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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. State Farm Auto Insurance v Lawrence (07/13/2001) sp-5429

State Farm Auto Insurance v Lawrence (07/13/2001) sp-5429

     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.



             THE SUPREME COURT OF THE STATE OF ALASKA
                                 


STATE FARM MUTUAL AUTOMOBILE  )
INSURANCE COMPANY,            )
                              )    Supreme Court No. S-8915
             Appellant,       )
                              )    Superior Court No.
     v.                       )    3AN-96-7929 CI
                              )
STACEY LAWRENCE SR., and      )
TOBITHA LAWRENCE,             )    O P I N I O N
                              )
             Appellees.       )    [No. 5429 - July 13, 2001]
______________________________)



          Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
                    Brian C. Shortell, Judge.


          Appearances: Paul W. Waggoner, Waggoner Law
Office, Anchorage, and Earl M. Sutherland, Reed McClure, Seattle,
for Appellant.  Jonathon A. Katcher, Pope & Katcher, Anchorage, for
Appellees.


          Before:   Matthews, Chief Justice, Eastaugh,
          Fabe, Bryner, and Carpeneti, Justices.  


          CARPENETI, Justice.


I.   INTRODUCTION
          Stacey Lawrence, Jr. was seriously injured in a car
accident caused by an underinsured motorist.  Lawrence exhausted
the "Each Person" limits of the uninsured/underinsured motorist
(UM/UIM) provisions of his family's State Farm Mutual Automobile
Insurance Co. policies.  His parents then sought to collect
separate policy limits under the "Each Accident" provision of their
UM/UIM provisions, for both negligent infliction of emotional
distress (NIED) and punitive damages for the intentional act of the
underinsured tortfeasor.  On motions for summary judgment, the
superior court ruled that (1) the Lawrence parents' NIED claims
qualify for separate policy limits; and (2) the Lawrences' UM/UIM
provisions provide coverage for punitive damages against an
underinsured tortfeasor.  Because State Farm has waived all of the
arguments that could show that the Lawrence parents do not qualify
for separate policy limits under the terms of their UM/UIM
provisions, we affirm the superior court's ruling on the separate
policy limits issue.  Because the Lawrences' liability policies
cover them for punitive damages for which they themselves may be
liable, we affirm the superior court's ruling on the punitive
damages issue.
II.  FACTS AND PROCEEDINGS
     A.   Facts
          1.   The accident and its aftermath
          The underlying facts of this case are not in dispute. 
Stacey Lawrence, Jr. (Stacey Jr.) was involved in a car accident at
an intersection in Anchorage.  Tell Wohltmann, who is not a party
to this action, ran a stop sign and crashed into the car that
Stacey Jr. was driving.  Wohltmann admitted that he was speeding as
he drove through the intersection, and stated that he did not want
to stop at the stop sign because he was suicidal. 
          Stacey Jr. was taken to the hospital in an ambulance.  He
suffered severe injuries as a result of the accident, including
traumatic brain injury and a ruptured spleen and diaphragm. 
          Neither of Stacey Jr.'s parents was present at the
accident scene.  Tobitha Lawrence, Stacey Jr.'s mother, was at a
bookstore several blocks away; his father, Stacey Lawrence, Sr.
(Stacey Sr.), was also elsewhere.  While Tobitha did encounter the
ambulance that carried her son after she left the bookstore, she
did not know at the time that her son was in the ambulance. 
          Soon after the accident, Tobitha received a phone call
from a nurse who said that Stacey Jr. had been in an accident. 
Tobitha's sister then drove her to the hospital.  Around the same
time, Stacey Sr. was told by a friend that Stacey Jr. had been in
accident; Stacey Sr. then drove to the hospital himself. 
          When Tobitha arrived at the hospital, she was told that 
Stacey Jr. was "very sick."  She was not allowed to see him.  After
Stacey Sr. arrived at the hospital, he saw his son on a gurney. 
Tobitha and Stacey Sr. waited in the hospital waiting area while
their son was in surgery. 
