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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Cole v. State Farm Insurance Co. (1/27/2006) sp-5978
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| HOMER COLE and ANNETTE | ) |
| MAYAC, | ) Supreme Court No. S- 11460 |
| ) | |
| Appellants, | ) Superior Court No. 3AN-00-10951 CI |
| ) | |
| v. | ) |
| ) O P I N I O N | |
| STATE FARM INSURANCE | ) |
| COMPANY, | ) [No. 5978 - January 27, 2006] |
| ) | |
| Appellee. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, Mark Rindner, Judge.
Appearances: Michael W. Flanigan, Walther &
Flanigan, Anchorage, for Appellants.
Kimberlee A. Colbo and Jimmy E. White, Hughes
Thorsness Powell Huddleston & Bauman, L.L.C.,
Anchorage, for Appellee.
Before: Bryner, Chief Justice, Matthews,
Eastaugh, Fabe, and Carpeneti, Justices.
BRYNER, Chief Justice.
I. INTRODUCTION
Homer Cole and Annette Mayac divorced each other,
reunited, and lived together without remarrying. After being hit
and injured by a car, Cole sought medical and underinsured
motorist payments under Mayacs State Farm automobile insurance
policy, which named Mayac as the person insured and also extended
coverage to the named insureds spouse. At issue in this appeal
is whether Cole was entitled to coverage as Mayacs spouse despite
not being legally married. Because the policy unambiguously
defined spouse to mean a legally married husband or wife and
because Cole has failed to show that a broader interpretation is
needed to avoid impermissible marital status discrimination, we
affirm the superior courts judgment declaring that Cole was not
entitled to coverage as Mayacs spouse.
II. FACTS AND PROCEEDINGS
Homer Cole and Annette Mayac married in the mid-1980s
and divorced in 1993. After marrying and separating from another
woman, Cole reunited with Mayac in 1995 but did not remarry her.
Cole had no drivers license, so the couples car was titled,
registered, and insured in Mayacs name. In May 2000, as Cole was
walking along a street in Anchorage, he was hit by a motorist and
severely injured. A short time before, Cole had been riding in
Mayacs car, and the car was nearby when the accident occurred.1
Mayacs car was insured by State Farm Insurance Company.
Her policy provided for medical payments and
uninsured/underinsured motorist (UM/UIM) coverage. Under the
policy, this coverage extended to the named insured, Mayac, and
his or her spouse. The policy defined spouse as your husband or
wife who resides primarily with you. The policy also extended
coverage to any other person injured while occupying Mayacs car.
As a result of his injuries, Cole claimed medical
payments and UIM coverage under Mayacs State Farm policy. State
Farm denied coverage; Cole then filed an action for declaratory
relief, alleging that he was covered under Mayacs policy, both as
her spouse and as a person injured while occupying her car.
State Farm moved for summary judgment; Cole cross-moved
for summary judgment. The superior court granted partial summary
judgment to State Farm, ruling that, because Cole was not legally
married to Mayac, he did not qualify for coverage under the
policy as Mayacs spouse. The court denied summary judgment on
the issue of Coles coverage as an occupant of Mayacs car, finding
genuine issues of material fact in dispute on that point. The
parties stipulated to the entry of a partial final judgment under
Alaska Civil Rule 54(b) on the courts summary judgment order
declaring that the State Farm policy did not cover Cole as Mayacs
spouse. After the superior court entered the judgment, Cole
filed this appeal.2
III. DISCUSSION
In challenging the superior courts summary judgment
order, Cole advances two reasons why the spousal coverage
provision of Mayacs State Farm policy should be broadly construed
to cover him as Mayacs spouse. First, Cole argues, the policys
terms are ambiguous, so they should be broadly construed to
protect the reasonable expectations of the insured. Second, he
insists, the policy should be interpreted broadly for reasons of
public policy to avoid potential conflict with the Alaska Human
Rights Acts prohibition against marital status discrimination and
with two provisions of the Alaska Insurance Code that, in Coles
view, are meant to complement the Human Rights Acts prohibition.
