Hammon v. Farmers Ins. Group

Decision Date29 November 1984
Docket NumberNo. 14321,14321
PartiesGlen HAMMON and Ethel Hammon, husband and wife, Plaintiffs-Appellants, v. FARMERS INSURANCE GROUP and Rex L. Woolf, Defendants-Respondents.
CourtIdaho Court of Appeals

Monte B. Carlson and Lloyd J. Webb, Twin Falls (Webb, argued, Burton, Carlson, Pedersen & Paine, Twin Falls), for plaintiffs-appellants.

Richard T. St. Clair, Idaho Falls (St. Clair, Hiller, Wood & McGrath, Idaho Falls), for defendants-respondents.

BURNETT, Judge.

This case presents two issues regarding uninsured motorist coverage in an automobile insurance policy. First, does coverage extend to a claim of bodily injury allegedly caused when an unknown motorist forced the claimants' vehicle off the road? We hold that it does. Second, is potential recovery on the claim limited only to the policy issued for the particular vehicle involved in the accident? We hold that it is not. Accordingly, we reverse a summary judgment entered against the claim below and we remand for examination of the claim on its merits.

I

Glen and Ethel Hammon sued their insurance carrier, Farmers Insurance Company, and the insurance agent, Rex L. Woolf, to obtain payment on a claim for uninsured motorist benefits. The Hammons alleged, and for the purpose of summary judgment it is assumed, that they were victims of a traffic accident caused by an unknown motorist. They maintained that the accident occurred as they were driving toward the Blackfoot Reservoir on the "Old Bone Highway" in eastern Idaho. A red pickup truck with a camper shell travelling in the opposite direction veered across the center of the roadway and forced them off the road. Although there was no physical contact between the vehicles, the accident left Mrs. Hammon permanently paralyzed in the lower portions of her body. The identity of the red pickup, or of its driver, never was discovered.

The automobile insurance carrier provided medical payments of approximately $2,000 under the policy. But the company denied uninsured motorist benefits upon the ground that such coverage was expressly limited under the policy to injury caused by vehicles known to be uninsured or by "hit-and-run vehicles" that had come into "physical contact ... with the insured or with an automobile which the insured [was] occupying at the time of the accident...." The Hammons have not disputed the company's interpretation of the policy. Rather, they argue that the "physical contact" requirement is void because it narrows the uninsured motorist protection mandated by statute.

Idaho Code § 41-2502 requires all insurance companies selling automobile liability policies to include uninsured motorist coverage, unless rejected by the insured. The statute employs the following language:

[Coverage must be provided] in limits for bodily injury or death as set forth in section 49-1505, Idaho Code [fixing minimum liability insurance or security requirements], as amended from time to time, under provisions approved by the director of the department of insurance, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom....

Although this language is somewhat turgid, the basic legislative scheme is clear. When an insurance company sells a policy, "each person insured thereunder" is entitled to protection--in an amount not less than the minimum liability coverage--against injury, illness or death for which the insured (or his heirs) would be "legally entitled to recover" from an uninsured motorist. Thus, each liability policy, together with its uninsured motorist section or endorsement, provides two reciprocal coverages: one compensating persons to whom the insured would be liable for harm caused while operating a motor vehicle, and the other compensating the insured for the harm he suffers as the result of an uninsured motorist's negligent operation of a vehicle.

But while the overall scheme is clear, its specific application to the instant case is murky. Neither I.C. § 41-2502 nor any of its companion sections defines an "uninsured motorist" or an "uninsured motor vehicle," except to say that the latter "includes" a vehicle insured by an insolvent carrier. I.C. § 41-2503. The statutes are silent on whether an unidentified vehicle, such as the red pickup in this case, is to be regarded as "uninsured." The Hammons urge that it should. In contrast, the insurance company asserts that it should not and that by affording coverage in relation to a "hit-and-run" vehicle, so long as there is physical contact, the company actually has broadened, not restricted, the scope of statutory protection.