          After the surgery, a surgeon came into the waiting area
and told the Lawrence parents that Stacey Jr. was in a coma, and
that he would probably not wake up from it.  Tobitha fainted upon
hearing this. 
          As a result of her reaction to the events, Tobitha
herself was admitted to the hospital.  She was diagnosed as
suffering post-traumatic stress disorder, anxiety, and headaches, 
and was prescribed sedatives.  The record contains no indication
that Stacey Sr. suffered any physical illness as a result of these
events. 
          2.   The insurance policies
          State Farm was the insurer for both Wohltmann and the
Lawrences.  Wohltmann's liability policy provided "Each Person"
policy limits of $100,000, plus supplemental payments of interest,
costs, and attorney's fees.  The Lawrences had three State Farm
policies, one for each of their cars.  Each policy contained
identical terms and provisions, including UM/UIM "Each Person"
limits of $50,000 and UM/UIM "Each Accident" limits of $100,000.
     B.   Proceedings
          The Lawrences originally brought suit against Wohltmann, 
seeking damages in excess of $300,000, plus attorney's fees and
costs.  Stacey Jr. sought damages for his injuries; his parents
sought damages for NIED.  Both Stacey Jr. and his parents also
sought punitive damages for Wohltmann's "reckless and outrageous"
conduct.  The Lawrences later amended their complaint to add State
Farm as a defendant. 
          The Lawrences initially sought a declaration that
Wohltmann's policy provided him with "Each Person" liability
coverage limits for the parents' NIED claims, in addition to the
"Each Person" limits for Stacey Jr.'s bodily injury claims.  As
such, the Lawrences argued that Wohltmann's "Each Accident" limits
applied.  State Farm disputed this contention. 
          The parties then entered into a Stipulation and Order, 
pursuant to which Stacey Jr. settled his claims against Wohltmann
for one "Each Person" policy limit, plus supplemental payments.  In
addition, Stacey Jr. recovered the "Each Person" policy limits on
each of the UM/UIM provisions in the Lawrences' policies, thereby
exhausting the "Each Person" policy limits of both Wohltmann's and
the Lawrences' policies.
          As part of the stipulation, the Lawrence parents agreed
to dismiss their NIED claims against Wohltmann.  The parents and
State Farm agreed, however, that the parents could pursue their
NIED claims against the Lawrences' own State Farm UM/UIM
provisions. 
          The Lawrence parents then moved for declaratory judgment
on two issues: (1) whether their NIED claims qualify for policy
limits under their UM/UIM provisions that are separate from the
policy limits received by their son; and (2) whether their UM/UIM
provisions cover them for the punitive damages of an underinsured
motorist.  The parents argued that both questions should be
answered in the affirmative.  State Farm brought a cross-motion for
summary judgment on both of these issues, arguing that both
questions should be answered in the negative. 
          After oral argument, Superior Court Judge Brian C.
Shortell ruled in favor of the Lawrences on both issues and awarded
them attorney's fees and costs.  State Farm appeals. [Fn. 1] 
III. STANDARD OF REVIEW
          This appeal raises questions of contract interpretation
and statutory construction.  We substitute our own judgment on
questions pertaining to the interpretation of a contract. [Fn. 2] 
We resolve questions of statutory construction de novo by applying
our independent judgment. [Fn. 3]  In doing so, we "adopt the rule
of law that is most persuasive in light of precedent, reason, and
policy." [Fn. 4] 
IV.  DISCUSSION
          This appeal presents two issues: (1) whether the superior
court correctly ruled that the Lawrence parents' NIED claims
qualify for UM/UIM policy limits that are separate from the UM/UIM
policy limits that Stacey Jr. received for his injuries; and (2)
whether the superior court correctly ruled that the UM/UIM
provisions in the Lawrence parents' policies cover them for the
punitive damages of an underinsured motorist.  Both issues present
us with questions of first impression.
     A.   The Superior Court Did Not Err in Ruling that the
Lawrence Parents' NIED Claims Qualify for Separate Policy Limits.

