similarly worded exclusion deemed unenforceable because less favorable than permitted by applicable version of UM statutes
How later courts described this case
- similarly worded exclusion deemed unenforceable because less favorable than permitted by applicable version of UM statutes
Written by the judges who cited it.
The opinion
O’CONNELL, C. J.,
dissenting in part.
I dissent from that part of the opinion which holds that plaintiff is entitled to recover $5,000 in this proceeding. The court reaches this conclusion on the reasoning that each of the policies constitute a separate contract obligating each insurer to pay only a pro rata share of the loss. The previous payment of the full loss by the co-insurer is disregarded on the theory that each of the insurance contracts stands alone and any payment made under one is of no significance in an action upon the other.
Whether the reasoning is sound depends upon where one starts. If one starts with the pro rata clause of the policy, the court’s conclusion comes easy; if, however, one starts with the insuring agreement, which binds each insurer to pay the entire loss, the opposite conclusion is equally easy to arrive at.
Either conclusion is an ipse dixit unless reason is marshalled to explain it. The cases relied upon by the majority do not satisfactorily explain why the insured’s recovery should be governed by the pro rata clause rather than the insuring clause.
I prefer to turn to cases that do attempt to explain why the choice is made. Such a case is Wilks v. Allstate Insurance Company, 195 So2d 390 (La Court of Appeals, 3rd Cir 1967). In that case the court concludes that the liability of the insurer “is not transmuted by the pro rata clause into only partial coverage which may be less than the policy limits for which premiums were charged.” The court reaches this con *537 elusion through several avenues of reasoning, the most compelling of which in my opinion is a practical one which the court explains as follows:
“Under the pro rata clause (see footnote 1), the company’s liability is shared proportionately with the policy limits of another company which has also provided ‘valid and collectible insurance against such loss/ If this other alleged insurer is not impleaded in the suit, any holding that this other insurance is Valid and collectible’ is not binding upon the other company in different proceedings by the insured against such other company to enforce such other alleged coverage. Thus a defendant insurer’s protection of its insured might be reduced to below policy limits in present litigation, but the insured nevertheless denied recovery against the other insurer in subsequent litigation. To effectuate the policy intention we believe that ordinarily the other insurance cannot be regarded as Valid and collectible’ so as to reduce an insurer’s liability below policy limits, unless the validity and collectibility [footnote omitted] of the other insurance is determined by proceedings to which the alleged other insurer is a party [footnote omitted].” 195 So2d at 399.
Based upon this practical consideration and for other reasons I shall not summarize, the court concluded that “the pro rata clause is simply designed to regulate contribution as between insurers which may have provided coverage which happens to apply to the same loss.”
I reach the same conclusion. I would, therefore, hold that plaintiff’s previous recovery from the co-insurer of his entire loss now bars him from recovery against defendant. The co-insurer will, of course, be entitled to contribution against defendant for a pro rata share of the loss.