We address each argument in turn.3
A. Reasonable Expectations
We have previously recognized that because insurance
policies are contracts of adhesion, they are construed according
to the principle of reasonable expectations. 4 Here, Cole
contends that the State Farm policys use of the word spouse is
ambiguous enough to trigger the reasonable expectations doctrine,
so as to require the State Farm policy to be construed in favor
of coverage. We consider four factors in determining what
reasonable expectations an insurance policy will generate: (1)
the disputed policy language; (2) other related policy language;
(3) relevant extrinsic evidence; and (4) precedent interpreting
similar provisions.5 Here, Mayacs State Farm policy expressly
extends coverage to her spouse and defines spouse as your husband
or wife who resides primarily with you. The policy does not
define husband or wife. But in a separate provision extending
coverage to any resident relative, the policy does define
relative as a person related to you or your spouse by blood,
marriage or adoption[.] Cole claims that this singular reference
to marriage in the policys resident-relative provision casts
doubt on what meaning the policy attributes to spouse in its
spousal coverage provision. Specifically, Cole reasons, by using
the word marriage to define the scope of its resident-relative
coverage while omitting the word in defining its spousal
coverage, the State Farm policy creates the obvious implication
. . . that marriage is required for the coverage provided to the
insureds resident relatives, but [not] for coverage provided to
the insureds spouse.
We disagree. The policys reference to marriage in its
definition of relative simply demonstrates an intent to expand
the definition of relative beyond the words usual meaning, so
that it encompasses relationships other than blood relationships
specifically, relationships by marriage and adoption. If this
reference to marriage implies anything, then, it suggests that,
had the policy meant the term spouse to extend beyond formal
marriages, it would have defined spouse to include both a husband
or wife by marriage or by common law.
Cole identifies no other policy language that creates
ambiguity on this point or that might support a reasonable
expectation that spouse includes unmarried cohabitants. Websters
Third New International Dictionary defines spouse as a man or
woman joined in wedlock: a married person: husband, wife.6 The
policys definition of spouse as your husband or wife who resides
primarily with you thus appears to be clear and complete as a
reference to formally married couples.
Notably, in Serradell v. Hartford Accident and
Indemnity Co., we considered a similar spousal coverage provision
contained in a policy for life insurance; in that context, we saw
no room to doubt the provisions meaning, expressly concluding
that there is no ambiguity in the . . . policys use of the term
spouse which would lead a lay person to expect to recover death
benefits for the death of his unmarried cohabitant.7
Cole nevertheless points to extrinsic evidence that, in
his view, tends to create doubt; citing the 2003 U.S. Census
Report on Marital Status, Cole insists that millions of couples
in this country and thousands of couples in this state are living
together as husband and wife without the benefit of a legal
certificate of marriage in the same relationship as possessed by
their married neighbors. In Coles view, [t]his creates an
ambiguity which should be construed in favor of coverage.
Yet we rejected essentially the same argument in
Serradell, quoting approvingly from the Minnesota Supreme Courts
decision in Hedlund v. Monumental General Insurance Co.:
spouse is commonly known to mean husband or
wife. The legal, as well as the ordinary,
meaning of spouse is ones wife or husband. We
realize that unmarried couples are
increasingly cohabiting and that many of
these relationships are permanent and
analogous to marital relationships. But they
are not spousal relationships . . . .[8]
The fact that many unmarried couples live together and
view their relationships as being similar to marriage hardly
establishes that they actually regard themselves as spouses or
that they would expect to be covered under a policy that
expressly limited coverage to the named insured and his or her
husband or wife. Hence, Coles statistics do not support his
contention that he could reasonably have expected to be covered
as Mayacs spouse.
