Transportation Ins. Co. v. Wade

• Decision Date: 08 October 1970
• Docket Number: No. 9907--PR,9907--PR
• Citation: 475 P.2d 253,106 Ariz. 269
• Parties: TRANSPORTATION INSURANCE COMPANY, a division of Continental National American Group, a corporation, Appellant, v. Gordon WADE, Administrator of the Estate of Leonard Maurice Aubuchon, deceased, Appellee.
• Court: Arizona Supreme Court

Page 253

475 P.2d 253

106 Ariz. 269

TRANSPORTATION INSURANCE COMPANY, a division of Continental National American Group, a corporation, Appellant, v. Gordon WADE, Administrator of the Estate of Leonard Maurice Aubuchon, deceased, Appellee.

No. 9907--PR.

Supreme Court of Arizona, In Banc.

Oct. 8, 1970.

Chandler, Tullar, Udall & Richmond, by D. B. Udall, Tucson, for appellant.

David S. Wine, Norman A. Schwarts, Tucson, for appellee.

Molloy, Jones, Hannah, Trachta & Coolidge, by John F. Molloy, and Miller, Pitt & Feldman, by David J. Leonard, Tucson, for amicus curiae.

McFARLAND, Justice.

This case comes to us on a Petition for Review from a decision of the Court of Appeals, Division Two, reported at 11 Ariz.App. 14, 461 P.2d 190, which affirmed the judgment of the Superior Court of Pima County. The facts are undisputed and we set them forth as they appear in the Stipulation of Facts in the Record on Appeal.

'* * *

1. On January 22, 1967, the decedent, Leonard Maurice Aubuchon, was a passenger in a 1962 Buick automobile owned by him and driven by his brother, Norman Lee Aubuchon.

2. That said Buick was struck by a 1956 International Harvester Truck owned by Louis Singer and driven by John Calvin Howard, in the State of Arizona.

3. That the accident was caused by the negligence of John Calvin Howard and, at the time of the accident, John Calvin Howard was an uninsured motorist and there was no policy of insurance applicable to said vehicle or driver.

4. That Leonard Maurice Aubuchon was killed as a result of said accident and that the damages to plaintiff as a result of said accident exceed $10,000.00.

5. That at the time of said accident there was in full force and effect a policy of insurance covering the 1962 Buick, issued to the decedent, being Policy No. 88--18397541, issued by the Farmer's Insurance Exchange; that among other coverages applicable was uninsured motorist coverage in the amount of $10,000.00.

6. The plaintiff made claim against Farmer's Insurance Exchange for the full amount of the uninsured motorist coverage, and Farmer's Insurance Exchange has paid the same.

7. That at the time of said collision there was in full force and effect a policy of insurance issued to Norman Lee Aubuchon, written by the defendant, Transportation Insurance Company, being policy No. AS 048 391 37 23 88.

8. That plaintiff has made claim against the defendant for the full amount of the uninsured motorist coverage under the policy issued to Norman Lee Aubuchon, and defendant has refused to pay said claim by virtue of the other insurance provisions of Part IV of said policy.

9. Under Part IV of said policy issued by the defendant, the decedent, Leonard Maurice Aubuchon, is an insured.'

The Superior Court held that the uninsured motorist coverage of the policy issued by Transportation Insurance Company (Transportation) was available to the decedent's administrator, Wade even though it was secondary insurance and despite the fact that the policy contained an 'Other Insurance' clause. That clause 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 Part IV 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.

'Except as provided in the foregoing paragraph, if the insured has other similar insurance available to him and applicable to the accident, the damages shall be deemed not to exceed the higher of the applicable limits of liability of this insurance and such other insurance, and the company shall not be liable for a greater proportion of any loss to which this coverage applies than the limit of liability hereunder bears to the sum of the applicable limits of liability of this insurance and such other insurance.'

Wade has no argument with the wording of the clause and in his brief '* * * readily admits that if the sole consideration in this matter were the policy provisions, then plaintiff's decedent would not be entitled to any 'uninsured motorist' benefits under the defendant's policy.' Both sides agree the sole question is whether the 'other insurance' clause, in the light of Arizona's uninsured motorist statute, is contrary to public policy.

