Simpson v. Farmers Ins. Co., Inc. , 981 P.2d 1262 ( 1999 )

WATT, Justice.

¶ 1 The facts of this matter are undisputed and its resolution turns on the law. Plaintiff Floyd Simpson had four automobile liability policies of insurance with defendant Farmers Insurance Company, Inc. Each policy covered a car owned by Simpson. All of the policies provided medical expense coverage in identical language, although three of the policies had liability limits of $5,000.00 each, while the fourth contained a $2,000.00 limit of liability. Simpson was involved in an accident and sustained medical expenses in an amount exceeding $17,000.00, which was the aggregate amount of the medical expense coverage in all four policies.

¶2 Simpson demanded payment of the entire $17,000.00 but Farmers paid Simpson only $5,000.00 based on the following language contained in “Coverage E — Medical Expense Coverage” of each policy:

Limit of Liability

Regardless of the number of vehicles insured, insured persons, claims or policies, or vehicles involved in the accident, we will pay no more for medical expenses, including funeral expenses, than the limit of liability shown for this coverage in the Declarations for each person injured in any one accident. ...

Other Insurance

If any applicable insurance other than this policy is issued to you by us or any other member company of the Farmers Insurance Group of companies, the total amount payable among all such policies shall not exceed the limits provided by the single policy with the highest limits of liability.

After Farmers denied his claim, Simpson sued Farmers for payment of the balance, $12,000.00, of the $17,000.00 aggregate amount of medical expense coverages in all four policies.

¶ 3 Both Farmers and Simpson sought summary judgment and the trial court granted Farmers’ motion for summary judgment and denied Simpson’s motion for summary judgment. The Court of Civil Appeals affirmed with one judge dissenting. This appeal was taken under the accelerated procedure for summary judgments set out in Rule 1.36, Supreme Court Rules. Neither we nor the Court of Civil Appeals ordered that appellate briefs be filed. Consequently, in accordance with Rule 1.36(g), which prohibits appellate briefs unless expressly ordered by the appellate court, the trial court and the Court of Civil Appeals considered the same briefs, those filed in the trial court.

¶ 4 In holding for Farmers, both the trial court and the Court of Civil Appeals majority relied on our opinion in Frank v. Allstate Insurance Co., 1986 OK 42, 727 P.2d 577. There we held: (1) public policy does not require this Court to ignore language in the insurance contract that limits the payment of medical expense coverage to the amount payable to each person under the policy, (2) the additional premiums paid for additional medical expense coverage on other automobiles were “for an additional and separate risk of loss which did not occur,” and (3) the terms of the policy “clearly and unambiguously preclude the stacMng of medical payment coverage.”

¶ 5 Both in his trial court briefs and in his petition for certiorari, Simpson claimed that this is not a stacking case because Simpson had a separate policy for each of his cars rather that a single policy covering multiple cars. We are puzzled by this argument, as we have consistently applied the term “stacMng” to both multiple policies, Keel v. MFA Insurance Company, 1976 OK 86, 553 P.2d 153, and single policies insuring multiple cars, Richardson v. Allstate Insurance Company, 1980 OK 157, 619 P.2d 594. In Richardson, the insurance company argued that its insured was not entitled to stack the uninsured motorist coverages under a single policy because Keel had involved multiple policies. We rejected the insurance company’s argument and held,

It would be anomalous to allow “stacking” where an insured has been issued separate policies containing uninsured motorist insurance as in Keel, supra, and not allow “stacking” if more than one vehicle is insured in the same policy even though multiple premiums have been paid.

Richardson, 1980 OK 157 at ¶ 13, 619 P.2d 594. Based on our analysis of Keel and Richardson we hold, contrary to Simpson’s contention, that the issue here is whether Simpson is entitled to “stack” the medical expense coverages in his four automobile policies; we hold that he may not do so. Consequently, Frank applies to this appeal and the unambiguous language in Simpson’s policies prohibit him from stacking their medical expense coverages.

¶ 6 The dissent in the Court of Civil Appeals predicted that this Court would overrule its opinion in Frank and would allow Simpson to stack the medical expense coverage in his four automobile policies in light of our more recent holding in Max True Plastering Company v. United States Fidelity & Guaranty Co., 1996 OK 28, 912 P.2d 861. Simpson adopted the dissent’s position on certiorari. In Max True Plastering, we approved the use of the “reasonable expectations” doctrine in interpreting insurance contracts. We granted certiorari here because whether we should overrule Frank because of Max True Plastering is a question of first impression. We hold that nothing in our adoption of the rule of reasonable expectations as delineated in Max True Plastering created any reason to overrule Frank.

¶ 7 In Max True Plastering we adopted the doctrine of reasonable expectations but limited its application “to situations in which the policy contains an ambiguity or to contracts containing unexpected exclusions arising from technical or obscure language or which are hidden in policy provisions.” Max True Plastering, 1996 OK 28 at ¶ 17, 912 P.2d 861.

¶ 8 Further, we observed in Max True Plastering, “If the doctrine is not put in proper perspective, insureds could develop a 'reasonable expectation’ that every loss will be covered by their policy and courts would find themselves engaging in wholesale rewriting of insurance policies.” Max True Plastering, 1996 OK 28 at ¶ 18, 912 P.2d 861.

