Natalie Wetmore Colwell was injured in an automobile accident involving several other vehicles, and incurred damages in excess of $50,000. At the time of the accident, Colwell was covered under an automobile insurance policy defendant Allstate Insurance Company issued. The policy provided $50,000 in single-limit UM/UIM coverage. The driver who allegedly caused the accident also had a single-limit liability policy with $50,000 in coverage, but that coverage was not enough to pay all claims arising out of the multiple vehicle accident. Consequently, Colwell settled her claim against the tortfeasor for $34,473 and looked to the UIM coverage in her Allstate policy for further compensation. Allstate denied her claim, asserting that because the tortfeasor's liability policy limit was not less than Colwell's UM/UIM limit, the tortfeasor was not underinsured within the meaning of her Allstate policy or § 941(f). In response, Colwell sought a declaratory judgment that she is entitled to UIM coverage. By joint request of the parties, the superior court certified to this Court pursuant to V.R.A.P. 5(a) the question of whether Colwell was entitled to UIM coverage under the circumstances of this case.

B. The Bonanno Case

¶ 4. On December 22, 1995, plaintiff Nicholas Bonanno was operating his employer's vehicle during a work-related activity when he was injured in an automobile accident. His employer, defendant Bell Atlantic Communications, Inc., was self insured. The driver of the vehicle who caused the accident was covered by a $500,000 liability policy. Bonanno collected workers' compensation benefits from Bell Atlantic. He also obtained a recovery under the tortfeasor's policy, but only in the amount of $62,500 because of payments made to another person rendered quadriplegic by the accident.

¶ 5. Claiming that he had not been fully compensated for his injuries, Bonanno sought UIM coverage from Bell Atlantic and from defendant American Protection Insurance Co. (API), with whom he had a personal automobile insurance policy providing $300,000 in UM/UIM coverage. Both Bell Atlantic and API denied coverage, and Bonanno filed the present action for declaratory relief. The superior court granted summary judgment in favor of Bell Atlantic and API, ruling that Bonanno's workers' compensation recovery was his exclusive remedy from his employer, and that UIM coverage was not available under his API policy because the tortfeasor was not underinsured as defined by § 941(f).

II. UIM Coverage

¶ 6. We first address the issue common to both cases: whether § 941(f) defines "underinsured" by comparing policy limits only without any consideration of the funds actually available from the tortfeasor's policy to pay all claims arising out of an accident. Because appellants in both cases concede that the relevant provisions of their individual policies are consistent with the terms of the governing statute, 23 V.S.A. § 941(f), we examine the statute directly to resolve the issue.

¶ 7. In construing a statutory provision, our paramount goal is to discern and implement the intent of the Legislature. Baker v. State, 170 Vt. 194, 198, 744 A.2d 864, 868 (1999); State v. O'Neill, 165 Vt. 270, 275, 682 A.2d 943, 946 (1996). When the language of a statute is plain and unambiguous, we presume that the Legislature intended the meaning expressed by that language. Baker, 170 Vt. at 199,744 A.2d at 868. In such situations, our duty is to enforce the statute according to its terms without resort to statutory construction. Tarrant v. Dep't of Taxes, 169 Vt. 189, 197, 733 A.2d 733, 739 (1999); Sanders v. St. Paul Mercury Ins. Co., 148 Vt. 496, 504, 536 A.2d 914, 918 (1987). We have such a situation here.

¶ 8. Section 941(f) defines an underinsured motor vehicle as follows:

For the purpose of this subchapter, a motor vehicle is underinsured to the extent that its personal injury limits of liability at the time of an accident are less than the limits of uninsured motorists coverage applicable to any injured party legally entitled to recover damages under said uninsured motorist coverage.

We have repeatedly interpreted the statute as requiring a comparison of policy limits as they exist at the time of the accident in accordance with § 941(f)'s unambiguous plain language. See, e.g., Merkel v. Nationwide Ins. Co., 166 Vt. 311, 315, 693 A.2d 706, 708 (1997); Webb v. United States Fid. & Guar. Co., 158 Vt. 137, 141, 605 A.2d 1344, 1347 (1992); Stanhope v. Lumbermens Mutt. Ins. Co., 155 Vt. 645, 646, 582 A.2d 150, 150 (1990) (mem.). The statutory provision makes no mention of comparing UM/UIM coverage to the amounts actually available or paid to the injured insured(s) at some later point under the tortfeasor's policy.

¶ 9. Appellants argue nevertheless that we must ignore the literal terms of § 941(f) because the terms create anomalous and unfair results that are contrary to the statute's objectives. See In re Jewell, 169 Vt. 604, 606, 737 A.2d 897, 900 (1999) (mem.) (statute should not be construed in way that is at odds with its underlying purpose); Braun v. Bd. of Dental Examiners, 167 Vt. 110, 117, 702 A.2d 124, 128 (1997) (Legislature is presumed not to have intended interpretation that would lead to absurd or irrational results). According to appellants, adhering to the plain language of the statute means they would have been better off if their tortfeasors had no insurance, an anomalous result they assert the Legislature intended to resolve by enacting the UIM provision in 1980. See Merkel, 166 Vt. at 314, 693 A.2d at 708; Monteith v. Jefferson Ins. Co. of N.Y., 159 Vt. 378, 386, 618 A.2d 488, 492 (1992). We find this argument appealing, but ultimately unpersuasive for the reasons that follow.

¶ 10. The legislative history of § 941(f) shows that while the Legislature may have chosen the current language of the statute as the way to fix the anomaly that an injured motorist was better off if the tortfeasor was uninsured than if he carried some insurance, it did not appreciate how the statute would operate in accidents involving multiple victims. When introduced to the Vermont House of Representatives in 1979, UIM coverage was a new concept. As a result, much of the testimony in the early committee hearings on the matter was explanatory in nature and filled with confusion. Through the confusion emerged a consensus that the underinsurance provision should protect individuals involved in accidents with "marginally insured" motorists, just as the financial responsibility law protects people involved in accidents with uninsured motorists. Statement of Stewart Ledbetter on H.411 to Senate Highways and Traffic Committee, at 21 (Mar. 21, 1979); Testimony of Linda Reis on H.411 to Senate Finance Committee, at 11-12 (Mar. 25, 1980). Unfortunately, very few details about how the statute would function beyond that broad policy goal, including how the statute might operate in multiple-victim accidents, arose from the debate. The Legislature finally settled on the present language, which offers some protection against accidents with marginally insured motorists. But in some multiple-victim accidents, as Colwell and Bonanno's cases show, more compensation is available to satisfy an injured motorist's damages when the tortfeasor has no insurance at all. Section 941(f) therefore does not fully address the discrepancy between uninsured motorists and marginally insured motorists the Legislature sought to fix by enacting the...

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