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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Umialik Insurance Company v. Safet Miftari, Umialik Insurance Company v. Safet Miftari (11/22/2024) sp-7731
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, email
corrections@akcourts.gov.
THE SUPREME COURT OF THE STATE OF ALASKA
UMIALIK INSURANCE CO., )
) Supreme Court Nos. S-18461/18701
Petitioner, ) (Consolidated)
)
v. ) Superior Court No. 4BE-21-00187 CI
)
SAFET MIFTARI, ) O P I N I O N
)
Respondent. ) No. 7731 - November 22, 2024
)
)
Petitions for Review from the Superior Court of the State of
Alaska, Fourth Judicial District, Bethel, Terrence P. Haas,
Judge.
Appearances: Rebecca J. Hozubin and Douglas H. Kossler,
Hozubin, Moberly & Associates, Anchorage, for Petitioner.
Jason Ringstad and Ken Ringstad, Ringstad Law Office,
Fairbanks, and Jim Valcarce, Valcarce Law Office, LLC,
Bethel, for Respondent.
Before: Maassen, Chief Justice, and Carney, Borghesan,
Henderson, and Pate, Justices.
CARNEY, Justice.
INTRODUCTION
After a driver was injured in an accident caused by an uninsured motorist,
he filed a claim for coverage under a policy that he had taken out for a different vehicle
than the one involved in the accident. The insurer denied the claim, asserting that the
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policy excluded uninsured and underinsured motorist (UIM) coverage for vehicles not
insured under the same policy.
The driver next sued the uninsured motorist, who defaulted. A jury
subsequently awarded the injured driver $1 million in noneconomic damages. The
driver then sued the insurer that had denied his claim, seeking to enforce the final
judgment from his suit against the uninsured motorist. Both sides filed motions for
partial summary judgment. The superior court granted the driver's first motion, holding
that the insurer was bound by the prior judgment by res judicata. In the same order, it
denied the insurer's motion seeking to prevent the driver from pursuing economic
damages. In a separate order, the superior court held that the insurance policy's
exclusion of UIM coverage for injuries sustained in any of policy holder's vehicles that
were insured under a separate policy was not authorized by Alaska law. The insurer
petitioned for review from both orders; we consolidated and granted both petitions.
We hold that Alaska law does not authorize excluding UIM coverage for
a vehicle not insured under the same insurance policy under which UIM coverage is
sought. We also conclude that res judicata prohibits the parties from relitigating non-
economic damages and litigating economic damages against the insurer.
FACTS AND PROCEEDINGS
A. Facts
Safet Miftari owned two vehicles: a personal car and one he operated as
a taxi. He insured the cars with two different insurers; Umialik provided the policy for
his personal car. Umialik's insurance policy provided for UIM coverage but excluded
such coverage for vehicles not insured under the same policy. It specifically provided:
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A. We do not provide Uninsured/Underinsured
Motorists Coverage for "property damage" or "bodily
1
injury" sustained by any "insured" :
1. While "occupying", or when struck by, any
motor vehicle owned by you or any "family member", which
is not insured for this coverage under the Policy.
In September 2019 Miftari was driving his taxi when he was struck by a
2
vehicle driven by Jerry David. David was uninsured.
In November Miftari filed a UIM claim with Umialik. After receiving the
police report, Umialik's adjuster notified Miftari that the report showed that he was
driving the taxi, not the personal car that Umialik insured under the policy it had issued
him. Miftari responded that the Umialik policy "should afford him . . . underinsured
motorist coverage and perhaps med pay."
In December Umialik sent Miftari a letter denying the claim on the
grounds that the vehicle he was driving was not the vehicle listed on Umialik's policy
and therefore not a "covered auto" under the policy.
In January 2020 Miftari advised Umialik that the insurer for his taxi had
tendered its UIM policy limits of $100,000 each to Miftari and his two passengers.
Miftari also informed Umialik of his intent to seek coverage under his policy with
Umialik. On the same day, Umialik's adjuster responded to Miftari that Umialik's
position "remain[ed] unchanged" and directed him to its December 2019 letter. Miftari
informed Umialik that he "respectfully disagree[d]" with its position and that he
intended to pursue a direct claim against David. Miftari also advised Umialik that he
would no longer "serve . . . or provide [Umialik] with any updates or further notice."
1 The policy defines "insured" to include the policyholder, family members,
and any other person occupying the "covered auto." A "covered auto" includes any
vehicle listed in the Declarations section of the policy.
2 Miftari had two passengers at the time of the accident. David later pled
guilty to DUI and third-degree assault in connection with the incident.
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Umialik's adjuster requested that Miftari provide it with a courtesy copy
of the complaint if he filed suit against Umialik. Miftari responded that he was "not . . .
suing Umialik at this juncture but the uninsured driver as a determination of damages."
B. Proceedings
Later in January 2020 Miftari sued David for damages relating to injuries
suffered in the accident as well as other economic and noneconomic damages. In March
he provided Umialik a copy of the complaint and wrote that he "wish[ed] that Umiliak
[sic] would reconsider." Umialik's adjuster responded on the same day that its position
"remain[ed] unchanged." The superior court entered a default against David later that
month.
The court held a one-day trial in January 2021 to determine compensatory
damages. The jury awarded Miftari and his passengers $1,000,000 each for past and
future noneconomic damages. The superior court entered an amended final judgment
a few days later in favor of Miftari and his passengers that included attorney's fees,
costs, and interest.
In June 2021 Miftari filed suit against Umialik, seeking the policy limit of
UIM coverage. Umialik answered and denied that the policy covered the accident
involving Miftari's taxi.
Miftari moved for partial summary judgment, arguing that Umialik was
bound by the jury's damages verdict returned against David. He argued that res judicata
and collateral estoppel prohibited Umialik from relitigating damages . Umialik
opposed, arguing that it had not participated in that case and was therefore not bound
by the jury's verdict.
