Scalf v. Globe American Cas. Co.

• Citation: 442 N.E.2d 8
• Decision Date: 17 November 1982
• Docket Number: No. 4-282A35,4-282A35
• Parties: Billy J. SCALF, Appellant (Plaintiff Below), v. GLOBE AMERICAN CASUALTY COMPANY, Appellee (Defendant Below).
• Court: Court of Appeals of Indiana

Page 8

442 N.E.2d 8

Billy J. SCALF, Appellant (Plaintiff Below), v. GLOBE AMERICAN CASUALTY COMPANY, Appellee (Defendant Below).

No. 4-282A35.

Court of Appeals of Indiana Fourth District.

Nov. 17, 1982.

Kent M. Frandsen, Parr, Richey, Obremskey & Morton, Lebanon, for appellant.

Samuel A. Fuller, Richard L. Fairchild, Stewart, Irwin, Gilliom, Fuller & Meyer, Indianapolis, for appellee.

YOUNG, Presiding Judge.

Billy J. Scalf appeals a negative judgment in a suit brought against his insurance carrier Globe American to enforce the uninsured motorist clause of his automobile insurance policy. On appeal, he argues that the trial judge erred in upholding a policy provision requiring an uninsured motorist claim to be commenced within twelve months of the date of the loss.

We reverse.

On December 31, 1978, Scalf was a passenger in a taxi when it was hit in the rear by an auto which was owned and operated by an uninsured motorist. As a result of this collision, Scalf was injured and was totally disabled for several months. Scalf was insured under a Globe American auto policy purchased by his wife. This policy contained an uninsured motorist provision. On March 26, 1979, Scalf's attorney wrote a letter to Globe American asserting a claim under the uninsured motorist provision. The attorney enclosed a copy of the police report in the letter and made an inquiry concerning the proper way to process such a claim. Globe American did not respond; ¹ therefore, on September 26, 1979, Scalf sent another letter noting Globe American's failure to respond and asking if Globe American wanted him to file a request for arbitration. On October 4, 1979, Globe American sent a letter stating that certain items were necessary before a valid claim existed. ² On February 29, 1980, Scalf submitted the necessary information. Globe American denied the claim relying upon a policy provision requiring either arbitration or legal action to be initiated within twelve months of the date of loss. ³ Scalf filed a complaint and a motion for summary judgment on the provision. The court denied Scalf's motion for summary judgment indicating the policy provision was valid. On September 24, 1981, the jury heard the evidence and returned a verdict in favor of Globe American.

On appeal, Scalf contends the court erred in determining that the limitation provision was valid. He claims that such a limitation is contrary to the public policy of the uninsured motorist statute, and that absent express statutory authority, such a limitation is contrary to law. Ind.Code 27-7-5-1, in effect at the time of this accident, ⁴ provided in part:

No automobile liability or motor vehicle liability policy or 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 Acts 1947, chapter 159, sec. 14, 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 purpose of the statute is to afford the same protection to a person injured by the uninsured motorist as he would have enjoyed if the offending motorist had himself carried liability insurance. Bocek v. Inter-Insurance Exchange of Chicago Motor Club, (1977) 175 Ind.App. 69, 369 N.E.2d 1093. Thus, any limiting language in the insurance contract which has the effect of providing less protection than that made obligatory by the above statute would be contrary to the public policy, and of no force and effect. ⁵ See Indiana Insurance Co. v. Noble, (1970) 148 Ind.App. 297, 265 N.E.2d 419; Signal Insurance Co. v. Walden, (1973) 10 Wash.App. 350, 517 P.2d 611. We also recognize that this statute is to be liberally construed to accomplish its remedial purpose.

With the above in mind, we hold the one-year limitation in the uninsured motorist section of Globe American's policy inhibits the fulfillment of the purpose that a claimant should have the same rights as he would have against an insured third party. This provision is an attempt by the insurer to dilute and to diminish the protection of the uninsured motorist statute. As such, it is contrary to public policy. ⁶ Indiana Insurance Co., supra. A similar result was reached in Burgo v. Illinois Farmers Insurance Company, (1972) 8 Ill.App.3d 259, 290 N.E.2d 371 when a one-year limitation clause in an arbitration provision was found to be void as contrary to public policy. See also, Sandoval v. Valdez, (1978) 91 N.M. 705, 580 P.2d 131; Signal, supra; however, compare Colvin v. Globe American Casualty Company, (1982) 69 Ohio St.2d 293, 432 N.E.2d 167.

Globe American argues that the policy is not a dilution of protection and that the protection relates to money and not procedure. We disagree. Bocek, supra supports our conclusion. In Bocek, the plaintiff sought to expand her time to recover against the insurer beyond the statutory two-year time period in a wrongful death action. The court determined that the contract statute of limitations was inapplicable noting that, if Bocek were allowed to sue under the ten-year contract limitation, it would in effect be giving a greater right than would have been available to her were the tortfeasor covered by ordinary liability insurance. Thus, the Bocek court determined that a plaintiff should have no greater procedural rights than she would have if the tortfeasor were insured. It must also follow that a plaintiff...