Li v. Enterprise Rent-a-Car Co. of Utah

• Citation: 2006 UT 80,150 P.3d 471
• Decision Date: 05 December 2006
• Docket Number: No. 20050583.,20050583.
• Parties: Beiwi LI, Personal Representative of the Estate of Beizhong Li, Deceased, Plaintiff and Respondent, v. ENTERPRISE RENT-A-CAR COMPANY OF UTAH, a Utah corporation, Shuyu Zhang, Geico Indemnity Company, a Maryland corporation, and John Doe, whose true name is not known, Defendants and Petitioner.
• Court: Supreme Court of Utah

150 P.3d 471

2006 UT 80

Beiwi LI, Personal Representative of the Estate of Beizhong Li, Deceased, Plaintiff and Respondent, v. ENTERPRISE RENT-A-CAR COMPANY OF UTAH, a Utah corporation, Shuyu Zhang, Geico Indemnity Company, a Maryland corporation, and John Doe, whose true name is not known, Defendants and Petitioner.

No. 20050583.

Supreme Court of Utah.

December 5, 2006.

Earl D. Tanner, Salt Lake City, for respondent.

Paul M. Belnap, Joseph J. Joyce, Andrew D. Wright, A. Joseph Sano, Salt Lake City, for petitioner.

On Certiorari to the Utah Court of Appeals

DURRANT, Justice:

INTRODUCTION

¶ 1 This case concerns the insurance obligation of rental car companies under the Financial Responsibility of Motor Vehicle Owners and Operators Act (the "Financial Responsibility Act").¹ The Financial Responsibility Act requires owners of motor vehicles to maintain liability insurance in the amount of at least $25,000 to cover bodily injury or death.² Utah Code section 31A-22-314 requires rental car companies to provide their renters with "primary coverage" meeting the requirements of the Financial Responsibility Act "unless there is other valid or collectible insurance coverage." Enterprise Rent-A-Car Company of Utah ("Enterprise") contends that section 31A-22-314 excuses it from providing any insurance coverage when there is other valid or collectible insurance coverage amounting to at least $25,000. The estate of Beizhong Li ("Li's Estate") argues that this section exempts Enterprise only from providing primary insurance when there is other valid or collectible insurance coverage, and that absent such other insurance, the minimum liability coverage obligation imposed upon Enterprise by the Financial Responsibility Act remains unaltered by the section. We conclude that the existence of other valid or collectible insurance does not excuse Enterprise from its insurance obligations as a vehicle owner and that this result is dictated by the plain language and statutory context of section 31A-22-314.

BACKGROUND

¶2 The court of appeals reversed the district court's grant of summary judgment. On certiorari, we therefore "recite the facts in a light most favorable to [Li's Estate], the non-moving party below."³ On July 20, 2000, Li rented a Ford Taurus (the "Taurus") from Enterprise. Li signed a rental agreement (the "Rental Agreement") with Enterprise representing that he had personal automobile insurance meeting the minimum requirements of the Financial Responsibility Act. He initialed the box declining the optional $8 per day supplemental liability protection offered by Enterprise. The rental agreement designated Shuyu Zhang, Li's traveling companion and co-worker, as an additional authorized driver. The next day, while Zhang was driving the Taurus and Li was a passenger, they were involved in a traffic accident that caused Li's death.

¶3 Li's Estate filed suit against both Zhang and the unknown driver of a "miss-and-run" vehicle, "John Doe," alleging that the negligence of both drivers caused the accident. It also named Li's personal automobile insurer, Geico Indemnity Company ("Geico"), and Enterprise as additional defendants in the case. In total, Li's Estate identified three insurance providers that could be required to pay damages in the case: American Insurance, as Zhang's liability insurer; Geico, as Li's provider of both underinsured motorist and uninsured motorist coverages; and Enterprise, as the self-insuring owner of the Taurus.

¶4 Li's Estate was able to reach settlements on Zhang's liability with Zhang's Insurer, American Insurance, for the liability policy limit of $100,000, and with Li's insurer, Geico, for the policy limit of $100,000 on Li's underinsured motorist coverage. In total, Li's Estate has recovered $200,000 on Zhang's liability. Li's Estate asserts that this does not cover the damages caused by Zhang's negligence, however, and it reserved its claim against Enterprise for an additional $25,000 based on Enterprise's liability coverage on the Taurus. With respect to the claims of Li's Estate against John Doe, Li's Estate settled with Geico for $50,000, half of the $100,000 policy limit on Li's uninsured motorist coverage.

¶5 Enterprise then moved for summary judgment, arguing that Utah Code section 31A-22-314 exempts Utah rental car companies from providing liability coverage on their rental vehicles when there is "other valid or collectible insurance" available from the driver's personal automobile insurance policy and that other coverage is sufficient to meet Utah's $25,000 minimum liability coverage requirement. The trial court agreed and granted summary judgment, finding that there was other valid or collectible insurance available in this case.

