Cormier v. National Farmers Union Property & Cas. Co., 890074

• Decision Date: 15 August 1989
• Docket Number: No. 890074,890074
• Citation: 445 N.W.2d 644
• Parties: Hope C. CORMIER and LeRay M. Cormier, Plaintiffs, Appellees and Cross-Appellants, v. NATIONAL FARMERS UNION PROPERTY & CASUALTY COMPANY, a North Dakota Corporation, Defendant, Appellee and Cross-Appellee, and Citizens Security Mutual Insurance Company, Inc., a North Dakota Corporation, Defendant and Appellant. Civ.
• Court: North Dakota Supreme Court

Page 644

445 N.W.2d 644

Hope C. CORMIER and LeRay M. Cormier, Plaintiffs, Appellees and Cross-Appellants, v. NATIONAL FARMERS UNION PROPERTY & CASUALTY COMPANY, a North Dakota Corporation, Defendant, Appellee and Cross-Appellee and Citizens Security Mutual Insurance Company, Inc., a North Dakota Corporation, Defendant and Appellant.

Civ. No. 890074.

Supreme Court of North Dakota.

Aug. 15, 1989.

Lee Hagen Law Office, Ltd., Fargo, for plaintiffs, appellees and cross-appellants; argued by Mary L. Muehlen Maring.

Pringle & Herigstad, P.C., Minot, for defendant, appellee and cross-appellee; argued by Mitchell Mahoney.

Hefte, Pemberton, Sorlie & Rufer, Fergus Falls, Minnesota, for defendant and appellant; argued by Richard L. Pemberton.

LEVINE, Justice.

This is an appeal from summary judgment resolving issues of uninsured motorist coverage. We affirm in part and reverse in part.

The parties stipulated to the following facts. On October 25, 1985, Hope C. Cormier, a passenger in a car driven by Cynthia Fankhanel, was injured when the car collided with a pickup. Cormier was insured under an automobile insurance policy issued by Citizens Security Mutual Insurance Co. (Citizens), which included uninsured motorist benefits. Fankhanel was insured under an automobile insurance policy issued by National Farmers Union Property & Casualty Co. (National Farmers), which also included uninsured motorist benefits. At the time of the accident, Cormier and Fankhanel were in the course and scope of their employment. Cormier received workers compensation benefits, and Fankhanel is immune from suit by Cormier under the North Dakota workers compensation laws. Cormier settled with the driver of the pickup that collided with the Fankhanel vehicle.

Hope Cormier and her husband, LeRay Cormier, sued National Farmers and Citizens, claiming Fankhanel was an uninsured motorist which entitled them to uninsured motorist benefits under their insurance policy issued by Citizens and under Fankhanel's policy issued by National Farmers. ¹ The Cormiers requested declaratory relief on whether Fankhanel is an uninsured driver under NDCC 26.1-40-14(1), the uninsured motorist coverage statute, and the insurance policies, and whether Cormier is restricted to workers compensation benefits as the exclusive remedy for claims relating to the fault of Fankhanel. All parties moved for partial summary judgment and the trial court granted partial summary judgment in favor of the Cormiers against Citizens, holding that Fankhanel was an uninsured motorist under the uninsured motorist statute and the Citizens insurance policy and that workers compensation was not the Cormiers' exclusive remedy.

The trial court also granted summary judgment in favor of National Farmers, finding that although Fankhanel was an uninsured motorist, the Cormiers were not entitled to benefits under the policy issued by National Farmers because there was no contractual relationship between the Cormiers and National Farmers. The Cormiers and Citizens appealed. ²

While the Cormiers have raised several issues, we believe the dispositive issue is whether Hope Cormier is "legally entitled to recover" damages under the uninsured motorist coverage statute and under the insurance policies.

The Cormiers assert that in order to be "legally entitled to recover" damages, a claimant need only prove the elements of her claim and a tort-feasor's statutory immunity does not affect the claimant's legal entitlement to recover. We disagree.

Section 26.1-40-14(1), NDCC, requires uninsured motorist coverage. The applicable 1985 statute provided:

"1. No motor vehicle liability insurance policy against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of ownership, maintenance, or use of any motor vehicle may be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto in amounts not less than that set forth in section 39-16.1-11 for bodily injury or death for the protection of insureds who are legally entitled to recover damages from owners or operators of uninsured motor vehicles, and hit-and-run motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom." ³ [Emphasis added.]

The pertinent Citizens' policy provision provides:

"We will pay damages which a covered person is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury:

1. Sustained by a covered person; and

2. Caused by an accident."

The National Farmers' policy uses substantially similar language.

