Allstate Ins. Co. v. Fibus, s. 87-6011

• Decision Date: 14 November 1988
• Docket Number: 87-6042,Nos. 87-6011,s. 87-6011
• Citation: 855 F.2d 660
• Parties: ALLSTATE INSURANCE COMPANY, a corporation, Plaintiff-Appellee, v. Charles FIBUS, David Foran and Celeste Foran, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 660

855 F.2d 660

ALLSTATE INSURANCE COMPANY, a corporation, Plaintiff-Appellee, v. Charles FIBUS, David Foran and Celeste Foran, Defendants-Appellants.

Nos. 87-6011, 87-6042.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 11, 1988.

Decided Sept. 6, 1988.

As Amended on Denial of Rehearing Nov. 14, 1988.

Gregory R. Vanni and Karl W. Schoth, Thon & Beck, Pasadena, Cal., for defendants-appellants David Foran and Celeste Foran.

Allen Thomas, Smith & Thomas, Long Beach, Cal., for defendant-appellant Charles Fibus.

Abigail S. Kelly and Laura E. Fannon, Kelly, Herlihy & Bane, and William B. Boone, Kornblum & McBride, San Francisco, Cal., for plaintiff-appellee.

Appeal from the United States District Court for the Central District of California.

Before FARRIS and REINHARDT, Circuit Judges, and CROCKER, ^* District Judge.

FARRIS, Circuit Judge:

Charles Fibus, David Foran, and Celeste Foran appeal from the district court's grant of summary judgment to Allstate Insurance Company. We reverse the summary judgment and remand for factual findings.

BACKGROUND

On November 3, 1985, an automobile driven by Charles Fibus collided with a The [$100,000] limit stated for each person for bodily injury is our total limit of liability for all damages because of bodily injury sustained by one person in any single auto accident, including all damages sustained by anyone else as a result of that bodily injury. (emphasis added).

motorcycle driven by David Foran. Foran was severely injured. At the time of the accident, Fibus's insurance policy with Allstate limited Allstate's liability for bodily injury to $100,000 per person and $300,000 per occurrence. Allstate paid Foran $100,000 for his injuries, but would not pay Celeste Foran's claim for loss of consortium. Allstate relied on the following language in the policy:

The Forans and Fibus concede that Allstate would have no liability on the consortium claim if the language of the policy applied. They contend, however, that the language was rendered inoperative under the following theory: (1) Fibus's original policy provided separate coverage for Celeste Foran's consortium claim; (2) before the accident, Allstate amended the policy so that a consortium claim would be aggregated with the underlying bodily injury claim for purposes of the $100,000 per person limitation; (3) Allstate did not properly notify Fibus of the amendment that reduced his coverage; (4) because of this, California law renders the amendment inoperative and reinstates the coverage provided under Fibus's original policy.

Allstate sought declaratory relief to determine coverage. The district court granted Allstate's motion for summary judgment, holding that the Forans together could not have received more than $100,000 under either the original policy or the amended policy. Thus, the court concluded that Allstate did not have to notify Fibus of linguistic changes in the amended policy because those changes clarified but did not reduce Fibus's coverage.

DISCUSSION

1. Coverage Under Original Policy

The original policy provided that

[t]he limit stated for each person for bodily injury applies to all damages arising from bodily injury, sickness, disease, or death sustained by one person in any one occurrence.

Under California law, this language is ambiguous and would be interpreted to provide separate coverage for Celeste Foran's consortium claim. Abellon v. Hartford Insurance Co., 167 Cal.App.3d 21, 212 Cal.Rptr. 852, 857-60 (1985). The district court declined to follow Abellon, however, because Abellon was decided after Allstate amended the policy. The district court apparently believed that Abellon made new law and that prior law would have required the court to interpret Fibus's original policy as aggregating Celeste Foran's consortium claim with her husband's claim.

Abellon did not change California law. It is consistent with earlier cases and was mandated by the California Supreme Court's decision in Rodriguez v. Bethlehem Steel Corp., 12 Cal.3d 382, 115 Cal.Rptr. 765, 525 P.2d 669 (1974). Rodriguez held that a loss of consortium claim was not a derivative claim, but one for an independent injury. Id. at 405, 115 Cal.Rptr. at 780, 525 P.2d at 684. Subsequent to Rodriguez, but before Abellon, the California Court of Appeals twice considered the issue of whether an insurance policy provided separate coverage for a consortium claim. In both cases, the Court of Appeals concluded that the policies did not provide separate coverage. The policies in those cases, however, expressly aggregated consortium claims with the claims of the party primarily injured. Compare United Services Auto. Ass'n. v. Warner, 64 Cal.App.3d 957, 135 Cal.Rptr. 34, 36-37 (1976) and State Farm Mutual Auto Ins. Co. v. Ball, 127 Cal.App.3d 568, 179 Cal.Rptr. 644, 645-46 (1981).

Abellon distinguished the policy language in question from that in Warner and Ball. Whereas policy language in Warner and Ball expressly precluded separate coverage for consortium claims, the language in Abellon did not. See 167 Cal.App.3d at 25, 31, 212 Cal.Rptr. at 853, 858. Under the maxim that ambiguous insurance contracts will be construed against the insurer, Abellon concluded that the contract could be reasonably interpreted to provide separate coverage for a consortium claim, which under Rodriguez is independent from the claim of the...