Umialik moved for partial summary judgment, arguing that collateral
estoppel precluded Miftari from relitigating economic damages and required limiting
Miftari's damages to $400,000 under AS 09.17.010's noneconomic damages cap. On
the same day Miftari filed a second motion for partial summary judgment, arguing that
Umialik's position that his taxi was excluded from UIM coverage because it was
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insured under a different policy was contrary to Alaska law. Miftari and Umialik each
opposed the other's motions. Umialik also cross-moved for summary judgment that its
exclusion of Miftari's taxi was lawful.
The superior court granted Miftari's first motion for partial summary
judgment , concluding that Umialik was bound by res judicata. It also denied Umialik's
motion for partial summary judgment, holding that collateral estoppel did not bind
Miftari to the noneconomic damages cap in AS 09.17.010. But the superior court held
that res judicata bound both parties to the damages judgment from the trial against
David. It first clarified that although the default entered against David was an
"interlocutory order" and the entry of default did not preclude full litigation of the
underlying factual issues, a trial had in fact taken place to determine damages. The
court therefore held that the jury verdict was a final judgment on the merits.
The superior court also concluded that Umialik was in privity with David.
The superior court held that privity requires that a non-party had notice and an
opportunity to be heard. But the court noted that Alaska courts had yet to rule on what
constitutes sufficient notice in the UIM litigation context. It observed that other states
have held that "notifying the insurance company of the action against the motorist and
the possibility of a claim under the underinsured motorist coverage" constitutes
sufficient notice. The court also noted that a majority of these jurisdictions co ncluded
that an insurer could intervene in a plaintiff's claim against an uninsured tortfeasor. The
court concluded that under Alaska Civil Rule 24(b)'s permissive standard for
intervention, Umialik could have participated in the damages litigation.
The court also found that Umialik had notice of the action against David
and was therefore "on notice that an entry of default was a possibility, as it is in any
lawsuit." It found that Umialik had a reasonable opportunity to be heard, and observed
that if Umialik had intervened it would have had exclusive control over the litigation
because its interests were so closely aligned with David's and he had defaulted. Finally,
the court noted that by later filing its own motion for summary judgment regarding
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----------------------- Page 6-----------------------
collateral estoppel, Umialik had "ultimately concede[d] that preclusion applies" against
3
it. The court therefore concluded that Umialik was in privity with David.
The superior court held oral argument on the cross-motions for partial
summary judgment based on whether Umialik's denial of coverage for Miftari's taxi
was authorized under Alaska law. The court ruled on the motions on the record in
March 2023. It held that Alaska law did not authorize Umialik 's exclusion and resulting
denial of coverage, and granted summary judgment to Miftari, while denying Umialik's
cross-motion.
The superior court first discussed the applicability of Hillman v.
4
Nationwide Mutual Fire Insurance Co. There we held the UIM coverage on one
vehicle owned and insured by a policyholder extended to cover damages from an
accident involving another vehicle owned by the policy holder, but not insured under
5
the policy or any other policy. We held that UIM coverage is "portable": the statute
only requires that "the person injured be insured and that he or she be entitled to recover
damages from the operator of the uninsured motor vehicle arising out of the use of the
6
uninsured motor vehicle" for coverage. But the enactment of AS 28.20.445(d)(1) after
our decision in Hillman imposed a further requirement: that the injured not be
"occupying a motor vehicle owned by, but not insured by, the named insured [person]
or the insured's spouse or relative residing in the same household."
3 The superior court rejected Umialik's argument that collateral estoppel
bound Miftari to the noneconomic damages cap in AS 09.17.010, reasoning that the
cap's applicability was not "actually adjudicated" in the trial against David. See
AS 09.17.010(b)-(c) (limiting amount of noneconomic damages awarded by court or
jury to $400,000 without finding of severe permanent physical impairment or severe
disfigurement and limiting amount to $1,000,000 when such findings have been made).
4 758 P.2d 1248 (Alaska 1988).
5 Id. at 1252.
6 Id.
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The superior court concluded that the plain language of
AS 28.20.445(d)(1) meant that Umialik's exclusion here was not authorized under
Alaska law. It observed that it would be "hard to understand what the significance of
portability would be if it were the case that you had to insure both vehicles in order for
the uninsured/underinsured motorist policy to follow you." The court concluded that
"it seems to be the case, and nobody argues to the contrary, that portability is still a
thing." It also considered AS 28.20.445(c), which provides for "stacking" payments
where a person "is entitled to uninsured or underinsured motorists coverage under more
than one policy providing motor vehicle liability coverage ." The court determined that
both statutory sections supported its conclusion that UIM insurance "is clearly intended
to still follow you around as a pedestrian, as a bicyclist, as a passenger in a vehicle
insured by somebody else."
The court accepted Umialik 's argument that the legislature's subsequent
enactment of AS 28.20.445(d)(1) after Hillman changed the landscape of Alaska law,
"but not to the degree that [Umialik] would say ." Instead, the court held that
AS 28.20.445(d)(1) "created . . . a policy against a free ride . . . in those instances where
somebody chooses not to insure their other vehicle at all." But as in Miftari's situation,
it was "not the case that you're getting a free ride if you choose to insure [a second
owned] vehicle but with a different insurer."
The court noted that the legislature might have had policy reasons to allow
UIM claims under more than one policy, such as to "allow or even encourage people to
. . . spread[] out the risk" or "to ensure that people didn't buy one insurance policy and
expect it to cover all of their vehicles which they chose not to insure." It also observed
that there was no evidence in the statute or legislative history of an intent "to bar people
from using separate insurance on any one of their vehicles and still benefit from the
portability of their uninsured/underinsured motorist coverage." As a result, the court
concluded that AS 28.20.445(d)(1) had not superseded Hillman.
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The court specifically found that Miftari's situation was "not the
circumstance addressed by the statute," and if the legislature had intended to "supersede
portability so far as to completely supersede Hillman . . . , then they would have put
language like that in the statute." The court instead concluded that the legislature was
"trying to . . . ensure that people not fail to insure some of their vehicles while benefiting
from the insurance on others."