In spite of Serradell, Cole insists that two other
Alaska precedents support his reasonable expectations argument:
Greer Tank & Welding, Inc. v. Boettger9 and Burgess Construction
Co. v. Lindley.10 But these cases are inapposite. In Greer, a
wrongful death case, we simply held that the deceaseds unmarried
cohabitant qualified as a beneficiary under a provision of the
Alaska Wrongful Death Act that expressly allowed wrongful death
claims by a surviving spouse and other dependents.11 And in
Burgess, we relied on the fact that the workers compensation act
expressly defined the term married to include a person who is
divorced but is required by the decree of divorce to contribute
to the support of his former wife12 in order to hold that a
deceased workers former spouse who had been awarded the right to
regular alimony could receive workers compensation benefits as
the workers surviving wife.13 In both Burgess and Greer, then, we
simply applied express statutory language that allowed the claims
under the specific facts at issue. As we subsequently emphasized
in Serradell, neither of these decisions established an exception
to the rule against recognition of common law marriage.14
Hence, considering the language of the State Farm
policy provision disputed here, other related policy language,
extrinsic evidence bearing on the issue of reasonable
expectations, and pertinent case law, we find no plausible basis
for concluding that a reasonable purchaser of the disputed policy
would have expected spouse to include a live-in companion who was
not legally married.
B. Public Policy
Cole alternatively maintains that, even if the State
Farm policys language is unambiguous, its spousal coverage
provision must be broadly construed for reasons of public policy.
Specifically, Cole maintains that the Alaska Human Rights Act
takes a strong stand against discrimination on the basis of the
marital status;15 he urges us to find that this policy informs two
provisions of the Alaska Insurance Code that generally prohibit
arbitrary or unfair discrimination by state-regulated insurers.16
Cole points to our decision in University of Alaska v. Tumeo.17
There, we upheld a decision in which the superior court ruled
that the Human Rights Acts bar against marital status
discrimination precluded the University of Alaska from giving
family benefits to married employees while denying these benefits
to similarly situated employees who had permanent domestic
partners but were not legally married.18 Here, in light of Tumeo,
Cole reasons, it would be entirely inconsistent to argue that an
employer could not offer insurance benefits to its employees on
the basis of marital status, but that an insurer could
discriminate in offering insurance policies to the public on that
basis.
This argument is unavailing. As an initial matter, it
ignores the amendments to the Human Rights Act that Alaskas
legislature enacted in response to the superior courts ruling in
Tumeo. The act now specifically allows employers like the
University to give preferential health and retirement benefits to
family members of legally married employees.19 In its current
form, then, the Human Rights Act lends no support to Coles
argument based on the need to avoid inconsistency. Moreover,
even if we assume that Cole is correct in maintaining that the
spirit of the Human Rights Acts policy against marital status
discrimination might be echoed in the anti-discrimination
provisions of the Alaska Insurance Code, Coles policy-based
argument would still be destined to fail on the current record,
because Cole has neglected to advance any facts establishing a
prohibited pattern or practice of marital status discrimination.
Cole also contends that insurance is a public
accommodation under the Human Rights Act.20 He correctly notes
that an insurance office is specifically listed as a public
accommodation under the Americans with Disabilities Act.21 But
similar language is absent from the Human Rights Act. In
addition, the Human Rights Act dates from 1965, well before the
ADA, and Cole fails to explain why it should be understood to
incorporate the ADAs later definition of public accommodation. A
likely source of the term public accommodation for the Human
Rights Act was Title II of the federal Civil Rights Act of 1964,
which defines public accommodation to include hotels,
restaurants, cinemas, and sports arenas, but it does not
expressly include insurance offices.22
Alaska has other statutes that specifically protect
insurance customers from discrimination. These statutes forbid
unfair discrimination between insureds or property having like
insuring or risk characteristics in any. . . of the terms and
conditions of the insurance.23 But as State Farm argues, the
costs of providing insurance would, other factors being equal,
likely be higher for unmarried couples than for married couples.
The insurer would have the difficult and expensive task of
determining who is and who is not in a sufficiently marriage-like
relationship. Thus the insuring and risk characteristics between
otherwise similarly situated married and unmarried couples would
be different. To the extent discrimination on the basis of such
a distinction is not prevented under a specific statute or
constitutional provision, it survives the general anti-
discrimination statutory challenge.
