Patton v. Safeco Ins. Co. of America, 970A152

Decision Date29 March 1971
Docket NumberNo. 970A152,No. 2,970A152,2
Citation148 Ind.App. 548,25 Ind.Dec. 191,267 N.E.2d 859
PartiesWilliam A. PATTON, Marilyn Patton and Michael Patton, Appellants, v. SAFECO INSURANCE COMPANY OF AMERICA, Appellee
CourtIndiana Appellate Court

James R. Martin and Daniel J. Harrigan, Kokomo, for appellants; Bayliff, Harrigan, Cord & Maugans, Kokomo, of counsel.

H. William Irwin and Richard L. Fairchild, Stewart, Irwin, Gilliom, Fuller & Meyer, Indianapolis, for appellee; Bagot, Free, Shearer & Miller, Anderson, of counsel.

HOFFMAN, Chief Justice.

Defendants-appellants appeal the entry of a judgment by the trial court in favor of plaintiff-appellee in an action for declaratory judgment based upon the 'excess-escape' clause contained in the uninsured motorist portion of appellee's policy of insurance issued to appellants.

The issue presented by this appeal is: Does the uninsured motorist 'excess-escape' clause limit recovery to one insurance contract, even though the injured person was covered by more than one policy?

Both parties agree that there is no genuine issue of material fact.

The record before us discloses the following:

In October, 1967, appellants (Pattons) were passengers in an automobile owned and operated by one Joseph Holtsclaw. The Holtsclaw vehicle was involved in a collision with a pickup truck being operated by an uninsured motorist. As a result of the collision, nine persons, including the Pattons, suffered personal injuries or death.

At the time of the accident Joseph Holtsclaw was insured with United Farm Bureau Mutual Insurance Company (United). Mr. Holtsclaw's policy provided uninsured motorist coverage with limits of $10,000 for one person and $20,000 per accident. William A. Patton was insured with appellee-Safeco Insurance Company of America (Safeco) and his policy provided identical limits of liability for uninsured motorist coverage.

Seeking compensation for their injuries, the Pattons made a claim under United's uninsured motorist coverage and from a total payment of.$19,000 to nine persons received a settlement of $7,125.

The Pattons then filed their petition with the American Arbitration Association against Safeco demanding arbitration of their respective claims for personal injuries under Safeco's uninsured motorist coverage. In response to the petition filed by the Pattons, Safeco initiated the action for declaratory judgment which led to this appeal.

Both parties filed motions for summary judgment. The trial court overruled the Pattons' motion and entered judgment in favor of Safeco on their motion. The sole error assigned by the Pattons is the overruling of their motion to correct errors.

Safeco agrees that for the purpose of determining the validity of their 'excessescape' clause, it may be assumed that the negligence of the uninsured motorist was the proximate cause of the injuries sustained by the Pattons and that the damages exceed $27,125.

The so-called 'excess-escape' clause, which is placed in issue by this appeal, reads as follows:

'Other Insurance. With respect to bodily injury to an insured while occupying an automobile not owned by the named insured, the insurance under Uninsured Motorist shall apply only as excess insurance over any other similar insurance available to such insured and applicable to such automobile as primary insurance, and this insurance shall then apply only in the amount by which the limit of liability for this coverage exceeds the applicable limit of liability of such other insurance.'

Appellants contend that this clause limits and qualifies the words, purpose and legislative intent of the applicable statute.

Acts 1965, ch. 138, § 1, p. 215, 1 Ind.Stat.Anno., § 39--4310, Burns' 1965 Repl., the applicable statute, is as follows:

'Motor vehicle liability--Non-insured vehicle coverage--Rejection in writing.--No automobile liability or motor vehicle liability policy of insurance 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 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 set forth in (IC 1971, 9--2--1--15) Acts 1947, chapter 159, sec. 14 (§ 47--1057), as amended heretofore and hereafter, under policy provisions approved by the commissioner 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, sickness or disease, including death, resulting therefrom; Provided, That the named insured shall have the right to reject such coverage (in writing) and Provided further, That unless the named insured thereafter requests such coverage in writing, such coverage need not be provided in or supplemental to a renewal policy where the named insured has rejected the coverage in connection with a policy previously issued to him by the same insurer.'

The limits specified in IC 1971, 9--2--1--15 (Acts 1947, ch. 159, § 14, as last amended by Acts 1957, ch. 140, § 2), Ind.Stat.Anno., § 47--1057, Burns' 1965 Repl., are $10,000 for one person and $20,000 for one accident.

Safeco contends that their clause does not violate public policy or contravene § 39--4310, supra, because when the total limits of one policy are invoked because of injuries caused by an uninsured motorist, the injured persons are in the same position they would be if the uninsured motorist had the minimum limits set out in § 47--1057, supra.

Safeco's position definitely states the result of inserting an enforceable 'excess-escape' clause in the uninsured motorist coverage of an automobile liability policy. There is little doubt that such a result was intended by insurers when they fabricated the 'excess-escape' clause. 2 However, if the clause in question is in derogation of the Indiana uninsured motorist statute, § 39--4310, supra, such clause will be unenforceable regardless of the insurer's intent.

Both parties, and this court, have available a flurry of recent cases which decide the issue presented by this appeal. Pattons cite the following cases, all of which tend to support their position. LeBlanc v. Allstate Insurance Company, 194 So.2d 791 (La.App.1967); Kraft v. Allstate Insurance Company, 6 Ariz.App. 276, 431 P.2d 917 (1967); Moore v. Hartford Fire Insurance Company Group, 270 N.C. 532, 155 S.E.2d 128 (1967); Sellers v. United States Fidelity & Guaranty Co., 185 So.2d 689 (Fla.1966); Bryant v. State Farm Mutual Automobile Ins. Co., 205 Va. 897, 140 S.E.2d 817 (1965); Travelers Indemnity Company v. Wells, 209 F.Supp. 784 (D.C.W.D.Va.1962); Smith v. Pacific Automobile Insurance Co., 240 Or. 167, 400 P.2d 512 (1965).

Safeco cites, among others, the following cases, all of which tend to support its position. Martin v. Christensen, 22 Utah 2d 415, 454 P.2d 294 (1969); M.F.A. Mutual Ins. Co. v. Wallace, 245 Ark. 230, 431 S.W.2d 742 (1968); State Farm Mutual Automobile Ins. Co. v. De La Cruz, 283 Ala. 167, 214 So.2d 909 (1968); Russell v. Paulson, 18 Utah 2d 157, 417 P.2d 658 (1966); Miller v. Allstate Insurance Company, 66 Wash.2d 871, 405 P.2d 712 (1965); Burcham v. Farmers Insurance Exchange, 255 Iowa 69, 121 N.W.2d 500 (1963).

However, none of the above cited cases deal with the statute which is at issue here. The cited cases clearly demonstrate that there are two schools of thought with regard to 'excess-escape' clauses. Inasmuch as Indiana has a statute regulating uninsured motorist coverage, we need only to determine whether the 'excess-escape' clause is in derogation of our statute.

The Pattons cite the only case which deals with the Indiana uninsured motorist statute, Simpson v. State Farm Mut. Auto Ins. Co., 318 F.Supp. 1152 (D.C.S.D.Ind.1970). 3 In Simpson Judge S. Hugh Dillin held that an 'excess-escape' clause almost identical to Safeco's was in derogation of § 39--4310, supra. Pamela Simpson, a minor, resided with her mother who owned two automobiles and insured each with State Farm on separate policies. While a passenger in an automobile other than her mother's...

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