Jamison v. Utah Home Fire Ins. Co.

Decision Date20 January 1977
Docket NumberNo. 14523,14523
Citation559 P.2d 958
PartiesDonald J. JAMISON, Sr., et al., Plaintiffs and Respondents, v. UTAH HOME FIRE INSURANCE COMPANY, Defendant and Appellant.
CourtUtah Supreme Court

L. L. Summerhays, of Strong & Hanni, Salt Lake City, for defendant-appellant.

Gaylen S. Young, Jr., Salt Lake City, for plaintiffs-respondents.

CROCKETT, Justice:

The issue involved herein is plaintiffs' asserted right to recover from the defendant insurance company $12 per day for loss of household services of their 12-year-old son as coming within the meaning of Section 31--41--6(1)(b)(ii), U.C.A.1953, which is quoted below. From a determination on that issue in favor of the plaintiffs, awarding disability benefits at $12 a day for 112 days, totaling $1,344, and attorney fees totaling $475 and costs, the defendant appeals.

Inasmuch as the recovery sought is based on the No-Fault Insurance Act, the exact details as to how the accident occurred are not material to the issue involved. There is no dispute about the fact that while Donald was riding his bicycle on Highland Drive about 3700 South in Salt Lake County on November 19, 1974, he was involved in a collision with a pickup truck driven by Boyd D. Lemon, who was insured by the defendant, nor that Donald suffered bruises and contusions, injuries to his hip and a broken nose. He was hospitalized for a week, then remained at home until after the Christmas holidays when he was permitted to attend school, but was not given an outright release by his doctor until March 11, 1975. This totals the 112 days during which plaintiff says he was not able to perform the household services hereinafter listed.

The parties reached an agreement and the court approved a settlement as to other aspects of the case for Donald's injury, medical and hospital expenses. But, they were unable to agree upon, and therefore stipulated to reserve for determination by the court, the issue as to plaintiff's rights to any further damages as disability benefits under the No-Fault Insurance Act, and as to attorney's fees.

The statute of concern here, Section 31--41--6(1)(b)(ii), states:

. . . in lieu of reimbursement for expenses which would have been reasonably incurred for services that, but for the injury, the injured person would have performed for his household and regardless of whether any of these expenses are actually incurred, an allowance of $12 per day commencing not later than three days after the date of the injury and continuing for a maximum of 365 days thereafter, . . .. (Emphasis added.)

The view of this statute advocated by the plaintiff is that it mandates an automatic award of $12 per day for injury to any member of a household who would have performed services of any nature, however much or minimal, and whether their value is great or small. As it is but natural to expect, the defendant takes a differing view and argues that the statute is not susceptible to any such interpretation. We have no hesitancy in agreeing that the interpretation and application of the law should be a process of reason, as contrasted to a mere reading of tables or schedules, nor that when controversies arise it is both permissible and desirable to look to the background and purpose of a statute to ascertain its meaning and proper application in particular circumstances.

Since the advent of the automobile near the turn of this century there has been a constant and accelerating increase, both in the number of automobiles and the speed at which they travel, and a corresponding increase in injuries and damages resulting from their use. This has resulted in ever increasing insurance coverage and insurance costs, including various methods of compelling insurance coverage. Consequent to this, due to the controversies and litigation over who was at fault in such accidents, with the attendant delays, uncertainties and expenses, the concept of No-Fault Insurance arose. In enacting it, our legislature determined as a matter of public policy that some specified primary damages as to necessary medical, hospital, and loss of wages should be paid without undue delay. 1

This objective is plainly stated in Sec. 31--41--2:

. . . to effectuate a more efficient, equitable method of handling the greater bulk of the personal injury claims that arise out of automobile accidents Another equally important and desirable objective of the act, to be achieved in correlation with the foregoing, is coping with the ever increasing costs of the insurance. This is also clearly expressed in the language of the same section, stating that a purpose of the act is to possibly stabilize, if not effectuate certain savings in the rising costs of automobile accident insurance.