The appellee places great emphasis on the public policy relating to liability insurance as enumerated by decision of this court, citing Schecter v. Killingsworth, 93 Ariz. 273, 380 P.2d 136; Jenkins v. Mayflower Insurance Exchange, 93 Ariz. 287, 380 P.2d 145, and Sandoval v. Chenoweth, 102 Ariz. 241, 428 P.2d 98, in support of his position that such policy is to provide as much insurance protection as possible, and cites Geyer v. Reserve Insurance Company, 8 Ariz.App. 464, 447 P.2d 556, in which it was stated that these cases:

'* * * indicate to us that Arizona will be nowhere but in the forefront of jurisdictions in making available to automobile accident victims the fullest benefits of insurance coverage.'

In Mayflower, this Court considered a small print provision of an insurance policy which denied coverage because an otherwise qualified driver was wearing a uniform of the armed forces of the United States. We have held that the 'omnibus clause' is a part of every motor vehicle liability policy 'by whatever name it is called' and we quoted from Schecter to point out that the primary purpose of the Financial Responsibility Act was 'the providing of security against uncompensated damages arising from operation of motor vehicles on our highways.' In Sandoval, relying on Mayflower, this Court refused to limit recovery by the injured party to the minimum amount specified in the Financial Responsibility Act under a policy which otherwise contained higher limits of coverage.

However, in those cases we were dealing with wording in policies limiting liability to the extent the provisions may have been contrary to public policy. We have held these and other such non-liability clauses were against public policy.

Those provisions were written by the insurance company, while here we are dealing with the uninsured motorist insurance provisions required by our statute, ¹ in which it is evident the Legislature was attempting to fill a gap in our law.

The motorist is not compelled to carry this insurance, but he is encouraged to do so by the statute which requires that an insured must affirmatively reject such coverage if he does not desire it. In interpreting provisions of insurance policies issued in compliance with this provision of our statute we must give consideration as to what the Legislature deemed to be in the public interests when it passed the uninsured motorist law. They passed the law providing for minimum coverage in the amounts of $10,000 per person, $20,000 per occurrence, and $5,000 for property damage, as provided for in the Financial Responsibility Act, ² after this court had handed down decisions liberally interpreting the insurance law for the protection of the public. It is reasonable to suppose that it intended such protection be extended in the Uninsured Motorist Act, and that could be not less than the protection of the minimum requirement provided for the public in the Financial Responsibility Act. Such protection is not to be whittled away by small print provisions, or extended beyond the intent of the Legislature. In the instant case, Wade's decedent bought insurance giving him this minimum, mandatory coverage, but he bought no more and he received the full measure of such coverage. He is now claiming the benefit of the uninsured motorist coverage bought by his brother who was the driver of the car. He should not receive this additional benefit unless the Legislature reasonably intended that he have it.

It is true that the decedent's brother paid premiums on the policy which the decedent's administrator seeks to reach, but he did so for his own protection and for the protection of 'other insureds' where such individuals would not otherwise have the benefit of available funds within the statutory financial limits. And it is not sheer speculation to conclude that the premiums paid for this coverage reflected the limitation of coverage imposed by the statutes. The administrator seeks to have this Court transform a limited purpose coverage into an extended insurance plan which can be reached even in amounts beyond those contemplated by statute. On the other hand Transportation urges upon us a construction of the 'Other Insurance' clause which would virtually make uninsured motorist coverage non-existent--equivalent to a biological appendix of the insurance industry in that it can be ignored most of the time but easily removed when it causes discomfort. In the case of Porter v. Empire Fire and Marine Insurance Company, 106 Ariz. 274, 475 P.2d 258, and Bacchus v. Farmers Insurance Group Exchange, 106 Ariz. 280, 475 P.2d 264, decided this date, we took a dim view of the carriers' lack of enthusiasm to fully abide by their liability within the limits imposed by A.R.S. § 28--1170 and § 20--259.01; here we also reject the zealousness of the insured's administrator to impose liability beyond the financial limits of these statutes. When considering public policy there is a...