No. 14696
IN THE SUPREIE COURT OF THE STATE OF MONTANA
1979
H. JAMES OLESON, Personal Representative
of the Estate of Joy Ann Sunford, Deceased,
Plaintiff and Respondent,
VS .
FARMERS INSURANCE GROUP, a corporation,
Defendant and Appellant.
Appeal from: District Court of the Eleventh Judicial District,
Honorable James M. Salansky, Judge presiding.
Counsel of Record:
For Appellant:
Murphy, Robinson, Heckathorn and Phillips, Kalispell,
Montana
I. James Heckathorn argued, Kalispell, Montana
For Respondent :
Hash, Jellison, O'Brien and Bartlett, Kalispell, Montana
Kenneth E. O'Brien argued, Kalispell, Montana
Submitted: December 13, 1979
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Decided :
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Filed:
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Clerk
Mr. J u s t i c e J o h n Conway H a r r i s o n d e l i v e r e d t h e O p i n i o n o f
t h e Court.
Respondent H . James Oleson f i l e d a n a c t i o n f o r d e -
c l a r a t o r y judgment i n t h e D i s t r i c t C o u r t o f t h e E l e v e n t h
J u d i c i a l D i s t r i c t , t h e Honorable James M. Salansky presiding.
The a c t i o n r e q u e s t e d t h e c o u r t t o d e t e r m i n e w h e t h e r Thomas
H. B a r t o n was a n u n i n s u r e d m o t o r i s t w i t h i n t h e meaning o f
t h r e e l i a b i l i t y i n s u r a n c e p o l i c i e s i s s u e d by a p p e l l a n t ,
F a r m e r s I n s u r a n c e Group, and owned by H a r r y W. Grover.
T h i s c a s e w a s s u b m i t t e d on a n a g r e e d s t a t e m e n t o f
facts. Both p a r t i e s f i l e d m o t i o n s f o r summary judgment.
The D i s t r i c t C o u r t h e l d t h a t B a r t o n was a n u n i n s u r e d mo-
t o r i s t w i t h i n t h e meaning o f t h e p o l i c i e s i s s u e d by F a r m e r s
I n s u r a n c e Group and e n t e r e d judgment a c c o r d i n g l y . This
appeal followed.
Respondent O l e s o n i s t h e p e r s o n a l r e p r e s e n t a t i v e o f t h e
e s t a t e o f J o y Ann S u n f o r d . Ms. S u n f o r d was r i d i n g i n a c a r
w i t h Thomas H. B a r t o n when i t w a s i n v o l v e d i n a n a c c i d e n t .
Ms. Sunford d i e d a s a r e s u l t of t h e a c c i d e n t .
A t t h e t i m e o f t h e a c c i d e n t , B a r t o n had l i a b i l i t y
i n s u r a n c e i n t h e amount o f $10,000 p e r e a c h p e r s o n and
$20,000 f o r e a c h a c c i d e n t he was i n v o l v e d i n . Harry W.
Grover, M s . S u n f o r d ' s g r a n d f a t h e r , had p u r c h a s e d t h r e e
s e p a r a t e i n s u r a n c e p o l i c i e s from F a r m e r s I n s u r a n c e Group.
Each c o n t a i n e d u n i n s u r e d m o t o r i s t c o v e r a g e f o r M s . Sunford
i n t h e amount o f $25,000. Under t h e t e r m s o f t h e i n s u r a n c e
p o l i c i e s , F a r m e r s a g r e e d t o pay a l l sums t h e owner o r o p e r -
a t o r o f a n u n i n s u r e d motor v e h i c l e would be l e g a l l y r e s p o n -
s i b l e t o pay b e c a u s e o f i n j u r y s u s t a i n e d by M s . Sunford.
The p o l i c i e s d e f i n e d u n i n s u r e d motor v e h i c l e a s ". . . a
l a n d motor v e h i c l e . . . o f which t h e r e i s , i n a t l e a s t t h e
amounts specified by the financial responsibility law of the
state in which the insured motor vehicle is principally
garaged, no bodily injury liability insurance . . ."
The following issue is presented on appeal:
Is Thomas H. Barton an uninsured motorist within the
meaning of the policies issued by appellant covering Ms.
Sunford?
Respondent Oleson must show two things to recover under
the terms of the uninsured motorist policy at issue here.
First, respondent must prove that Barton would be legally
responsible to pay Ms. Sunford's damages because of bodily
injury sustained by her in an automobile accident. Second,
he must show that Barton did not have insurance "in at least
the amount specified by" Montana's Motor Vehicle Safety-
Responsibility Act. (Herein referred to as the Act.) The
parties present no question on appeal concerning the respon-
sibility of Barton for damages suffered by Ms. Sunford. The
problem, therefore, lies in determining if the insurance
coverage carried by Barton is at least the amount specified
by the financial responsibility law. In interpreting the
Act, we note this case arose before the 1979 amendments to
the Act. The following interpretation therefore deals with
the Act as it read before the amendments.