The superior court held that AS 28.20.445(d)(1) did not apply because the
plain language of the statute made clear it applied to vehicles "not insured by the named
insured," and that Miftari's taxi was insured by him, just "not covered by the same
insurance company." It then held that Umialik's denial of coverage unlawfully
restricted coverage below what Alaska law required. The court therefore held that the
Umialik insurance policy should be reformed to provide the minimum coverage Alaska
law required.
Umialik filed a petition for review of the superior court's order granting
partial summary judgment to Miftari and finding that Umialik was bound by the jury's
damages verdict. Following the court's order that its exclusion of coverage violated
Alaska law, Umialik filed a second petition. We consolidated and granted the petitions.
STANDARD OF REVIEW
"We apply our independent judgment to questions of statutory
interpretation, adopting the rule of law that is 'most persuasive in light of precedent,
7
reason, and policy.' " "Whether res judicata applies is a question of law that we review
8
de novo."
7 McDonnell v. State Farm Mut. Auto. Ins. Co. , 299 P.3d 715, 719 (Alaska
2013) (quoting In re Life Ins. Co. of Alaska , 76 P.3d 366, 368 (Alaska 2003)).
8 Patterson v. Infinity Ins. Co. , 303 P.3d 493, 497 (Alaska 2013).
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DISCUSSION
A. Umialik's Exclusion Is Not Authorized By Statute.
Umialik first argues the superior court's order interpreted
AS 28.20.445(d)(1)'s and AS 28.22.231(1)'s language "in isolation from the statutory
9
scheme in which it appears." It argues that UIM coverages are "vehicle- and policy-
specific" and that if it must cover vehicles not listed on the policy, "the consumer is
receiving coverage for those additional vehicles without having paid for it - i.e., a free
ride." Citing two decisions from other courts, Umialik asserts that the superior court
erred and reached "an absurd outcome," rendering the exclusion of other owned
vehicles "completely and utterly illusory" when a consumer purchases insurance from
another company.10
And it argues that the superior court erred by focusing on portability.
Because the legislature enacted AS 28.20.445(d)(1) and AS 28.22.231(1) after Hillman ,
Umialik argues that Hillman was no longer applicable to a "statutorily authorized other-
owned-vehicle exclusion."
1. The statutes' plain language does not authorize Umialik's
exclusion.
"When determining a statute's meaning, we consider three factors: the
language of the statute, the legislative history, and the legislative purpose behind the
9 Both statutes exclude coverage for injury, death, or damage to or
destruction of property "while occupying a motor vehicle owned by, but not insured by,
the named insured." See AS 28.20.445(d)(1); AS 28.22.231(1).
10 Umialik cites decisions from the Maryland Court of Special Appeals and
Supreme Court of Arkansas in support of its argument. See Powell v. State Farm Mut.
Auto. Ins. Co. , 585 A.2d 286, 291 (Md. Spec. App. 1991); Clampit v. State Farm Mut.
Ins. Co. , 828 S.W.2d 593, 596 (Ark. 1992).
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statute."11 "The objective of statutory construction is to give effect to the intent of the
legislature, with due regard for the meaning that the statutory language conveys to
others."12 "We give unambiguous statutory language its ordinary and common
meaning, but the 'plain meaning ' rule is not an exclusionary rule; we will look to
legislative history as a guide to construing a statute's words."13
We have also "declined to mechanically apply the plain meaning rule
when interpreting statutes, adopting instead a sliding scale approach: 'The plainer the
statutory language is, the more convincing the evidence of contrary legislative purpose
or intent must be.' We apply this sliding scale approach even if a statute is facially
unambiguous."14
Miftari and Umialik disagree over the meaning of two statutes. Alaska
Statute 28.20.445(d)(1) states that "[u]ninsured and underinsured motorists coverage
does not apply to bodily injury or death or damage to or destruction of property of an
insured . . . while occupying a motor vehicle owned by, but not insured by, the named
insured or the insured's spouse or relative residing in the same household." The second
statute, AS 28.22.231(1), uses virtually identical language : "The uninsured and
underinsured motorists coverage required . . . does not apply to bodily injury or death
or damage to or destruction of property of an insured . . . while occupying a motor
vehicle owned by, but not insured by, the named insured or the insured 's spouse or
relative residing in the same household." Both statutes explicitly allow the exclusion
11 Alaska Ass'n of Naturopathic Physicians v. State, Dep't of Com., Cmty. &
Econ. Dev., Div. Corps., Bus. & Pro. Licensing , 414 P.3d 630, 634 (Alaska 2018)
(internal quotation marks omitted).
12 Heller v. State, Dep't of Revenue, 314 P.3d 69, 74 (Alaska 2013).
13 Id.
14 State, Dep 't of Com., Cmty. & Econ. Dev., Div. of Ins. v. Alyeska Pipeline
Serv. Co., 262 P.3d 593, 597 (Alaska 2011) (quoting Gov't Emps. Ins. Co. v. Graham-
Gonzalez, 107 P.3d 279, 284 (Alaska 2005)).
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of UIM coverage if: (1) bodily damage, destruction of property, or death of an insured
occurs; (2) that result occurs while the insured is occupying a motor vehicle; (3) that
motor vehicle is owned by the insured or the insured's spouse or a relative residing in
the same household; and (4) the vehicle is not insured by the named insured, spouse, or
said relative.
In Burton v. State Farm Fire and Casualty Co. we observed that the
language of the predecessor statute to AS 28.22.231(1) clearly implied "that if an
insured is occupying an insured vehicle owned by him, he is protected by his
underinsured motor vehicle coverage."15 Neither AS 28.20.445(d)(1) nor
AS 28.22.231(1) contains language relating to a vehicle insured under a different
insurance policy than the one under which UIM coverage is sought. The language of
each statute excludes "a vehicle owned by, but not insured by" the named insured.
