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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Progressive Casualty Insurance Company v. Skin (03/06/2009) sp-6343
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| PROGRESSIVE CASUALTY | ) |
| INSURANCE COMPANY, | ) Supreme Court No. S- 12586 |
| ) | |
| Appellant, | ) Superior Court No. 2BA-05-00001 CI |
| ) | |
| v. | ) O P I N I O N |
| ) | |
| SARAH SKIN, JOE SKIN, EVA | ) No. 6343 March 6, 2009 |
| NAGEAK, BENJAMIN NAGEAK, | ) |
| and BONNIE NAGEAK, | ) |
| ) | |
| Appellees. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Second Judicial District, Barrow,
Richard E. Erlich, Judge.
Appearances: Aisha Tinker Bray and Gary
Zipkin, Guess & Rudd, P.C., Fairbanks, for
Appellant. Michele L. Power, Power & Brown,
L.L.C., Bethel, for Appellees Sarah Skin and
Joe Skin. Dennis M. Mestas, Law Offices of
Dennis Mestas, Anchorage, for Appellees Eva
Nageak, Benjamin Nageak, and Bonnie Nageak.
Rebecca J. Hozubin, Wilkerson Hozubin,
Anchorage, for Amicus Curiae Property
Casualty Insurers Association of America.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, Carpeneti, and Winfree, Justices.
FABE, Chief Justice.
WINFREE, Justice, with whom MATTHEWS,
Justice, joins, dissenting in part.
I. INTRODUCTION
Progressive Casualty Insurance Company appeals the
superior courts ruling that it issued an ambiguous insurance
policy and acted improperly in handling its insureds claim.
Specifically, Progressive challenges the superior courts
conclusions that (1) the Progressive policy failed to meet the
requirements for a personal motor vehicle liability policy under
AS 28.22.101(c); (2) the Progressive policys definition of
vehicle must be reformed to include liability coverage for the
operation of non-owned all-terrain vehicles (ATVs); (3) the
Progressive policys definition of insured person for the purpose
of medical payments coverage, which relied on the common usage
definition of motor vehicle, was ambiguous and thus construed in
favor of the insured; (4) Progressive waived its right to assert
a defense based on the named driver exclusion in the policy; (5)
Progressive is estopped from asserting a defense based on the
named driver exclusion in the policy; and (6) Progressive
breached its fiduciary duty to Sarah Skin, its insured, thus
warranting coverage by estoppel for all of the parties claims
arising out of an accident involving Skins minor son.
Because Progressives policy meets the requirements for
an owners motor vehicle liability insurance policy under AS
28.22.101(a), and because the policy does not provide liability
coverage for accidents arising out of the insureds operation of
an ATV, we reverse the superior courts rulings to the contrary.
We affirm, however, the superior courts decision to hold
Progressive liable for medical payments coverage because that
section of the Progressive policy employs the term vehicle in an
ambiguous manner, requiring us to construe coverage in favor of
the insured.
II. FACTS AND PROCEEDINGS
On May 17, 2002, Sarah Skin purchased a motor vehicle
insurance policy from Progressive to cover a Chevrolet Prizm
automobile, which she intended to drive in Barrow.1 A resident
of Barrow, Skin bought the policy over the phone from an
InsuranceMart agent in Anchorage. The agent faxed her insurance
application forms with instructions to sign or initial her
consent to various clauses, including a Named Driver Exclusion
that listed her two sons, including then fifteen-year-old son
Joseph Skin. Skin signed and initialed as instructed and sent
the forms back.2
Less than a month later, on June 13, 2002, Joseph ran a
stop sign at an intersection in Barrow while driving a four-wheel
Honda ATV owned by Bonnie and Benjamin Nageak. The Nageaks
daughter, Eva Nageak, was riding as Josephs passenger on the ATV.
A pickup truck collided with them, seriously injuring both Joseph
and Eva.3 The Barrow police investigated the accident and
assigned fault to Joseph.
Neither the Skins nor the Nageaks notified Progressive
of the accident. The owner of the pickup truck, however, held a
Progressive insurance policy, and he contacted Progressive on
June 24, 2002, to report the accident. Based on that report,
Progressive cross-referenced Skins policy. A Progressive
adjuster, Kelly Ford, telephoned Skin later that day to interview
her and to acquire a recorded confirmation that Skin had excluded
Joseph from her policy coverage.
On June 29, 2002, Progressive sent a letter to Skin
notifying her of the companys determination that Joseph did not
meet the requirements for medical coverage under her policy. The
Medical Payments Coverage section of Skins policy binds
Progressive to provide coverage for bodily injury:[4] 1.
sustained by an insured person; 2. caused by accident; and 3.
arising out of the ownership, maintenance or use of a motor
vehicle. The section goes on to define insured person as:
a. you while occupying any vehicle or
rental vehicle, other than a vehicle
owned by you which is not a covered
vehicle;
b. a relative while occupying a covered
vehicle or non-owned vehicle;
c. you or any relative when struck by a
motor vehicle or trailer while not
occupying a motor vehicle; and
d. any other person while occupying a
covered vehicle.
Progressives letter to Skin explains that because the
ATV is not a private passenger, pickup or sedan, it would not be
considered a vehicle.5 As a result, Joseph did not qualify as an
insured person, defined by sub-definition b of the policy as a
relative while occupying a covered vehicle or non-owned vehicle.
At the same time, Joseph failed to qualify under sub-definition c
as a relative when struck by a motor vehicle or trailer while not
occupying a motor vehicle. According to the letter, [w]hile the
policy does not define a motor vehicle, Alaska Statute 28.40.100
defines a motor vehicle as self propelled except a vehicle moved
by human or animal power. Therefore, the letter concludes, even
though Joseph was not occupying a vehicle as defined in the
policy, Joseph Skin was occupying a motor vehicle, and therefore
he would not have been deemed an insured person under sub-
definition c of the Medical Payments Coverage section of the
policy.
Four days later, on July 3, 2002, Progressive sent
another letter denying third-party liability coverage for the
accident. Part I of Skins policy, entitled Liability to Others,
explains that Progressive will pay damages, other than punitive
or exemplary damages, for bodily injury for which an insured
person becomes legally responsible because of an accident arising
out of ownership, maintenance, or use of a vehicle or a rental
vehicle. Within the Additional Definitions of Part I,
Progressive defines non-owned vehicle, as any vehicle, and any
rental vehicle, that is not owned by you, a relative, or the
named insureds non-resident spouse. Progressives July letter
notified Skin that there is no coverage for Bodily Injury or
Property Damage for the use of the ATV being operated by Joseph
Skin. The company once again explained that the ATV did not meet
the definition of vehicle under the policy.
On August 9, 2002, the Nageaks attorney contacted
Progressive, and the company sent the attorney a copy of the
letter shortly thereafter. No further communication between
Progressive and the parties took place until this litigation
began.
On October 21, 2003, Bonnie, Benjamin, and Eva Nageak
brought suit against Joseph for damages arising out of the
accident. They did not notify Progressive of the suit. Acting
on behalf of her minor son, Skin entered into a settlement with
the Nageaks, assigning to them the proceeds of her claims against
Progressive and agreeing to jointly prosecute those claims. On
October 8, 2004, at the parties request, Superior Court Judge
Michael I. Jeffery entered a consent judgment against Joseph in
favor of the Nageaks for a total amount of $1,582,632.