The key portion of the clause of the insurance contract
at issue stated that a third-party tortfeasor will be considered
uninsured unle'ss the third party carries insurance that
meets the minimum limits specified by the financial responsi-
bility law. ". . . The word 'specified' means 'to mention
or name in a specific or explicit manner; to tell or state
precisely or in detail.' . . ." Aleksich v. Industrial
Accident Fund (1944), 116 Mont. 127, 138, 151 P.2d 1016.
See also Herrin v. Erickson (1931), 90 Mont. 259, 268, 2
P.2d 296; Roche Valley Land Co. v. Barth (1923), 67 Mont.
353, 357, 215 P. 654.
It is important to note the term "specified" does not
mean "required." The Act only requires a motorist to carry
liability insurance in certain instances. Velte v. Allstate
Ins. Co. (1979), Mont. , 593 P.2d 454, 456, 36
St.Rep. 724, 726; Lewis v. Mid-Century Insurance Company
(19691, 152 Mont. 328, 332, 449 P.2d 679; Boldt v. State
Farm Mutual Automobile Ins. Co. (1968), 151 Mont. 337, 342-
43, 443 P.2d 33. The Act requires coverage when a motorist
has been involved in an accident or convicted of certain
driving offenses or when there is an outstanding judgment
against the motorist as a result of a past automobile acci-
dent. Boldt, 151 Mont. at 343. The parties here present no
evidence that Barton fell into any of the categories requir-
ing proof of financial responsibility before the accident
involving Ms. Sunford. The Act, therefore, did not require
Barton to carry insurance.
Since the language in the uninsured motorist policy
refers to insurance specified rather than required by the
Act, however, the inquiry cannot end with a determination
that Barton was not required to carry insurance. The Court
must determine the minimum limits on liability insurance
"named in an explicit manner" or "stated precisely" by the
Act.
Prior to the 1979 amendments, the Act contained conflict-
ing definitions of minimum financial responsibility limits.
Section 61-6-102(4), MCA, defined "proof of financial respon-
sibility" as:
". . . proof of ability to respond in damages
for liability, on account of accidents . . .
arising out of the ownership, maintenance or
use of a motor vehicle, - - amount of $10,000
in the
because of bodily injury - or death o f o n e per-
to - ---
- in any one accident and .
son - - - .. - - amount
in the
- $20,000 because of bodily injury - - -
of to or death
two or more persons in any one acciden\ and
of - - -
-
in the amount of $5,~ ~ ~ b e c a u s e - - to or
of injury
destruction of property of others in any one
accident. " (Emphasis added. )
The Act also provided, "(1) Proof of financial responsibil-
ity when required under this part . . . may be given by
filing: (a) a certificate of insurance as provided in 61-6-
133 or 61-6-134." Section 61-6-132(1)(a), MCA.
Section 61-6-133(1), MCA, stated in part:
"Proof of financial responsibility may be fur-
nished by . . . certifying that there - -
is in
effect a motor vehicle liability policy for
the benefit of the person required to furnish
proof of financial responsibility. . . (Em-
I'
phasis added. )
Section 61-6-103, MCA, defined "motor vehicle liability
policy." The definition required policy limits of $25,000
because of injury to or death of one person in an accident,
$50,000 for injury to or death of two or more persons in an
accident, and $5,000 for property damage in any one accident.
Section 61-6-103(2)(b), MCA.
Thus, the section of the Act that defined proof of
financial responsibility set $10,000/20,000 minimum limits.
Another provision of the Act dealing with the proof of
financial responsibility when required by the Act incorpor-
ated the limits on liability insurance in the definition of
motor vehicle liability policy. Those limits were $25,000/50,000.
The problem now becomes determining which of these two sets
of minimums were within the meaning of the uninsured motorist
policy.
To reiterate, the policy provisions state a motor
vehicle uninsured ". . . of which there is, in at least the
amounts specified by the financial responsibility law ...
no bodily injury liability insurance." "Specified" means
mentioned or named in a specific or explicit manner or
stated precisely or in detail. Aleksich, 116 Mont. at 138.
Looking to the Act prior to amendment, the definition of
proof of financial responsibility that set the $10,000/
20,000 minimums required a motorist to have ". . . proof of
ability to respond in damages . . ." Section 61-6-102(4),
MCA. While liability insurance can constitute proof of the
ability to respond in damages, other means such as a bond or
savings account could be such proof. Thus, the section did
not necessarily refer to liability insurance.
