Fidelity & Cas. Co. of New York v. Darrow

• Decision Date: 05 May 1971
• Citation: 286 A.2d 288,161 Conn. 169
• Court: Connecticut Supreme Court
• Parties: FIDELITY AND CASUALTY COMPANY OF NEW YORK v. Rose L. DARROW, Administratrix (ESTATE of James J. DARROW).

Page 288

286 A.2d 288

161 Conn. 169

FIDELITY AND CASUALTY COMPANY OF NEW YORK v. Rose L. DARROW, Administratrix (ESTATE of James J. DARROW).

Supreme Court of Connecticut.

May 5, 1971.

Joseph F. Skelley, Jr., Hartford, with whom, on the brief, were Richard A. Walsh and William M. Shaughnessy, Hartford, for plaintiff.

Bernard D. Gaffney, New Britain, with whom, on the brief, was D. Stephen Gaffney, New Britain, for defendant.

Before HOUSE, THIM, RYAN, SHAPIRO and LOISELLE, ^* JJ.

RYAN, Associate Justice.

This action seeking a declaratory judgment was reserved for the advice of this court on a stipulation of facts. The basic question to be determined is whether the 'other insurance' clause of an insured's own uninsured motorist protection provision of the policy barred his recovery thereunder because the administratrix of the insured, killed while a passenger in an automobile not owned by him through the negligence of an uninsured motorist, has received a limited or proportional payment under the uninsured motorist protection provision of the policy insuring the automobile in which he was a passenger, when the limits of the latter policy and the insured's own policy are the same. The parties have stipulated to the following facts: James J. Darrow, the defendant's decedent, who was twenty-seven years old, was killed on August 17, 1968, in Plymouth, Vermont, when the automobile in which he was riding as a passenger with three companions was struck head on by another automobile. The car in which Darrow was riding was owned and operated by James L. Scarrozzo of New Britain. Scarrozzo was also killed instantly and two other passengers were seriously injured. The automobile which struck the Scarrozzo vehicle was owned and operated by Gregory Ellison of Chester Depot, Vermont. Ellison's operation of his automobile was the sole proximate cause of the accident. Ellison was an uninsured motorist within the meaning of all the policies hereinafter referred to. Scarrozzo carried uninsured motorist coverage on his automobile with the Hardware Dealer's Mutual Fire Insurance Company. The policy limit for uninsured motorist coverage on this policy was $20,000. The Hardware Dealer's Mutual Fire Insurance Company paid a total amount of $20,000 proportionately to the defendant and the three other occupants. The defendant claims that the damages suffered by the defendant's decedent exceed the proportional sum she received. The defendant's decedent carried uninsured motorist coverage on his own automobile with the plaintiff-insurer, the policy limit of which is also $20,000. This policy provides that claims under the uninsured motorist clause shall be submitted to arbitration if the plaintiff and the injured party cannot agree on the amount of payment to the injured party. The defendant instituted a claim to be submitted to arbitration.

With respect to uninsured motorist coverage the policy issued by the plaintiff to the defendant's decedent provides in part as follows: '7. Other Insurance. With respect to bodily injury to an insured while occupying an automobile not owned by the principal named insured, the insurance under this endorsement shall apply only as excess insurance over any other similar insurance available to such insured and applicable to such automobile as primary insurance, and this insurance shall then apply only in the amount by which the limit of liability for this coverage exceeds the applicable limit of liability of such other insurance.

'Except as provided in the foregoing paragraph, if the insured has other similar insurance available to him and applicable to the accident, the damages shall be deemed not to exceed the higher of the applicable limits of liability of this insurance and such other insurance, and the company shall not be liable for a greater proportion of any loss to which this Coverage applies than the limit of liability hereunder bears to the sum of the applicable limits of liability of this insurance and such other insurance.'

The plaintiff claims that paragraph 7 of the policy above quoted excludes coverage under the uninsured motorist provision of the policy issued by it in the factual situation herein set forth. The defendant claims that her decedent was covered under the terms of the policy and that the defendant should be allowed to proceed with the claim submitted to arbitration. The question upon which advice is desired is as follows: 'Does paragraph 7 of the policy issued by the plaintiff exclude coverage in the situation herein presented?'

