DeMello v. First Ins. Co. of Hawaii, Ltd., 5437

• Decision Date: 12 June 1974
• Docket Number: No. 5437,5437
• Citation: 523 P.2d 304,55 Haw. 519
• Parties: Howard J. DeMELLO, Plaintiff, v. FIRST INSURANCE COMPANY OF HAWAII, LTD., Defendant.
• Court: Hawaii Supreme Court

Page 304

523 P.2d 304

55 Haw. 519

Howard J. DeMELLO, Plaintiff, v. FIRST INSURANCE COMPANY OF HAWAII, LTD., Defendant.

No. 5437.

Supreme Court of Hawai'i.

June 12, 1974.

Syllabus by the Court

1. A 'physical contact' requirement in the 'hit-and-run' driver clause in an uninsured motorists provision of an automobile insurance policy is a contractual provision that imposes upon insured, as one of the prerequisites of recovery (under the uninsured motorists provision of his policy) the meed to prove physical contact petween the insured's vehicle and a second vehicle.

2. In order to effectuate the protective purpose of HRS § 431-448, any 'physical contact' requirement in the 'hit-and-run' driver clause in the uninsured motorists provision of an automobile liability policy must be deemed invalid.

Christopher P. McKenzie, Honolulu (Gould & McKenzie, Honolulu, of counsel), for plaintiff.

Walter Davis, Honolulu, for defendant.

Before RICHARDSON, C. J., LEVINSON, KOBAYASHI and OGATA, JJ., and VITOUSEK, Circuit Judge, Assigned Temporarily by reason of vacancy.

OGATA, Justice.

Howard J. DeMello (hereinafter plaintiff or plaintiff-insured) and First Insurance Company of Hawaii (hereinafter defendant or defendant-insurer) submitted this case for our decision under the provisions of the former ch. 631 of H.R.S., which provided that this Court could hear and determine a claim for relief presented on an Agreed Statement of Facts. ¹ From the submitted Agreed Statement of Facts we extract the following sequence of legally significant events.

Late on the evening of August 18, 1971, plaintiff was operating his pickup truck in Honolulu, on Kalanianaole Highway about one-half mile ewa (west) of the intersection of Kalanianaole Highway and Ehukai Street. At this particular location, Kalanianaole Highway is a two-lane road; plaintiff was in his ewa- bound lane. The other lane was for traffic proceeding in the opposite direction (Makapuu or east bound). Suddenly, plaintiff noticed the headlights of an on-coming, Makapuubound vehicle approaching his pickup truck. According to the stipulated facts, the on-coming Makapuu-bound vehicle was in the ewa-bound lane of travel. To avoid an apparently imminent head-on collision, plaintiff swerved his vehicle to the right and collided with the mountainside off the right shoulder of the highway. The operator of the approaching vehicle that had been driven in the improper lane drove on without stopping and has never been identified.

It is further stipulated and agreed that: (1) plaintiff suffered severe injuries as a result of his collision with the mountainside; (2) this collision and its resultant injuries were proximately caused by the negligence of the still unknown operator of the on-coming vehicle; (3) there was no physical contact between plaintiff's vehicle and the unidentified on-coming vehicle. It is also agreed that plaintiff had in force at the time of the accident a valid automobile liability insurance policy with defendant-insurer that provided that defendant-insurer would pay damages caused by an uninsured motorist. The particular provision under which plaintiff-insured claims coverage is the 'hit-and-run' paragraph, which paragraph specifically includes coverage for any 'bodily injury to an insured arising out of physical contact' of insured's motor vehicle and any motor vehicle operated by a negligent 'hit-and-run' driver, so long as the identity of the 'hit-and-run' driver cannot be ascertained. ² Plaintiff and defendant agree that all the prerequisites for recovery under the policy provisions have been complied with, save and except for the fact that there was no physical contact between plaintiff-insured's vehicle and the vehicle operated by the still unidentified other driver.