On January 3, 2005, Skin and her assignees, the
Nageaks, jointly filed an action against Progressive and the
individual adjusters assigned to the claim. Their complaint
alleged that the Progressive agents conspired and engaged in a
wrongful and bad faith scheme that culminated in the wrongful
denial of the Progressive policys liability coverage, denial of
defense, and denial of medical payments coverage to Joe Skin.
Progressive filed its answer to the complaint on April 26, 2005.
At about the same time, on April 29, 2005, Progressive sent Skin
a followup to its earlier Medical Payments Coverage denial,
explaining that [i]f the ATV involved in this accident is
determined to be a vehicle, then that determination would trigger
the Named Driver Exclusion Election pertaining to Joseph Skin,
which was in effect at the time of the loss.6 Progressive sent a
similarly worded letter on May 3, 2005 to explain the companys
alternative basis for denial of Bodily Injury and Property Damage
coverage.
On September 26, 2005, Progressive filed two motions
for partial summary judgment on the Nageaks third-party liability
coverage claims and Skins medical payments coverage claim,
respectively. The Nageaks and Skin filed oppositions and cross-
motions for summary judgment. Superior Court Judge Richard H.
Erlich consolidated the motions for decision.
On November 28, 2006, the superior court issued its
decision, ruling against Progressive on all of the issues before
it. The court determined that Skin had purchased a personal
motor vehicle policy, as defined by AS 28.22.101(c), and that
such a policy required non-owned vehicle coverage. The
Progressive definition of non-owned vehicle in Skins policy did
not meet the minimum coverage mandated by the statute, according
to the superior court, because only the broad statutory
definition of motor vehicles will meet the legislative intent to
close gaps in motor vehicle liability coverage. The superior
court reasoned that [a]n insured who does not desire liability
coverage for non-owned vehicles [including ATVs] may purchase an
owners policy to provide liability coverage for designated
vehicles. The purchaser of a personal motor vehicle liability
policy, by contrast, bargains for the greater coverage.
Consistent with this theory, the superior court undertook a
reformation of Progressives definition of non-owned vehicle,
substituting the term motor vehicle as defined by the statute,
and thus qualifying Joseph as an insured person.
The superior court went on to find that the Nageaks had
properly asserted their claims for breach of contract based on
Progressives denial of third-party liability coverage.
Similarly, the court held that Joseph qualified for medical
payments coverage under the policy, subject to applicability of
the named driver exclusion defense. The superior court proceeded
to determine that Progressive had waived the named driver
exclusion defense because it initially relied on the policys
definition of vehicle alone as the grounds for denying coverage
for the accident. In addition to waiver, the superior court held
that because the plaintiffs reasonably relied on Progressives
sole defense to coverage and were prejudiced as a result . . . .
Progressive is estopped from asserting the [named driver
exclusion] defense.
Finally, relying on Lloyds & Institute of London
Underwriting Cos. v. Fulton,7 the superior court imposed coverage
by estoppel based on Progressives breach of its fiduciary duties
to Skin. Noting that a Progressive agent initially called Skin
to ask her to confirm that she had requested the named driver
exclusion for Joseph, the court cited the transcript of that
conversation as evidence of misconduct by Progressive. The
court also held that Progressives failure to give timely notice
of its intent to reserve its right to assert the [named driver
exclusion] defense also violated the companys fiduciary duty to
Skin.
Progressive filed a motion for reconsideration on
December 8, 2006. Among other arguments, the company advanced
the contention that the superior court failed to give deference
to the Division of Insurances approval of its policy. In its
order denying Progressives motion, the superior court noted that
Progressive declined to heed the Divisions express recommendation
that it revise confusing and potentially misleading language in
its policy. On January 8, 2007, the superior court entered final
judgment pursuant to Alaska Civil Rule 54(b). Progressive
appeals.
III. STANDARD OF REVIEW
We review a grant of summary judgment de novo and will
uphold the lower courts ruling if the record presents no genuine
issues of material fact and the movant is entitled to judgment as
a matter of law.8 We draw all reasonable inferences of fact
against the moving party.9
IV. DISCUSSION
A. The Progressive Policy Meets Minimum Statutory
Requirements.
Alaska Statute 28.22.311 defines a motor vehicle
liability policy as an owners policy, an operators policy, or a
personal policy that . . . meets the requirements of AS
28.22.101. According to AS 28.22.101(a), an owners policy must
designate . . . the motor vehicles that it covers and insure the
person named against loss arising out of the ownership,
maintenance, or use of a designated motor vehicle. By
comparison, a personal motor vehicle liability policy offers
broader coverage, insuring the person named as insured against
loss arising out of the ownership, maintenance, or use by the
named person of a motor vehicle whether owned or not owned by the
person.10 The superior court found that Progressive issued a
personal motor vehicle liability policy. Progressive argues that
it issued an owners policy and that offering limited additional
coverage should not bind it to the statutory requirements for a
personal policy. We agree with Progressives interpretation of
the statute.
It was error to conclude that Progressive had to insert
explicit language in the policy identifying it as an owners
policy. The superior courts holding relied on findings that the
Progressive policy expressly provides non-owned vehicle coverage
and that the title of the Personal Auto Policy Declarations Page
signed by Skin does not identify the policy as an owners policy
or an operators policy. As a result, the superior court
concluded, the policy had to meet the requirements of a personal
motor vehicle policy as described in AS 28.22.101(c). But
nothing in the statutes or our case law requires an insurer to
explicitly label a motor vehicle liability policy as either an
owners policy or a personal policy.
Moreover, the policy declarations page signed by Skin
hardly implicates the broad coverage that the superior court read
a personal policy to require. First, the declarations page
specifies the make, model, and VIN number of the Chevrolet Prizm
that Skin planned to purchase. In other words, it designate[s] .
. . the motor vehicle[] that it covers,11 as an owners policy must
do. Moreover, the declarations page contains a box labeled
Personal Auto Liability, which lists categories of automobile
liability coverage, including coverage for any auto, scheduled
autos, and non-owned autos. Skins policy declarations page
indicates that she purchased coverage only for scheduled autos.
A purchaser of a personal policy, however, would presumably
expect to see a checkmark by the any auto or non-owned autos box
as well, since under AS 28.22.101(c) personal policy coverage
extends to a motor vehicle whether owned or not owned by the
person.
The Nageaks argue that by offering some non-owned
vehicle coverage, Progressive committed itself to meet the
statutory requirements of a personal motor vehicle liability
policy. But they marshal little support for this proposition.
In contrast, Progressive points out that we have characterized,
in dicta, an identical Progressive policy as an owners policy.12
And Progressive cites persuasive precedent from the Idaho Supreme
Court, upholding the validity of the Progressive insurance policy
and rejecting an argument similar to the Nageaks.13
The Nageaks argue that a legislative intent to close
gaps in insurance coverage supports their claim. They leave us
unconvinced, however, that the legislature intended to cabin
insurance policy coverage into narrow statutorily defined
categories unless explicitly labeled otherwise. The plain
language of AS 28.22.311 makes clear that the Progressive policy
need only meet the requirements of an owners policy under
AS 28.22.101(a). We therefore turn to the question of whether
the policy, by its own terms, provides coverage for Josephs
accident.