Consistent with the general purposes just stated, Sec. 31--41--7 provides a formula to arrive at what the actual losses are; and also provides that any benefits shall be reduced by other coverages, workmen's compensation or military benefits, which the injured person receives. This idea finds further support in Section 31--41--8, which states that payment of the benefits provided for in Section 31--41--6 shall be made on a monthly basis as expenses are incurred; and that benefits are overdue if not paid within 35 days after the insurer receives 'reasonable proof of the fact and amount of expenses incurred.'

To test the validity of plaintiff's contentions and how they coordinate with the above stated objectives and provisions of the statutes, such problems as this should be considered: assume, e.g., a family where there are eight or ten children, each of whom does his assigned share of the family chores. The family car has a collision and all are injured. Does the insurer pay the $12 per day 10 = $120 per day? Or, does the rule of reason apply?

However much we may desire it to be otherwise, this fact might as well be accepted as inescapable: that insurance is a business, not a philanthropy. There can be no free gifts or benefactions. In the long run premiums must pay for losses; and therefore, increases in premiums must and will be correlated to the extent of the coverage. Otherwise, the business cannot continue to operate. Someone has to pay the increased premiums. That someone is the policyholders, i.e., the public. Accordingly, a seeming generosity in broadening coverage in an individual situation, would be no favor to policyholders generally, nor to the public.

The principle which best serves the objective to be desired is to give both parties the benefit of a sensible, even-handed and practical application of the statute, under the assumption that all of its language was used advisedly and in harmony with its purposes. 2 If the Act had intended reimbursement for any and all duties performed by members of households, it could have plainly so stated. But it does not do so. Only by keeping the awards within reason, and excepting therefrom claims that might be unrealistic, fanciful, or perhaps even fraudulent, 3 can the stated objective, 'to effectuate . . . savings in the rising costs of automobile accident insurance . . .' be accomplished. Otherwise it is obvious that necessary increases in premiums would defeat, rather than promote, the purposes of the Act.

When the provisions of the sections of the Act as quoted herein are considered together in the light of that purpose, particularly the key statement in Section 31--41--6, wherein it speaks in terms of reimbursement 'for expenses which would have been reasonably incurred' it becomes plain that the Act, both in its statement of general purpose, and its specific provisions, was not intended to provide an automatic reward or a 'windfall,' for being involved in an accident by requiring payment when there was no loss actually suffered, nor for any expense not reasonably to be incurred, 4 but should be construed in conformity with the fundamental principle of insurance law, that the purpose of insurance is to indemnify for losses or damages suffered, as contrasted to gambling for a munificent reward if a loss occurs. 5

The clause of the statute, 'and regardless of whether any of these expenses are actually incurred . . .,' was undoubtedly included to eliminate the necessity of proof and to prevent an insurance company from claiming the benefit of services rendered gratuitously by friends or relatives, 6 which otherwise would have to be paid for. But it is still speaking of 'expenses which would have been reasonably incurred.'

It seems commendable indeed that Donald assumed and discharged considerable responsibility in the household. Particularly in view of the fact that he had two older sisters, one 13 and one 14, and his parents, all of whom were able to help. Donald's contributions are summarized, with the time for each, thus:

Took out the garbage daily (five minutes); washed dishes two or three times a week (fifteen to twenty minutes); vacuumed carpet three or four times a week (fifteen to twenty minutes); helped mother carry in groceries from car each Friday (no time given); and washed the car in the summer once every week or two (no time given).

In response to a question as to whether the sisters and others helped with those chores Mrs. Jamison testified:

Q. And they shared the household duties around the house, did they with your son?

A. A little. My oldest one worked, and my other one was mainly out tending. She brought in extra money by going out tending.

Q. You say they didn't do the dishes along with your son?

A. A little, yes. They helped around the house, but Don did most of the chores around the house because the girls were not home that much.

Q. Did the manager of the apartment have your walks cleaned for you?

A. I will say, sometimes.

Q. Did you ever complain to him about not doing it?

A. Oh, definitely. That's why we moved out. We had a lot of complaints with him.

Whatever view may be taken of the foregoing, for the purpose of dealing with the issue presented in this case, ...

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