Liddy v. Companion Ins. Co.
| Decision Date | 12 June 1979 |
| Docket Number | No. 1-878A222,1-878A222 |
| Citation | 390 N.E.2d 1022,181 Ind.App. 16 |
| Parties | Mary S. LIDDY, Martin J. Liddy, Margaret Mattson, Lloyd Mattson, Defendants- Appellants, v. COMPANION INSURANCE COMPANY, Plaintiff-Appellee. |
| Court | Indiana Appellate Court |
John G. Herrin and James L. Tuohy, Wood, Tuohy, Gleason & Mercer, Indianapolis, for plaintiff-appellee.
Plaintiff Companion Insurance Company was awarded a summary judgment in its declaratory judgment suit for determination of the rights of the Plaintiff and Defendant Mary S. Liddy and other Defendants under an automobile liability insurance policy issued by Companion. Defendants appeal, challenging the trial court's interpretation of the insurance policy.
We affirm.
Mary S. Liddy purchased an automobile liability insurance policy from Companion Insurance Company. The policy covered two automobiles, and it contained an uninsured motorist provision.
On November 8, 1973, Liddy was injured while riding in one of her insured automobiles, a 1968 Ford. The negligence of an uninsured motorist was the proximate cause of Liddy's injuries. Liddy alleges that her damages exceed $30,000.
Companion tendered $15,000 to Mary Liddy and her husband Martin as payment in full of its liability under the uninsured motorist provision. Liddy refused to accept the $15,000 as payment in full on the ground that she had paid for uninsured motorist coverage of $30,000 per person and $60,000 for two or more persons in any one accident. Liddy made a demand for arbitration of the dispute. Companion filed an action for a declaration of the parties' rights under the insurance contract and for an injunction against arbitration of the matters in dispute. Companion maintained that its uninsured motorist liability under the contract was limited to $15,000 per person and $30,000 for two or more persons in any one accident.
The Hancock Circuit Court entered the following decree and judgment on Companion's motion for summary judgment:
"AMENDED DECREE AND FINAL JUDGMENT
The Court at the suggestion of the Defendants amends the Decree heretofore entered on the 20th day of March, 1978, so as to enter final judgment.
The uninsured motorist coverage contained in the insurance policy involved in this case is specifically excluded from the separability clause of the policy.
The United States Circuit Court of Appeals has held that 'stacking' of uninsured motorist coverage, provided in a single policy of insurance which is applicable to multiple vehicles, will not be permitted where the separability clause of the policy does not apply to the uninsured motorist clause, even though the premiums are charged on the basis of the number of cars involved.
There is no issue of fact in this case as to the wording of the policy and therefore summary judgment is appropriate. The Plaintiffs' Motion for Summary Judgment is sustained.
The court further declares that the arbitrator does not have jurisdiction to interpret the insurance contract.
The court expressly determines that there is no just reason for delay and the court expressly enters judgment as to the above issues.
It is ordered, adjudged and declared that plaintiffs' liability to defendant Mary J. Liddy, pursuant to the uninsured motorist clause of the policy in this case is limited to $15,000.00.
DATED this 16 day of May, 1978.
/s/ George B. Davis
/s/ George B. Davis, Judge
/s/ Hancock Circuit Court"
1. Whether or not the trial court erred in ruling that the arbitrator was without jurisdiction to interpret the insurance contract.
2. Whether or not the insurance contract was ambiguous and therefore should have been construed to provide double uninsured motorist benefits.
3. Whether or not Ind.Code 27-7-5-1 requires that Liddy receive double uninsured motorist benefits.
4. Whether or not there was a material issue of fact which should have precluded summary judgment.
Liddy's contentions with regard to the arbitration question are focused upon the following paragraph from the uninsured motorist provision:
She argues, first, that the question of whether she is entitled to $15,000 or $30,000 under the uninsured motorist clause is a question "as to the amount of payment which may be owing under this Coverage," and, that, consequently, it was a question reserved by the terms of the insurance policy for final decision by the arbitrator. She maintains that this agreement embodied in the insurance policy is final and does not violate public policy. Secondly, Liddy contends that this arbitration clause constitutes an enforceable written agreement to submit the question of the proper amount of proceeds owed by Companion to arbitration under Ind.Code 34-4-2-1. 2 Liddy cites no cases to support her arguments on this issue, presumably because this is a case of first impression in Indiana.
