Lotoszinski v. State Farm Mutual Automobile Insurance

Levin, J.

(dissenting). We would hold that a person who pays the additional premium to provide a fund to pay "damages for bodily injury caused by uninsured motor vehicles” (the bold face print), has provided a source of recovery, to the extent of the amount of the uninsured motor vehicle coverage ($20,000/$40,000), where the vehicle driven by the defendant held liable in damages is insured for liability but the amount of the insurance is exhausted by payment to other injured persons.

The Legislature, to be sure, has not required that automobiles be insured for public liability for more than $20,000/$40,000, and many drivers are underinsured. That but poses the problem pre*14sented in this lawsuit and cuts both ways on the issue under consideration — what did Ms. Lotoszinski rightfully think she was buying?

It makes little difference to Ms. Lotoszinski whether her inability to recover at least $20,000 of the $180,000 judgment is attributable to the offending vehicle being "uninsured” or (there being so many injured persons in such amounts that the policy limits have been exhausted) "underinsured”. There being no insurance available to pay any part of the judgment Ms. Lotoszinski obtained, she understandably sees the vehicle as "uninsured”.

A standard insurance policy is not an ordinary "contract”.1 Much like a manufactured product, it is produced by an industry, the insurance industry, and marketed for mass consumption. The insurer offers the policy on a take-it-or-leave-it basis. There are no negotiations concerning terms; a policy containing different or more favorable *15language is not obtainable. There is little or no language variation between the uninsured motorist clause offered by one insurer and another.2

A policy of insurance can be expected, like other products produced and marketed for mass consumption, to be free of substantial defect. An uninsured motorist clause which does not protect the policyholder, within the dollar amounts of policy limits, in the situation which gave rise to this litigation is, in our opinion, defective.

It is the historic responsibility of the courts to protect, in the exercise of the judicial power, against imposition in commercial transactions. Fairness is the proper inquiry where a court is assessing policy language marketed and purchased without negotiation or explanation of the scope of the coverage.3 There is no suggestion that Ms. Lotoszinski was told that she would not be covered in this situation.

The governing rule of law cannot rightfully be predicated on the assumption that Ms. Lotoszinski would read the policy, that if she did read it she would or could understand its esoteric verbiage, anticipate the situation which developed and deduce that she was not covered.4 Many competent lawyers would, unless they set aside time for *16careful reading and reflection, have failed that exam.

Insurance premiums were no doubt calculated on the basis of a literal reading of the policy language, and therefore the construction of the policy we advocate would cause insurers unanticipated loss. But if the insurer had paused for just a moment and thought objectively of the matter from the standpoint of a person who buys uninsured motorist coverage, it should have been able to see the unfairness of failing to provide coverage for the serious injury case where there are multiple claimants.

Kavanagh, J., concurred with Levin, J. Riley, J., took no part in the decision of this case.

There is no meeting of the minds except regarding the broad outlines of the transaction, the insurer’s desire to sell a policy and the insured’s desire to buy a policy of insurance for a designated price and period of insurance to cover loss arising from particular perils (death, illness, fire, theft, auto accident, "comprehensive”). The details (definitions, exceptions, exclusions, conditions) are generally not discussed and rarely negotiated.

The policyholder can, of course, be said to have agreed to whatever the policy says — in that sense his mind met with that of the insurer. Such an analysis may not violate the letter of the concept that a written contract expresses the substance of a meeting of minds, but it does violate the spirit of that concept.

To be sure, contract law principles are not confined by the concept of a "meeting of the minds”. Nevertheless, a point is reached when the label "contract” ceases to fully and accurately describe the relationship of the parties and the nature of the transaction between insurer and insured.

Just as a deed given as security is not only a conveyance, a document stating mutual agreements produced and marketed for mass consumption is not only a contract. It, like other products produced and marketed for mass consumption, must measure up to the standards which the law imposes as a safeguard against the failure of a product so produced and marketed to be reasonably fit for the purpose for which the product is produced, marketed, and acquired.

See DAIIE v Gavin and DAIIE v Standfest, 416 Mich 407; 331 NW2d 418 (1982), decided today.

See Bradley v Mid-Century Ins Co, 409 Mich 1, 61; 294 NW2d 141 (1980); DiOrio v New Jersey Manufacturers Ins Co, 63 NJ 597, 602; 311 A2d 378, 381 (1973); C & J Fertilizer, Inc v Allied Mutual Ins Co, 227 NW2d 169, 175 (Iowa, 1975); Hionis v Northern Mutual Ins Co, 230 Pa Super 511, 516-517; 327 A2d 363, 365 (1974); Henningsen v Bloomfield Motors, Inc, 32 NJ 358, 399-400; 161 A2d 69, 92 (1960); Ady v West American Ins Co, 69 Ohio St 2d 593, 597; 433 NE2d 547, 549 (1982).

See also Keeton, Insurance Law, § 63, pp 350-351; 2 Restatement Contracts, 2d, § 208; 1 Corbin, Contracts, § 128, p 554; Grismore, Contracts (Murray), § 294, p 508.

Ibid.