Mollena v. Fireman's Fund Ins. Co. of Hawaii, Inc.
| Decision Date | 21 August 1991 |
| Docket Number | Nos. 14648 and 14645,s. 14648 and 14645 |
| Citation | 72 Haw. 314,816 P.2d 968 |
| Parties | Olivia K. MOLLENA, Plaintiff-Appellant, and Edward Singson, Jr., and Paulette M. Singson, Plaintiffs, v. FIREMAN'S FUND INSURANCE COMPANY OF HAWAII, INC., a Hawaii corporation, Defendant-Appellee, and Hawaiian Insurance and Guaranty Company, Limited, a Hawaii corporation, United Pacific Reliance Insurance Companies, a Washington corporation; and Liberty Mutual Insurance Company, a Massachusetts corporation, Defendants. Patsyann H. COSTA, Plaintiff-Appellant, v. FIREMAN'S FUND INSURANCE COMPANY OF HAWAII, INC., a Hawaii corporation, Defendant-Appellee. |
| Court | Hawaii Supreme Court |
Syllabus by the Court
1. HRS § 431-448(b) requires that "[e]ach insurer shall offer to each policyholder" optional underinsured motorist coverage. (Emphasis added.) We interpret this language to mean the insurer must make a legally sufficient offer of underinsured motorist coverage under a four-part test.
2. Under the four-part test, an offer is legally sufficient when all of the following are met: (1) if made other than face-to-face, the notification process must be commercially reasonable; (2) the limits of optional coverage must be specified and not merely offered in general terms; (3) the insurer must intelligibly advise the insured of the nature of the optional coverage; and (4) the insurer must apprise the insured that the optional coverage is available for a relatively modest increase in premium. If the insurer cannot show that the four-part test has been met, then coverage is implied as a matter of law.
3. HRS § 431-448(b) relating to underinsured motorist coverage must be read in conjunction with HRS § 431-448(a) which states "coverage required under this section shall not apply where any insured named in the policy shall reject the coverage in writing." (Emphasis added.)
4. Upon subsequent amendment of HRS § 431-448, the legislature clarified it had originally intended an offer of underinsured motorist coverage to be rejected in writing.
5. Based on the plain language of HRS § 431-448(a) and (b), an insurer must make an offer for underinsured motorist coverage every time a policy is renewed.
William Copulos (Ian L. Mattoch and Henry R. Lobdell on the brief) Law Offices of Ian L. Mattoch, Honolulu, for plaintiff-appellant Olivia K. Mollena.
Keith K. Hiraoka of Roeca & Louie, Honolulu, for defendant-appellee Fireman's Fund Ins. Co. of Hawaii, Inc.
Gerald Y. Sekiya, Bert S. Sakuda and Keith K.H. Young on the brief of Cronin, Fried, Sekiya, Kekina and Fairbanks, Honolulu, for plaintiff-appellant Patsyann H. Costa.
Plaintiffs-appellants, Olivia K. Mollena (Mollena) and Patsyann H. Costa (Costa), appeal from the trial court orders entered June 22, 1990, and July 13, 1990, respectively, denying their cross motions for summary judgment which requested that underinsured motorist coverage be implied, as a matter of law, under their respective motor vehicle insurance policies, and the granting of defendant-appellee, Fireman's Fund Insurance Company of Hawaii, Inc.'s (Fireman's Fund), motions for summary judgment against Mollena and Costa. The two cases were consolidated for the purpose of this appeal. We vacate the judgment entered in favor of Fireman's Fund.
Mollena and Costa contend the trial court erred in denying their cross motions for summary judgments for several reasons: (1) the Fireman's Fund policyholder message is not a legally sufficient offer of optional underinsured motorist coverage under Hawaii Revised Statutes (HRS) § 431-448, and therefore, underinsured motorist coverage should be implied as a matter of law; (2) Fireman's Fund should have repeated this offer of underinsured motorist coverage each time it mailed renewal declarations to its insureds under HRS § 431-448; and (3) a genuine issue of material fact exists as to whether or not Costa and Mollena actually received the policyholder message. Costa also argues Fireman's Fund should have obtained her written rejection of underinsured coverage under HRS § 431-448.
On January 1, 1986, HRS § 431-448(b) and (c) became effective. HRS § 431-448, in its entirety, reads:
§ 431-448. Automobile liability; coverage for damage by uninsured or underinsured motor vehicle. (a) No automobile liability or motor vehicle liability policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance, or use of a motor vehicle, shall be delivered, issued for delivery, or renewed 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 set forth in section 287-7, under provisions filed with and approved by the insurance commissioner, 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, sickness, or disease, including death, resulting therefrom, provided that the coverage required under this section shall not apply where any insured named in the policy shall reject the coverage in writing. (Emphasis added.)
(b) Each insurer shall offer to each policyholder or applicant for a motor vehicle liability policy optional additional insurance coverage for loss resulting from bodily injury or death suffered by any person legally entitled to recover damages from owners or operators of underinsured motor vehicles. (Emphasis added.)
