Enterprise Insurance v. Mulleague

Opinion

In this case we consider the statutory limits on uninsured motorist coverage. The issue turns on the proper construction of Insurance Code section 11580.2, subdivisions (a) and (m). We also address the question whether a statement of decision under Code of Civil Procedure section 632 is required when only an issue of law is tendered to the court in a bench trial.

Defendant Bernard James Mulleague claimed uninsured motorist benefits under a policy of insurance issued by plaintiff Enterprise Insurance Company (Enterprise). When the parties could not agree on the applicable limits of coverage, Enterprise filed a complaint for declaratory relief. The trial court entered a judgment holding that the applicable uninsured motorist limit was $15,000 for bodily injury to one person in one accident. Defendant appeals raising a number of procedural and legal issues. On the coverage question, he argues that the statutory provisions require that the coverage be equal to the limits of liability in the underlying policy, in this case $600,000. We reject both the trial court’s and the defendant’s construction of the statute. We conclude instead that the uninsured motorist benefits available to defendant are limited to $30,000 under the statute’s plain and unambiguous language. (Ins. Code, § 11580.2, subds. (a), (m).) We will modify the judgment to so provide. We further hold that a statement of decision is not required when the only contested issue at trial presents a question of law. Finding no other error, we shall affirm the judgment as modified.

Facts

Although defendant complains of the manner in which the operative facts were presented to the trial court, the facts essential to resolution of this

On March 20, 1984, while operating a commercial vehicle with a load capacity in excess of 1,500 pounds within the scope of his employment, defendant was involved in a collision with an uninsured motorist. Enterprise concedes defendant is entitled to claim legally mandated uninsured motorist benefits under the policy, but maintained in the trial court and originally on appeal that pursuant to Insurance Code section 11580.2 the limit of benefits available to defendant was $15,000. At oral argument Enterprise abandoned that contention and, while still arguing that the coverage was not $600,000, conceded that the benefits available to defendant were $30,000 rather than the $15,000 originally claimed. In light of this concession we permitted the parties to file supplemental briefs. Defendant continues to insist that he is entitled to benefits with a limit of $600,000. And there hangs the controversy.

Discussion

A policy of insurance is a contract and the rights and liabilities of the parties ordinarily spring from their contractual relationship. (Johansen v. California State Auto. Ass'n Inter-Ins. Bureau (1975) 15 Cal.3d 9 , 18 [ 123 Cal.Rptr. 288 , 538 P.2d 744 ].) But in some circumstances the Legislature has statutorily imposed special duties upon insurers of motor vehicles. In such an instance the statutory provisions in effect at the time of issuance are read into the policy and become a part of the contract. (Samson v. Transamerica Ins. Co. (1981) 30 Cal.3d 220 , 231 [ 178 Cal.Rptr. 343 , 636 P.2d 32 ]; Robles v. California State Auto. Ass'n (1978) 79 Cal.App.3d 602 , 608 [ 145 Cal.Rptr. 115 ].) This is such a case. In the parties’ contract of insurance Enterprise did not provide, and Sansome Trucking did not purchase, uninsured motorist coverage for persons driving a commercial vehicle in excess of 1,500 pounds load capacity. In spite of that omission,

In claiming uninsured motorist benefits of $600,000 in his original brief, defendant impermissibly read only the first portion of subdivision (m) of section 11580.2, and ignored the remainder. He read in the first part of the statute that the coverage shall be “equal to the limits of liability for bodily injury in the underlying policy of insurance” and, finding it to his liking, stopped there. That reading violated Justice Frankfurter’s three rules for mastering the meaning of a statute: “(1) Read the statute; (2) read the statute; (3) read the statute!” (Friendly, Benchmarks (1967) Mr. Justice Frankfurter and Reading of Statutes, p. 202.) From these rules, the precept of statutory construction is deducible that a statute must be read as a whole and so construed that each part is given effect. (Code Civ. Proc., § 1858; Turner v. Board of Trustees (1976) 16 Cal.3d 818 , 826-827 [ 129 Cal.Rptr. 443 , 548 P.2d 1115 ].)