B. The Progressive Policy Reasonably and
Unambiguously Excludes Liability Coverage for Accidents
Arising Out of the Operation of ATVs.
The Nageaks argue that regardless of how we
characterize it, the Progressive policy covers the operation of
an ATV by an insured. They reason that the Progressive policys
coverage for non-owned vehicles extends to ATVs because the
policys liability coverage section defines non-owned vehicle as
any vehicle . . . that is not owned by you. They further contend
that vehicle must include ATVs because AS 28.90.990(15) defines
motor vehicle as a vehicle which is self-propelled except a
vehicle moved by human or animal power, and AS 28.90.990(28)
defines vehicle even more broadly as a device in, upon, or by
which a person or property may be transported. For its part,
Progressive maintains that the definition of vehicle at the
outset of the Progressive policy, contained in the General
Definitions section, excludes coverage for ATVs.
The doctrine of reasonable expectations guides our
review of the terms of an insurance policy.14 In applying that
doctrine, we held in Hillman v. Nationwide Mutual Fire Insurance
Co. that an insurance policys definitional section is distinct
from the coverage provisions, and cannot logically be read as
providing any substantive additions to the coverage section.15
Progressives definition of vehicle in its policys General
Definitions section effectively provides a substantive limitation
to its policys liability coverage section. The Nageaks therefore
argue that just as the definitional section cannot add
substantive protections, it cannot delete them.16
The substantive provision for third-party liability
coverage in the Progressive policy appears as follows:
Part I Liability to Others
Insuring Agreement Bodily Injury
Subject to the Limits of Liability, if you
pay a premium for bodily injury liability
coverage, we will pay damages, other than
punitive or exemplary damages, for bodily
injury for which an insured person becomes
legally responsible because of an accident
arising out of the ownership, maintenance, or
use of a vehicle or a rental vehicle.
The Additional Definitions subsection in Part I goes on to define
insured person as, among other things, a relative with respect to
an accident arising out of the maintenance or use of a non-owned
vehicle with the express or implied permission of the owner of
the non-owned vehicle. Also within the same Additional
Definitions subsection, the policy clarifies that non-owned
vehicle means any vehicle and any rental vehicle, that is not
owned by you, a relative, or the named insureds non-resident
spouse.
Finally, the General Definitions section of the policy,
number 12, explains:
Vehicle means a land motor vehicle:
a. of the private passenger, pickup body,
or sedan delivery type;
b. designed for operation principally upon
public roads;
c. with at least four (4) wheels; and
d. with a gross vehicle weight of 10,000
pounds or less;
which is not a rental vehicle.
As Progressive explained in its initial correspondence with Skin,
the ATV involved in Josephs accident did not meet the first two
criteria of the vehicle definition: it was neither a land motor
vehicle . . . of the private passenger, pickup body, or sedan
delivery type, nor a land motor vehicle . . . designed for
operation principally upon public roads. Consequently, the ATV
did not qualify as a non-owned vehicle, and Joseph did not
qualify as an insured person because he was not operating a non-
owned vehicle. Progressive therefore denied coverage.
The Nageaks argue that Progressive cannot rely on its
policys distinct and separate General Definitions section to
limit the scope of coverage. They argue that the statutory
definition of vehicle should apply within the Progressive policys
liability coverage section. According to the Nageaks, Hillman
relieves the insured of any obligation to cross-reference the
General Definitions section when reading the non-owned vehicle
definition.
In Hillman, however, we rejected an appeal for coverage
based on a definition that we determined could not logically be
read as providing any substantive additions to the coverage
section of the policy.17 Here, Progressive relies on the general
definition of vehicle set out at the beginning of its policy.
That section explains that [e]xcept as otherwise defined in this
policy, terms appearing in boldface will have the following
meaning. And the term vehicle appears in boldface within the
liability coverage sections non-owned vehicle definition.
That boldfaced vehicle definition unambiguously
excludes ATVs. The Nageaks do not argue that ATVs are of the
private passenger, pickup body, or sedan delivery type. Nor do
they claim that the ATV was designed for operation principally
upon public roads.18 The superior court took judicial notice that
lay persons in Barrow regularly see snowmobiles and ATVs driven
upon the public roads. And the Nageaks defend the trial courts
reasoning by pointing to Alaska Administrative Code provisions
and Barrow Municipal Ordinances that apparently permit non-
licensed drivers to operate ATVs in the streets of Barrow.19 But
an insurance coverage rule that turns so readily on the
conditions and ordinances particular to the insureds place of
residence would inject uncertainty into a policys scope of
coverage. Progressives definition of vehicle meets the
objectively reasonable expectations of consumers across Alaska.
The local ordinances and regulations cited by the Nageaks do not
entitle consumers in some parts of Alaska to more insurance
coverage.
The Nageaks further argue that the Progressive policy
is confusing and ambiguous because a definition of vehicle cannot
be found in the policys liability coverage section. Therefore,
they maintain, an insured has a reasonable expectation of
coverage for all non-owned vehicles that meet the statutory
definition of motor vehicle. But adopting this argument would
lead us to recognize a Progressive insureds reasonable
expectation of coverage for liability incurred while driving non-
owned scooters, golf carts, fork-lifts, tugs, and any other
vehicle which is self-propelled except a vehicle moved by human
or animal power.20 The Progressive policy does not support such
an expectation of coverage. At its outset, the policy defines
the term vehicle, and an insured may fairly apply that definition
throughout the policy, including the liability coverage section.
We therefore conclude that because the Nageaks ATV
fails to qualify as a covered vehicle, third-party liability
coverage was not available to Skin.21 In light of this holding,
we need not determine whether Joseph was legally excluded as a
covered driver under the policy.
C. The Superior Court Correctly Construed the Medical
Payments Coverage Section of the Progressive Policy To
Provide Coverage for Josephs Accident.
The Medical Payments Coverage section of the
Progressive policy covers expenses associated with the bodily
injury of an insured person. This part of the policy defines
insured person as including a relative while occupying a covered
vehicle or non-owned vehicle, as well as you or any relative when
struck by a motor vehicle or trailer while not occupying a motor
vehicle. (Boldface type in original; underlined emphasis added.)
Thus, as a relative, Josephs claim for medical payments coverage
proceeds under two discrete theories. Under the first theory, he
claims that he is covered as a relative while occupying a . . .
non-owned vehicle. But our previous holding makes clear that the
Nageaks ATV does not qualify as a vehicle under the policy.22 The
second theory applies if the Nageaks ATV does not qualify as a
vehicle. Under this theory, the policy would cover Joseph as a
relative when struck by a motor vehicle or trailer while not
occupying a motor vehicle.