The interpretation of a statute is fully reviewable by this court. Ladish Malting Co. v. Stutsman County, 351 N.W.2d 712, 718 (N.D.1984). Similarly, construction of a written contract of insurance is a question of law to be resolved by this court. Link v. Federated Mutual Ins. Co., 386 N.W.2d 897, 899 (N.D.1986). In interpreting a statute, we first look to the language of the statute, and, if the intent of the statute is apparent from its face, there is no room for construction. State v. Grenz, 437 N.W.2d 851, 853 (N.D.1989). We follow the same rule in interpreting a contract, see Link, supra at 900, so that when the language of an insurance policy is unambiguous, it should not be strained to impose liability on the insurer. Davis v. Auto-Owners Ins. Co., 420 N.W.2d 347, 348 (N.D.1988).

There is no ambiguity in either the statutory language or the policy language. It plainly provides that an insured is entitled to uninsured motorist benefits only if she is "legally entitled to recover" damages from the owner or operator of an uninsured vehicle. Under North Dakota law, workers compensation benefits are an employee's exclusive remedy against her employer and coemployees for injuries sustained in the course of employment. NDCC Secs. 65-01-01; 65-01-08; 65-05-06; ⁴ see also Wald v. City of Grafton, 442 N.W.2d 910 (N.D.1989). It is clear that under workers compensation law, an employee injured in the scope of her employment by the negligence of a coemployee may not recover damages from the coemployee, regardless of the coemployee's fault, because workers compensation benefits are the injured employee's exclusive remedy for work-related injuries against the coemployee. See NDCC Secs. 65-01-01; 65-01-08; 65-05-06; (see n. 4); see also Stine v. Weiner, 238 N.W.2d 918 (N.D.1976). Because workers compensation affords the exclusive remedy against Hope Cormier's coemployee, Frankhanel, we conclude that Hope Cormier is not "legally entitled to recover" damages from Frankhanel and is not entitled to uninsured motorist benefits.

Our conclusion is consonant with a leading treatise, which states:

"Ordinarily, for the uninsured motorist clause to operate in the first place, the uninsured third person must be legally subject to liability. Thus, if the third person is specifically made immune to tort suit by the compensation act's exclusive remedy clause, the uninsured motorist provision does not come into play. In the familiar example of coemployee immunity, the issue thus becomes whether the accident was in the course of employment; if it was, the uninsured motorist carrier has no liability. A. Larson, 2A Workmen's Compensation Law Sec. 71.23(j) at 14-37 (1983) (1987 Supp. at 14-44)."

It is also in accord with the views expressed in Aetna Casualty & Surety Co. v. Dodson, 235 Va. 346, 367 S.E.2d 505, 508 (1988) [quoting A. Larson, 2A Workmen's Compensation Law Sec. 71.23(j) at 14-37 (1987 Supp. at 14-44) ], and Perkins v. Insurance Co. of North America, 799 F.2d 955, 959 (5 Cir.1986) [applying Mississippi law].

In Aetna Casualty & Surety Co. v. Dodson, supra, the Virginia Supreme Court, in considering the identical question under notably similar facts, found that the policy phrase "legally entitled to recover" damages, unambiguously "interposes, as a condition precedent to the [uninsured motorist] insurer's obligation, the requirement that the insured have a legally enforceable right to recover damages from an owner or operator of an uninsured motor vehicle." Id. at 508. The court held, as we do, that because workers compensation afforded the exclusive remedy against the employer and fellow employees, the injured person (or the decedent's beneficiaries, as was the case in Dodson ) was not "legally entitled to recover" damages against them. Id.

We believe that the clear meaning of the language, "legally entitled to recover," imports a condition precedent to the uninsured motorist insurer's obligation that the insured have a legally enforceable right to recover damages from the owner or operator of the uninsured motor vehicle. Because workers compensation is the exclusive remedy for an injured employee against a coemployee, Cormier does not have a legally enforceable right to recover damages from Fankhanel and, therefore, is not "legally entitled to recover." Other jurisdictions have similarly interpreted equivalent language. See, e.g., Aetna Casualty & Surety Co. v. Dodson, supra; Perkins, supra; Hubbel v. Western Fire Ins. Co., 218 Mont. 21, 706 P.2d 111 (1985); Peterson v. Kludt, 317 N.W.2d 43 (Minn.1982); Gray v. Margot Inc., 408 So.2d 436 (La.App.1981); Williams v. Country Mutual Ins. Co., 28 Ill.App.3d 274, 328 N.E.2d 117 (1975); Hopkins v. Auto-Owners Ins. Co., 41 Mich.App. 635, 200 N.W.2d 784 (1972).

The Cormiers rely on several cases holding that a claimant is "legally entitled to recover" if she is able to prove the elements of her claim, notwithstanding the statutory immunity of the tort-feasor. See, e.g., Allstate Ins. Co. v. Elkins, 77 Ill.2d 384, 33 Ill.Dec. 139, 396 N.E.2d 528 (1979); Guillot v. Travelers Indem. Co., 338 So.2d 334 (La.App.1977). These cases involve interspousal immunity, not workers compensation immunity. Workers compensation is the injured...