Martinez v. ICRMP

• Citation: 999 P.2d 902,134 Idaho 247
• Decision Date: 28 April 2000
• Docket Number: No. 23981.,23981.
• Parties: Daniel Asevedo MARTINEZ, Jr. and Nancy Martinez, husband and wife, Plaintiffs-Appellants, v. IDAHO COUNTIES RECIPROCAL MANAGEMENT PROGRAM ("ICRMP"), a reciprocal company domiciled in Boise, Idaho and its producer James D. Dickinson Insurance, Inc. d/b/a Dickinson Insurance and Financial Services, Defendants-Respondents.
• Court: United States State Supreme Court of Idaho

999 P.2d 902

134 Idaho 247

Daniel Asevedo MARTINEZ, Jr. and Nancy Martinez, husband and wife, Plaintiffs-Appellants, v. IDAHO COUNTIES RECIPROCAL MANAGEMENT PROGRAM ("ICRMP"), a reciprocal company domiciled in Boise, Idaho and its producer James D. Dickinson Insurance, Inc. d/b/a Dickinson Insurance and Financial Services, Defendants-Respondents.

No. 23981.

Supreme Court of Idaho, Coeur d'Alene, April 1999 Term.

April 28, 2000.

Rehearing Denied April 28, 2000.

Harvey Richman, Coeur d'Alene, for appellants.

Hamlin & Sasser, P.A., Boise, for respondent ICRMP. Geoffrey M. Wardle argued.

Elam & Burke, P.A., Boise, for respondent Dickinson.

Substitute Opinion the Court's Prior Opinion Dated December 17, 1999 is Hereby Withdrawn.

ON DENIAL OF PETITION FOR REHEARING

KIDWELL, Justice.

This is an insurance policy interpretation case. Plaintiff Daniel Asevedo Martinez was injured in an automobile collision while on duty as a reserve police officer for the City of Rathdrum (City). He recovered a portion of his losses from worker's compensation and then filed a claim under the uninsured motorist provision of the City's insurance policy. The insurance company refused to pay the claim, contending that the injuries to Martinez were excluded from uninsured motorist coverage. The district court granted summary judgment for the insurance company, and Martinez appeals.

I. FACTS AND PROCEDURAL HISTORY

On September 3, 1994, Martinez was injured in a head-on collision with an uninsured motorist while on duty as a reserve police officer for the City. As a result of the accident, Martinez received extensive injuries which required prolonged hospitalization and physical therapy. Martinez collected partial compensation for his injuries under worker's compensation. In an attempt to recover the rest of his damages, he filed a claim with the City's insurance carrier under the uninsured motorist provision of the policy. The City's policy was underwritten by respondent Idaho Counties Risk Management Program (ICRMP), and was sold to the City through the insurance agency of James E. Dickinson (Dickinson Insurance), which is also a respondent.

ICRMP based its denial of Martinez's claim on two exclusions to the policy: 1) injuries covered by worker's compensation, and 2) to employees of the insured. On May 9, 1995, Martinez and his wife filed a complaint against both respondents for denial of the claim, alleging several theories of liability. They argued that the exclusions from coverage were against public policy, and that the respondents had breached their contract of insurance with the City. They also claimed that Dickinson Insurance had negligently failed to provide the City with adequate insurance, and that Martinez was injured as a third-party beneficiary of the City's policy. Additionally, they sought damages for Martinez's injuries under the policy. Finally, Martinez argued that the exclusions violated the Unfair Claims Settlement Practices Act (UCSPA).

On October 23, 1995, defendant ICRMP filed a motion for summary judgment arguing that Martinez's injuries were excluded from coverage by the terms of the policy. While the district court found that the policy was ambiguous as to the uninsured motorist coverage, it nevertheless granted partial summary judgment for ICRMP and Dickinson Insurance on the breach of contract and UCSPA causes of action. However, the district court reasoned that there were issues of material fact as to the claims regarding the uninsured motorist coverage.

Following the district court's grant of partial summary judgment, the respondents filed a motion to reconsider. They urged that the only issue concerning the uninsured motorist exclusion was one of law rather than of fact, and that the exclusions were not contrary to Idaho law.

On March 7, 1997, Martinez moved the district court for summary judgment, primarily citing the district court's determination that the policy was ambiguous. Martinez reasoned that where the policy was admittedly in force and the exclusion had been ruled ambiguous, there was no legal basis for denying him coverage.

On June 27, 1997, the district court entered summary judgment for the respondents, foreclosing the rest of Martinez's claims. This determination was based on the respondents' original motion for summary judgment of March 9, 1996. Martinez appealed the grant of summary judgment.