Progressive denied medical payments coverage for Joseph
under this theory on the basis of a distinction between the term
vehicle, which is set out in boldface type in the policy, and the
term motor vehicle. We agree with Progressive that Joseph was
not occupying a vehicle at the time of the accident. But
Progressive also takes the position that Joseph cannot recover
under the second theory that the accident occurred while Joseph
was not occupying a motor vehicle. According to Progressive,
although the Nageaks ATV does not qualify as a vehicle, it does
qualify as a motor vehicle. Therefore, according to Progressive,
Joseph was occupying a motor vehicle, even though he was not
occupying a vehicle.
Progressive argues that because the policy does not
define the term motor vehicle for purposes of medical payments
coverage, an insured must rely on the common usage meaning of the
term. The company contends that an objectively reasonable lay
person should understand that an ATV qualifies as a motor vehicle
but not as a vehicle. We cannot agree with Progressives tortured
reading of its policy.
The General Definitions section of the Progressive
policy explains that [e]xcept as otherwise defined in this
policy, terms appearing in boldface will have the following
meaning[.] The policy fails to mention that the same terms, when
not appearing in boldface, will depart from those meanings. In
the superior courts words, vehicle must be read as vehicle in
boldface to convey the policy meaning rather than the ordinary
meaning as understood by lay persons. The court noted that there
are at least 56 instances of vehicle or motor vehicle non-
boldface throughout Mrs. Skins policy and concluded that a
reasonable insured may question whether the appearance of
vehicle, non-boldface, is intentional or a typographical error.
We agree with the superior court that the distinction
between the terms motor vehicle and vehicle would be difficult
for a policyholder to understand. A reasonable lay person could
not be expected to understand that he could simultaneously be
denied coverage under one policy provision because he was not
occupying a vehicle while also being denied coverage under
another provision because he was occupying a vehicle.
Accordingly, we hold that this ambiguous policy language entitles
Skin to attach the policy definition of vehicle to that term
wherever it appears in the policy, regardless of its typeface or
whether the word motor precedes it. Because that definition
excludes ATVs, we hold that Progressive must extend medical
payments coverage under the policy to Joseph.
We are not alone in arriving at the conclusion that
Progressives practice of attaching two definitions to the same
policy term is obscure at best. The Court of Appeals of
Washington has similarly determined that Progressive clouds its
policy with ambiguity by employing multiple definitions for the
term vehicle.23 In Getz v. Progressive Specialty Insurance Co., a
longshoreman sued Progressive for UIM coverage after an
underinsured, unauthorized driver on the dock collided with him
as he operated a piece of equipment known as a hustler.24
Progressive declared that the hustler fell within the statutory
definition of motor vehicle and therefore denied Getzs claim
under the terms of its UIM coverage.25 But Getzs policy, like
Skins, defined vehicle narrowly, although it used capital letters
rather than boldface type to denote that meaning.26 The
Washington Court of Appeals held in favor of Getz, reasoning that
Progressives effort to avoid the consequences of its own
definition fails.27
A New York court has similarly held that Progressives
definition of vehicle should carry over through the rest of its
policy, but its holding operated to exclude coverage.28 In re
Progressive Insurance Cos. (Nemitz) involved a Progressive
customer who sought UIM payments for injuries that she suffered
while riding as a passenger on an uninsured ATV.29 The policy in
Nemitz employed a definition of vehicle nearly identical to that
of Skins.30 And like Skins policy, it defined uninsured motor
vehicle as a motor vehicle that, through its ownership,
maintenance or use, results in bodily injury to the insured.31
The brief opinion of the New York Supreme Court omits any mention
of boldface type. The court nonetheless held that the definition
of an uninsured motor vehicle in the [UIM] section of the policy
[] references the phrase motor vehicle, which, as we previously
noted, is already unambiguously defined in the policy in a manner
that excludes ATVs.32 The New York court apparently saw no reason
to distinguish between the specific wording of the UIM provisions
reference to motor vehicle and the general definitions sections
reference to vehicle.33
These cases further persuade us that Progressives
position relies on an ambiguous and confusing convention that
varies material terms of Progressives policy depending on the
typeface. Progressive maintains that it intentionally makes use
of this convention to deliberately provide additional coverage to
the policy holder.34 But the typeface convention in Skins policy
has operated only to deny her coverage. And despite what
Progressive may have intended, its policy lends itself to
competing interpretations. We conclude that a reasonable insured
is entitled to rely on Progressives policy-defined terms,
including the term vehicle, to carry a uniform meaning throughout
the policy, regardless of typeface.35 We therefore affirm the
superior court on the issue of medical payments coverage.
D. Coverage by Estoppel Does Not Apply.
The superior court, citing Lloyds & Institute of London
Underwriting Cos. v. Fulton,36 found that Progressive had breached
its fiduciary duty to Skin and that this misconduct warranted
coverage by estoppel. Specifically, the court found that
Progressive acted improperly when its agent called Skin and
sought to confirm that she had named Joseph as an excluded driver
from her policy. The court identified other acts of misconduct
as well, all of which concerned Progressives alternative defense
based on the named driver exclusion election in Skins policy.
Any misconduct that Progressive might have committed in
its effort to obtain evidence regarding the named driver
exclusion, however, did not prejudice the Skins or the Nageaks.
In Fulton, we made clear that an insurers breach of fiduciary
duty is intolerable if it has any adverse effect on an insured
party.37 But the Skins suffered no such adverse effect. The
Progressive policy does not provide liability coverage for
Josephs accident because an ATV does not qualify as a vehicle
under the policy. This coverage limitation has nothing to do
with the named driver exclusion or Progressives alleged
impropriety in attempting to confirm that exclusion.38 We
therefore reverse the superior courts decision to impose coverage
by estoppel.
V. CONCLUSION
For the reasons detailed above, we REVERSE the judgment
of the superior court that Progressives insurance policy failed
to meet minimum statutory requirements, that the policys
liability coverage extends to all-terrain vehicles, and that
Progressives misconduct warranted coverage by estoppel. Because
we reverse on these issues, we conclude that the superior courts
decision to impose coverage by estoppel must also be REVERSED.
We AFFIRM the superior courts decision that Joseph is entitled to
medical payments coverage.
WINFREE, Justice, with whom MATTHEWS, Justice, joins, dissenting
in part.
I respectfully disagree with the courts conclusion that
Joseph Skin is entitled to medical-payments (med-pay) coverage
under his mothers policy. In my view this conclusion is
inconsistent and incompatible with our decision that Joseph Skin
is not entitled to liability coverage under the policy.
Fundamental to our decision that Joseph Skin had no
liability coverage while operating the Nageaks ATV is the special
definition of vehicle in the policys General Definitions section:
Vehicle means a land motor vehicle:
a. of the private passenger, pickup body,
or sedan delivery type;
b. designed for operation principally upon
public roads;
c. with at least four (4) wheels; and
d. with a gross vehicle weight of 10,000
pounds or less;
which is not a rental vehicle.[1]
Its very obviousness makes it easy to overlook, but to
understand the specially defined term vehicle in boldface one
must understand the undefined but easily understood general terms
vehicle and motor vehicle. Otherwise it would be impossible to
appreciate the difference between a vehicle and just another
motor vehicle or, for specific example, to appreciate that gross
vehicle weight can be the distinguishing factor between a vehicle
and just another motor vehicle.
