McSorley v. Hertz Corp., 79695

• Decision Date: 01 November 1994
• Docket Number: No. 79695,79695
• Citation: 1994 OK 120,885 P.2d 1343
• Parties: Cathleen McSORLEY, Appellant, v. The HERTZ CORPORATION, Appellee.
• Court: Oklahoma Supreme Court

Page 1343

885 P.2d 1343

1994 OK 120

Cathleen McSORLEY, Appellant, v. The HERTZ CORPORATION, Appellee.

No. 79695.

Supreme Court of Oklahoma.

Nov. 1, 1994.

As Corrected Nov. 8, 1994.

Rehearing Denied Dec. 13, 1994.

Certiorari to the Court of Appeals, Division I; Leamon Freeman, District Judge.

The appellant, Cathleen McSorley (McSorley/car renter) rented a car from the appellee, the Hertz Corporation (Hertz) in Tulsa, Oklahoma. Subsequently, McSorley was involved in an automobile accident caused by the negligence of a third-party, underinsured motorist. After unsuccessfully attempting to collect underinsured motorist benefits from her own insurance policy, McSorley sued Hertz for recovery of uninsured/underinsured motorist coverage. Hertz moved for summary judgment arguing that, as a self-insurer, it was not required to offer uninsured/underinsured motorist coverage pursuant to 36 O.S.1981 § 3636. The trial judge, Honorable Leamon Freeman, granted summary judgment to Hertz. The Court of Appeals reversed. Under the facts presented

here, we find that a self-insured car rental company is not required to offer uninsured motorist coverage to a car renter and that uninsured motorist coverage did not arise by operation of law. Summary judgment was proper.

CERTIORARI PREVIOUSLY GRANTED; COURT OF APPEALS OPINION VACATED; TRIAL COURT AFFIRMED.

Rex K. Travis, Margaret E. Travis, Oklahoma City, for appellant.

Don M. Vaught, John R. Denneny, Oklahoma City, for appellee.

Robin L. Dill, Gerard F. Pignato, Oklahoma City, for amicus curiae, Budget Rent-A-Car, Inc.

KAUGER, Justice:

The first impression question presented is whether the trial court erred in granting summary judgment to a self-insured car rental company which did not offer uninsured/underinsured motorist coverage¹ pursuant to its rental agreement. Under the facts presented here, we find that a self-insured car rental company is not required to offer uninsured motorist coverage to a car renter and that uninsured motorist coverage did not arise by operation of law. Summary judgment was proper.

FACTS

Cathleen McSorley (McSorley/car renter), a Maryland resident, rented a car from the Hertz Corporation (Hertz/self-insurer) at the Tulsa International Airport on July 17, 1987. The face of the rental agreement provided three options for the car renter: 1) collision damage waiver; 2) personal accident insurance; and 3) personal effects coverage.² On the rental agreement, McSorley wrote "no," and initialed the appropriate space, declining any coverage described in the rental agreement.³ On July 20, 1987, she was involved in an automobile accident in On September 1, 1989, McSorley sued her insurance company in Maryland to recover uninsured motorist benefits.⁴ The Maryland court stayed the action on May 20, 1991, until Oklahoma could determine the issue of primary liability for uninsured insurance coverage. On November 8, 1991, McSorley sued Hertz alleging that she was entitled to uninsured motorist coverage. Hertz moved for summary judgment arguing that as a self-insurer,⁵ it was not required to offer uninsured motorist coverage in connection with a car rental agreement.

Miami, Oklahoma, caused by the alleged negligence of a third-party, underinsured motorist.

The trial court entered summary judgment for Hertz. McSorley appealed; and the Court of Appeals held that: 1) Hertz, as a self-insurer, was obligated to offer uninsured motorist protection to renters of its vehicles; and 2) in the absence of a written offer and an effective rejection, uninsured motorist coverage was in effect by operation of law. We granted certiorari on March 4, 1994, to address the question of first impression.

UNDER THE FACTS PRESENTED HERE, A SELF-INSURED CAR RENTAL COMPANY IS NOT REQUIRED TO OFFER UNINSURED MOTORIST COVERAGE TO A CAR RENTER--UNINSURED MOTORIST COVERAGE DID NOT ARISE BY OPERATION OF LAW. SUMMARY JUDGMENT WAS PROPER.