A

To put these contentions in proper perspective, it is helpful to examine Idaho's place in the national pattern of uninsured motorist legislation. Uninsured motorist coverage emerged during the 1950's as a counterpart to compulsory liability insurance and financial responsibility laws. Each of these measures was intended to reduce the economic hardship suffered by persons injured in accidents caused by negligent and financially irresponsible drivers. Cf. State v. Reed, 107 Idaho 162, 686 P.2d 842 (Ct.App.1984) (discussing compulsory liability insurance). Every state now requires liability insurance carriers to provide uninsured motorist coverage.

Our research discloses that the question of whether physical contact is required to invoke uninsured motorist coverage has been addressed in forty-two jurisdictions. The results comprise a broad spectrum. At one end of the spectrum, nine states have enacted statutes specifically requiring a collision or other physical contact. 1 Fourteen other states have held that their uninsured motorist statutes, while silent as to physical contact, are not offended by insurance policies requiring contact. 2 In seventeen states with such statutes, the courts have struck down physical contact requirements imposed by insurance policies. 3 Finally two states explicitly have barred physical contact requirements by statute. 4

Our focus is upon the two groups of states that have addressed the physical contact issue through case law rather than by statute. To understand these cases more fully, we must go beneath the surface. Uninsured motorist statutes which are silent on physical contact may be placed into two categories. See generally A. WIDISS, A GUIDE TO UNINSURED MOTORIST COVERAGE § 2.41 (Supp.1981). The first type, of which I.C. § 41-2502 is an example, simply affords protection to any insured who is legally entitled to recover damages from owners or operators of uninsured motor vehicles. The statute does not mention hit-and-run drivers. The second type of statute furnishes protection in relation to uninsured motorists and it mentions "hit-and-run motor vehicles" without defining that term.

Of the fourteen jurisdictions upholding physical contact requirements, twelve have the first type of statute and only two have the second type. 5 Of the seventeen states rejecting physical contact requirements, eight have type one statutes and nine have the second type. 6 The states rejecting such requirements have concluded

(1) that even though there is no specific reference to accidents caused by unknown motorists in the uninsured motorist statute, the statutory mandate contemplates coverage for such accidents, and (2) that any provisions in the insurance contracts restricting coverage for accidents caused by unknown motorists to instances where there was a 'physical contact' is in derogation of the protective purposes of the statute.

WIDISS, supra, at § 2.41.

Thus, the aggregate statistics disclose a majority of states (seventeen to fourteen) now disfavoring the physical contact requirement. The type one states, as a group, lean the other direction (twelve to eight). However, within this group, the mix is changing. Until 1971, no type one state had rejected the physical contact requirement. Three--Wisconsin, Louisiana and Tennessee--had embraced it. But in 1971 the Florida Supreme Court decided Brown v. Progressive Mutual Insurance Co., supra note 3. The Court disapproved the physical contact requirement and observed:

The statute is designed for the protection of injured persons, not for the benefit of insurance companies or motorists who cause damage to others.

* * *

* * *

The argument that the policy requirement of physical contact is reasonable is fallacious. The only reason for such a requirement is to prove that the accident actually did occur as a claimant may say it did. This is a question of fact to be determined by the jury, or the judge if demand for jury trial is not made. If the injured party can sustain the burden of proof that an accident did occur, he should be entitled to recover, regardless of the actuality of physical contact.

249 So.2d at 430.

Other type one states have taken note of Brown. In the last ten years, since 1974, six more such states--Colorado, Hawaii Pennsylvania, New Mexico, Maryland and Kansas--have rejected the physical contact requirement. During the same period, five other type one states--Missouri, Arizona, Arkansas, Connecticut and Kentucky--have adhered to it. Consequently, the issue now seems to be in relative equipoise among states in this category.

B

This decade of thrusting and parrying between competing viewpoints has left the courts in type one states disagreeing on three fundamental points concerning the physical contact requirement. First, courts espousing the requirement have suggested that terms such as "uninsured motorist" and "uninsured motor vehicle" have plain meanings and that they clearly exclude unknown or unidentified drivers and vehicles. The opposing view is that these terms are ambiguous and should be construed to advance the remedial purposes of uninsured motorist coverage. As noted by the Colorado Court of Appeals, "[T]he...

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