          The superior court ruled that the Lawrence parents' NIED
claims qualify for policy limits that are separate from the policy
limits Stacey Jr. received for his bodily injuries.  We agree.
          The UM/UIM provision of the Lawrences' policies provide
that
          The amount of coverage for bodily injury is
shown on the declarations page under "Limits of Liability - U -
Bodily Injury, Each Person, Each Accident".  Under "Each Person" is
the amount of coverage for all damages due to bodily injury to one
person.  "Bodily injury to one person" includes all injury and
damages to others resulting from this bodily injury.  Under "Bodily
Injury -- Each Accident" is the total amount of coverage, subject
to the amount shown under "Each Person", for all damages due to
bodily injury to two or more persons in the same accident.

The Lawrences' policies define "bodily injury" as "bodily injury to
a person and sickness, disease or death which results from it."
          In Crabtree v. State Farm Insurance Co., [Fn. 5] the
Supreme Court of Louisiana interpreted State Farm policy language
that is virtually identical to the language at issue here. [Fn. 6] 
That case involved a husband who was driving his motorcycle and his
wife who followed him in her car. [Fn. 7]   An oncoming car crossed
the center line and collided head on with the husband. [Fn. 8]  The
wife witnessed the accident, went to help her husband, and found
that one of his legs was "almost completely severed below the
knee." [Fn. 9]  In deciding whether the wife's mental anguish claim
qualified for policy limits that are separate from those that her
husband received for his injuries, the Crabtree court held that two
requirements must be met in order for separate limits to apply: (1)
the wife must have suffered "bodily injury"; and (2) the wife must
have suffered that bodily injury "in the same accident" as her
husband. [Fn. 10]  We agree with this approach.  Therefore, in
order for the Lawrence parents to be eligible for separate policy
limits, they must demonstrate that (1) they suffered "bodily
injury"; and (2) they were injured "in the same accident" as Stacey
Jr.
          1.   State Farm has waived its arguments that the
Lawrence parents do not qualify for separate policy limits because
they did not suffer "bodily injury" and because they fail to meet
the policies' requirement of having been "in the same accident" as
their son.
          State Farm argues that the emotional distress claimed by
the Lawrence parents does not constitute "bodily injury."  State
Farm also suggests that the Lawrence parents do not qualify for
separate policy limits because they do not meet the policies'
requirement of having been "in the same accident" as their son.
          But State Farm has waived both of these arguments because
it failed to adequately raise them below. [Fn. 11]  State Farm did
not argue to the superior court that the emotional distress claimed
by the Lawrence parents does not constitute bodily injury. 
Therefore, this argument has been waived for purposes of this
appeal. [Fn. 12]
          While State Farm did assert to the superior court that
the Lawrence parents were not "in the same accident" as their son, 
it did so in the context of arguing that the Lawrence parents'
injuries "resulted from" their son's injuries.  Nowhere did State
Farm clearly argue to the superior court that the Lawrence parents
failed to meet the "same accident" requirement of their policies. 
As such, this argument has also been waived for purposes of this
appeal. [Fn. 13]
          2.   Even if the Lawrence parents' injuries "result[ed]
from" the injury to their son, this would not compel the conclusion
that the Lawrence parents fail to qualify for separate policy
limits.