II. STANDARD OF REVIEW

On appeal from the grant of a motion for summary judgment, this Court employs the same standard as that used by the district court originally ruling on the motion. McKay v. Owens, 130 Idaho 148, 152, 937 P.2d 1222, 1226 (1997). On review, summary judgment is proper "if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact, and that the moving party is entitled to a judgment as a matter of law." I.R.C.P. 56(c). This Court liberally construes all disputed facts in favor of the non-moving party, and draws all reasonable inferences and conclusions supported by the record in favor of the party opposing the motion. Bonz v. Sudweeks, 119 Idaho 539, 541, 808 P.2d 876, 878 (1991). If reasonable people could reach different conclusions or draw conflicting inferences from the evidence, summary judgment must be denied. Id. However, if the evidence reveals no disputed issues of material fact, and the moving party is entitled to judgment as a matter of law, then the grant of summary judgment is appropriate. Allen v. Blaine County, 131 Idaho 138, 140, 953 P.2d 578, 580 (1998).

III. ANALYSIS

A. The Exclusions to the Uninsured Motorist Coverage Are Illusory and Void as Against Public Policy Under I.C. § 41-2502.

Martinez argues that the policy issued by ICRMP is ambiguous and as such, should be construed in favor of finding coverage. Martinez also contends that because the exclusions in the policy are so all-inclusive, no claimant will be able to collect under the uninsured/underinsured motorist provision.

The determination of whether a contract is ambiguous is a question of law upon which this Court exercises free review. Mutual of Enumclaw Life Ins. Co. v. Lincoln, 131 Idaho 454, 455, 958 P.2d 1140, 1141 (1997); DBSI/TRI V v. Bender, 130 Idaho 796, 802, 948 P.2d 151, 157 (1997); Kessler v. Tortoise Dev., Inc., 130 Idaho 105, 107, 937 P.2d 417, 419 (1997). When this Court finds that language in the policy is ambiguous, this Court must determine "what a reasonable person in the position of the insured would have understood the language of the contract to mean." City of Boise v. Planet Ins. Co., 126 Idaho 51, 55, 878 P.2d 750, 754 (1994).

The policy issued to the City contains the following coverage provisions:

GENERAL INSURING AGREEMENT

I. NAMED ASSURED

It is agreed that the unqualified word "Assured" wherever used in this Insurance includes not only the Named Assured but also:

2. under Section III, any person while using an owned automobile or a hired automobile, and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the Named Assured or with his permission. . . .

SECTION III AUTOMOBILE LIABILITY

INSURING AGREEMENT

A AUTOMOBILE LIABILITY: ...

B AUTOMOBILE MEDICAL PAYMENTS: ...

C UNINSURED/UNDERINSURED

MOTORIST: uninsured/underinsured motorist insurance shall be afforded in respect of any occurrence to the minimum extent permitted by the law of the State in which each owned or hired automobile is principally garaged, but only if the law of such State required the Assured to have such insurance and the Assured has otherwise failed to comply with such law.

EXCLUSIONS APPLICABLE TO SECTION III

THIS SECTION DOES NOT APPLY:

(a) To bodily injury or property damage which the Assured intended or expected or reasonably could have expected.

(b) To damage or destruction of property owned by the Assured.

(c) To any obligation for which the Assured may be held liable under any workers' compensation, unemployment compensation, disability benefits law, employers liability or under any similar law or to bodily injuries to any employee or to any liability for indemnity or contribution brought by any party for bodily injuries to any employee.

1. The policy is ambiguous as to uninsured motorist coverage.

Martinez contends, and the district court stated, that the policy coverage under Section III(C) is ambiguous. This section sets forth the scheme as to when the uninsured/underinsured motorist coverage is applicable. Under Section III(C) uninsured/underinsured motorist coverage is extended in every policy "to the minimum extent permitted by law ... but only if the law of such State required the Assured to have such insurance and the Assured has otherwise failed to comply with such law." ICRMP has stated in its pleadings that this section should be interpreted to mean simply that if the State of Idaho requires uninsured/underinsured motorist coverage, then such coverage is automatically extended; and if uninsured/underinsured motorist coverage is not required, then no such coverage exists.

Under I.C. § 41-2502, Idaho does not require uninsured/underinsured motorist coverage on all policies. This is the crux of I.C. § 41-2502, which provides in pertinent part that:

No policy insuring against loss resulting from liability imposed by law for bodily injury ... arising out of the ... use of a motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death as set forth in section 49-117, Idaho Code, . . . 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. . .

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