This does not necessarily mean that an insurance
company is free to completely deny insurance coverage to
unmarried couples. But it does mean that premiums might be
different as between married and unmarried couples. Cole has
failed to show that when Mayac bought the State Farm policy, she
actually sought or expected to obtain coverage for Cole as her
spouse.24 Nor has Cole attempted to show that he ever attempted
to buy coverage for himself from State Farm but was refused. And
the record is silent as to whether, or to what extent, State Farm
might have been able to sell such coverage, or equivalent
coverage, had Mayac or Cole asked. In effect, then, Cole simply
asks us to assume that the mere existence of a provision in the
State Farm policy limiting coverage to a legally married couple
amounts to a prima facie showing of marital status
discrimination. Yet Cole fails to cite any authority suggesting
that a comparable policy provision, standing alone, can establish
an impermissible act of marital status discrimination. Nor are
we aware of any such authority; indeed, cases elsewhere have
uniformly upheld identical policy restrictions without any
mention of potential discrimination issues.25 In short, on the
current record, Coles public policy argument appears to be both
factually and legally groundless.
IV. CONCLUSION
Because neither Coles reasonable expectations argument
nor his public policy argument provides any basis for construing
the State Farm policy broadly, so as to cover an unmarried
spouse, we AFFIRM the superior courts order granting summary
judgment on this issue to State Farm.
_______________________________
1 Just how close Cole was to Mayacs car when he was hit
and what direction he was headed are disputed issues, but the
dispute is not relevant to this appeal.
2 Although there is arguably good reason to question
whether entry of a partial final judgment was appropriate here
under the standard set out in Civil Rule 54(b), we decline to
address this procedural issue and will decide the appeal on its
merits. We do so because substantial time has elapsed since the
superior court entered its partial judgment; meanwhile, both
parties have fully briefed the appeal, neither has addressed the
procedural issue, and the appeal has been argued and submitted
for a decision on the merits. Given these circumstances, we
believe that it would be unfair to dismiss the appeal based on a
sua sponte finding that the partial final judgment should not
have been entered.
We nevertheless take this occasion to note that this
case illustrates a recurring procedural problem. Under our
current Appellate Rules, when parties stipulate to entry of a
partial final judgment and the trial court enters the judgment
based on the stipulation, neither party is required to alert this
court that the appeal is taken from a partial final judgment or
to brief the issue of whether entry of that judgment was properly
granted. Consequently, the issue can easily remain undetected
until it becomes functionally unreviewable. Yet even when
entered by stipulation, partial final judgments deserve careful
appellate review: given the laws fundamental aversion to
piecemeal appeals, see Johnson v. State, 577 P.2d 706, 709
(Alaska 1978), the interests of justice often will militate
against the entry of a partial judgment that the parties might
find convenient.
To prevent uncontested but arguably improvident partial
final judgments from continuing to evade appellate review, we
request the Appellate Rules Committee to recommend amendments to
the Appellate Rules that would ensure early identification of
appeals from judgments entered under Civil Rule 54(b) and enable
this court to require preliminary briefing and resolution of
questions concerning the appropriateness of the partial judgments
at issue in such cases.
Our referral of this issue to the committee should not
obscure another important point. A trial court should not enter
a Rule 54(b) certificate simply because counsel request it.
Johnson, 577 P.2d at 710. The device should be used only
infrequently and only when there is some danger of actual
hardship caused by delay in entry of final judgment. Id.
3 We review summary judgment orders de novo. Odsather v.
Richardson, 96 P.3d 521, 523 n.2 (Alaska 2004). When reviewing
questions of law, we adopt the rule of law that is most
persuasive in light of precedent, reason, and policy. Guin v.
Ha, 591 P.2d 1281, 1284 n.6 (Alaska 1979).
4 West v. Umialik Ins. Co., 8 P.3d 1135, 1138 (Alaska
2000).
5 Id.
6 Websters Third New International Dictionary 2208
(1966).
7 843 P.2d 639, 641 (Alaska 1992) (policy provided:
Spouse means your spouse unless: (a) you and your spouse are
legally separated or divorced.).
8 Hedlund v. Monumental Gen. Ins. Co., 404 N.W.2d 371,
373-74 (Minn. App. 1987), quoted in Serradell, 843 P.2d at 641
n.6 (internal citations omitted).
9 609 P.2d 548 (Alaska 1980).