          State Farm argues that the Lawrence parents cannot
recover separate policy limits because their injuries "result[ed]
from" the injuries to their son.  The Lawrences' policies state
that under the "Each Person" limits, State Farm will pay "damages
due to bodily injury to one person."  Included in "bodily injury to
one person" is "all injury and damages to others resulting from
this bodily injury."  State Farm argues that because the Lawrence
parents' injuries "resulted from" the bodily injury to their son,
single "Each Person" limits apply.  We disagree.
          Even if the Lawrence parents' injuries did result from
their son's bodily injury, this would not necessarily lead to the
conclusion that the parents' injuries do not qualify for policy
limits separate from those that their son received.  In Crabtree,
the Supreme Court of Louisiana rejected State Farm's argument that
a wife could not recover separate policy limits for the mental
anguish that she claimed "resulted from" the injuries suffered by
her husband. [Fn. 14]  The Louisiana court indicated that State
Farm's  interpretation, which would read the "each person" limit as
preventing coverage of a second person whose bodily injury arguably
"resulted from" the injuries to the first, disregards "the clear
and explicit language defining the aggregate coverage for 'Each
Accident' as 'all damages due to bodily injury to two or more
persons in the same accident.'" [Fn. 15]
          Given the problematic consequences of holding that single
policy limits necessarily apply if one person's injury "results
from" the bodily injury of another, the Crabtree court construed
State Farm's policy language to mean that the "Each Person" limit
applies if only one person suffered "bodily injury" in an accident.
[Fn. 16]  On the other hand, separate limits apply to two or more
persons who suffer "bodily injury" if those persons were injured
"in the same accident." [Fn. 17]
          We find the Louisiana Supreme Court's reasoning to be
persuasive.  Given the wording of State Farm's "Each Accident"
provision, it is objectively reasonable for State Farm insureds to
expect that two or more persons who suffer bodily injury in the
same accident would be entitled to separate policy limits.  Since
we honor the objectively reasonable expectations of insureds
regarding the terms of insurance contracts, [Fn. 18] we reject
State Farm's interpretation of the policy language at issue.
          3.   The Lawrences are not subject to single policy
limits on the grounds that the Lawrence parents' claims are akin to
claims for loss of consortium.

          State Farm also argues that the individual "Each Person"
limits apply because the Lawrence parents' claims are essentially
claims for loss of consortium.  This argument is unpersuasive.
          Other courts have rejected arguments equating emotional
distress and loss of consortium. [Fn. 19]  We agree with those
courts.  Unlike claims for loss of consortium, claims for emotional
distress concern injuries that the claimants have suffered
directly, rather than derivative injuries that resulted from an
injury to another. [Fn. 20]
          Even if we considered the Lawrence parents' claims to be
akin to claims for loss of consortium, State Farm would not
necessarily prevail on the separate policy limits issue.  As noted
above, the dispositive questions in interpreting this aspect of the
Lawrences' policies are whether the Lawrence parents suffered
"bodily injury," and whether such "bodily injury" was suffered "in
the same accident" that injured their son. [Fn. 21]  State Farm has
waived its arguments pertaining to these questions. [Fn. 22]
          Because State Farm has waived the arguments that, if
successful, would show that the Lawrence parents do not qualify for
separate policy limits under the terms of the UM/UIM provisions in
their policies, we affirm the superior court's ruling that the
Lawrence parents' claims of NIED qualify for policy limits 
separate from those that their son received for his bodily
injuries. [Fn. 23]
     B.   The Lawrences' State Farm Policies Cover Them for
Punitive Damages that They Are Legally Entitled to Collect from an
Underinsured Motorist.

          The superior court ruled that the UM/UIM provisions in
the Lawrences' policies cover them for punitive damages that they
would be legally entitled to collect from an underinsured motorist. 
We agree.
          1.   Because the Lawrences' liability policies provide
coverage for punitive damages for which the Lawrences themselves
may be liable, the Lawrences' UM/UIM provisions provide coverage
for punitive damages incurred by an underinsured tortfeasor.
          
               a.   In Alaska, automobile insurance companies must
provide UM/UIM coverage that mirrors an insured's liability
coverage.

          In State Farm Mutual Automobile Insurance Co. v.
Harrington, [Fn. 24] we considered AS 21.89.020(c), which describes
the UM/UIM coverage that insurance companies offering automobile
liability insurance must offer to insureds. [Fn. 25]  We stated
that "the evident purpose of section 020(c)(1) is to provide for
the insured, as an injured claimant, the same benefit level as that
provided by the insured to those asserting claims against the
insured." [Fn. 26]  Therefore, automobile insurance companies must
offer insureds UM/UIM coverage that mirrors the insureds' liability
coverage. [Fn. 27]  If State Farm has failed to provide such
coverage, its UM/UIM provisions will be reformed to conform with
the statutory requirements. [Fn. 28]  Therefore, if the Lawrences'
liability policies cover them for punitive damages for which they
may be liable, the UM/UIM provisions in their policies must also
cover them for the punitive damages that they are legally entitled
to collect from an underinsured tortfeasor. [Fn. 29]
               b.   The Lawrences' liability policy covers them
for punitive damages for which they may be liable.

