Stuart v. State Farm Fire and Cas., s. 95-35139

Decision Date28 August 1996
Docket NumberNos. 95-35139,95-35143,s. 95-35139
Citation99 F.3d 1147
PartiesNOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel. W. Reid STUART, Personal Representative of the Estates of Rachelle Irene Stuart and Rhanda Dee Stuart, Deceased, Plaintiff-Appellee, v. STATE FARM FIRE AND CASUALTY COMPANY; State Farm Mutual Automobile Insurance Company, an Illinois Corporation, Defendants-Appellants, and Robert Aiken; Ruth Aiken, Husband and Wife, Individually, and Aiken Ranch Company, a Montana Corporation, Plaintiff-Intervenors-Appellees. W. Reid STUART, Personal Representative of the Estates of Rachelle Irene Stuart and Rhanda Dee Stuart, Deceased, Plaintiff-Appellee, v. STATE FARM FIRE AND CASUALTY COMPANY; State Farm Mutual Automobile Insurance Company, an Illinois Corporation, Defendants-Appellees, v. Robert Aiken; Ruth Aiken, Husband and Wife, Individually, and Darcy Brazill, Plaintiff-Intervenors, and Aiken Ranch Company, Plaintiff-Intervenor-Appellant.
CourtU.S. Court of Appeals — Ninth Circuit

Before: ALARCON, NORRIS, and KLEINFELD, Circuit Judges.

MEMORANDUM *

The evidence in this case compels us to conclude that two findings were clearly erroneous: conclusion 20, that at the time of the accident Robert Aiken was acting as an officer and agent of Aiken Ranch Company, and that his actions are attributable to Aiken Ranch Company; and conclusion 26, that at the time of the accident Robert Aiken's automobile was loaned to Aiken Ranch Company and being used for a corporate purpose or in furtherance of corporate business. The evidence allowed for but one conclusion, that the ranch business had been concluded when Mr. Aiken finished checking on the calving cow and turned back onto the highway on the way to dinner. We acknowledge that the scope of review is narrow, and findings of fact may be set aside only if clearly erroneous. Fed.R.Civ.P. 52(a). Nevertheless, after reviewing all the evidence, we are left with a definite and firm conclusion that a mistake was made in attributing Mr. Aiken's conduct at the time of the accident to the ranch.

A. The Fleet Policy.

The fleet policy insures Aiken Ranch Company, and provides coverage for a large number of vehicles, one or more of which may have been regularly used for the Ranch by Robert Aiken. Premiums are listed for vehicles listed on an attached vehicle schedule. But the schedule does not list the vehicle Mr. Aiken was driving at the time of the accident. Nor is Robert Aiken listed among the five drivers, including four Aikens, on the driver information list.

The car Robert Aiken was driving was not covered under the general coverage provisions. The general coverage is to pay damages caused by an accident resulting from use of "your car." "Your car" means the cars listed on the declaration page. Mr. Aiken's car was not listed, so it is not covered as one of the Ranch's cars.

The Ranch also has "coverage for the use of other cars," and Plaintiff's theory is that Mr. Aiken's car was a "non-owned car." Liability coverage is extended to use of a "non-owned car" by an "insured." To be an "insured" under the non-owned car provisions, Robert Aiken must be "the first person named" or a "relative" of "the first person named." He is neither. The definition section of the policy says that the "first person named" "means that person whose surname followed by a given name or initial is printed first in the 'Insured' section of the declaration page." The term "person" is defined, and "means a human being." The only named insured on the declaration's page is Aiken Ranch Company, so Robert Aiken is clearly not a named insured.

Robert Aiken is not a "relative" of the "first person named" either. The term "relative" is defined to require that the person be "related to" "by blood or adoption." No human being can be related to a corporation by blood or adoption, so it is impossible for Robert Aiken to be a "relative" of the Ranch Company.

Plaintiff argues that since "first person named" includes only human beings, and the only name on the declarations page is that of Aiken Ranch Company, the policy is ambiguous. We find this to be unambiguous. The multiple definitions of "insured" in this policy distinguish between a "person" and an "organization." In regard to the non-owned provisions, the policy clearly indicates that it intends to cover persons, not organizations. The possibility that this will limit the instances in which a corporation's non-owned vehicles will be covered does not make the provision less clear.

Plaintiff also argues that the reasonable expectations of Aiken Ranch Company would have been that its officers and shareholders, including Robert Aiken, were additional insureds, under Hager v. American West Ins. Co., 732 F.Supp. 1072 (D.Mont.1989). See Wellcome v. Home Ins. Co., 849 P.2d 190, 192 (Mont.1993) (a policy exclusion may be invalid if it fails to " 'honor the reasonable expectations' of the purchaser"). There could be no such reasonable expectation. The only named insured is the corporation. Several members of the Aiken family, but not Robert Aiken, are named as covered drivers, and several vehicles, but not the one Robert Aiken was driving at the time of the accident, were designated as covered vehicles. The plaintiffs' theory for why the corporation could reasonably expect the policy to cover Robert Aiken as an insured is that if he were not, then the relatives' provision of the non-owned car coverage, or perhaps the entire non-owned car coverage, would not add anything to the designated fleet coverage. That does not matter. The policy is a printed form designed for use in many situations. We have been cited to no rule requiring that in every situation, policy language providing additional coverage must add to the coverage in that particular case. Hager is a federal district court case, not a Montana Supreme Court case, so it is not binding authority. We intimate no view on whether Hager correctly states Montana law on insurance policies issued to close corporations. If it were, it would be distinguishable because it is an uninsured motorist coverage case. A principle of uninsured motorist coverage law provided the basis for decision in Hager, 732 F.Supp. at 1074 ("the uninsured motorist coverage ... may not limit the class of persons covered under the endorsement to a group smaller than...

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