To determine whether a vehicle is a vehicle under the
policy, one must start with the larger set of vehicles called
land motor vehicle[s] and then use the four limiting provisions
of (a) - (d) to arrive at the specific subset of vehicles
contemplated by the policy. The term land motor vehicle is not
defined in the policy and therefore must be construed in
accordance with ordinary and customary usage.2 The land portion
of the term is self-evident. The common definition of motor
vehicle is broad enough to cover any automotive vehicle not
operated on rails.3 This is consistent with relevant statutory
definitions in Title 28 of the Alaska Statutes (Motor Vehicles):
AS 28.90.990(a)(29) defines vehicle as a device for transporting
people or property, and AS 28.90.990(a)(16) defines motor vehicle
as a vehicle which is self-propelled.
We had no difficulty understanding the policy
definition of vehicle or differentiating between a vehicle and
other examples of motor vehicle when concluding that Joseph Skin
had no liability coverage while operating the Nageaks ATV. We
stated that: (1) the boldfaced vehicle definition [in the
General Definitions section] unambiguously excludes ATVs; (2) the
policy definition of vehicle meets the objectively reasonable
expectations of consumers; (3) to conclude otherwise would create
coverage for liability incurred while driving non-owned scooters,
golf carts, fork-lifts, tugs, and any other [motor vehicle]; and
(4) an insured may fairly apply the policy definition of vehicle
throughout the policy. In short, we concluded that the Nageaks
ATV is a (land) motor vehicle but not a vehicle or, more
specifically, not a non-owned vehicle as defined by the policy,
and that this conclusion is within a consumers reasonable
expectations.4
But when the court considers med-pay coverage under the
policy, it makes an about-face and concludes that the term
vehicle [is used] in an ambiguous manner in the med-pay coverage
section and the distinction between the terms motor vehicle and
vehicle would be difficult for a policyholder to understand. The
court describes as tortured Progressives argument that a
reasonable layperson should understand that an ATV qualifies as a
motor vehicle but not as a vehicle, although we concluded that
very thing with respect to liability coverage.
Relevant policy provisions from Mrs. Skins med-pay
coverage are as follows:
PART II - MEDICAL PAYMENTS COVERAGE
INSURING AGREEMENT
[We will pay medical expenses for injuries]:
1. sustained by an insured person;
2. caused by accident; and
3. arising out of the ownership,
maintenance or use of a motor vehicle.
. . . .
ADDITIONAL DEFINITIONS
When used in this Part II:
1. Insured person and insured persons mean:
a. you while occupying any vehicle or
rental vehicle, other than a
vehicle owned by you which is not a
covered vehicle;
b. a relative while occupying a
covered vehicle or non-owned
vehicle;
c. you or any relative when struck by
a motor vehicle or trailer while
not occupying a motor vehicle; and
d. any other person while occupying a
covered vehicle.
The court ignores the general grant of coverage for medical
expenses arising out of the . . . use of a motor vehicle and
focuses only on whether Joseph Skin is an insured person for the
coverage.
Provision (c) of the insured person definition is at
issue here, but it is important to consider all of the provisions
as a whole and place provision (c) in proper context. First and
foremost, provisions (a), (b), and (d) combine to provide med-pay
coverage to anyone who occupies Mrs. Skins car, i.e., the covered
vehicle. Provision (b) also extends med-pay coverage to
Mrs. Skin and her family members while they occupy any non-owned
vehicle. It is thus clear that Joseph was an insured for med-pay
coverage under Mrs. Skins policy anytime he was occupying any
vehicle there is no vehicle for which Joseph would not be a med-
pay insured.5
This leads to provision (c), which adds a very
different dimension of med-pay coverage to Mrs. Skins family
members. Provision (c) extends med-pay coverage to Mrs. Skins
family members only when they (1) are struck by any kind of motor
vehicle and (2) are not occupying any kind of motor vehicle.
This is pedestrian coverage, and although the common situation
invoking this coverage would be a pedestrian struck by a car,
under the policy it also would apply for pedestrians struck, for
example, by ATVs and scooters, golf carts, fork-lifts, tugs, and
any other [motor vehicle]. But it would not apply for persons
injured while occupying ATVs or scooters, golf carts, fork-lifts,
tugs, and any other [motor vehicle], i.e., for non-pedestrians.6
Other courts have applied similar pedestrian coverage
provisions. In State Farm Mutual Automobile Insurance Co. v.
Green,7 for example, Green was injured in a collision between his
motorcycle and another vehicle and sought med-pay coverage under
policies insuring his truck and automobile.8 The policies
provided med-pay coverage to Green if he were struck by a highway
vehicle while not occupying a land motor vehicle.9 Green argued
that although he was occupying his motorcycle at the time of the
accident, his motorcycle was not a land motor vehicle within the
meaning of the policy language.10 The Indiana Court of Appeals
made short work of this argument: [W]e do not believe any
reasonable person could honestly conclude that a motorcycle is
not a land motor vehicle within the plain, ordinary meaning of
that term . . . . [The] phrase is not a term of art; nor is it
automatically ambiguous simply because it is not defined within
the policy.11
In Colwell v. State Farm Mutual Automobile Insurance
Co.,12 Colwell was driving a minibike when he collided with an
automobile and sought med-pay coverage under his fathers family
automobile policy.13 The policy provided med-pay coverage for
Colwell if he were struck by a Highway vehicle while not
Occupying a land motor vehicle.14 The Arizona Court of Appeals
noted that although the term land motor vehicle was not defined
in the policy, it was not vague or ambiguous (although it could
be more artfully drawn),15 and concluded that it had little
difficulty in holding that the common sense definition of the
term land motor vehicle would include such a gasoline-powered
motorized two-wheeled vehicle.16
Jirousek v. Prudential Insurance Co. of America17
yielded a similar result in a different insurance scenario.
There, a beneficiary under a life insurance policy sought payment
of supplemental benefits after her son died in a motorcycle
accident.18 Supplemental benefits were payable if the decedent
had been struck by a motor vehicle while not himself or herself
driving or riding in a motor vehicle.19 The beneficiary claimed
ambiguity in the wording, arguing that a motorcycle was not a
motor vehicle under this provision, but the Ohio Supreme Court
found no ambiguity: Each word has its own meaning in every day
usage, and the purchaser of insurance . . . would understand the
limited aspects of . . . motorcycle, and the broader meaning of
motor vehicle. 20 It went on to conclude that the term motor
vehicle has a normal meaning in common usage which includes
motorcycle.21
Following this line of cases and using the ordinary and
customary meaning of motor vehicle, the only reasonable
conclusion here is that Joseph Skin was not an insured person for
med-pay coverage under Mrs. Skins policy because he was occupying
a motor vehicle the Nageaks ATV at the time of his accident.