¶ 9 Finally, we declared that despite our adoption of the reasonable expectations doctrine, “the provisions of insurance policies which are clearly and definitely set forth in appropriate language and upon which the calculations of the company are based, should be maintained unimpaired by loose and ill-considered judicial interpretation.” Max True Plastering, 1996 OK 28 at ¶24, 912 P.2d 861.

¶ 10 Simpson makes no claim that the insurance contracts at issue are ambiguous. Indeed, the provisions relied on by Farmers are clear and unambiguous. Simpson argues, however, that he paid four premiums for medical expense coverage but received the benefit of only one of those coverages. This argument ignores our rejection, nearly thirteen years ago, of the same argument in Frank, 1986 OK 42 at ¶5, 727 P.2d 577, where we held:

While the insured did pay an additional premium for the medical payment coverage for his other vehicle, that premium was for an additional and separate risk of loss which did not occur. Allstate would have become contractually liable for the extra coverage only if the insured’s second vehicle had been involved in an accident. Hence, we conclude that, under the facts of this case, the policy terms in question clearly and unambiguously preclude the stacking of medical payment coverage.

Simpson, therefore, did not pay for coverage he did not receive. Instead the additional premiums were “for an additional and separate risk of loss which did not occur.” Frank, 1986 OK 42 at ¶5, 727 P.2d 577.

¶ 11 The Court of Civil Appeals dissenting opinion would have found that the “Other Insurance” provisions in Simpson’s policies are hidden because they are masked by obscure language. To accept the dissent’s conclusion would be to ignore Frank. In Frank we found that the policy exclusion limiting the medical expense coverage to the amount shown for a single accident, regardless of the number of automobiles insured under the policy, was unambiguous. The exclusion before us is no less clear than was the provision we examined in Frank.

¶ 12 We note that the exclusion to which Simpson objects is contained in the same section of the policy that created medical expense coverage. Thus, this case differs from Conner v. Transamerica Ins. Co., 1972 OK 64, 496 P.2d 770. In Max True Plastering, we cited Conner as an example of a holding by this court in which we had given effect to the reasonable expectation of the insured. In Conner we held that a provision in one portion of a policy stating that “this policy does not apply ... to any dishonest, fraudulent, criminal or malicious act or omission of any insured,” would not insulate the insurance company from providing the insureds a defense where the insuring section of the contract expressly covered defending claims against the insureds, “even if any of the allegations of the suit are groundless, false or fraudulent.”

¶ 13 Conner differs from the case at bar in an important respect. In Conner the issue was not whether the insured’s reasonable expectations would make the insurer responsible for an insured loss. Instead the only issue was whether the insurer was obliged to furnish a defense to the insureds under a legal malpractice insurance policy. The issue of the insurer’s liability to pay a loss based on the insured’s reasonable expectations never arose in Conner because the insureds prevailed in the malpractice litigation against them. We held there only that the “reasonable expectations” of the insureds would have reasonably lead them to believe that the insurer would provide a defense not that those reasonable expectations required the insurer to pay a loss.

¶ 14 Unlike Conner, there is no discrepancy in the case at bar between the insuring agreement and the exclusion: here the medical expense coverage section, Coverage E, provides that only the amount stated, $5,000.00 or $2,000.00, will be paid for medical expenses incurred by one insured in one accident. We hold, therefore, that the exclusionary language in Simpson’s policies is neither ambiguous, hidden, nor masked by technical or obscure language. Thus, the reasonable expectations doctrine is not available to Simpson.

¶ 14 This Court has allowed stacking of coverages only in the realm of uninsured motorist coverages and then only because public policy required stacking as a result of 36 O.S. Supp.1994 § 3636 and it predecessors. Keel, 1976 OK 86 at ¶ 7, 553 P.2d 153. We expressly rejected the notion that public policy required the stacking of medical expense coverages in Frank because § 3636 requires only that UM coverages be offered. There is no statutory requirement that medical expense coverages be offered. Thus, “There exist no statutory or other public-policy requirements which would provide a basis for either invalidating or modifying the medical payment provisions of the insurance policy here in contest.” Frank, 1986 OK 42 ¶ 6, 727 P.2d 577. We also pointed out there that most jurisdictions have refused to allow stacking of medical expense coverages. Frank, 1986 OK 42 ¶ 9, 727 P.2d 577.

¶ 16 In order to provide the relief Simpson seeks here we would have to rewrite clear and unambiguous policy provisions, which are neither excessively technical nor hidden. Such a result would require us to indulge in the sort of “loose and ill-considered judicial interpretation,” which we criticized in Max True Plastering, 1996 OK 28 at ¶ 24, 912 P.2d 861. We decline to do so.

COURT OF CIVIL APPEALS’ OPINION VACATED, TRIAL COURT’S JUDGMENT AFFIRMED.

¶ 17 SUMMERS, C.J., HARGRAVE, V.C.J., LAVENDER, SIMMS, and OPALA, JJ. — concur. ¶ 18 KAUGER, J. — concurs by stare decisis. ¶ 19 HODGES and ALMA WILSON, JJ.' — dissent.