The parties have stipulated further that the answer to this question will determine, or is reasonably certain to enter into the determination of, the case; and the present determination of this question will be in the interest of simplicity, directness and economy of judicial action because it will allow the defendant to proceed with her claim in arbitration and thus seek compensation for the damages suffered or it will terminate any remedies available to the defendant and thus end all litigation and arbitration in this matter.

The plaintiff claims that a party cannot be compelled to arbitrate a dispute unless it has contracted so to do. We so held in Frager v. Pennsylvania General Ins. Co., 155 Conn. 270, 274, 231 A.2d 531. It also claims: (1) That the policy provisions when read together with the applicable statutes show clearly that there can be no 'stacking' of uninsured motorist coverages; (2) that to allow the defendant to recover against the plaintiff would permit her to recover a greater amount than if the uninsured operator had coverage in the minimum statutory amount; and (3) that to interpret the policy as the defendant urges would, in effect, rewrite the policy and give the defendant's decedent more coverage than he purchased.

We have not had prior occasion to determine the issues involved in the present controversy. The courts of other states have taken divergent views dependent in a large measure on the varying statutory provisions of the several states. The courts of some states have adopted the position of the plaintiff and have held that the design and purpose of the uninsured motorist statutes are to provide protection only up to the minimum statutory limits for bodily injuries, and not to provide the insured with greater insurance protection than would have been available had he been injured by an insured motorist, and have held that such 'other insurance' provisions are valid where they do not reduce coverage below the minimum statutory limit. See note, 28 A.L.R.3d 551, 556 § 3, and cases cited.

On the other hand, many courts have held, as claimed by the defendant in this case, that 'other insurance' provisions, whether in the form of a 'pro rata,' 'excess insurance,' 'excess-escape,' or other similar clause, are invalid as a part of uninsured motorist protection, on the ground that the statute requiring every liability policy to provide this type of protection will not permit the insurer to provide in any way that the coverage will not apply where other insurance is also 'available,' despite the fact that the insured may thus be put in a better position that he would be in if the other motorist were properly insured.

The question of whether an 'other insurance' clause is valid was raised in Florida where the court ruled that an insurer could not, after accepting a premium for uninsured motorist coverage, deny coverage on the ground that the insured had other similar insurance available to him. It appeared to the court that the statute expressed the statutory requirements both as to coverage to be provided by the insurer, and as to its sources of recovery of insurance protection it has paid out, to the exclusion of inconsistent language inserted in the uninsured motorist endorsement itself. There appeared to be no latitude in the statute, the court said, for an insurer to limit its liability through such 'other insurance' clauses, and if the statute was to be meaningful and controlling in respect to the nature and extent of the coverage, the sources of recovery or the subrogation of the insurer, all inconsistent clauses in the policies must be judicially rejected. Sellers v. United States Fidelity & Guaranty Co., 185 So.2d (Fla.). Georgia held that there was no latitude in the uninsured motorist statute for an insurer to limit its liability to 'other insurance,' 'excess-escape,' or 'pro rata' clauses, as attempted in such a provision. Such a provision was held void, even though the state insurance commissioner had approved the policy of insurance containing the exclusion. State Farm Mutual Automobile Ins. Co. v. Barnard, 115 Ga.App. 857, 156 S.E.2d 148. Automobile policy provisions which conflict with the requirements of the uninsured motorist statute will not be effective to reduce the insured's recovery below the amount necessary to indemnify him for loss within the limits of all applicable policies. Protective Fire & Casualty Co. v. Woten, 186 Neb. 212, 181 N.W.2d 835; see also Bose v. American Family Mutual Ins. Co., 186 Neb. 209, 181 N.W.2d 839. An insurer was not permitted to deny coverage on the ground that the insured had other similar insurance available to him under a provision in an uninsured motorist endorsement providing that with respect to bodily injury to an insured while occupying an automobile not owned by the named insured the endorsement should apply only as 'excess insurance' over any other similar insurance available, and then only in the amount by which the limit of liability of the endorsement exceeded the sum of all other such limits of liability. The court rested the decision in this case on the language of the relevant statutes, the purpose of which was to protect an insured as to his...