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Midland Risk Management Co. v. Watford6/30/1994
tter of law, § 28-1170 does not permit Midland to avoid coverage for the Watfords' claims.
The parties agree that but for the accident Midland could have rescinded the policy it issued to Tamara Sanchez as a result of her fraud. Midland, however, maintains that despite the accident it may avoid liability coverage in the instant case, contending that A.R.S. § 28-1170(F)(1) is inapplicable and the resolution of this issue is controlled by A.R.S. § 20-1109, which provides in part:
Misrepresentations, omissions, concealment of facts
and incorrect statements shall not prevent a recovery
under the policy unless:
1. Fraudulent.
2. Material either to the acceptance of the risk, or to the hazard assumed by the insurer.
3. The insurer in good faith would either not have issued the policy . . . or would not have provided coverage with respect to the hazard resulting in the loss, if the true facts had been made known to the insurer as required either by the application for the policy or otherwise.
Although fraud is a policy defense under § 20-1109, Midland's argument fails to recognize the full import of the Motor Vehicle Safety Responsibility Act, and specifically § 28-1170(F)(1), which provides:
Every motor vehicle liability policy is subject
to the following provisions which need not be
contained in the policy:
1. The liability of the insurance carrier with respect to the insurance required by this chapter shall become absolute when injury or damage covered by the motor vehicle liability policy occurs. The policy may not be cancelled or annulled as to such liability by an agreement between the insurance carrier and the insured after the occurrence of the injury of damage, and no statement made by the insured or on his behalf and no violation of the policy shall defeat or void the policy.
This statute broadly mandates that an insurer's obligation to provide coverage "shall become absolute" whenever injury occurs. Unlike the provisions of § 20-1109, which apply to insurance policies of all kinds, § 28-1170 is applicable only to automobile insurance policies. It is a fundamental rule of statutory construction that courts will construe conflicting statutes in harmony when possible. Baker v. Gardner, 160 Ariz. 98, 770 P.2d 766 (1988). Where two statutes dealing with the same subject are seemingly in conflict, the more specific statute controls. Pima County v. Heinfeld, 134 Ariz. 133, 654 P.2d 281 (1982). As a matter of statutory construction, the general provisions of § 20-1109 do not override the more specific provisions of § 28-1170(F)(1). See, e.g., Farmer's Insurance Exchange v. Rose, 411 F.2d 270 (9th Cir. 1969).
This result is further supported by our supreme court's determination that every automobile liability policy is subject to A.R.S. § 28-1170(F)(1), whether or not "certified" under the Act or expressly stated in the insurance contract. See Sandoval v. Chenoweth, 102 Ariz. 241, 428 P.2d 98 (1967); Jenkins v. Mayflower Ins. Exchange, 93 Ariz. 287, 380 P.2d 145 (1963). Because this was an automobile liability policy, once the Watfords were injured in the accident, § 28-1170(F)(1) superseded § 20-1109.
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