The first portion of the subdivision provides that benefits must be offered in the amount of the bodily injury liability limits of the policy, and in this case the bodily injury liability limits were $600,000. But the section does not end there and thus it does not follow that the mandated limits of the uninsured motorist benefits were $600,000. The second portion of subdivision (m) goes on to provide the maximum level of benefits the insurer is required to offer. If the Legislature had intended that the uninsured motorist benefits imposed by statute would be equal to bodily injury liability in all cases, it obviously would not have added this express limitation to the statutorily required benefits. Subdivision (m) clearly and unambiguously goes on to declare that an insurer is not required to offer or provide uninsured motorist benefits in excess of $30,000 per person and

Defendant now argues in his supplemental brief that the proper interpretation of the statute is that the uninsured motorist coverage must be equal to the liability limits but must be at least $30,000/$60,000 in any event, even if the liability limits are lower. This interpretation, he insists, is consistent with the requirement of liberal construction of insurance policies. But his construction is at odds with the statute. Defendant would stand the statute on its head by construing it to impose only a floor on coverage. But it imposes both a floor and a ceiling on mandatory coverage when there has been no written waiver. The statute cannot fairly be read to provide that coverage must be not less than $30,000/$60,000. By it terms, “coverage . . . shall not be required . . . with limits in excess of [$30,000/$60,000].” (§ 11580.2, subd. (m).) The phrase “not ... in excess of’ does not mean “not less than.”

Defendant’s reliance upon the rubric of liberal construction is also misplaced. The question posed here does not deal with the proper reading of a contract of insurance. To be sure, any ambiguity or uncertainty in an insurance policy must be resolved against the insurer. (Insurance Co. of North America v. Sam Harris Constr. Co. (1978) 22 Cal.3d 409 , 412-413 [ 172 Cal.Rptr. 263 ].) But when contractual liability is superimposed by statute upon insurers, the rule of liberal construction no longer applies. “Conceding that any ambiguity or uncertainty of an insurance policy will be construed

The trial court adopted Enterprise’s original claim that the limits of the uninsured motorist benefits available to defendant were $15,000. This reading, now abandoned on appeal, evidences an equal disregard of the statutory language. As we have recounted, when the Legislature acted to require insurers to provide uninsured motorist coverage unless expressly waived by the insured, its purpose was to make sure that persons injured by uninsured drivers would have at least a minimum level of insurance protection. (Pabitzky v. Frager, supra, 164 Cal.App.3d at p. 403; California State Auto. Ass'n Inter-Ins. Bureau v. Carter (1985) 164 Cal.App.3d 257 , 261 [ 210 Cal.Rptr. 140 , 54 A.L.R.4th 1177 ]; Mid-Century Ins. Co. v. Koch (1970) 11 Cal.App.3d 1019 , 1023 [ 90 Cal.Rptr. 280 ].) Originally the Legislature was satisfied that its purpose would be fulfilled by requiring uninsured motorist coverage to be offered to the extent insurance coverage would have been available if the uninsured driver had been insured to the minimum extent required by our financial responsibility law. (Ibid. See also Interinsurance Exchange v. Alcivar (1979) 95 Cal.App.3d 252 , 268 [ 156 Cal.Rptr. 914 ].) But with the 1980 amendment, the Legislature acted to require that effective January 1, 1982, uninsured motorist coverage would be available in some circumstances in excess of the minimum liability insurance required to fulfill the financial responsibility law. (Stats. 1980, ch. 1321.) Under this amendment the uninsured motorist coverage cannot be less than the financial responsibility minimum and must also be at least equal to the limits specified in subdivision (m). Subdivision (m) of section 11580.2 now requires that unless waived, an automobile liability policy will be deemed to provide uninsured motorist coverage in the amount of the bodily injury liability coverage up to $30,000 per person and $60,000 per accident. Unlike defendant, who would misread subdivision (m) to guarantee a coverage not less than $30,000/$60,000, the trial court would not read it at all. The express language of the current and controlling statutory provisions cannot be overcome by references to an earlier legislative purpose. Enterprise now concedes on appeal that under the facts of this case the uninsured coverage available to defendant is $30,000/$60,000. We agree with this belated concession. Since the Sansome Trucking insurance policy provided liability limits in excess of both the limits imposed by the financial responsibility law and those contained in subdivision (m) of section 11580.2 and because

