Travelers Ins. Co. v. Lopez
| Decision Date | 17 August 1977 |
| Docket Number | No. 9398,9398 |
| Citation | 567 P.2d 471,93 Nev. 463 |
| Parties | TRAVELERS INSURANCE COMPANY, Appellant, v. Ramiro LOPEZ, Respondent. |
| Court | Nevada Supreme Court |
This is an appeal from an order granting summary judgment in an action for declaratory relief. Following judgment in the court below, appellant, Travelers Insurance Company, was ordered to pay to respondent, Ramiro Lopez, $10,000 under the basic reparation benefits clause contained in the policy of insurance issued by Travelers to Lopez.
The facts are undisputed. On July 12, 1974, respondent insured was seriously injured when his automobile collided with that of an uninsured motorist. His personal automobile being operated by him at the time of the accident was insured by both Ambassador Insurance Company and Travelers. Both policies of insurance contained the standard reparation benefits endorsement as mandated by Chapter 698 of the Nevada Revised Statutes. Both basic reparation benefits endorsements contained "other insurance" clauses stating that the maximum amount recoverable by Lopez under both policies is the amount that would have been payable under the provisions of the insurance policy providing the highest dollar limit. In this case, neither insurance carrier provided a higher limit or added reparation benefits, but both companies provided a limit of $10,000. The Ambassador policy was issued on the accident vehicle. The Travelers policy insured three of respondent's vehicles under a commercial policy and also covered "all owned vehicles." The parties have stipulated that the various medical expenses incurred by respondent exceeded $20,000. Ambassador has paid to respondent the $10,000 limit on its policy under the basic reparation benefits provision and is not a party to these proceedings. Travelers has consistently maintained that it has no obligation to pay the insured under the basic reparation benefits endorsement of its comprehensive policy, due to the $10,000 payment by Ambassador.
Appellant has raised the following issues for our determination. (1) Whether the provisions of the Nevada Motor Vehicle Insurance Act, Nevada Revised Statutes Chapter 698, preclude the stacking of two or more obligations to pay basic reparation benefits; and (2) What is the effect to be given the "other insurance" clause contained in Travelers' basic reparation benefits endorsement? We turn to resolve these questions.
1. Resolution of the first issue involves the interpretation of Chapter 698 of the Nevada Revised Statutes known as the Nevada Motor Vehicle Insurance Act, adopted by the Nevada Legislature in 1973 to implement Nevada's no-fault insurance scheme. The Act reveals that the Legislature intended to provide for the payment of certain benefits referred to as basic reparation benefits, excluding harm to property (NRS 698.040), in an amount not to exceed $10,000 per person per accident for such damages as loss of income, funeral benefits, medical costs and survivor benefits (NRS 698.070). Every policy of insurance issued in this State, except for those policies which provide coverage only for liability in excess of required minimum tort liability coverages, includes basic reparation benefits coverage (NRS 698.200), and these benefits are payable without regard to fault (NRS 698.250).
Appellant contends that NRS 698.070 read in conjunction with the definition of the basic reparation benefits contained in NRS 698.040 and the provisions of NRS 698.260(4) limit the recovery of basic reparation benefits under all applicable policies of insurance to $10,000.
NRS 698.260 is the section of the Motor Vehicle Insurance Act which provides basic reparation insureds with guidance as to which obligor he must look to for recovery of his first party benefits. Since both Ambassador and Travelers are considered respondent's insurer under our statutory scheme, a question arises as to what the respective obligations of each insurer are when multiple coverages are available. Generally, when there are two or more obligations to pay basic reparation benefits to a person injured while operating or occupying a motor vehicle, the insurers will fall into different categories set forth in NRS 698.260(1), and that subsection specifically designates which insurer must be looked to in order to seek recovery. Subsection (1) indicates that the injured person's claim is to be made to "his insurer", and if he does not have his own insurance "(to) the insurer of the owner of the motor vehicle", and if neither of the above are insured to "the insurer of the operator of the motor vehicle." It is apparent that conflicts arise under this priority scheme when two or more insurers can be considered as primary obligors under these categories. Appellant posits how this conflict can be resolved, contending that the Nevada Legislature anticipated this dilemma and resolved it by adding subsection (4) to NRS 698.260. NRS 698.260(4) provides If two or more obligations to pay basic reparation benefits are applicable to any injury under the priorities set out in this section, benefits are payable only once and the reparation obligor against whom a claim is asserted shall process and pay the claim as if wholly responsible. (Court's emphasis.)
It is Travelers' contention that the "payable only once" language precludes a basic reparation insured from receiving any payments above the $10,000 figure mentioned in NRS 698.070. Respondent contends that NRS 698.260(4) only precludes double recovery for the same items of damage. We are constrained to agree with respondent.
Appellant admits that both it and Ambassador can be considered to be respondent's insurer, and, therefore, are first in order of priority pursuant to NRS 698.260(1)(a). Subsection (4) of NRS 698.260 refers specifically to our type factual setting arising when "two or more obligations to pay basic reparation benefits are applicable to an injury under the priorities set out in this section." (Court's emphasis.) A reasonable interpretation of this language, when read in light of the provisions of subsection (1) of NRS 698.260, is that the Legislature intended to limit the payment of basic reparation benefits to a single level of priority rather than to preclude the "stacking" or "pyramiding" of insurance policies.
Additionally, recognizing that all policies of insurance issued in the State of Nevada must provide for basic reparation benefits (NRS 698.200) and accepting our interpretation of NRS 698.260(4), we perceive NRS 698.460 as supporting the proposition that an insurer must pay basic reparation benefits without regard to payments made from other sources of insurance of the same priority.
Legislative intent supportive of our determination is further reflected in that provision is made to the end that insurers can provide "additional optional coverage for added reparation benefits." NRS 698.360. This section has a chilling effect on Travelers' contention that it was the intent of the Legislature to limit the recovery of basic reparation damages to $10,000 per accident. Although arguendo, the additional reparation benefits contemplated by NRS 698.360 are to be provided only upon the payment of higher corresponding premiums, there is nothing preventing the securing of additional reparation benefits through the purchase of a separate policy of insurance providing for the same basic reparation benefits. Nowhere in our legislation is there evidence that the $10,000 minimum basic reparation benefits need be purchased from the same insurer. Had the Legislature intended a different result, it would have so provided.
We conclude by holding that there exists no legislative prohibition against the "stacking" of insurance policies when both insurers are at the same level of priority, as is the case here. There are public policy and other considerations which support this...
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