The court avoids this logical interpretation and implementation
of the pedestrian coverage under provision (c) by examining that
provision without considering: (1) the context of the original
definition of vehicle; (2) the opening grant of med-pay coverage
for an insured in an accident arising from the use of a motor
vehicle; or (3) the other three provisions defining an insured
for med-pay coverage.22 The court then finds ambiguity because
the term motor vehicle contains the word vehicle in plain rather
than bold typeface, concluding that the distinction between the
terms motor vehicle and vehicle would be difficult for a
policyholder to understand.23
The court notes but does not distinguish Progressive
Express Insurance Co. v. Boyce,24 a case involving a Progressive
policy and refuting the courts analysis. Like Mrs. Skins
policy, the Boyces automobile policy contained a general
definitions section using boldface type for specially defined
words, including vehicle.25 The Boyces sought uninsured motorist
coverage benefits under their policy after they collided with an
uninsured vehicle while riding their motorcycle.26 The Boyces
uninsured motorist coverage contained an exclusion for injuries
incurred while using an owned motor vehicle other than a covered
vehicle, and there was no dispute that the motorcycle was not a
covered vehicle under the policy.27 Just as the court does with
respect to Mrs. Skins policy, the Boyce trial court found that
vehicle as used in the policy was ambiguous because it was used
in boldface form in some places and in non-boldface form in the
term motor vehicle. Construing the policy in favor of the
Boyces, the trial court found that a motorcycle was not a motor
vehicle for purposes of the exclusion for uninsured motorist
coverage.28 But the appellate court reversed, finding no
ambiguity in the policys use of the specially defined term
vehicle and holding that, because motor vehicle was not defined
in the policy and the statutory definition therefore applied, a
motorcycle was a motor vehicle for purposes of the coverage
exclusion.29 The appellate court in Boyce had the correct
analysis and directly contradicts the courts decision in this
case.
Towne v. Progressive Insurance Co., an unpublished Ohio
appellate decision concerning another Progressive policy, is
equally instructive.30 There, holders of an automobile policy
sought underinsured motorist coverage under their policy after
being involved in an accident while on a motorcycle.31 The
policy contained the same boldface definition of vehicle as Mrs.
Skins policy,32 and no one disputed that the motorcycle was not a
vehicle under the policy.33 The policy contained an exclusion in
the underinsured motorist coverage for damages incurred while
operating or occupying a motor vehicle other than an expressly
covered vehicle.34 Just as the court does with respect to Mrs.
Skins policy and as the Boyce trial court did with the Boyces
policy, the Towne trial court agreed with the insureds arguments
that (1) because vehicle in its non-boldface form was not defined
in the policy, the term motor vehicle was ambiguous, and (2) the
exclusion for uninsured motorist coverage therefore must be
construed to mean vehicle and did not encompass operating or
occupying the motorcycle.35 The Ohio Court of Appeals reversed,
stating:
The General Definitions section of the policy
unambiguously states that terms appearing in
boldface type will have the supplied
meanings. Because the term vehicle does not
appear in boldface type in the exclusion, the
policys definition does not apply. Instead,
the ordinary meaning of the word applies.[36]
Like the Boyce appellate court, the Towne appellate court
correctly analyzed the policy. That analysis precludes med-pay
coverage for Joseph Skin under his mothers policy because he was
operating a motor vehicle at the time of the accident.
The court instead relies on the Washington appellate
court decision Getz v. Progressive Specialty Insurance Co.,37 but
the court misreads that decision. Getz raised the very same
question as the Towne case, but came to a different result
because of differences in the language of the two Progressive
policies.
In Getz a longshoreman was operating a tractor-like
piece of dock equipment known as a hustler when he was struck by
another vehicle.38 Getz sought underinsured motorist coverage
under his own automobile insurance policy, but his policy had the
same exclusion from coverage as in the Towne case: coverage was
excluded for damages incurred while operating a motor vehicle not
expressly covered by the policy.39 But unlike the policy in
Towne, Getzs policy had a special definition of motor vehicle in
its underinsured motorist coverage section, a definition that
specifically excluded equipment designed or modified for use, and
actually used, off-road.40 It was undisputed that the hustler
was not a motor vehicle under this definition and that the
coverage exclusion was facially inapplicable.41 Progressive
nonetheless sought to avoid that result:
Progressives sole argument rests on its claim
that [t]hroughout the policy, capital letters
are used to denote defined terms. The term
motor vehicle appears in the regular use
exception in lower case letters. Progressive
therefore argues that the ordinary definition
of the term, rather than the policy
definition, applies. Progressive provides no
authority for this premise. Instead,
Progressive simply asserts: This [practice]
makes abundant good sense.[42]
The Washington court correctly rejected Progressives arguments
because, unlike the policy in Towne, Getzs policy contained no
notice that emphasized terms had special meaning:
[Progressives argument] might be [correct] if
the policyholder only knew about it. But
nothing in the policy signals that the
presence or absence of capital letters has
any significance at all.
. . . .
So, the question in this case is easily
answered as a matter of law. An average
person purchasing insurance would reasonably
have believed the exclusion inapplicable.
Therefore, the exclusion does not apply.[43]
Getz does not support the courts decision here. Mrs.
Skins policy plainly states that boldface terms have specifically
defined meanings. The term motor vehicle is not defined in the
policy and therefore does not have a specially defined meaning.
Progressive is not seeking to avoid a specifically defined term
in its policy and replace it with common meaning and usage. Nor
is Progressive seeking to avoid the common meaning and usage of
the term motor vehicle by pointing to a boldface term in some
other portion of the policy. Progressive seeks to apply the
common meaning and usage of the undefined term motor vehicle
consistently throughout its policy.
The courts reliance on the New York appellate decision
In re Progressive Insurance Cos. (Nemitz)44 is equally
unpersuasive. There, a passenger on an uninsured ATV fell and
was injured; she sought uninsured motorist coverage under her own
automobile policy.45 The brief two-page decision includes a
quotation of the policys general definition of vehicle, which is
similar to that of Mrs. Skins policy but lacks any boldface
type.46 That definition was said to control except as otherwise
defined in the policy,47 and there was a separate definition of
uninsured motor vehicle in the uninsured motorist coverage
section of the policy, again without any boldface type:
uninsured motor vehicle means a motor vehicle that, through its
ownership, maintenance or use, results in bodily injury to the
insured.48 Noting without further explanation that the lower
court had decided and the insured did not dispute that an ATV
was not a motor vehicle under the general definition, the court
decided that the definition of uninsured motor vehicle had to be
read to conform to the general definition. Thus there was no
coverage.49
Nemitz provides no real support for Joseph Skin to
obtain med-pay coverage under Mrs. Skins policy. Indeed, our own
holding about the definition of vehicle in Mrs. Skins policy is
exactly opposite of the holding in Nemitz. While the Nemitz
court concluded that vehicle and motor vehicle were synonymous
terms, our analysis of Mrs. Skins liability coverage acknowledged
that vehicle and motor vehicle had different meanings in the
context of the policy.
The court states that Mrs. Skins policy contains a
definition of uninsured motor vehicle just like the policy in
Nemitz. It does not. The policy in Nemitz defined the phrase as
a motor vehicle that, through its ownership, maintenance or use,
results in bodily injury to the insured.50 Mrs. Skins policy
defines uninsured motor vehicle in significantly more detail:
PART III - UNINSURED/UNDERINSURED MOTORIST
COVERAGE
. . . .