Nothing in either statute requires that a motor vehicle be insured under the same policy
under which UIM coverage is sought for coverage to be available. And given our
conclusion in Hillman that UIM coverage is portable, such an exclusion is not permitted
by the plain language of either statute. Umialik therefore faces a heavy burden to prove
that legislative history requires a different result.16
2. Other provisions of the statutes do not support excluding
vehicles insured under a different policy.
A brief outline of the history of UIM coverage in Alaska is necessary.
Alaska law originally "fixed the maximum amount of an insurer's liability on any given
UIM policy by subtracting from the UIM policy limits any amount paid or payable to
15 796 P.2d 1361, 1363 (Alaska 1990). The facts in Burton differed from
Miftari's. Burton was seriously injured while riding as a passenger in his own vehicle
and sought UIM coverage under the same policy that the vehicle was insured under. Id.
at 1362.
16 See Alyeska Pipeline Serv. Co. , 262 P.3d at 597 (quoting Graham-
Gonzalez, 107 P.3d at 284).
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the insured from other sources, including liability coverage."17 Hence "[b]y subtracting
from UIM policy limits all other payments, these provisions rendered UIM coverage
superfluous to the extent of coverage under any liability policy."18 The result was that
an injured person could not combine, or "stack," liability and UIM coverages, even
when neither coverage alone would fully pay the person 's damages.19
The 1990 amendments to AS 28.20.445, however, sought to "broaden
UIM coverage by substituting an 'excess' approach for the original reduction approach"
to "compensate the injured person for actual damages sustained in an accident."20 In
Progressive Insurance Co. v. Simmons we recognized the "philosophical shift" in
approaches to compensating those injured by underinsured motorists from a "reduction"
scheme of UIM coverage to an "excess" or "stacking" approach.21 And we have since
recognized that "[t]he basic public policy behind mandatory uninsured or underinsured
motorist schemes . . . is generally to ensure that the insured recovers the damages he or
she would have been able to recover if the [un]insured motorist had maintained a
(sufficient) policy of liability insurance."22
17 Progressive Ins. Co. v. Simmons , 953 P.2d 510, 514 (Alaska 1998)
(describing effect that former AS 28.20.445(a)-(b) (1984) had on UIM coverage).
18 Id.
19 Id.
20 Id.
21 953 P.2d at 518; see also id. at 514-15, 517-19 (describing 1990
amendments to AS 28.20.445(a)-(b) which "marked a basic change" to "excess
coverage" which "maximize[s] the potential for full compensation by allowing the
purchaser of UIM insurance to supplement available liability payments with UIM
payments to the extent necessary to cover all actual damages").
22 State Farm Mut. Auto. Ins. Co. v. Wilson, 199 P.3d 581, 584 (Alaska 2008)
(typographical error corrected) (citing 12 COUCH ON INSURANCE § 171:2, at 171-07 (3d
ed. 2006)).
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Alaska Statute 28.20.445(c) specifically contemplates the stacking of
UIM coverage under multiple policies . It lists priorities to determine which motor
vehicle policy will pay first to a person "entitled to uninsured or underinsured motorists
coverage under more than one policy providing motor vehicle liability coverage."23
Umialik argues that this sets up a priority system only if there is UIM
coverage, but that the question of whether UIM coverage exists must be answered
independently. Alaska Statute 28.20.445(c) subsections (3), (4), (7) and (8) specifically
apply to "a policy . . . not covering a motor vehicle occupied by the injured person but
covering the injured person," either as a "named insured," as "an insured other than as
a named insured." Subsections (7) and (8) specifically apply to a policy that covers the
injured person "as excess, umbrella, or similar insurance."24 If UIM coverage depended
on the occupancy of the very motor vehicle insured under the policy under which UIM
coverage is sought, there would be few if any situations where subsections (c)(3), (4),
(7), and (8) could take effect.25 For AS 28.20.445(c)'s list of priorities to have any
meaningful application, the statutory scheme cannot authorize the exclusion for which
Umialik advocates.
23 AS 28.20.445(c). But see Hillman v. Nationwide Mut. Fire Ins. Co. , 758
P.2d 1248, 1254-55 (Alaska 1988) (holding policy's exclusion of stacking coverages
for multiple vehicles under same policy was valid because policy was "clear in limiting
coverage to the highest limit applicable to any of the insured vehicles" and "no
windfall" exists for insurer since separate premiums bought protection for non-
relatives); Lindfors v. State Farm Mut. Auto. Ins. Co. , 562 F. Supp. 3d 5, 9 (D. Alaska
2021) (concluding AS 28.20.445(c) and AS 28.22.221 "permit . . . anti-stacking
provisions . . . if there is 'no circularity in language' and [policies] are 'clear in limiting
coverage to the highest limit applicable to any of the insured vehicles' ").
24 AS 28.20.445(c)(7), (8).
25 Under Umialik's interpretation of AS 28.20.445(d)(1) and 28.22.231(1),
AS 28.20.445(c) subsections (3), (4), (7), and (8) could only take effect where insurance
policies themselves lacked an other-owned-vehicle exclusion.
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Alaska Statutes 21.96.020, 28.22.101, and 28.20.440 also suggest the
legislature intended to require UIM coverage where a vehicle is insured under an
insurance policy other than the policy under which UIM coverage is sought.
Alaska Statute 21.96.020(c) requires an insurance company offering
automobile liability insurance to "offer coverage prescribed in AS 28.20.440 and
28.20.445 or AS 28.22 for the protection of the persons insured under the policy who
are legally entitled to recover damages for bodily injury or death from owners or
operators of uninsured or underinsured motor vehicles." Similarly, AS 28.22.101(e)
requires that a motor vehicle liability policy "must provide coverage under
AS 28.22.201-28.22.231 . . . for the protection of the persons insured under the policy
who are legally entitled to recover damages from the owner or operator of an uninsured
or underinsured motor vehicle because of bodily injury or death, or damage to or
destruction of property arising out of the ownership, maintenance, or use of the
uninsured or underinsured motor vehicle." And AS 28.20.440(b) requires that an
automobile insurance policy "contain coverage . . . for the protection of the persons
insured under the policy who are legally entitled to recover damages from owners or
operators of uninsured or underinsured motor vehicles because of bodily injury or death,
or damage to or destruction of property arising out of the ownership, maintenance or
use of the uninsured or underinsured motor vehicle ."26
We have recognized that dictionaries "provide a useful starting point" for
determining common meanings.27 Merriam-Webster defines "protect" as "to cover or
26 AS 28.20.440(b)(3). The statute also requires that UIM coverage "comply
with the provisions of AS 28.20.445." Id.