10 504 P.2d 1023 (Alaska 1972).
11 609 P.2d at 550 (quoting AS 09.55.580(a)).
12 504 P.2d at 1024 (quoting AS 23.30.265(15)).
13 Id. at 1025.
14 843 P.2d at 642.
15 AS 18.80.200 lays out the purpose of the Human Rights
Act, providing in part:
(b) Therefore, it is the policy of the state
and the purpose of this chapter to eliminate
and prevent discrimination in employment, in
credit and financing practices, in places of
public accommodation, in the sale, lease, or
rental of real property because of race,
religion, color, national origin, sex, age,
physical or mental disability, marital
status, changes in marital status, pregnancy
or parenthood.
16 AS 21.36.090(c) provides:
A person may not make or permit arbitrary or
unfair discrimination between insureds or
property having like insuring or risk
characteristics, in the premium or rates
charged for a policy or contract of . . .
transportation insurance, or in the dividends
or other benefits payable on the insurance,
or in the selection of it, or in any other of
the terms and conditions of the insurance.
Similarly, AS 21.36.120(c) provides:
An insurer may not make or permit an unfair
discrimination between insureds or property
having like insuring or risk characteristics,
in the premium or rates charged for
insurance, or in the dividends or other
benefits payable thereon, or in any other of
the terms and conditions of the insurance.
17 933 P.2d 1147 (Alaska 1997).
18 Id. at 1156.
19 Id. at 1151. AS 18.80.220(c)(1) now provides:
Notwithstanding the prohibition against
employment discrimination on the basis of
marital status or parenthood under (a) of
this section,
(1) an employer may, without violating this
chapter, provide greater health and
retirement benefits to employees who have a
spouse or dependent children than are
provided to other employees.
20 Alaskas Human Rights Act makes it unlawful for an
owner, lessee, manager, agent, or employee of a public
accommodation to discriminate on a number of bases, including on
the basis of marital status. AS 18.80.230.
21 The following private entities are considered public
accommodations for purposes of this subchapter, if the operations
of such entities affect commerce . . . (F) a laundromat,
dry-cleaner, bank, barber shop, beauty shop, travel service, shoe
repair service, funeral parlor, gas station, office of an
accountant or lawyer, pharmacy, insurance office, professional
office of a health care provider, hospital, or other service
establishment. 42 U.S.C. 12181(7) (2005) (emphasis added).
22 42 U.S.C. 2000a(b) (2005) provides, in part:
Each of the following establishments which
serves the public is a place of public
accommodation within the meaning of this
subchapter if its operations affect commerce,
or if discrimination or segregation by it is
supported by State action:
(1) any inn, hotel, motel, or other
establishment which provides lodging to
transient guests, other than an establishment
located within a building which contains not
more than five rooms for rent or hire and
which is actually occupied by the proprietor
of such establishment as his residence;
(2) any restaurant, cafeteria, lunchroom,
lunch counter, soda fountain, or other
facility principally engaged in selling food
for consumption on the premises, including,
but not limited to, any such facility located
on the premises of any retail establishment;
or any gasoline station;
(3) any motion picture house, theater,
concert hall, sports arena, stadium or other
place of exhibition or entertainment; and
(4) any establishment (A)(i) which is
physically located within the premises of any
establishment otherwise covered by this
subsection, or (ii) within the premises of
which is physically located any such covered
establishment, and (B) which holds itself out
as serving patrons of such covered
establishment.
23 AS 21.36.090(c). See also AS 21.36.120(c) (nearly
identical language).
24 Relatedly, we note that Mayac named herself and her
three children as insured persons on the policys declarations
page but did not name Cole as a spouse or in any other capacity.
25 See, e.g., Sypien v. State Farm Mut. Auto. Ins. Co.,
443 N.E.2d 706 (Ill. App. 1982); Menchaca v. Farmers Ins.
Exchange, 130 Cal. Rptr. 607 (Cal. App. 1976); Causey v.
Valentine, 271 So. 2d 365 (La. App. 1972); Harleysville Mut.
Casualty Ins. Co. v. Carroll, 123 A.2d 128 (Del. Super. 1956).
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