Anderson v. State Farm Mutual Automobile Insurance

OPINION

R. PORTER MURRY, Judge (Retired).

Paul Anderson and Dusty Ellington appealed from the granting of a summary judgment in favor of State Farm Mutual Insurance Company. This appeal challenges the right of State Farm to limit its liability under its uninsured motor vehicle coverage to exclude damages caused by an unidentified vehicle which has caused another vehicle to be propelled into the insured’s vehicle.

The facts in this case are undisputed. On February 15, 1978, appellants Paul Anderson and Dusty Ellington were occupying a motor vehicle which was stopped in traffic at the intersection of Dobson Road and State Route 360 when their vehicle was rearended by another vehicle owned by the Purolator Courier Corporation and driven by its employee. The Purolator employee claimed that he was struck from behind by a third vehicle which left the scene before anyone could identify it. There was affirmative evidence found by the investigating police officer indicating that the rear of the Purolator vehicle had been contacted by a third vehicle. At no time was there ever any contact between the unidentified third vehicle and the vehicle occupied by appellants.

Appellants filed suit against appellee State Farm for recovery of uninsured motorist policy benefits provided in an auto*484mobile liability policy carried by Dusty Ellington.1

Under the uninsured motor vehicle coverage of its policy, State Farm agrees to pay the insured:

all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by the insured, caused by accident and arising out of the ownership, maintenance or use of such uninsured motor vehicle .... (Emphasis in original).

The insurance policy further defines uninsured motor vehicle as including “a hit- and-run motor vehicle.” A hit-and-run motor vehicle is then defined in the policy as follows:

Hit-and-Run Motor Vehicle — means a land motor vehicle which causes bodily injury to an insured arising out of physical contact of such vehicle with the insured or with a vehicle which the insured is occupying at the time of the accident, provided:
(1) there cannot be ascertained the identity of either the operator or owner of such hit-and-run motor vehicle; (Emphasis in original).

In order to fall within the definition of hit-and-run motor vehicle, this provision requires that there be “physical contact” of the unidentified vehicle with the insured or with the vehicle which the insured was occupying at the time of the accident.

The parties filed cross motions for summary judgment. Appellants contended that the collision initiated by physical contact between the “hit-and-run" vehicle and the Purolator van, which in turn collided with appellants’ vehicle, substantially satisfies the purpose and intent of the previously quoted uninsured motorist provisions of the policy. State Farm’s motion for summary judgment asserted that since the uncontested facts established that there was no physical contact between the unidentified vehicle and the insured’s vehicle, the unidentified vehicle did not fall within the definition of “hit-and-run motor vehicle” of the policy and was, therefore, not within the definition of “uninsured motor vehicle.”

On January 3, 1980, the trial court entered an order granting State Farm’s motion for summary judgment and denying appellants’ motion for summary judgment. Appellants filed a motion for new trial which was denied and this appeal was taken. We affirm the trial court.

Appellants concede that Balestrieri v. Hartford Accident & Indemnity Insurance Co., 112 Ariz. 160, 540 P.2d 126 (1975) specifically held that a “physical contact” requirement in a “hit-and-run” provision of an automobile liability insurance policy was not in derogation of Arizona’s uninsured motorist statute nor was it void as against public policy. However, appellants attempt to distinguish Balestrieri on the basis that, unlike the instant case, Balestrieri did not involve contact between an intervening vehicle and the insured’s vehicle. Appellants argue that the intent of A.R.S. § 20-259.01 is to protect innocent persons and that the “physical contact” requirement is primarily designed as a matter of proof to prevent fraudulent claims. Appellants then point out that evidence of the unidentified vehicle’s physical contact with the Purolator van supports the bona fide nature of their claim. Thus, they conclude that the policy reasons in Balestrieri for denying recovery for accidents allegedly caused by “phantom vehicles” are not present in the instant case. However, our supreme court’s opinion in Balestrieri is not limited to upholding the physical contact requirement in an uninsured motorist policy because it is designed to prevent fraudulent claims. Rather, the court stated:

Of the states in this legislative category [states with uninsured motorists statutes similar to that of Arizona] which have considered the issue before us, two divergent lines of authority appear to have developed. One view is that the physical *485contact restriction is in conflict with the uninsured motorist statute and is viola-tive of the state’s public policy. [Citations omitted].
******
Other courts have held under identical statutes, however, that the physical contact rule is consistent with both the uninsured motorist statute and public policy. [Citations omitted]. Central to their reasoning is the determination that the statute was intended to apply only when the negligent party actually is without insurance coverage. Since no presumption of lack of insurance may arise in instances where the negligent party remains unidentified, the statutory definition of uninsured vehicle cannot encompass “phantom” vehicles.
Although our courts have said that the Arizona uninsured motorist statute is to be liberally construed in accordance with its remedial purposes, [citations omitted] it also has been noted that “uninsured” within this section means literally “not insured.” [Citations omitted].
******
The fact that the phrase “unknown motorist” was deleted from the statute in its enacted form indicates a conscious legislative design to exclude unidentified motorists from the act’s coverage. Furthermore, our legislature has not recognized the need to amend the term “uninsured motor vehicles” notwithstanding the judicial controversy surrounding its meaning. ******
Because the hit-and-run provision is neither required nor prohibited by the Arizona uninsured motorist statute, the physical contact requirement is a matter of contract between the insurer and insured which we will not disturb. (Emphasis added).

112 Ariz. at 162-163, 540 P.2d at 128-129. See also Gardner v. Aetna Casualty & Surety Co., 114 Ariz. 123, 559 P.2d 679 (App. 1976).

The dissent in this matter takes the position that the insurance clause in question is ambiguous (an issue not raised by either party). Not only does the dissent fail to point out where the ambiguity lies, it relies only upon the case of Johnson v. State Farm Mutual Automobile Ins. Co., 70 Wash.2d 587, 424 P.2d 648 (1967), for this conclusion, which suffers from the same deficiency in analysis. The cases from other jurisdictions cited in the dissent (from California and New York) are based upon statutory requirements and the ascertaining of legislative intent based upon public policy considerations. Both jurisdictions found the “physical contact” provision of their statutes were intended by the legislature to limit fraudulent claims by “phantom” automobiles and that if the fraudulent claim concern was satisfied, (by proving that the unidentified vehicle struck a known vehicle which struck the insured) then the legislative intent was satisfied. See Motor Vehicle Acc. Indem. Corp. v. Eisenberg, 18 N.Y.2d 1, 271 N.Y.S.2d 641, 218 N.E.2d 524 (1966); Inter-Insurance Exchange of Auto Club of So. Cal. v. Lopez, 238 Cal.App.2d 441, 47 Cal.Rptr. 834 (1966).

We are not here dealing with legislative enactments and public policy, but as Bales-trieri makes clear, a private contract. While legislature may enact “physical contact” hit-and-run legislation in order to avoid fraudulent claims, private parties may write such insurance on actuarial considerations dealing with risk of loss and cost recovery. It may well be that insurance companies are willing to write hit-and-run insurance coverage, where not statutorily required, because studies may have shown that where the unidentified vehicle actually strikes the insured, the risk that the unidentified vehicle will “run” and thus remain unidentified, is minimal.

To change the parties’ legitimate contract expectations, under the guise of ambiguity, may simply force insurance companies to delete such voluntary coverage to avoid judicial rewriting of their contracts.

The contract between the parties to this litigation requires “physical contact of such vehicle [the unidentified vehicle] with the insured or with a vehicle which the insured *486is occupying at the time of the accident. ...” (Emphasis added). This language is plain and unambiguous and a majority of this court will not rewrite the contract between the parties. We conclude that the trial court correctly granted summary judgment in this matter.

Judgment affirmed.

JACOBSON, P.J., concurs.

. Appellants also filed separate actions against Purolator Courier Corporation and its employee driver. These actions are not involved in this appeal.