27 See Alaska Ass'n of Naturopathic Physicians v. State, Dep't of Com.,
Cmty. & Econ. Dev., Div. Corps., Bus. & Pro. Licensing, 414 P.3d 630, 635 (Alaska
2018).
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shield from exposure, injury, damage, or destruction."28 Alaska Statutes 21.96.020,
28.22.101(e), and 28.20.440 therefore aim to broadly shield from injury insureds who
legally ought to recover damages from operators of uninsured or underinsured motor
vehicles.
In Hillman , we interpreted AS 28.20.440 as it was written in 1983.29 At
the time, AS 28.20.440(b) required that "[t]he owner's policy of liability insurance shall
. . . contain coverage . . . for the protection of the persons insured under the policy who
are legally entitled to recover damages from owners or operators of uninsured motor
vehicles because of bodily injury or death arising out of the ownership, maintenance or
use of the uninsured motor vehicle."30
While AS 28.20.440(b)(3) was amended in 1985, it remains largely
identical to the former AS 28.20.440(b)(3) we interpreted in Hillman , and the former
AS 28.20.440(b) largely resembles AS 21.96.020(c) and AS 28.22.101(e).31 The
amendment provides no reason to depart from our interpretation of AS 28.20.440(b) in
Hillman that "all that [AS 28.20.440(b)] requires is that the person injured be insured
and that he or she be entitled to recover damages from the operator of the uninsured [or
28 Protect, MERRIAM-WEBSTER DICTIONARY, https://www.merriam-
webster.com/dictionary/protect (last visited Sept. 10, 2024).
29 758 P.2d 1248, 1251 (Alaska 1988).
30 Former AS 28.20.440(b) (1983); see also Hillman , 758 P.2d at 1251-52.
31 The former AS 28.20.440(b)(3) is almost identical to the current version
of AS 28.20.440(b)(3) and notably differs only in the following ways : the former
version provides only for protection of insureds entitled to recover damages from
owners and operators of uninsured motor vehicles while the current version protects
recovery from both uninsured and underinsured motor vehicle owners and operators;
the former version only protected insureds who suffered bodily injury or death while
the current version protects insured who suffered both bodily injury or death and
damage to or destruction of property. See AS 28.20.440(b); Ch. 70, § 11, SLA 1984
(amending AS 28.20.440(b)); Hillman , 758 P.2d at 1251 (providing former version of
AS 28.20.440(b)).
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----------------------- Page 16-----------------------
underinsured] motor vehicle arising out of the use of the uninsured [or underinsured]
motor vehicle."32 This interpretation accords with the use of the word "protects," which
implies that AS 28.20.440(b), AS 21.96.020(c), and AS 28.22.101(e) shield from injury
insureds who are legally entitled to recover damages from operators of uninsured or
underinsured motor vehicles.
Alaska Statute 28.20.440(b)(3) also requires that UIM coverage "comply
with the provisions of AS 28.20.445." Similarly, AS 28.22.101(e) specifies that
policies "must provide coverage under AS 28.22.201-28.22.231." And
AS 28.20.445(d) and 28.22.231 create specific carveouts from the broad statutory
command to "protect" or shield from injury insureds who are legally entitled to recover
damages from an owner or operator of an uninsured or underinsured motor vehicle .
Those exceptions are that the insured cannot be occupying a vehicle owned by but not
insured by the named insured or the insured's spouse or relative residing in the same
household, and that the insured cannot have been struck by a vehicle owned by the
named insured or the insured's spouse or relative residing in the same household.
Taken together, AS 28.20.440(b), AS 21.96.020(c), and AS 28.22.101(e)
suggest that the legislature aimed to broadly protect insureds who are legally entitled to
recover from uninsured or underinsured motor vehicle operators except under the two
circumstances specified above. They do not suggest the legislature intended to
authorize exclusions from UIM coverage where an insured vehicle was not insured
under the same policy under which UIM coverage is sought.
3. The statutes do not clearly support Umialik's proposed
legislative policies.
Umialik argues that other-owned-vehicle exclusions remove the incentive
"to insure only one vehicle and thereby obtain uninsured or underinsured motorist
32 Hillman, 758 P.2d at 1251.
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coverage on multiple household vehicles." In support it relies on a section analysis
prepared for an earlier version of the bill that eventually became AS 28.20.445(d)(1).33
The section analysis for what became AS 28.20.445(d)(1) states that the
section "[c]larifies that UM/UIM coverage does not apply in situations where the
alleged un/underinsured vehicle is owned by a name [sic] insured or resident relative
but not insured" and "is designed to prevent a person from owning several vehicles but
only insuring one."34 This is consistent with AS 28.20.445(d)(1)'s plain language,
which states that UIM coverage does not apply to injury of an insured "while occupying
a motor vehicle owned by, but not insured by, the named insured or the insured's spouse
or relative residing in the same household." The plain language of AS 28.20.445(d)(1)
does not require that a vehicle be insured under the same policy under which UIM
coverage is sought. The legislative history Umialik cites does not support its argument
that the legislature intended to exclude UIM coverage where a vehicle is not insured
under the same policy.
4. No legislative policy is clear from the statutes.
Umialik argues that legislative policy decisions support its interpretation
of AS 28.20.445(d)(1) and AS 28.22.231(1). It argues that exclusions like the one in
Miftari's policy advance three purposes: (1) allowing the insurer to accurately calculate
premium rates; (2) addressing the "free ride" issue, i.e., the ability of an insured to
collect UIM benefits from the use of vehicle that is not insured under the policy; and
(3) removing an incentive to insure only one vehicle but obtain UIM coverage on
multiple household vehicles.