McSorley asserts that Hertz, as a self-insured car rental company, is under an obligation to offer uninsured motorist coverage to a car renter and because Hertz did not offer uninsured motorist coverage, it must The determination of legislative intent controls statutory interpretation.⁶ The intent is ascertained from the whole act based on its general purpose and objective.⁷ In construing statutes, relevant provisions must be considered together whenever possible, to give full force and effect to each.⁸ To ascertain legislative intent, we look to the language of the pertinent statutes.⁹ Legislative silence, when the Legislature has authority to speak, may be considered as an indication of its intent not to occupy the field.¹⁰ Consequently, we must examine the liability and responsibility of self-insurers under Oklahoma's financial responsibility act and the intent of the Legislature as it relates to the application of uninsured motorist coverage to self-insurers.

provide uninsured motorist protection to her. Hertz insists that: 1) its status as a self-insurer for purposes of financial responsibility laws does not also obligate it to offer or provide uninsured motorist coverage to a car renter; and 2) the uninsured motorist statute contemplates and requires the existence of a policy of insurance.

Under Oklahoma's Financial Responsibility Act (the Act)¹¹ owners and operators of motor vehicles must maintain security for their automobiles. Section 7-601 of the Act requires that: 1) owners maintain security on their vehicle; and 2) operators of a vehicle not owned by them must maintain security on the vehicle they operate, unless the owner of the vehicle provides coverage for the operator.¹² The Act further provides for three types of security: 1) a policy or bond; 2) a deposit of cash or securities; and 3) self-insurance.¹³ Any form of security cannot be less than the minimum amounts required by The purpose behind compulsory insurance is to mandate that vehicles operated on Oklahoma highways be secured against liability to innocent victims of the negligent operation or use of the insured vehicle.¹⁵ Title 47 O.S.1981 § 7-503¹⁶ allows a person,¹⁷ who has more than twenty-five vehicles registered in Oklahoma, to qualify as a self-insurer by obtaining a certificate of self-insurance by the Department of Public Safety. Hertz provides security for its vehicles through self-insurance.¹⁸

§ 7-204 of the Act.¹⁴

Section 3636 of the Oklahoma Insurance Code¹⁹ relates to required uninsured motorist coverage in insurance policies. Title 36 O.S.1981 § 3636(A) mandates that all policies insuring against loss resulting from liability imposed by law arising out of ownership, maintenance, or use of a motor vehicle shall include coverage as described in subsection (B).²⁰ Subsection (B) of § 3636²¹ provides that uninsured motorist coverage provided as Section 7-204 sets the minimum limits of liability coverage required to be carried by all owners of vehicles registered in the State of Oklahoma.²³ If an insured desires to reject the required uninsured motorist coverage, the rejection must be in writing.²⁴ The purpose of the uninsured motorist provision, when considered in connection with the requirement that it provide minimum standards of protection, is to place the insured in the same position as if the negligent uninsured motorist had complied with the Oklahoma laws concerning financial responsibility.²⁵

part of a liability policy shall not be less than that required under 47 O.S.1981 § 7-204,²² with the insured having the option to purchase increased limits of liability not to exceed the limits provided for bodily injury liability under the policy.

The uninsured motorist statute clearly requires that a policy of insurance insuring against loss arising out of the ownership or use of a motor vehicle provided by an insurer be in existence in order to necessitate the offering of uninsured motorist coverage. While the statute speaks to policies and refers to insured and insurers, it does not expressly address whether a self-insured car rental company comes within the confines of the statute.

This Court first addressed the application of the uninsured motorist statute to car rental companies in Moon v. Guarantee Ins. Co., 764 P.2d 1331 (Okla.1988). In Moon, a car rental agency purchased liability insurance from an insurance company. The rental agency attempted to reject uninsured motorist insurance from coverage under the policy's statutorily mandated provision. Subsequently, a lessee of a rental vehicle signed a rental agreement which included the purchase of insurance coverage. An additional fee was charged in consideration of acceptance of the insurance. The lessee was involved in an automobile accident caused by the negligence of an uninsured motorist. After the insurance company denied uninsured motorist coverage on the policy issued in the course of the rental transaction, the lessee sued.

We held that: 1) insurance companies issuing, delivering, renewing, or extending policies However, Moon is not dispositive of the present case. In Moon, the rental company was required to offer uninsured motorist coverage because it was selling insurance as an insurance agent through an insurance company. The car renter purchased a policy of insurance; therefore, a policy existed to which uninsured motorist coverage could attach. Here, the car rental company self insures, and McSorley did not purchase a policy of insurance.²⁷ Where no policy exists, uninsured motorist coverage does not arise by operation of law.

are required to also offer by written provision uninsured motorist coverage, unless it is waived by a written rejection by the named insured;²⁶ 2) the named insured, within the context of the uninsured motorist statute, applies to persons named as insured in a vehicle rental/insurance contract; 3) a car rental agency acts as an agent of the insurance company when it solicits fees and sells insurance on behalf of an insurer; and 4) the car rental agent can not...