ADDITIONAL DEFINITIONS
When used in this Part III:
. . . .
5. Uninsured/underinsured motor vehicle
means a land motor vehicle or trailer of
any type:
a. [which is uninsured];
b. [which is the subject of a denial
of coverage or an insolvent
insurer];
c. that is a hit-and-run vehicle whose
operator and owner cannot be
identified and which comes into
direct physical contact with:
i. you or a relative;
ii. a vehicle that you or a
relative are occupying; or
iii. a covered vehicle;
provided that the insured person,
or someone on his or her behalf,
reports the accident to the police
or civil authority within twenty-
four (24) hours; or
d. [which is underinsured].[51]
If similarity of language is significant to the courts reliance
on Nemitz, this is additional reason to find Nemitz unpersuasive.
More importantly, this policy provision helps reveal unintended
havoc the courts decision may cause in light of its holding that
an insured is entitled to rely . . . on a uniform meaning of
vehicle throughout the policy, regardless of typeface.
As with the original definition of vehicle, an
uninsured/underinsured motor vehicle is a subset of the larger
set land motor vehicle. The subset is further defined by the
conditions of (a) - (d), including the condition involving a hit-
and-run vehicle. There also is an exclusion for damages
resulting from accidents with motorized vehicles designed for off-
road use. Substituting the special definition of vehicle52 for
vehicle generates confusing circularity about or perhaps a
narrowed definition of underinsured/uninsured vehicle (a land
motor vehicle or trailer of any type instead of a land motor
vehicle or trailer of any type), further limiting that subset
(hit-and-run vehicle instead of hit-and-run vehicle), and an
eviscerated coverage exclusion (accident caused by any motorized
vehicle instead of caused by any motorized vehicle). In short,
the court significantly changes the meaning of many provisions of
Mrs. Skins policy, perhaps in as many as fifty-six different
places, without giving those provisions any real examination.
How those changes actually affect coverage under the policy will
be left to future litigation.
With that in mind, a final analysis of the critical
elements of the med-pay provision is appropriate:
INSURING AGREEMENT
[We will pay medical expenses for injuries
sustained by an insured person, caused by
accident]:
3. arising out of the ownership,
maintenance or use of a motor vehicle.
. . . .
ADDITIONAL DEFINITIONS
When used in this Part II:
1. Insured person and insured persons mean:
. . . .
c. you or any relative when struck by
a motor vehicle or trailer while
not occupying a motor vehicle; and
In finding coverage for Joseph Skin, the court significantly
changed what had been pedestrian coverage under provision (c).
Based on the courts ruling, motor vehicle in all three places of
this provision should now be uniformly read as vehicle. Although
this means that the class of people not occupying a motor vehicle
has increased from only pedestrians to anyone not occupying a
vehicle, such as Joseph Skin, it also means that there has been
a decrease in the number of motor vehicles covered by the other
prong of provision (c): when struck by a motor vehicle is now
when struck by a vehicle. It is fortuitous for Joseph Skin that
while negligently operating the Nageaks ATV he struck a pickup
truck that qualifies as a vehicle, instead of another ATV or some
other motor vehicle outside the policy definition of vehicle.
But by interpreting Progressives policy language to find med-pay
coverage for Joseph Skin, the court significantly changes the
pedestrian coverage Progressive intended to provide.53
Because the court finds ambiguity where there is none
and unnecessarily changes coverage throughout the policy, I
dissent.
_______________________________
1 The policy contained $50,000/$100,000 limits for
liability coverage, $50,000/$100,000 limits for uninsured
motorist/underinsured motorist (UM/UIM) bodily injury coverage, a
limit of $25,000 for UM/UIM property damage coverage, and
comprehensive and collision coverage for the Chevrolet Prizm,
although Skin later decided not to purchase the Prizm.
2 In response to the question whether she had disclosed
all the residents of your household, Skin marked both the Yes and
No boxes. At some point later, an InsuranceMart agent made a
note on the page indicating that Skin, whose first language is
Inupiaq, had not understood the question.
3 Evas injuries include a permanently crippled, painful
and unsightly leg. Josephs injuries, although temporary, caused
him to incur over $17,000 in medical expenses.
4 As explained further below, Progressive assigns
distinct definitions to contractual terms in bold versus plain
typeface.
5 The General Definitions section of the policy explains:
Vehicle means a land motor vehicle:
a. of the private passenger, pickup body,
or sedan delivery type;
b. designed for operation principally upon
public roads;
c. with at least four (4) wheels; and
d. with a gross vehicle weight of 10,000
pounds or less;
which is not a rental vehicle.
6 The named driver exclusion in the Progressive policy
states:
If you have asked us to exclude any person
from coverage under this Policy, then we will
not provide coverage for any claim arising
from an accident or loss involving a vehicle
or rental vehicle being operated by the
excluded person. THIS INCLUDES DAMAGES MADE
AGAINST YOU, A RELATIVE, OR ANY OTHER PERSON
OR ORGANIZATION THAT IS VICARIOUSLY LIABLE
FOR AN ACCIDENT ARISING OUT OF THE OPERATION
OF A VEHICLE BY THE EXCLUDED DRIVER.
7 2 P.3d 1199 (Alaska 2000).
8 Newton v. Magill, 872 P.2d 1213, 1215 (Alaska 1994).
9 Id.
10 AS 28.22.101(c).
11 AS 28.22.101(a).
12 Nelson v. Progressive Cas. Ins. Co., 162 P.3d 1228,
1235-36 (Alaska 2007) (upholding the named driver exclusion term
within a similar Progressive insurance policy as a valid
exception to the requirements for an owners policy under
AS 28.22.101(a)).
13 See Purvis v. Progressive Cas. Ins. Co., 127 P.3d 116,
120 (Idaho 2005) (That the policy does not state whether it is an
operators policy or an owners policy, provides both owners and
operators coverage, and states it has some non-standard
restrictions simply does not show the policy is ambiguous.).
14 Allstate Ins. Co. v. Teel, 100 P.3d 2, 4 (Alaska 2004).
15 758 P.2d 1248, 1250 (Alaska 1988).
16 The Division of Insurance appears to have endorsed this
theory as well. In a 1999 letter to Progressive, the Division
cited Hillman for the proposition that the definitional section
cannot add substantive coverage and explained that [l]ikewise,
substantive exclusions should be found in the exclusions section,
not in definitional provisions. The letter strongly recommended
that all exceptions to the definition of Uninsured/Underinsured
Motor Vehicle must be modified or deleted.
17 758 P.2d at 1250.
18 The Certificate of Origin for the Nageaks ATV warns
that the vehicle was not manufactured for use on public streets,
roads or highways.
19 As the Nageaks point out, operating a golf cart on
public streets without a license is also legal in Barrow.
20 AS 28.90.990(16).
21 In addition to the unambiguous terms of the Progressive
policy, we are further persuaded by the Department of Motor
Vehicles exclusion of ATVs and other recreational vehicles from
Alaskas mandatory automobile insurance laws.