On the other hand, section 61-6-103, MCA, which set out
the $25,000/50,000 limits, directly referred to motor vehicle
liability insurance. The heading of section 61-6-103 read,
"Motor vehicle liability policy defined." Subsection (1) of
section 61-6-103 states in part: "(1) A 'motor vehicle
liability policy' as said term is used in this part shall
mean an owner's or operator's policy of liability insurance
Comparing the two sets of minimum requirements, the
language contained in section 61-6-103 setting $25,000/
50,000 limits named specifically or explicitly or stated
precisely or in detail the requirements for a liability
insurance policy under the Act. Section 61-6-102, which
requires $10,000/20,000 limits, only referred to liability
insurance by inference. Under this analysis, section 61-6-
103, setting $25,000/50,000 minimum limits on liability
insurance under the ActI "specified" the amount of bodily
injury liability insurance set out in the Act. Thus, a
motorist carrying less than $25,000/50,000 limits on auto-
mobile insurance would be uninsured within the meaning of
the insurance policy at issue here. Since Barton carried
less than that amount insurance, he is an uninsured motor-
ist. Ms. Sunford's estate should therefore be able to
collect under the uninsured motorist policies covering
her.
Another manner of analyzing the problem reaches the
same result. When construing provisions of an insurance
policy, any ambiguity should be resolved in favor of the
insured. Lindell v. Ruthford (1979), Mont. , 598
P.2d 616, 618, 36 St.Rep. 1501, 1505; Atcheson v. Safeco
Insurance Company (1974), 165 Mont. 239, 247, 527 P.2d 549.
An ambiguity exists in the clause of the policy at issue
here. The least amount of liability insurance specified by
Montana's financial responsibility law could refer to the
$10,000/20,000 limits set out in section 61-6-102, or to the
$25,000/50,000 minimums contained in section 61-6-103.
Resolving the ambiguity in favor of the insured, the $25,000/
50,000 limits apply. Under those limits, Barton is an
uninsured motorist. Ms. Sunford's estate should therefore
recover under her uninsured motorist policies.
Further, other jurisdictions have reached the same
result in analogous situations. The California courts have
interpreted conflicting provisions of California's statutes
in this context. Taylor v. Preferred Risk Mutual Insurance
Company (1964), 225 Cal.App.2d 80, 37 Cal.Rptr. 63. In
Taylor, a motorist carrying insurance with maximum limits of
$5,000 ran into Mrs. Taylor. She obtained a $31,754.48
judgment against the motorist. Mrs. Taylor had an uninsured
motorist policy, the exact terms of which are not set out in
the case. She filed an action against her insurance company
demanding payment under the uninsured motorist policy. The
insurance company denied liability, asserting the motorist
who hit Mrs. Taylor was not uninsured.
To resolve the problem presented by the case, the court
looked to California statutes dealing with uninsured motor-
ists. At one point, those statutes required a motorist to
carry insurance with $10,000 limits for injury to one person.
Taylor, 37 Cal.Rptr. at 63. Another section of the code,
however, defined uninsured motor vehicle as one not covered
by any liability insurance. Taylor, 37 Cal.Rptr. at 64.
Presented with these conflicting statutes, the court held an
uninsured vehicle was one carrying insurance less than the
$10,000 limit. 37 Cal.Rptr. at 64. The court reasoned that
this result was proper to carry out legislative intent to
give monetary protection to motorists lawfully using the
highways who suffer injury through the negligence of others.
Taylor, 37 Cal.Rptr. at 64.
In Pickering v. American Employers Insurance Co. (1971),
109 R.I. 143, 282 A.2d 584, the Rhode Island Supreme Court
faced a similar construction problem. Plaintiff Pickering,
who had uninsured motorist coverage, was injured in a col-
lision with a taxicab. The taxi owner carried insurance
with $5,000 limits, the minimum required in Rhode Island for
taxicabs. Rhode Island's general financial responsibility
law required $10,000 minimum coverage. Ms. Pickering made a
claim under her uninsured motorist policy. The insurance
company denied the claim, contending the cab owner was
insured.
The Rhode Island court applied the higher $10,000
minimum limit from the statutes and found the cab owner
uninsured within the meaning of Pickering's policy. The
court reasoned it would be unrealistic to hold that the
legislature, after passing legislation permitting the public
to obtain uninsured motorist coverage, would deny benefits
due thereunder if damages were caused by an underinsured
vehicle. Pickering, 282 A.2d at 587.
The results in Pickering and Taylor illustrate that,
when confronted with conflicting minimum limits on insurance
policies in the context of defining the minimums to determine
coverage under uninsured motorist policies, courts from
other jurisdictions have chosen the higher limits. Although
the two cases involve statutes different from Montana's Act,
the rationale of allowing motorists to protect themselves
from the uninsured motorist while lawfully using Montana's
highways is consistent with legislation passed in this area.
Based on this rationale, the $25,000/50,000 limits
contained in section 61-6-103, MCA, should be adopted for
defining uninsured motor vehicles. Barton should be found
to be uninsured, and Ms. Sunford's estate should be allowed
to recover.
A£firmed.
Justlce
We concur:
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m i e f Justice