33 A section analysis is a summary of a proposed bill describing what each
section of the bill is intended to achieve.
34 Conference Committee, Section Analysis Compromise for HB 7, 13th
Leg., 2d Sess. at 2 (Apr. 30, 1984).
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Miftari argues that the superior court's interpretation of
AS 28.20.445(d)(1) and AS 28.22.231( 1) promotes the policy of protecting individuals
entitled to recover damages from operators and owners of uninsured and underinsured
motor vehicles. And he asserts that there are good policy reasons the legislature may
have wanted individuals to recover from multiple insurers: to spread the risk among
multiple insurers and to promote competition and enable consumers to find the best
deals.
It is unclear to us which policies the legislature sought to promote. If
anything, the plain language of AS 28.20.440(b)(3) and AS 28.22.101(e), which uses
the phrase "for the protection of the persons insured under the policy," supports
Miftari's argument of protecting insured individuals to the maximum level possible .
And while it is possible that the legislature was concerned with premium rates, no
legislative history supports Umialik's argument that it was.35 Nor is it clear that the
legislature sought to protect insurance companies from a "free ride."
We recognized in Hillman that "[t]he purpose of [what was formerly
AS 28.20.440(b)(3)] is to protect [individuals] completely . . . , from all harm, whatever
their status - passenger, driver, pedestrian - at the time of injury, produced by
uninsured [and underinsured] motorists," as long as the individual is insured and legally
entitled to recover.36 We described UIM coverage as "personal and portable" in
35 On the other hand, when the legislature passed the Tort Reform Act in
1986, it specifically acted on its "primar[y] concern[] with avoiding increases in
malpractice insurance rates" in interpreting statutes authorizing medical malpractice
actions. Doan v. Banner Health Inc. , 535 P.3d 537, 547-49 (Alaska 2023); see also
Ch. 139, §§ 1-11, SLA 1986 (Tort Reform Act); Smith v. Ingersoll-Rand Co., 14 P.3d
990, 994 (Alaska 2000) ("[T]he Tort Reform Act was intended . . . to create a more
equitable distribution of the cost and risk of injury and increase the availability and
affordability of insurance." (internal quotation marks omitted)).
36 Hillman , 758 P.2d at 1252 (quoting Elledge v. Warren , 263 So. 2d 912,
918-19 (La. App. 1972)).
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Hillman.37 And as we observed above, the current version of AS 28.20.440(b)(3) is
virtually identical to the version it superseded. The statute's language suggests the
legislature intended to promote the portability of insurance. Although this is
inconclusive, it does favor Miftari's argument that the statute does not authorize
excluding UIM coverage for a vehicle that is insured under an insurance policy other
than the policy under which UIM coverage is sought.
The plain language of AS 28.20.445(d)(1) and AS 28.22.231(1), other
related statutory provisions, and the legislative history of AS 28.20.445(d)(1) suggest
that the legislature did not authorize excluding UIM coverage where a vehicle is not
insured under the very insurance policy under which UIM coverage is sought. Taken
together, we conclude that AS 28.20.445(d)(1) and AS 28.22.231(1) do not authorize
an other-owned-insured vehicle exclusion. The superior court did not err in concluding
that Umialik's exclusion of coverage for Miftari was not authorized.
B. Res Judicata Precludes Umialik From Relitigating Miftari's
Noneconomic Damages.
The superior court correctly determined that res judicata precludes
Umialik from relitigating the issue of Miftari's noneconomic damages.
A judgment is given res judicata effect when it is: "(1) a final judgment
on the merits; (2) from a court of competent jurisdiction; (3) in a dispute between the
same parties (or their privies) about the same cause of action."38 "[W]hether the cause
of action is the same does not rest on the legal theory asserted but rather on whether the
claims arise out of the same transaction - the same set of underlying facts."39
37 Id. (quoting Bradley v. Mid-Century Ins. Co., 294 N.W.2d 141, 152 (Mich.
1980)).
38 Angleton v. Cox , 238 P.3d 610, 614 (Alaska 2010) (citing Smith v. CSK
Auto, Inc. , 132 P.3d 818, 820 (Alaska 2006)).
39 Id. (citing Alderman v. Iditarod Props., Inc., 104 P.3d 136, 141 (Alaska
2004)).
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Umialik does not dispute that the judgment against David is from a court
of competent jurisdiction. But Umialik argues that it is not bound by the judgment
against David because Miftari failed to provide it fair notice. It argues that because
Miftari did not send Umialik a copy of his motion for entry of default against David
when he sent it a copy of his complaint, Miftari did not give it fair notice so that it could
intervene. Umialik also argues that the jury verdict and amended final judgment
pursuant to it do not constitute a judgment on the merits. And it asserts that "public
policy mandates that the incorrect verdict cannot stand," because the $1,000,000 verdict
exceeds the statutory cap for noneconomic damages without a specific finding of severe
permanent physical impairment or severe disfigurement that the statute requires for a
verdict in excess of the cap.40 It also argues in its reply brief that it had no interests in
the proceedings and was neither a party nor in privity with David because it did not
have "an opportunity to participate in the case with 'significant and unhampered
control.' "
But Umialik was in privity with David because it had adequate notice and
an opportunity to be heard. Privity exists where "the non-party (1) substantially
participated in the control of a party 's presentation in the adjudication or had an
opportunity to do so; (2) agreed to be bound by the adjudication between the parties; or
(3) was represented by a party in a capacity such as trustee, agent, or executor."41 It is
"a shorthand way of expressing assurance that the non-party has had adequate notice
and opportunity to be heard, and that its rights and interests have been protected."42
40 See AS 09.17.010(b)-(c).
41 Stewart v. Elliott, 239 P.3d 1236, 1241 (Alaska 2010) (quoting Powers v.
United Servs. Auto. Ass'n, 6 P.3d 294, 298 (Alaska 2000)).
