Halversen v. Allstate Prop. & Cas. Ins. Co.
| Decision Date | 04 June 2021 |
| Docket Number | No. 20200085-CA,20200085-CA |
| Citation | 493 P.3d 693 |
| Court | Utah Court of Appeals |
| Parties | Lane HALVERSEN, Appellee, v. ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY, Appellant. |
Lynn S. Davies, Rafael A. Seminario, Salt Lake City, and Samantha E. Wilcox, Attorneys for Appellant
Justin M. Hosman and Joshua S. Baron, Salt Lake City, Attorneys for Appellee
Opinion
¶1 Allstate Property and Casualty Insurance Company appeals the district court's denial of its motion to dismiss Lane Halversen's complaint. Halversen sought a trial de novo in the district court after arbitration because he was dissatisfied with the arbitration award he received on his underinsured motorist (UIM) claim. Allstate moved to dismiss, arguing that Utah's UIM statute allows for a trial de novo only where the arbitration award "was procured by corruption, fraud or other undue means." See Utah Code Ann. § 31A-22-305.3(8)(o)(i) (LexisNexis 2017)). We disagree with Allstate's interpretation of the UIM statute and hold that either party, within twenty days of service of the arbitration award, may request a trial de novo for any reason. Accordingly, we affirm the court's denial of Allstate's motion to dismiss and the resulting judgment.
¶2 Halversen was injured when an underinsured driver rear-ended his vehicle. Because the policy limits of the at-fault driver's insurance did not fully cover his damages, Halversen submitted a claim to Allstate, his own motor vehicle insurance carrier, under his policy's UIM coverage provision.1 When Allstate declined to pay Halversen the limits of his UIM coverage, Halversen elected to resolve his claim in binding arbitration as authorized by the UIM statute. See Utah Code Ann. § 31A-22-305.3(8)(a)(i) (LexisNexis 2017).
¶3 Halversen received an arbitration award, but within twenty days of receiving that award, he filed a complaint in district court requesting a trial de novo. At the time the complaint was filed, the relevant portion of the UIM statute provided as follows:
Id. § 31A-22-305.3(8)(o).2 In a prior version of the statute, subparts (i) and (ii) were separated by the word "or." See id. § 31A-22-305.3(7)(o) (LexisNexis 2010). In 2011, the legislature deleted the word "or," leaving the two subparts connected only by a semicolon without a conjunction. See id. (LexisNexis Supp. 2011).
¶4 On the eve of trial, Allstate moved to dismiss the complaint for lack of subject matter jurisdiction, arguing that a trial de novo was authorized only when the arbitration award was both "procured by corruption, fraud, or other undue means" and a complaint seeking a trial de novo was filed within twenty days. See id. § 31A-22-305.3(8)(o)(i) (LexisNexis 2017). Allstate asserted that by removing the word "or," the legislature effectively replaced "or" with "and," creating both a substantive and a procedural requirement for a party to request a trial de novo in district court.
¶5 The district court rejected that argument, explaining that "if what the legislature had intended was to remove the ‘or’ and replace it with ‘and,’ ... that's what the legislature would have done." Instead, the court reasoned that the legislature "created a hopelessly ambiguous statute because [it] took what was previously a complete sentence and [it] removed a necessary connector." The court concluded that removing the conjunction "was a mistake; this was a drafting error by the legislature." In light of the resulting ambiguity, the court looked to "the underlying legislative policy and legislative history" to interpret the statute. The court observed that "underinsured motorist statutes are designed to protect insureds" and should "be liberally construed in favor of coverage." In addition, it pointed out that Allstate's interpretation would "dramatically narrow[ ]" the ability to review arbitration awards, yet nothing in the legislative history suggested that "the legislature had intended to make a policy shift [that] dramatic." The court concluded that the legislature had not intended to make subpart (i) a substantive requirement for seeking a trial de novo and accordingly denied the motion to dismiss.