In its judgment the trial court correctly determined that Enterprise’s insurance policy provides uninsured motorist coverage to defendant, but the court erred in finding that the limit of the coverage is $15,000. Since we have concluded that in this one-person accident, Insurance Code section 11580.2, subdivisions (a) and (m) require that the policy be deemed to provide uninsured motorist coverage in the amount of $30,000, we will order that the judgment be modified accordingly.

Defendant raises procedural objections to the judgment. He asserts the judgment is not supported by the evidence because none was introduced. It is true that at the time the matter was to be tried, no witnesses were called and no evidence was presented. This is because that is the manner in which the parties chose to proceed. When the matter came on for trial setting it was assigned to Judge Dozier with the notation “to be submitted on briefs.” Judge Dozier was unavailable and the matter was reassigned to Department 4 with the notation that it would be heard as an uncontested matter and that trial would require five minutes to one-half hour to schedule briefing. The minute order on the trial date states: “Matter was regularly called for trial this date. Parties indicated that testimony would not be given and that the matter would be submitted on briefs.” The parties filed briefs in which they set forth the facts. The briefs reveal that with respect to the facts necessary to resolve the legal issue the parties were in complete agreement. Although the parties submitted a pure question of law for the court to resolve, there was nevertheless a “trial.” (7 Witkin, Cal. Procedure (3d ed. 1985) Trial, § 3, p. 19.) But since there were no contested factual issues it would have been unduly time consuming for trial counsel to have insisted that witnesses be called and evidence be formally presented. Counsel reasonably assented to the submission of the issue on the briefs. Appellate counsel now berates the procedure chosen by the parties; however, since trial counsel did not object and in fact consented to the procedure we find the objection to have been waived. (9 Witkin, Cal. Procedure, supra, Appeal, §§ 305-308, pp. 316-318.)

Defendant contends the trial court erred in failing to issue a statement of decision. Before trial Enterprise filed a request for a statement of decision. After the court announced its intended decision Enterprise withdrew its

Defendant contends the judgment does not resolve the controversy. He asserts there are numerous issues left open to further litigation. The contention flies wide of the mark. Pursuant to Insurance Code section 11580.2, subdivision (f) and a clause in the insurance policy in question, issues relating to the amount of compensation to which defendant is actually entitled are subject to arbitration. Unless the parties waive the right to arbitration, a trial court is without jurisdiction to resolve those issues. (California State Auto. Ass'n v. Blanford (1970) 4 Cal.App.3d 186 , 189 [ 84 Cal.Rptr. 333 ].) Under these circumstances Enterprise properly limited its request for declaratory relief to the legal question of the limits of the uninsured motorist coverage imposed upon it by Insurance Code section 11580.2, subdivisions (a) and (m). (See Hartford Accident & Indemnity Co. v. Jackson (1983) 150 Cal.App.3d 111 , 114-115 [ 197 Cal.Rptr. 477 ]; Kincer v. Reserve Ins. Co., supra, 11 Cal.App.3d at pp. 717-718.) The judgment resolved the only issue before the trial court.

Defendant contends that he was denied due process of law. He first asserts that it is a denial of due process to render a decision without evidence or on the basis of evidence received out of court. (See Gimbel v. Laramie (1960) 181 Cal.App.2d 77 , 85-86 [ 5 Cal.Rptr. 88 ].) As defendant’s cited authority recognizes, and we have already held, the objection has been waived by counsel’s consent to the procedure followed. (Ibid.) Defendant asserts the procedure was a sham, citing the objections, we have already resolved. Since we have rejected each of defendant’s assertions of procedural error individually, those assertions do pot cumulatively support a finding of a violation of due process of law.