42 Id. (quoting Alaska Foods, Inc. v. Nichio Gyogyo Kaisha, Ltd., 768 P.2d
117, 121 (Alaska 1989)).
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Privity "assures that it is fair to legally bind the non-party to the actions of the party in
the earlier action."43
Umialik relies on Powers v. United Services Automobile Ass'n to argue
that it was not in privity with David.44 In Powers an injured plaintiff successfully
arbitrated an uninsured motorist claim against a primary carrier and sought to preclude
a secondary carrier from further arbitration.45 Powers was injured in a car accident
involving an uninsured driver.46 Powers was a passenger in a car insured by a State
Farm policy that included UIM coverage.47 Powers had separate UIM coverage with
United Services Automobile Association (USAA), which was obligated to pay damages
exceeding those covered by State Farm.48 An arbitration clause in each policy allowed
either party to the insurance contract to demand arbitration.49 Powers demanded
arbitration with State Farm but not with USAA.50 Powers sent USAA's local
representative a letter informing it of his demand for arbitration with State Farm.51
After an arbitration award granted damages and costs to Powers, he demanded that
USAA pay the excess up to the coverage limit .52 USAA responded that it was not
bound by the State Farm arbitration and it requested Powers's medical records for an
43 Id. (citing Donnelly v. Eklutna, Inc. , 973 P.2d 87, 92 (Alaska 1999)).
44 6 P.3d 294 (Alaska 2000).
45 Id. at 295.
46 Id.
47 Id.
48 Id. at 295-96.
49 Id. at 296.
50 Id.
51 Id.
52 Id.
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independent evaluation.53 USAA eventually disputed the amount of damages claimed
and sought a separate arbitration.54
We held that USAA was not bound by the first arbitration because it was
not in privity with State Farm.55 We concluded that USAA did not participate in or
control State Farm's presentation in the arbitration, lacked a relationship with State
Farm, and that State Farm and USAA's interests were not identical even if they were
similar.56 We focused on the fact that USAA had no liability until State Farm's policy
limit was exceeded, and therefore had no interest in defending an amount under
$100,000, while State Farm had no interest in defending against any amount over
$100,000.57 Because the two insurers had different interests, we concluded USAA was
not in privity with State Farm and could not be bound by the prior judgment.58
But we have not addressed whether an insurer is in privity with an
underinsured or uninsured motorist and is therefore bound by an earlier judgment
against that uninsured or underinsured motorist. Courts across the country, however,
have concluded that an insurer is in privity with an uninsured or underinsured motorist
for purposes of preclusion so long as the insurer has notice and an opportunity to
intervene in litigation against the uninsured or underinsured motorist.59
53 Id.
54 Id. at 296-97.
55 Id. at 297.
56 Id. at 298.
57 Id.
58 Id.
59 See, e.g., Sutch v. State Farm Mut. Auto. Ins. Co., 672 A.2d 17, 21 (Del.
1995) (holding insurer is bound if it had notice of tort suit against underinsured or
uninsured motorist and opportunity to intervene); Nationwide Mut. Ins. Co. v. Webb ,
436 A.2d 465, 472 (Md. App. 1981) ("[I]f the insurer had notice of the tort suit and an
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In Lenzi v. Redland Insurance Co. the Supreme Court of Washington
noted the multiple policy issues at play in a UIM case.60 From the insurer's perspective,
"there is concern about collusion between its insured and the tortfeasor, who may be
judgment proof and have no real interest in the outcome of an arbitration or trial, leading
to an artificially high award for the insured the carrier must pay."61 From the insured's
perspective, "the insured should not have to relitigate a case depending on" whether the
outcome of litigation is "a small award" - in which case the insurer "may decide
simply to pay its insured" - or a high award - in which case the insurer "may decide
to force its insured to relitigate in the hope of obtaining a more favorable result."62 The
court held that the rule of requiring "timely notice of litigation between the insured and
the tortfeasor" "straightforwardly resolves all of these concerns."63
opportunity to intervene but failed to seek intervention, then the insurer will be bound
by the determination in the tort suit regarding the insured's entitlement to damages from
the uninsured motorist and the amount of those damages."); State ex rel. Shelton v.
Mummert, 879 S.W.2d 525, 528 (Mo. 1994) ("If notice is given and [the insurer]
chooses not to intervene, it will be bound by the resulting judgment as to liability and
damages."); Lenzi v. Redland Ins. Co., 996 P.2d 603, 606 (Wash. 2000) ("Our UIM
jurisprudence has clearly indicated an insurer having notice of a lawsuit brought by its
insured against the uninsured tortfeasor may be bound by the judgment obtained by the
insured."); Bailey v. Progressive Specialty Ins. Co. , 72 So. 3d 587, 593 (Ala. 2011)
(same); Clemer v. Hartford Ins. Co., 587 P.2d 1098, 1108 (Cal. 1978) (same); Briggs
v. Am. Fam. Mut. Ins. Co., 833 P.2d 859, 864 (Colo. App. 1992) (same); Jones v. Fla.
Ins. Guar. Ass'n , 908 So. 2d 435, 450 (Fla. 2005) (same); Gerdesmeier v. Sutherland,
690 N.W.2d 126, 129-30 (Minn. 2004) (same); Dominici v. State Farm Mut. Auto. Ins.
Co., 390 P.2d 806, 810 (Mont. 1964) (same); Heisner v. Jones , 169 N.W.2d 606, 612
(Neb. 1969) (same); Allstate Ins. Co. v. Pietrosh , 454 P.2d 106, 111 (Nev. 1969) (same);
Zirger v. Gen. Accident Ins. Co., 676 A.2d 1065, 1073 (N.J. 1996) (same).