22 Had we determined that the ATV qualified as a vehicle
under the policy, the named driver exclusion in the Progressive
policy might have barred Josephs ability to recover medical pay
benefits under this theory of coverage. But the exclusion only
applies to accident or loss involving a vehicle or rental vehicle
being operated by the excluded person. Because the ATV was
neither a vehicle nor a rental vehicle for the purposes of the
policy, Joseph does not qualify as a driver for the purposes of
the exclusion. The policy thus affords him the same coverage for
medical payments arising out of this accident as it would if he
had been struck while walking across the street.
23 Getz v. Progressive Specialty Ins. Co., 22 P.3d 835,
837-39 (Wash. App. 2001).
24 Id. at 836.
25 Id. at 837.
26 Id. at 837-38.
27 Id. at 839. In support of its holding, the Getz court
noted that nothing in the policy signals that the presence or
absence of capital letters has any significance at all. Id. at
838.
28 In re Progressive Ins. Cos. (Nemitz), 834 N.Y.S.2d 394,
396 (N.Y. App. Div. 2007).
29 Id. at 395.
30 Compare id. at 396, with supra note 5.
31 Id. at 396.
32 Id.
33 See id.
34 Progressive has convinced at least one court of this
argument. See Progressive Express Ins. Co. v. Boyce, 821 So. 2d
445, 446 (Fla. Dist. App. 2002) (holding that insureds motorcycle
qualified as a motor vehicle because [t]he word vehicle in the
owned but uninsured exclusion is not boldfaced, and thus, [the
earlier policy] definition would not apply).
35 The dissent suggests that this courts holding could
operate to shrink the scope of coverage in some situations.
Dissent at 37-39. But our holding is based on the ambiguity of
the policys language, and such ambiguities must always be
construed in favor of the insured, not the insurer. West v.
Umialik Ins. Co., 8 P.3d 1135, 1138 (Alaska 2000) (It is a
settled principle that ambiguities in an insurance policy are
construed in favor of the insured.).
36 2 P.3d 1199 (Alaska 2000).
37 Id. at 1208.
38 As we observed in our discussion of medical payments
coverage, the named driver exclusion only applies to accident or
loss involving a vehicle or rental vehicle being operated by the
excluded person.
1 Progressive assigns distinct definitions to contractual
terms in bold versus plain typeface. In the General Definitions
section, where the definition of vehicle is located, the policy
states: Except as otherwise defined in this policy, terms
appearing in boldface will have the following meaning: . . . .
2 Allstate Ins. Co. v. Falgoust, 160 P.3d 134, 139
(Alaska 2007).
3 Websters Third New International Dictionary 1476
(2002).
4 The Nageaks and Skins clearly understand the
distinction between a vehicle and a motor vehicle. Their
argument for liability coverage for Joseph Skin was that the
common meaning and usage of motor vehicle should replace the term
vehicle in the policy definition of non-owned vehicle so that the
Nageaks ATV would be included in liability coverage as a non-
owned vehicle. We rejected that argument.
5 The superior court found med-pay coverage for Joseph
under provision (b), but the court correctly concludes that
Joseph could not be an insured for coverage under (b) because the
ATV is not a vehicle as defined by the policy. The court could
not reach this conclusion without expressly acknowledging that
the ATV is a motor vehicle but not a vehicle.
6 Med-pay coverage is not required by Alaskas mandatory
insurance laws. See AS 28.22.101. Progressive is entitled to
provide, and to limit, med-pay coverage as it chooses. See AS
28.22.121.
7 474 N.E.2d 1037 (Ind. App. 1985).
8 Id. at 1037-38.
9 Id. at 1038.
10 Id.
11 Id.
12 600 P.2d 751 (Ariz. App. 1979).
13 Id. at 751.
14 Id. at 752.
15 Id.
16 Id.
17 271 N.E.2d 866 (Ohio 1971).
18 Id. at 867.
19 Id.
20 Id. at 868.
21 Id. An Ohio appellate court later relied on Jirousek
to deny med-pay coverage for an injured motorcycle rider under an
automobile policy providing med-pay coverage for any family
member struck by a highway vehicle while not occupying a land
motor vehicle, because the motorcycle was a motor vehicle.
Katanik v. State Farm Mut. Auto. Ins. Co., 455 N.E.2d 1340, 1342-
43 (Ohio App. 1982) (emphasis in original).
22 This is inconsistent with the rule that ambiguity can
exist only when the policy, taken as a whole, is reasonably
subject to differing interpretations. Dugan v. Atlanta Cas.
Cos., 113 P.3d 652, 655 (Alaska 2005).
23 The court notes that the superior court found at least
fifty-six instances in the policy where the terms vehicle or
motor vehicle are not boldfaced and create confusion. We noted
no confusion or ambiguity in the non-boldface terms motor vehicle
and gross vehicle weight when examining the policy definition of
vehicle and concluding that an ATV is not a vehicle. The court
similarly noted no confusion or ambiguity in the non-boldface
term motor vehicle in the grant of med-pay coverage.
24 821 So. 2d 445 (Fla. App. 2002).
25 Id. at 445-46.
26 Id.
27 Id. at 445.
28 Id. at 446.
29 Id.
30 2005 WL 3588425, 2005-Ohio-7030 (Ohio App.). Under
Ohios rules, unpublished court of appeals opinions may be cited
as legal authority and weighted as deemed appropriate by courts.
Ohio R. Reporting Op. 4.
31 Towne, 2005 WL 3588425 at *1.
32 Id. at *2.
33 Id. at *2 n.2.
34 Id. at *2.
35 Id. at *1.
36 Id. at *3.
37 22 P.3d 835 (Wash. App. 2001).
38 Id. at 836.
39 Id. at 837.
40 Id. The definition is as follows:
MOTOR VEHICLE means a land motor vehicle or a
utility trailer but does not mean a vehicle:
a. or any equipment designed or modified
for USE primarily off public roads,
while not on public roads. . . .
41 Id.
42 Id. at 838.
43 Id.
44 834 N.Y.S.2d 394 (N.Y. App. Div. 2007).
45 Id. at 395.
46 Id. at 396 n.1.
47 Id. at 396.
48 Id.
49 Id.
50 Id.
51 Mrs. Skins uninsured motorist coverage also contains an
exclusion for accidents caused by any motorized vehicle designed
mainly for off-road use, along with a number of other exclusions:
EXCLUSIONS - READ THE FOLLOWING EXCLUSIONS
CAREFULLY. IF AN EXCLUSION APPLIES, COVERAGE
WILL NOT BE AFFORDED UNDER THIS PART III.
Coverage under this Part III is not provided
for bodily injury sustained by any person:
. . . .
9. In an accident caused by any motorized
vehicle or equipment designed mainly for
use off public roads, while not on
public roads.
52 The general definition of vehicle apparently is
modified by the courts holding to state that a vehicle is a
subset of the category land motor vehicle but is within the
subset only if it has a gross vehicle weight of 10,000 pounds or
less. What this now means is unclear.
53 The court suggests that the ambiguity it relies on
could not be applied to reduce coverage but only to expand it.
It is a dubious proposition that an insured could apply different
meanings to the term motor vehicle when it is used two times for
the same purpose in a single sentence as in provision (c) of the
med-pay coverage.
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