Curran v. Fireman's Fund Insurance Company, Civ. No. A74-152.

• Decision Date: 14 May 1975
• Docket Number: Civ. No. A74-152.
• Citation: 393 F. Supp. 712
• Parties: Mary Jane CURRAN, as Personal Representative of the Estate of Thomas Edward Curran, Jr., Deceased, Plaintiff, v. FIREMAN'S FUND INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — District of Alaska

393 F. Supp. 712

Mary Jane CURRAN, as Personal Representative of the Estate of Thomas Edward Curran, Jr., Deceased, Plaintiff, v. FIREMAN'S FUND INSURANCE COMPANY, Defendant.

Civ. No. A74-152.

United States District Court, D. Alaska.

May 14, 1975.

Robert M. Libbey, Anchorage, Alaska, for plaintiff.

David H. Thorsness, Hughes, Thorsness, Lowe, Gantz & Powell, Anchorage, Alaska, for defendant.

MEMORANDUM AND ORDER

James A. von der Heydt, Chief Judge.

This declaratory action comes before the court upon cross motions for summary judgment. The case was removed to the district court upon the basis of diversity of citizenship. Under the mandate of Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), this court must apply the law of the forum state. Unfortunately, the courts of Alaska have yet to address the critical question here involved, i. e., whether an insured may "stack" the uninsured motorist's coverage provided him in a single multivehicle policy.

Thomas Curran was a named insured under a comprehensive automobile liability policy issued by Fireman's Fund Insurance Company. On May 31, 1974, an accident occurred while Mr. Curran was driving one of the seven vehicles insured under the aforementioned policy. It has been established that the proximate cause of such accident was the negligence of one Chester Kortas. Further, the record reflects that neither Kortas nor his automobile was insured at the time of the accident. Finally, it has been stipulated that Mr. Curran, who subsequently has died, suffered injuries evaluated in excess of the $20,000.00 paid thus far by his insurer.

The policy in question, MXP XXX-XX-XX¹, provided uninsured motorists coverage for Mr. Curran as a named insured. In addition, it provided coverage for his spouse and relatives while residents of the household of the named insured. Further, under the omnibus clause, the policy provided uninsured motorists coverage for any other person while occupying an insured highway vehicle. Exclusion (b), the other owned but uninsured vehicle clause, provides that the insurance shall not apply to an injury that occurs while an insured is occupying a highway vehicle, other than an insured highway vehicle, owned by the named insured or any relative resident in the same household as the named insured. An insured highway vehicle is defined as a vehicle described in the schedule as an insured highway vehicle to which bodily injury liability coverage applies.

The policy contains a standard limits of liability clause. The clause is set out in footnote one. The limits of liability schedule provides 15/30 coverage. The uninsured motorists endorsements were apparently purchased at the rate of six dollars per annum for the first vehicle and five dollars per annum for each additional vehicle. There is some dispute as to the amount charged for the first vehicle, but the court finds that to be immaterial to the resolution of the question of law involved.

As stated earlier, the courts of Alaska have yet to resolve the precise issue raised in the instant case. However, both this court² and the Alaska Supreme Court³ have allowed stacking in the multipolicy situation with respect to uninsured motorists insurance. As to the question of whether stacking will be allowed in a single multivehicle policy, it appears that the reported decisions are divided.⁴

There are a number of arguments advanced by the proponents of stacking in the single policy context. It has been argued, in some instances, that the policy in question is ambiguous and should therefore be construed against the insurer. In other cases the courts have held that it would be incongruous to allow stacking in the situation of multiple policies issued by one insurer but not to allow stacking where the same coverage is provided in the form of a multivehicle policy. A third argument has been that stacking is required by the particular language of the uninsured motorists statute at issue. Finally, a number of decisions have allowed stacking where to do otherwise would result in a windfall to the insurer since no consideration given by the insurer exists for the premiums paid on multiple vehicles.

This court finds that the Supreme Court of Texas effectively rebutted each of the aforementioned arguments, with the exception of the third, in Westchester Fire Insurance Company v. Tucker, 512 S.W.2d 679 (1974).

With respect to the third argument, that is, that stacking is required to comply with the terms of the uninsured motorists statute involved, it is sufficient to say that the Alaska statute, A.S. 21.89.020, does not require such a result. This conclusion follows from the fact that uninsured motorists insurance may be waived in Alaska. Werley v. United Services Automobile Association, 498 P.2d 112, 115 (Alaska 1972), recognizes the implications of the statutory waiver concept in an analogous situation.⁵

Although this court is in complete agreement with the decision in Westchester Fire Insurance Company v. Tucker, 512 S.W.2d 679, supra, the rationale of that decision is inapplicable to the policy here involved. One of the basic premises of that opinion was that the insured received consideration in the form of expanded coverage for the additional premium dollars he was required to pay for uninsured motorist coverage when multiple vehicles were covered by the policy. Specifically, the named insured and resident members of his family would be covered by uninsured motorists coverage when driving all vehicles owned by them. If uninsured motorists endorsements had not been purchased on such automobiles, Exclusion (a) of the policy there at issue would have barred recovery. Moreover, the additional premium dollars award benefit to the insured under the omnibus clause of the policy. That is, persons occupying a vehicle owned by the insured, other than the named insured or any relative, would only be covered by the uninsured motorists protection if the additional vehicles were insured.⁶

However, the policy involved in the instant case differs from that which was involved in Westchester in one important respect. The policy here at issue defines an insured highway vehicle as a highway vehicle described in the schedule as an insured highway vehicle to which bodily injury liability coverage⁷ of the policy applies. Tieing this definition to Exclusion (b)⁸ it becomes apparent that the insured, under the interpretation of the contract propounded by the insurer, would receive absolutely no additional coverage for his premium dollars paid for uninsured motorists coverage on vehicles two through seven. That is, the five or six dollars initially paid by the insured for uninsured motorists coverage effectively protected all insureds at all times as long as the highway vehicle had bodily injury liability coverage applicable to it since Exclusion (b) would therefore not apply. All seven vehicles were so covered.⁹

The premiums received by the insurer for uninsured motorists protection in relation to vehicles two through seven are a windfall to the insurer under its interpretation of the contract. Surely, the insured reasonably expected something in return for the premiums paid for the additional uninsured motorists endorsements. The only possible interpretation of the contract that would fulfill the reasonable expectations of a layman, Continental Insurance Company v. Bussell, 498 F.2d 706 (Alaska 1972); Graham v. Rockman, 504 P.2d 1351 (Alaska 1972), is that the uninsured motorists premiums paid in connection with vehicles two through seven were meant to increase the amount of coverage, the limits of liability clause notwithstanding.¹⁰

Accordingly, it is...