(c) The term "underinsured motor vehicle," as used in this section, means a motor vehicle with respect to the ownership, maintenance, or use of which the sum of the limits of liability of all bodily injury liability insurance coverage applicable at the time of loss to which coverage afforded by such policy or policies applies is less than the liability for damages imposed by law. A motor vehicle shall also be deemed uninsured within the meaning of this section if, after the occurrence of a loss described in this section, the owner or operator thereof is unknown. (Emphasis added.)
Pursuant to HRS § 431-448(b), Fireman's Fund sent a letter entitled, "Policyholder Message", informing its insureds of the new optional underinsured motorist coverage. The relevant parts are as follows:
Effective January 1, 1986, the state of Hawaii requires higher minimum limits of financial responsibility for Bodily Injury Liability and Uninsured Motorists Coverage.
The new minimum is $35,000 per person. If your policy provided less than the minimum limit mentioned above, it has been renewed with the higher limit.
Effective January 1, 1986 we are also required to offer you the option to purchase Underinsured Motorists Coverage. Underinsured Motorists Coverage includes Uninsured Motorists Coverage and the limit of liability is $35,000. Listed below are the annual premiums to be charged should you select this new coverage option.
UNDERINSURED/UNINSURED
MOTORISTS COVERAGE
$35,000 LIMIT
ANNUAL PREMIUM GARAGING LOCATION
$61 OAHU
$38 MAUI
(Lanai, Maui and Molokai)
$42 KAUAI
$46 HAWAII
Above premiums include $8 for basic uninsured motorists coverage.
If you have any questions about your insurance or wish to purchase Underinsured/Uninsured Motorists Coverage, contact your Fireman's Fund agent or Broker.
During the six month period between December 5, 1985 and June 4, 1986, this policyholder message was mailed along with the policy renewal declarations that are sent every six months.
Fireman's Fund had been providing motor vehicle insurance for Mollena since October 12, 1980 and for Costa since September 17, 1984. Both Mollena and Costa allege they never received the policyholder message. Neither purchased underinsured motorist coverage. However, Fireman's Fund claims it mailed a policyholder message once to Mollena the week of February 17, 1986 and once to Costa on or about February 2, 1986.
Mollena and Costa were injured in separate motor vehicle accidents on October 22 1987 and on October 31, 1986, respectively. 1 Both received bodily injury liability policy limits of $35,000 from the third party tortfeasors involved in their respective accidents. Both claimed underinsured motorist benefits from their insurer, Fireman's Fund. Fireman's Fund denied their claims on the basis that their policies did not provide underinsured motorist coverage.
Mollena and Costa filed separate declaratory judgment actions against Fireman's Fund requesting the trial court to find the policyholder message was not a legally sufficient offer, and therefore, underinsured motorist coverage be implied as a matter of law. Fireman's Fund moved for summary judgment in both cases. Mollena and Costa filed cross motions for summary judgments. The trial court granted summary judgment in favor of Fireman's Fund and denied Mollena's and Costa's cross motions for summary judgments.
HRS § 431-448(b) requires that "[e]ach insurer shall offer to each policyholder" optional underinsured motorist coverage. (Emphasis added.) We interpret this language to mean the insurer must make a legally sufficient offer of underinsured motorist coverage under the four-part test which we endorse and which is set forth in Hastings v. United Pac. Ins. Co., 318 N.W.2d 849 (Minn.1982). See also (applying four-part test) Cloninger v. Nat. General Ins. Co., 109 Ill.2d 419, 94 Ill.Dec. 549, 488 N.E.2d 548 (1985); State Farm Mut. Auto. Ins. Co. v. Wannamaker, 291 S.C. 518, 354 S.E.2d 555 (1987). Under the four-part test, an offer is legally sufficient when all of the following are met: (1) if made other than face-to-face, the notification process must be commercially reasonable; (2) the limits of optional coverage must be specified...
To continue reading
Request your trial
-
77 Hawai'i 117, Dawes v. First Ins. Co. of Hawai`i, Ltd.
...can be legitimately found which will give force to and preserve all words of the statute.); see also Mollena v. Fireman's Fund Ins. Co. of Hawaii, 72 Haw. 314, 324, 816 P.2d 968, 973 (1991) (construing subsections (a) and (b) of HRS § 431-448 so as to prevent rendering section meaningless);......
-
Honda v. Ers
...history or amendments to confirm its interpretation of an earlier statutory provision."); Mollena v. Fireman's Fund Ins. Co. of Hawaii, Inc., 72 Haw. 314, 324-25, 816 P.2d 968, 973 (1991) (subsequent statutory amendment construed to reflect original legislative In 2001, after the parties ha......
-
Taylor v. Government Employees Ins. Co.
...mandated that insurers offer UIM coverage at "a relatively modest increase in premium." Mollena v. Fireman's Fund Ins. Co. of Hawaii, Inc., 72 Haw. 314, 320, 816 P.2d 968, 971 (1991); see also Sen. Stand. Comm. Rep. No. 689, in 1985 Senate Journal, at 1181 (providing that "the overall inten......
-
Tallent v. National General Ins. Co.
...to be helpful in determining whether a proper offer had been made in the case before it. Similarly, in Mollena v. Fireman's Fund Ins. Co. of Hawaii, 72 Haw. 314, 816 P.2d 968, 971 (1991), the Hawaii Supreme Court reversed summary judgment in favor of the insurer and remanded the case for en......