City of Laramie v. Facer , 1991 Wyo. LEXIS 113 ( 1991 )

CARDINE, Justice,

specially concurring and dissenting.

I join with the majority in its holding that Shane Facer’s suit for negligent design, construction and maintenance of the city street is barred under the Wyoming Governmental Claims Act. However, in resolving that issue, the opinion of the court’s analysis of W.S. 1-39-118 fires the wrong arrow in the wrong direction. The question this court should have resolved is not whether the city of Laramie had insurance. It did. Rather, we should have decided whether the city’s insurance provided coverage for Shane Facer’s injuries.

The premise of the majority is that self insurance is no insurance. This premise is unfounded. There is “no insurance” only when there is no funding of a reserve to pay losses. The absurdity of the majority opinion is illustrated by reference to W.S. l-39-118(c), which provides that in addition to the procurement of insurance under W.S. l-39-118(b), a governmental entity may:

“(i) Establish a self-insurance fund against the liability of the governmental entity and its officers and employees; “(ii) Join with other governmental entities, by joint powers agreements under W.S. 16-1-102 through 16-1-108, or otherwise, to pool funds and establish a self-insurance fund or jointly purchase insurance coverage. * * *

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“(iv) Pay the judgment or settlement, with interest thereon, in not to exceed ten (10) annual installments in cases of undue hardship * * W.S. 1-39-118(c) (emphasis added).

Only subparagraph (iv) describes a no insurance provision, for there is no fund established that is committed to the payments of losses.

The opinion of the court construes W.S. 1 — 39—118(c)(ii) by shying away from use of the word “insurance.” The majority’s aversion to that term is surprising since the statute allows governmental entities to join together to “establish a self-insurance fund or jointly purchase insurance coverage.” W.S. 1 — 39—118(c)(ii) (emphasis added). Instead, while invoking the well-accepted rules of statutory construction including giving “effect to every word, clause and sentence,” maj. op. at 270, the opinion of the court substitutes for the word “insurance” such euphemisms as “governmental unit pool fund creation and participation” and “a funding mechanism for the governmental unit to defray costs created by the exceptions to immunity.” Maj. op. at 268, 271. Sadly, the quoted language describes insurance. Therefore, I dissent to the court’s ignoring the plain language of the statute and to its resulting conclusion that insurance is not insurance.

Only by stilted construction and ignoring other legislation does this court clear the hurdle of saying self-insurance is not insurance at all. This becomes particularly clear when one compares W.S. 1-39-118(c)(ii) with a related self-insurance statute, W.S. l-39-118(c)(v). In 1986, the legislature amended W.S. 1-39-118 to add subsection (c)(v) allowing governmental entities to join a state-administered insurance program. 1986 Wyo.Sess.Laws ch. 81 § 2. Wyoming statute 1-39-118(c)(v) states:

“[a local governmental entity may] [e]nter into contracts with the purchasing and property control division of the department of administration and fiscal control for the payment of assessments by the local government in such amounts as determined by the division to be sufficient, on an actuarially sound basis, to cover:

“(A) The potential liability, or any portion of potential liability, of the local government and its public employees as provided by this act;

“(B) Costs of administration;

“(C) Payment by the division of claims against the local government and its public employees acting within the scope of their duties which have been settled or reduced to final judgment.”

The statutes governing the administration of this state-run program are contained in W.S. 1-42-101 through -112. Wyoming statute 1-42-112 provides:

“Self-insurance provided under this act shall not be considered a purchase of insurance coverage and shall not be deemed an increase of the limits of liability under W.S. l-39-118(b).”

The legislature obviously recognized the danger that the self-insurance provided in W.S. l-39-118(c)(v) could expand liability under the Governmental Claims Act. Therefore, it included the disclaimer. No such disclaimer, however, is provided for the self-insurance provision involved in this case. The W.A.R.M. agreement was established pursuant to W.S. 1 — 39—118(c)(ii):

“[The governmental entity may] [j]oin with other governmental entities, by joint powers agreements under W.S. 16-1-102 through 16-1-108, or otherwise, to pool funds and establish a self-insurance fund or jointly purchase insurance coverage.”

There is a presumption in the law that where particular words or terms appear in one provision, but not in another related provision, the omission is intentional. See Longfellow v. State, 803 P.2d 1383, 1387 (Wyo.1991). We can say the same for a disclaimer which is effective as to one statute but not to another related statute. Had the legislature intended to say that self-insurance under W.S. 1 — 39—118(c)(ii) is not “insurance,” it would have done so. I conclude from the legislature’s silence that W.S. 1 — 39—118(c)(ii) self-insurance constitutes “insurance” for purposes of expanding liability under the Governmental Claims Act.

Having established that “self-insurance” under W.S. 1 — 39—118(c)(ii) is “insurance,” I now focus on the facts in this case. An agreement was entered into between W.A. R.M. and the board's participants which specified the required cash payments of each participant and the coverage provided. The only logical conclusion that can be drawn from reading the W.A.R.M. agreement, by-laws and memorandum of coverage together is that this is insurance. Insurance is

“a contract in which one undertakes to indemnify another against loss, damage or liability arising from determinable hazards or fortuitous occurrences or to pay or allow a specified amount or determinable benefit in connection with ascertainable risk contingencies.” W.S. 26-1-102(a)(xv) (Cum.Supp.1990). See also 1 Rhodes, Couch on Insurance 2d (Rev. ed. 1984) § 1:2.