          The Lawrences' liability policies do not specifically
exclude coverage for punitive damages.  Rather, they provide that
State Farm will "pay damages which an insured becomes legally
liable to pay because of . . . bodily injury to others."  Because
a person may become legally liable for punitive damages if that
person acts outrageously or with reckless indifference to the
interests of another, [Fn. 30] we hold that the Lawrences' liability
policies provide coverage for the Lawrences' own punitive damages.
          Our previous decision in Providence Washington Insurance
Co. of Alaska v. City of Valdez [Fn. 31] lends support to this
conclusion.  In that case, we considered policy language providing
that the insurance company would "pay . . . all sums which the
insured shall become legally obligated to pay as damages." [Fn. 32] 
Because the policy did not specifically exclude coverage for
punitive damages, we held that the policy provided such coverage.
[Fn. 33]
          At the very least, the relevant provision is ambiguous
with regard to punitive damages.  We interpret ambiguities in
insurance contracts in favor of the insured. [Fn. 34]  For this
additional reason, we hold that the Lawrences' liability policies
cover them for punitive damages for which they themselves may be
legally liable.
          Because the Lawrences' liability policies include
coverage for punitive damages, AS 21.89.020(c)(1) and Harrington
require the conclusion that the UM/UIM provisions in the Lawrences'
policies include coverage for punitive damages as well.  We
accordingly hold that the superior court correctly ruled that the
UM/UIM provisions in the Lawrences' policies include coverage for
punitive damages incurred by an underinsured tortfeasor.
          2.   The Lawrences' UM/UIM policies suggest that they
cover the Lawrences for punitive damages that they would be legally
entitled to recover from an underinsured tortfeasor.

          In addition, the language of the Lawrences' UM/UIM
policies also suggests that the Lawrences are covered for punitive
damages that they would be legally entitled to collect from an
underinsured tortfeasor.
          The UM/UIM provisions of the Lawrences' policies state:
          Two questions must be decided by agreement
          between the insured and us:
               1.   Is the insured legally entitled to
                    collect damages from the owner or
driver of the uninsured motor vehicle or underinsured motor
vehicle; and
               2.   If so, in what amount?
               
This provision makes no distinction between compensatory and
punitive damages.  Because the Lawrences may be legally entitled to
recover punitive damages from an underinsured motorist, this aspect
of the Lawrences' UM/UIM policies suggests that it covers the
Lawrences for such damages.
          Furthermore, punitive damages are specifically excluded
in the Medical Payments Coverage sections of the Lawrences'
policies, [Fn. 35] but are not specifically excluded in the UM/UIM
sections.  As the Lawrences correctly argue, "[t]his exclusion of
punitive damages only in the context of medical payments clearly
suggests that punitive damages are covered in the [UM/UIM] . . .
sections of the policy."  We have held that insureds' objectively
reasonable expectations regarding the terms of an insurance
contract will be honored. [Fn. 36]  Given that punitive damages are
excluded in the medical payments section, but not in the UM/UIM
section of the policy, it is objectively reasonable for State Farm
insureds to expect that State Farm's UM/UIM provision would cover
them for punitive damages caused by an underinsured tortfeasor. 
This consideration also provides strong support for our conclusion
that the Lawrences' UM/UIM provisions provide coverage for punitive
damages.
          3.   State Farm's policy arguments are unpersuasive.

