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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. (01/27/2006) sp-5978

Cole v. State Farm Insurance Co. (01/27/2006) sp-5978, 128 P3d 171

     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,


MAYAC, ) Supreme Court No. S- 11460
Appellants, ) Superior Court No. 3AN-00-10951 CI
v. )
) O P I N I O N
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.

          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.
          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
          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
          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.
          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

     5    Id.

     6      Websters  Third  New  International  Dictionary  2208

     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
     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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