Companion, on the other hand, has cited numerous cases from other jurisdictions which, it contends, represent the majority rule that an arbitrator is without jurisdiction to determine the coverage of or to interpret an insurance policy. Companion relies primarily upon Flood v. Country Mutual Insurance Co. (1968) 41 Ill.2d 91, 242 N.E.2d 149, and Frager v. Pennsylvania General Insurance Co. (1967) 155 Conn. 270, 231 A.2d 531. Companion asserts that Flood held that the Illinois version of the Uniform Arbitration Act, which is very similar to IC 34-4-2-1 Et seq., does not determine which issues are subject to arbitration and that the parties' arbitration agreement is what controls on that question. Furthermore, Companion maintains that Flood and Frager held that uninsured motorist provisions very similar to those in the Companion policy authorized the arbitration of only two issues: (1) the liability of the uninsured motorist, and (2) the amount of damages suffered by the insured. Companion urges us to adopt this so-called majority position.
Although there are no Indiana decisions in point on this particular question, we are well aware of the general rules we must follow in determining the meaning of an insurance policy. Our objective here "is to ascertain and give effect to the intent of the parties to the insurance contract." Meridian Mutual Insurance Co. v. Gulf Insurance Co. (1977) Ind.App., 366 N.E.2d 190, 192. In ascertaining the intent of the insurance contract, we look at what "the insured, as a reasonable man, believed that the insurer intended by the terms of the contract." United Farm Bureau Mutual Insurance Co. v. Brantley (1978) Ind.App., 375 N.E.2d 235, 237. We "will construe an ambiguous insurance contract in favor of the insured." Taylor v. American Underwriters, Inc. (1976) Ind.App., 352 N.E.2d 86, 89. Before we will resort to construction of the contract, however, we must find it to be ambiguous. That is, "it must be susceptible of more than one interpretation, so that reasonably intelligent men, upon reading it, would honestly differ as to its meaning," and "the mere existence of a controversy as to the meaning of an insurance policy does not establish that such an ambiguity exists." Taylor, supra, 352 N.E.2d at 89. In order to determine whether or not a policy is ambiguous, we must consider all of the provisions in that policy, or at least the entire endorsement in question. See Taylor, supra.
We note initially that one possible source of the controversy here is the use of the word "Coverage" in the arbitration clause of the uninsured motorist provision. Liddy's arguments to the effect that she is entitled to $30,000 rather than $15,000 go basically to the amount of the coverage under the uninsured motorist provision, so her conclusion that this is an arbitrable dispute might be based in part upon the use of the term "Coverage" in the arbitration clause. However, upon closer examination of the policy in general and the uninsured motorist provision in particular, we find that the term "Coverage," with a capital C, is used to designate a particular endorsement or section of the policy. Thus, the provision we are considering is labeled "Coverage D Uninsured Motorists (Damages for Bodily Injury)." When viewed in this light, the term "Coverage" is not ambiguous, and it does not in itself reveal anything about the scope of the arbitration clause.
As Companion has suggested, numerous appellate tribunals in other states have been called upon to determine the meaning of arbitration clauses very similar to that found in the Companion policy. While most of the reported opinions have not dealt with the question of whether or not the amount which the insurer has contracted to pay is arbitrable, they have dealt with questions of whether or not other aspects of the coverage of policies are arbitrable. As we stated before, Liddy contends that the amount of insurance benefits which Companion owes her is a question "as to the amount of payment which may be owing under this Coverage," within the meaning of the arbitration clause. We have already held that the term "Coverage" is not indicative of the scope of the...
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