          State Farm argues that policy considerations favor its
position that punitive damages are not covered by the policy.  We
have stated that the purpose of punitive damages is to punish and
deter; [Fn. 37] State Farm argues that punitive damages should not
be available here because it has engaged in no wrongdoing, and an
award of punitive damages would not punish the tortfeasor or deter
others like him.  This argument is unpersuasive.
          Under the Lawrences' liability coverage, there is no
question that State Farm would be liable for punitive damages
awarded against the Lawrences. [Fn. 38]  But coverage for the
Lawrences' liability for punitive damages is no different
analytically from coverage for an uninsured motorist's intentional
or reckless torts.  Thus, State Farm's argument proves too much. 
Its suggestion that the Lawrences' liability policies should also
not provide coverage for punitive damages is clearly wrong.  
          The question here ultimately turns not on policy but on
what the parties contracted for.  The Lawrences essentially bought
liability coverage for underinsured motorists who injured them. 
The terms of that coverage included protection for punitive damages
awards from an underinsured motorist.  Since that is the coverage
they contracted for, there is no reason that they should not obtain
it.
          In sum, the Lawrences' UM/UIM provisions provide coverage
for punitive damages because the Lawrences' liability policies
provide such coverage, because the Lawrences' policies suggest that
they include coverage for the punitive damages of an underinsured
tortfeasor, and because public policy does not forbid this result.
[Fn. 39]
V.   CONCLUSION
          State Farm has waived its arguments that the Lawrence
parents do not qualify for separate policy limits because the
Lawrence parents did not suffer "bodily injury" and because the
Lawrences do not meet their policies' requirement of having been
"in the same accident" as their son.  Accordingly, we AFFIRM the
superior court's ruling that the Lawrence parents' NIED claims
qualify for policy limits separate from those received by their
son.  Because the Lawrences' liability policies cover them for
their own punitive damages, because the policies suggest that they
cover the punitive damages of an underinsured tortfeasor, and
because public policy does not forbid this result, we also AFFIRM
the superior court's ruling that the Lawrences' UM/UIM provisions
provide coverage for the punitive damages of an underinsured
tortfeasor. [Fn. 40]


                            FOOTNOTES


Footnote 1:

     After this appeal is decided, remaining factual disputes will
be referred to arbitration. 


Footnote 2:

     See Alaska Hous. Fin. Corp. v. Salvucci, 950 P.2d 1116, 1119
(Alaska 1997).


Footnote 3:

     See Progressive Ins. Co. v. Simmons, 953 P.2d 510, 512 (Alaska
1998) (citing Deal v. Kearney, 851 P.2d 1353, 1356 n.4 (Alaska
1993)).


Footnote 4:

     Id. (internal quotation marks omitted) (quoting Guin v. Ha,
591 P.2d 1281, 1284 n.6 (Alaska 1979)).


Footnote 5:

     632 So. 2d 736 (La. 1994).


Footnote 6:

     See id. at 739 (quoting the policy language).


Footnote 7:

     See id. at 738.


Footnote 8:

     See id.


Footnote 9:

     Id.


Footnote 10:

     See id. at 745.


Footnote 11:

     See Chijide v. Maniilaq Ass'n, 972 P.2d 167, 173 (Alaska 1999)
(citing Revelle v. Marston, 898 P.2d 917, 927 (Alaska 1995)).


Footnote 12:

     See id. (citing Revelle, 898 P.2d at 927).


Footnote 13:

     See id. (citing Revelle, 898 P.2d at 927).


Footnote 14:

     See 632 So. 2d at 740.


Footnote 15:

     Id.


Footnote 16:

     See id.


Footnote 17:

     See id.


Footnote 18:

     See Jones v. Horace Mann Ins. Co., 937 P.2d 1360, 1362 n.3
(Alaska 1997).


Footnote 19:

     See, e.g., Pekin Ins. Co. v. Hugh, 501 N.W.2d 508, 511 (Iowa
1993); Treichel v. State Farm Mut. Auto. Ins. Co., 930 P.2d 661,
665 (Mont. 1997); Wolfe v. State Farm Ins. Co., 540 A.2d 871, 873
(N.J. Super. App. Div. 1988).


Footnote 20:

     See Pekin, 501 N.W.2d at 511.


