Atlantic Nat. Ins. Co. v. Armstrong

• Decision Date: 16 February 1966
• Citation: 49 Cal.Rptr. 439
• Court: California Court of Appeals Court of Appeals
• Parties: ATLANTIC NATIONAL INSURANCE COMPANY, Plaintiff and Respondent, v. Joseph A. ARMSTRONG, as Administrator of the Estate of Robert Stanley, Deceased, et al., Defendants and Appellants. Civ. 28257.

Page 439

49 Cal.Rptr. 439

ATLANTIC NATIONAL INSURANCE COMPANY, Plaintiff and Respondent, v. Joseph A. ARMSTRONG, as Administrator of the Estate of Robert Stanley, Deceased, et al., Defendants and Appellants.

Civ. 28257.

District Court of Appeal, Second District, Division 3, California.

Feb. 16, 1966.

Rehearing Denied March 16, 1966.

For Opinion on Hearing, see 52 Cal.Rptr. 569, 416 P.2d 801.

Betts & Loomis and Ingall W. Bull, Jr., Los Angeles, for appellants.

Moss, Lyon & Dunn, Gerold C. Dunn and Henry F. Walker, Los Angeles, for respondent.

FORD, Justice.

The question presented on this appeal is the extent of the coverage afforded, under the circumstances hereinafter related, by a policy of insurance issued by Atlantic National Insurance Company which was applicable to an automobile that had been rented by Kenneth McKeown from The Hertz Corporation in Bakersfield on August 7, 1958.

A collision between the rented car and an automobile driven by Norman Sobel occurred on August 17, 1958, while Robert Stanley was driving the rented vehicle and Mr. McKeown was in the front seat beside him. Both Mr. Stanley and Mr. McKeown were fatally injured. Mr. Sobel and members of his family sued the administrators of the Stanley and McKeown estates for damages for personal injuries alleged to have been sustained by them. Mr. McKeown's heirs brought an action against the administrator of Mr. Stanley's estate for damages arising out of the death of Mr. McKeown.

In the present action in which declaratory relief was sought, the trial court determined that the policy afforded coverage to the administrators of the Stanley and McKeown estates in the Sobel action and that the Atlantic National Insurance Company had the obligation to defend the administrators in that action. (Cf. Financial Indemnity Co. v. Hertz Corp., 226 Cal.App.2d 689, 38 Cal.Rptr. 249.) The court held, however, that the provisions, limitations and restrictions of the rental agreement, and the provisions of the insurance policy to which reference was made therein, were such as to exclude coverage in the action brought by the McKeown heirs against the administrator of the Stanley estate. The present appeal is by the McKeown heirs and the administrator of the Stanley estate from such adverse judgment.

On the face of the rental agreement between The Hertz Corporation and Mr. McKeown were the following provisions: '(4) Renter being one of the assured under the insurance policy covering said vehicle agrees to comply with all the terms and conditions of said policy, which by reference thereto are incorporated herein and made a part thereof [sic], and to comply with the terms and conditions appearing on reverse side hereof. (5) Renter further expressly agrees to indemnify the Insurance Company for any and all loss, damage, cost and expense paid or incurred by the Insurance Company because of injuries or damages sustained by occupants of said vehicle, in states where the law makes Hertz or its Insurance Carrier liable for injuries to occupants of aid vehicle or because of injuries or damages resulting from the use or operation of said vehicle in violation of any of the terms and conditions appearing on the reverse side hereof.'

A provision contained on the reverse side of the rental agreement was: 'The renter of the automobile described on the reverse side hereof participates in the benefits of an automobile public liability and property damage insurance policy subject to the terms, conditions, limitations and restrictions thereof and is bound by such terms, conditions, limitations and restrictions even though all of them are not outlined in this rental agreement. Said policy does not cover the renter or driver for injuries sustained by passengers or guests or any person while riding in * * * said vehicle * * *'

Another provision on the reverse side of the rental agreement was in part as follows: 'The vehicle described on the reverse side hereof shall not be used or operated: * * * (d) By any person other than the renter who signed the rental agreement or, provided he is a qualified licensed driver, by a member of the renter's immediate family, the renter's employer, or a person driving the car pursuant to said person's usual and customary employment by the renter, and in the course of said driver's regular and usual employment for the renter.'

The insurance policy, under the heading of 'Exclusions', provided in part as follows: 'This policy does not apply to: * * * (B) any liability of the renter or driver * * * with respect to bodily injury to * * * or death of * * * (2) any person sustained while riding in, alighting from or getting into or upon any of the automobiles insured hereunder.'

Under the heading of 'Definition of Insured' the policy provided in part as follows: 'The unqualified word 'insured' includes the named insured and also includes (1)...