¶6 The court of appeals reversed and remanded, holding that other provisions in the Utah Code require Enterprise to insure its rental vehicles while they are operated on the highways.⁴ It held that section 31A-22-314 does not excuse rental car companies from all coverage, but only from providing "primary coverage," as opposed to secondary or excess coverage, when there is "other valid or collectible insurance."⁵ The court of appeals thus held that section 31A-22-314 "speaks only to the positioning of coverage provided by rental car companies vis-a-vis other available coverage"⁶ and that summary judgment was inappropriate because Li's Estate may be entitled to recover money from Enterprise if, as Li's Estate alleges, Zhang's liability exceeds the policy limit on the primary insurance policy.⁷ To arrive at this conclusion, the court of appeals found that the language of section 31A-22-314 was ambiguous and then looked to legislative history and public policy to aid its analysis.⁸

¶7 We granted certiorari to consider the effect of Utah Code section 31A-22-314 on the insurance coverage that Utah rental car companies are required by statute to provide. We have jurisdiction pursuant to Utah Code section 78-2-2(3)(a), (5).

STANDARD OF REVIEW

¶8 On certiorari, we review the decision of the court of appeals, not the trial court.⁹ Here, we are called upon to review the court of appeals' interpretation of Utah Code section 31A-22-314 and Utah's Financial Responsibility Act. This is an issue of statutory construction, which we review for correctness.¹⁰

ANALYSIS

¶9 In interpreting the insurance requirements imposed on rental car companies by Utah's statutes, we first turn to familiar canons of statutory construction. Our primary goal in interpreting these statutes is "to evince the true intent and purpose of the Legislature."¹¹ We do so "by first looking to the statute's plain language, and giv[ing] effect to the plain language unless the language is ambiguous."¹² In conducting this plain meaning analysis, "[w]e read the plain language of the statute as a whole, and interpret its provisions in harmony with other statutes in the same chapter and related chapters."¹³

¶10 In this case, Utah Code section 31A-22-314 can be interpreted only with reference to the broader statutory scheme that imposes motor vehicle insurance requirements on motor vehicle owners. The insurance requirements related to motor vehicles are generally divided between two titles of the Utah Code: Title 41, chapter 12a, the Financial Responsibility of Motor Vehicle Owners and Operators Act, which requires motor vehicle owners to maintain insurance on their vehicles and imposes penalties for noncompliance,¹⁴ and Title 31A, chapter 22, part III, which sets forth specific provisions and coverages that must be included within motor vehicle insurance policies.¹⁵ In conducting this analysis, we discuss the broader requirements of the Financial Responsibility Act before turning to the more specific provisions of Title 31A, including Utah Code section 31A-22-314. Because the statutes relevant to this case have not undergone substantive changes since the accident occurred in 2000, we cite to the statutes as they are presently codified.

I. SECTION 41-12a-301(2) OF UTAH'S FINANCIAL RESPONSIBILITY ACT IMPOSES A DUTY TO MAINTAIN MOTOR VEHICLE INSURANCE ON ALL RESIDENT OWNERS OF MOTOR VEHICLES

¶11 We start our analysis of the insurance requirements imposed on Utah rental car companies with section 41-12a-301(2)(a) of the Financial Responsibility Act, which provides as follows: "Every resident owner of a motor vehicle shall maintain owner's or operator's security in effect at any time that the motor vehicle is operated on a highway or on a quasi-public road or parking area within the state."¹⁶ Specific exceptions to this requirement are listed in subsection 41-12a-301(5), none of which apply to resident owners of rental cars operated on roadways.¹⁷ Thus, section 41-12a-301(2)(a) imposes a baseline requirement that Utah rental car companies must maintain security (insurance) on their rental cars. Like any motor vehicle owner, a rental car company may meet this security requirement by acting as a self-insurer if it meets the requirements of Utah Code section 41-12a-407,¹⁸ but in such cases it will be required to pay benefits as if it were its own insurance provider.¹⁹ Enterprise has elected to self-insure.

¶12 Enterprise does not dispute that section 41-12a-301(2)(a) imposes the same baseline motor vehicle insurance requirements on Enterprise and other rental car companies that it imposes on any other resident motor vehicle owner. Instead, Enterprise primarily argues that section 31A-22-314 provides specific exceptions from the requirements of section 41-12a-301(2)(a) for rental car companies. This is an argument that we will address in depth. However, we first pause to consider Enterprise's novel interpretation of section 41-12a-301(2)(a)'s baseline insurance requirements.

¶13 Enterprise asserted at oral argument that the motor vehicle owner's duty to "maintain owner's or operator's security" on a vehicle while it is operated on a highway, road, or parking area within the state under section...