Footnote 21:

     See supra Part IV.A.2.


Footnote 22:

     See supra Part IV.A.1.


Footnote 23:

     Of course, whether the Lawrences have in fact suffered
compensable bodily injury is a question of fact that remains to be
determined in arbitration.


Footnote 24:

     918 P.2d 1022 (Alaska 1996).


Footnote 25:

     AS 21.89.020 is entitled "REQUIRED MOTOR VEHICLE COVERAGE." 
Section (c) provides, in relevant part, that

          An insurance company offering automobile
liability insurance in this state for bodily injury or death shall,
initially and at each renewal, 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.  The limit written may
not be less than the limit in AS 28.20.440 or AS 28.22.101. 
Coverage required to be offered under this section must include the
following options:
               (1) policy limits equal to the limits
voluntarily purchased to cover the liability of the person insured
for bodily injury or death . . . .


Footnote 26:

     Harrington, 918 P.2d at 1026.


Footnote 27:

     While such UM/UIM coverage may be waived in writing by the
insured, see AS 21.89.020(e), the Lawrences gave no such waiver in
the instant case.  Because such coverage was not waived, State Farm
must provide it.  See Harrington, 918 P.2d at 1025.


Footnote 28:

     See Harrington, 918 P.2d at 1025.


Footnote 29:

     This conclusion is buttressed by a comparison of AS
21.89.020(c), which Harrington is based upon, and the broader
language of AS 28.20.440.  In Lavender v. State Farm Mutual Auto.
Ins. Co., 828 F.2d 1517 (11th Cir. 1987), the Eleventh Circuit
distinguished between a Mississippi statute that required coverage
of accidents with uninsured motorists "for bodily damage" (similar
to AS 21.89.020(c)) and an Alabama statute requiring coverage
"because of bodily damage" (similar to AS 28.20.440).  The court
said that the Alabama statute extended uninsured motorist coverage
over punitive damages, but that the Mississippi statute did not. 
Id. at 1518.  Without expressly adopting the analysis in Lavender,
we recognize that no such distinction is necessary in this case
because our statutes contain both the "for bodily damage" (AS
21.89.020(c)) and "because of bodily damage" (AS 28.20.440(a)(3))
formulations with regard to uninsured motorists.  And where two
insurance statutes partially overlap, the statute requiring broader
coverage governs.  See Progressive Ins. Co. v. Simmons, 953 P.2d
510, 522 (Alaska 1998).      


Footnote 30:

     See AS 09.17.020(b).


Footnote 31:

     684 P.2d 861 (Alaska 1984).


Footnote 32:

     Id. at 862 (quoting the policy language).


Footnote 33:

     See id. at 862-63.


Footnote 34:

     See Grace v. Insurance Co. of N. Am., 944 P.2d 460, 467 n.15
(Alaska 1997) (citing U.S. Fire Ins. Co. v. Colver, 600 P.2d 1, 3
(Alaska 1979)).


Footnote 35:

     This section provides that if State Farm and the insured
cannot agree on an amount due, the claim shall be decided by
arbitration upon written request of one of the parties.  It goes on
to state that "[t]he arbitrators shall not award punitive damages
or other noncompensatory damages." 


Footnote 36:

     See Jones v. Horace Mann Ins. Co., 937 P.2d 1360, 1362 n.3
(Alaska 1997).


Footnote 37:

     See Providence Wash. Ins. Co. v. City of Valdez, 684 P.2d 861,
863 (Alaska 1984).


Footnote 38:

     See supra Part IV.B.1.b.


Footnote 39:

     State Farm advances other policy arguments against allowing an
award of punitive damages in this case.  For example, it argues
that punitive damages should not be allowed here because this would
lead to higher insurance prices for people like the Lawrences, and
that allowing punitive damages here is akin to allowing them
against the estate of a deceased tortfeasor.  We reject these
arguments.


Footnote 40:

     Because we affirm both of the superior court's rulings in
favor of the Lawrences, we also affirm the superior court's award
of attorneys' fees and costs to the Lawrences.