¶6 The case proceeded to trial, and the jury returned a verdict in favor of Halversen. Allstate moved for judgment notwithstanding the verdict based on the same arguments raised in its motion to dismiss. The district court denied the motion and entered a final judgment. Allstate timely appealed, challenging only the denial of its motion to dismiss and the resulting judgment.
¶7 Allstate appeals the district court's denial of its motion to dismiss for lack of subject matter jurisdiction, based on the court's interpretation of Utah Code section 31A-22-305.3(8)(o).3 Whether the district court "has subject matter jurisdiction presents a question of law, which [we] review under a correction of error standard." Amundsen v. University of Utah , 2019 UT 49, ¶ 19, 448 P.3d 1224 (cleaned up). Similarly, we "review questions of statutory interpretation for correctness, affording no deference to the district court's legal conclusions." State v. Gallegos , 2007 UT 81, ¶ 8, 171 P.3d 426.
¶8 Allstate argues that by removing the word "or" between the two statutory circumstances in which an arbitration award is not final, the legislature narrowed the UIM statute and allowed litigants to seek a trial de novo in district court only if both: (1) "the arbitration award was ‘procured by corruption, fraud, or undue means,’ " (quoting Utah Code Ann. § 31A-22-305.3(8)(o) (LexisNexis 2017)), and (2) "the party seeking the trial de novo complied with the procedural requirements for such a request." We disagree with Allstate's interpretation and affirm the district court's ruling denying the motion to dismiss.
¶9 "Our courts use a ‘plain meaning’ approach to statutory interpretation." Oliver v. Utah Labor Comm'n , 2017 UT 39, ¶ 19, 424 P.3d 22. "Under this approach, we need not look beyond the statute's text to secondary considerations—such as legislative history or the canon that we interpret statutes to avoid absurd results—unless there is ambiguity in the statute." Id. A statute is ambiguous when "its terms remain susceptible to two or more reasonable interpretations after we have conducted a plain language analysis." Marion Energy, Inc. v. KFJ Ranch P'ship , 2011 UT 50, ¶ 15, 267 P.3d 863. Only then do we "resort to other modes of statutory construction and seek guidance from legislative history and other accepted sources." Id . (cleaned up).
¶10 The district court ruled that when the legislature "removed a necessary connector"—the word "or"—it "render[ed] the statute ambiguous." To resolve that ambiguity, the district court relied on legislative policy and history to interpret the statute. We afford no deference to the district court's conclusion that the statute is ambiguous. See State v. Gallegos , 2007 UT 81, ¶ 8, 171 P.3d 426. Although we disagree with that conclusion, the district court's reading is the only reasonable interpretation of the statute's plain language, and we affirm on that basis. See Olguin v. Anderton , 2019 UT 73, ¶ 20, 456 P.3d 760 .
¶11 The absence of any conjunction between subparts (i) and (ii) may well have been "a drafting error by the legislature," but we disagree that the omission renders the statute "hopelessly ambiguous." We read statutory text not in isolation but "in light of the relevant context of the statute (including, particularly, the structure and language of the statutory scheme)." Bright v. Sorensen , 2020 UT 18, ¶ 59, 463 P.3d 626 (cleaned up). "Put another way, the fact that the statutory language may be susceptible of multiple meanings does not render it ambiguous; all but one of the meanings is ordinarily eliminated by context." Oliver , 2017 UT 39, ¶ 20, 424 P.3d 22 (cleaned up). Here, that context eliminates the potential ambiguity.
¶12 Under the "scope-of-subparts" canon of statutory construction, "[m]aterial within an indented subpart relates only to that subpart; material contained in unindented text relates to all the following or preceding indented subparts." Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 156 (2012); see also Vanderwood v. Woodward , 2019 UT App 140, ¶ 27, 449 P.3d 983 (). This principle is illustrated by subsection (8)(o)(ii), which provides that an arbitration award is not final when:
Utah Code Ann. § 31A-22-305.3(8)(o)(ii) (LexisNexis 2017). The formatting indicates that the material in subpart (ii) relates to indented subparts (A) and (B), but does not apply to subpart (i). See Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 156 (2012). Therefore, the twenty-day time limit in...
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