The City of Laramie joined with Laramie County, Natrona County and the City of Cheyenne to form W.A.R.M. in July 1986 pursuant to the authority granted under W.S. l-39-118(c). The purpose of W.A. R.M. is to seek “the prevention of or reduction of liability exposures which could lead to casualty and property losses to political subdivisions.” Under W.A.R.M.’s bylaws, coverage includes claims for general liability, public official liability and automobile liability up $250,000 per claimant and $500,-000 per occurrence. A “Memorandum of Liability Coverage” states that W.A.R.M. will pay a loss by reason of liability imposed by law or assumed by contract for damages because of bodily injury, property damage, public official errors and omissions, and personal injury. Thus, a contract exists between W.A.R.M. and its members. This insurance contract requires W.A.R.M. to indemnify its members for described risks and liability. If it looks like a duck, walks like a duck, and quacks like a duck, it must be a duck. And so it is with this “duck”; it must be insurance.

However, for Shane Facer, the fact that the City of Laramie had insurance does not mean that his claim is covered by insurance. W.A.R.M.’s by-laws provide that:

“It shall not be implied * * * that [W.A. R.M.] shall pay any claims in excess of the limits of liability set forth in W.S. 1-39-101 et seq. or that it waives any immunities or privileges granted or retained in the statute except as directed by the Supreme Court of the State of Wyoming.” (emphasis added)

The W.A.R.M. agreement was entered into July 1, 1986. Prior to that time, on March 19, 1986, W.S. 1-39-120 became effective. 1986 Wyo.Sess.Laws ch. 89 § 4. Wyoming statute 1-39-120 specifically excludes liability for negligent street design, construction and maintenance from coverage under the Governmental Claims Act:

“(a) The liability imposed by W.S. 1-39-105 through 1-39-112 does not include liability for damages caused by:

“(i) A defect in the plan or design of any bridge, culvert, highway, roadway, street, alley, sidewalk or parking area;

“(ii) The failure to construct or reconstruct any bridge, culvert, highway, roadway, street, alley, sidewalk or parking area; or

“(iii) The maintenance, including maintenance to compensate for weather conditions, of any bridge, culvert, highway, roadway, street, alley, sidewalk or parking area.”

The laws in existence at the time of the formation of the W.A.R.M. agreement enter into it and become part of it as though they were expressly incorporated therein. See, St. Paul Fire and Marine Ins. Co. v. Albany County School Dist. No. 1, 763 P.2d 1255, 1258-59 (Wyo.1988). The trial court noted the lack of any exclusion for highway safety in the W.A.R.M. agreement and concluded that W.A.R.M. covers highway safety claims. However, W.S. 1-39-120, which was in effect at the time W.A. R.M. was adopted, specifically excludes such claims. W.A.R.M. does not purport to extend liability beyond that contained in the Governmental Claims Act. The trial court’s conclusion was, therefore, wrong. It should be reversed, not because the W.A. R.M. agreement was not insurance, but because by its terms it did not expand liability beyond that provided in the Governmental Claims Act, including W.S. 1-39-120.

Beyond the legal reasoning applicable in this case, I have other concerns about the result the majority reaches. If self-insurance is not insurance, what is it? What is the coverage? How are claims made? How are they paid? I agree that the non-insurance approach to non-liability resolves this particular case, but I foresee a multitude of problems in future cases. Wyoming statute l-42-105(c) authorized the creation of a board to establish policies, rules and regulations for the state-run local governmental insurance program because the program was not subject to the state insurance laws. W.S. 1-42-109. If self-insurance under W.S. l-39-118(c)(ii) is not insurance, then is the W.A.R.M. or any other self-insurance board unregulated?

I am compelled to make one final comment. The majority opinion contains the following footnote:

“We also doubt that the legislative intent included making Wyoming attorneys who prepare joint powers agreements into experts on insurance policy draftsmanship.” Maj. op., n. 5.

The statement implies that Wyoming attorneys lack the competence to draft insurance policies. Such criticism is surely undeserved. Wyoming attorneys are called upon to draft many types of agreements and contracts and do so very well. There is no reason — and the majority offers none — to support a suggestion that Wyoming attorneys lack the competence to draft an insurance policy. It may be this kind of myopic thinking that causes the state of Wyoming to frequently employ outside counsel, often out-of-state counsel, to represent it in important affairs and litigation.

I would hold that there was insurance under W.S. 1 — 39—118(c)(ii). However, the W.A.R.M. agreement does not extend liability to negligent street design, construction and maintenance because immunity is provided under W.S. 1-39-120, and the W.A. R.M. agreement of appellant provided that it did not “waive any immunities * * * granted or retained in the statute [Governmental Claims Act].”

I would reverse on the bases stated in this specially concurring and dissenting opinion.