Before turning to the narrow legal issue involved herein, infra, the issue raised by the dissenting opinion merits brief discussion. We cannot agree with the view, expressed by the dissent, that we have invalidly assumed the applicability herein of HRS § 431-448 by invalidly assuming that accidents involving unidentified motor vehicle operators and insured drivers are intended by HRS § 431-448 to be covered in all automobile liability insurance policies issued in this state. Nor can we agree with the view expressed in the dissent that the terms of HRS § 431-448 are clear and unambiguous as applied in this case. ³

The dissenting opinion proceeds on the logically unsound basis that an unidentified driver is not, and cannot be, an uninsured driver, and hence the statute does not apply. However, it seems clear to us that unidentified drivers can either be (a) insured or (b) uninsured. Unless we make some completely unsupportable and unwarranted factual assumption about whether or not the unidentified driver is or is not insured, we cannot know from the bare terms of the uninsured motorists statute whether or not an automobile accident involving an unidentified driver is or is not intended to be covered by that statute. We have no factual basis on which to make such determination, and factual determinations are inappropriate activities for an appellate court, in any event. Whereas the dissenting opinion, perhaps unconsciously, makes a factual assumption that the unknown driver, by virtue of being unknown, cannot also be uninsured, we prefer to have recourse to the legislative history of HRS § 431-448 for assistance in determining how the term 'uninsured' in the statute is to be read in cases such as that here at bar. The legislative history of this statute, set out in pertinent part, infra, fn. 4, is not only clearly indicative of a legislative intention to assure, via HRS § 431-448, proper compensation for those tragically injured in automobile accidents, but in fact, expressly, clearly, and without ambiguity, states a legislative intention to assure that insurance companies provide coverage for persons injured in accidents and who have, as here, a valid claim that is uncollectible because of the fact that the tortfeasor operating the second vehicle involved in the accident cannot be identified. In sum, whereas the dissenting opinion apparently takes the illogical and unfounded view that because 'unidentified' and 'uninsured' are different adjectives (albeit not mutually exclusive conceptually), there is a presumption in favor of the unknown tortfeasor's insurance coverage, we think that only the opposite presumption can be reconciled with the clear and unambiguous statement of the legislative intent to provide to insureds adequate protection in instances such as that now before us.

The more narrow and complex legal issue presented for our decision is whether plaintiff-insured can recover under his particular insurance policy with defendant-insurer when, as here, the 'physical contact requirement' in the policy language is not complied with. Plaintiff-insured urges that the precondition of physical contact is null and void under HRS § 431-448.

We have recently decided a somewhat similar issue. In Walton v. State Farm Mutual Automobile Insurance Company, 55 Haw. 326, 518 P.2d 1399 (1974), we held that in order to accomplish the protective purpose of HRS § 431-448, ⁴ an 'other insurance' clause in the uninsured motorists provisions of an insured's automobile liability policy is invalid if its effect is to limit recovery by the insured under the particular policy to an amount that is less than the statutory minimum set up by HRS § 287-7, if that limit also results in insured's total recovery from all sources equalling less than the insured's actual damage. Similarly, we here hold invalid-as contrary to the protective purpose of HRS § 431-448-the 'physical contact' requirement in the uninsured motorists coverage of insured's automobile policy.

As in Walton, we are confronted at the outset with a split in authority. ⁵ However, a detailed study of the case authority in this field is only minimally helpful, because we are here required to construe a Hawaii statute, as to which the law in other jurisdictions can be advisory only.

In considering whether the contractually imposed policy requirement of physical impact should be null and void as in contravention of the statutory policy requirement evident in HRS § 431-448, we may analyze the problem by endeavoring to discover (1) what arguably valid objective this arbitrary physical impact requirement is designed to serve, (2) whether this objective is compatible with the statute, and (3) if so, whether (a) the objective is actually served by the requirement, and, (b) whether there are countervailing objections to the requirement that will nonetheless invalidate it as inconsistent with the statutory purpose.

The first two steps in the analysis are relatively easy. The physical impact requirement can only be designed to reduce the number of claims that may be filed by insureds with insurers, by elimination of some claims which are fraudulent. Brown v. Progressive Mutual Insurance Company, 249 So.2d 429, 430 (Fla.1971); Inter-Insurance Exchange of Auto. Club of Southern California v. Lopez, 238 Cal.App.2d 441, 446, 47 Cal.Rptr. 834, 837 (1965). 'The object is to eliminate fictitious claims of a driver who, through his own negligence, causes injury to himself without the involvement of another vehicle, and then seeks recovery on the ground that it was due to a fictitious hit-and-run driver.' State Farm Mutual Automobile Insurance Company v. Spinola, 374 F.2d 873, 875 (5th Cir. 1967). The elimination of fraudulent claims is obviously not repugnant to the statutory terms of HRS § 431-448 or to the policies reflected in the provision's legislative history.

Conceding that the physical impact requirement is designed to eliminate fraudulent claims and that such elimination is not contrary to the statute, we are next faced with the third analytical step of evaluating whether this proper and even laudable objective is actually served by the...