60 Lenzi, 996 P.2d at 606.
61 Id.
62 Id.
63 Id. at 607.
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We are persuaded by the reasoning in Lenzi . We agree with the courts
across the country that have concluded that when an insurer has adequate notice and an
opportunity to intervene in underlying litigation between an insured and an
underinsured or uninsured motorist, the insurer is in privity with the underinsured or
uninsured motorist. By having notice of and the opportunity to participate in the
underlying litigation, an insurer can prevent collusion between the insured and the
underinsured or uninsured motorist by defending against an insured's claims . And an
insured no longer has to worry about the insurer having two bites at the apple by waiting
to see if the underlying litigation against the underinsured or uninsured motorist
succeeds or fails. Requiring that an insurer has notice and an opportunity to intervene
"assures that it is fair to legally bind the [insurer] to the actions of the [underinsured or
uninsured motorist] in the earlier action."64
1. Umialik had adequate notice.
Adequate notice requires nothing more than "timely notifying [the
insurer] of the filing of the summons and complaint."65 In January 2020 Miftari
provided timely notice to Umialik that he intended to pursue a direct claim against the
uninsured motorist "as a determination of damages." And Miftari provided Umialik a
copy of his complaint against the uninsured motorist in March 2020. Umialik had
adequate notice.
64 See Stewart v. Elliott, 239 P.3d 1236, 1241 (Alaska 2010) (citing Donnelly
v. Eklutna, Inc., 973 P.2d 87, 92 (Alaska 1999)).
65 Lenzi, 996 P.2d at 607; see also, e.g., Nationwide Mut. Ins. Co. v. Webb ,
436 A.2d 465, 470, 478 (Md. App. 1981) (concluding that sufficient notice existed
when counsel informed insurer by letter that default judgment would be sought against
uninsured and then enforced against insurer if insurer did not intervene and enclosed
copies of "suit papers"); Briggs v. Am. Fam. Mut. Ins. Co., 833 P.2d 859, 860, 864
(Colo. App. 1992) (holding that informing insurer of separate tort action against
uninsured motorist was sufficient notice).
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2. Umialik had an opportunity to intervene in the litigation
against David.
Umialik also had an opportunity to intervene. Alaska Civil Rule 24(b)
allows an applicant to intervene "when an applicant 's claim or defense and the main
action have a question of law or fact in common." The amount of Miftari's damages
was a common question for both David and Umialik. Civil Rule 24(b) gives a court the
discretion to consider whether intervention would "unduly delay or prejudice"
adjudication; it would have been more prejudicial to deny intervention and require
Miftari to relitigate the same issues already litigated.
Umialik could have substantially controlled the defense had it intervened.
It shared identical interests with David because AS 28.20.440(b)(3) and
AS 28.22.101(e) specifically condition a UIM insurer's liability on the underinsured or
uninsured motorist's liability to the insured.66 Umialik was thus liable if and only if
David was liable to Miftari; their interests were therefore aligned in denying David's
liability to Miftari. Unlike in Powers where the different interests of the two insurers
compelled us to conclude that no privity existed between them,67 here David and
Umialik had aligned interests in defending against David's liability to Miftari. In
addition, because David failed to participate, Umialik would have had sole control of
the defense if it had intervened.
Umialik had the opportunity to intervene in and substantially participate
in the damages litigation to vindicate its interests but failed to do so. The superior court
correctly held that it was in privity with David.
66 See AS 28.20.440(b)(3) (requiring motor vehicle liability insurance policy
to contain coverage "for the protection of the persons insured under the policy who are
legally entitled to recover damages from owners or operators of uninsured or
underinsured motor vehicles"); AS 28.22.101(e) (same).
67 Powers v. United Servs. Auto. Ass'n , 6 P.3d 294, 296-98 (Alaska 2000).
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3. The amended final judgment was a "final judgment on the
merits."
A final judgment on the merits "does not require a full trial on the
merits,"68 and "may be based upon a prior dismissal on the merits of [the] plaintiff's
action against [the] defendant."69 The United States Supreme Court has held that a final
decision "generally is one which ends the litigation on the merits and leaves nothing for
the court to do but execute the judgment."70 A dismissal with prejudice also qualifies
as a final judgment on the merits.71
The jury verdict decided the damages that David owed Miftari. Nothing
else was left for the court to do once the jury reached its verdict but to issue and execute
a judgment. The amended final judgment incorporating the jury verdict was a final
judgment on the merits for purposes of res judicata.
Because the amended final judgment was a final judgment on the merits
and Umialik was in privity with David, Umialik cannot relitigate the award of
noneconomic damages to Miftari.72
68 Smith v. CSK Auto, Inc., 132 P.3d 818, 820 (Alaska 2006) (citing DeNardo
v. Calista Corp., 111 P.3d 326, 329 (Alaska 2005)).
69 Id. (quoting Shepherd v. Bering Sea Originals, 578 P.2d 587, 589 (Alaska
1978)).
70 Caitlin v. United States, 324 U.S. 229, 233 (1945) (citing St. Louis I.M. &
S. Ry. Co. v. S. Express Co., 108 U.S. 24, 28 (1883)).
71 Smith, 132 P.3d at 820 (citing Tolstrup v. Miller, 726 P.2d 1304, 1307
(Alaska 1986)).
72 Umialik's argument about exceeding the statutory damages cap
necessarily fails for the same reason.
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C. Res Judicata Also Precludes Miftari From Seeking Economic
Damages.
Umialik argues that Miftari is precluded from litigating economic
damages because Miftari waived it in his jury trial against David and did not request
that the jury make an award of economic damages.
Just as Umialik is bound by the judgment entered against David, so too is
Miftari. Res judicata not only bars claims actually brought and litigated but also claims
that could have been brought arising from "the same transactions as those in the first
suit."73 While Miftari 's complaint originally sought economic damages, Miftari's
proposed verdict form did not request such an award. As a result, the jury did not decide
any and the final amended judgment therefore did not award Miftari economic damages.
By failing to request them, Miftari waived his right to seek economic damages and is
barred from doing so in this action against Umialik .
CONCLUSION
We AFFIRM the superior court's orders on summary judgment.
73 Id. at 820-21.
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| Case Law Statutes, Regs & Rules Constitutions Miscellaneous |
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