Budden v. BRITISH AMERICA ASSURANCE COMPANY

• Decision Date: 28 February 1962
• Docket Number: Civ. No. 61-228.
• Citation: 203 F. Supp. 894
• Parties: Raymond G. BUDDEN, Plaintiff, v. BRITISH AMERICA ASSURANCE COMPANY, Defendant.
• Court: U.S. District Court — District of Oregon

203 F. Supp. 894

Raymond G. BUDDEN, Plaintiff, v. BRITISH AMERICA ASSURANCE COMPANY, Defendant.

Civ. No. 61-228.

United States District Court D. Oregon.

February 28, 1962.

J. O. Stearns, Jr., Glenn D. Ramirez, Klamath Falls, Or., for plaintiff.

Collins, Redden & Mullen, by Hugh B. Collins, Medford, Or., R. R. Bullivant, Patrick Ford, Pendergrass, Spackman, Bullivant & Wright, Portland, Or., for defendant.

KILKENNY, District Judge.

Plaintiff was injured in an automobile accident which occurred in the City of Klamath Falls, Oregon on August 17, 1957. Subsequently, he recovered a judgment for the sum of $25,015.22 against one Carl Clifford Dahlgren, Jr., the owner and operator of the other vehicle involved in the accident. Dahlgren's personal insurance carrier paid on said judgment the sum of $10,131.58, the limit of its liability. This action is for the balance of said judgment. At, and for some time prior to the accident, Dahlgren was employed as a salesman by Moore Business Forms, Inc.

At the time of the accident there was in full force and effect defendant's policy of liability insurance insuring Moore's Business Forms, Inc. as to liability created by the following language:

"INSURING AGREEMENT

* * * * * *

"SECTION A — THIRD PARTY LIABILITY

"The Insurer agrees to indemnify the Insured, his executors or administrators against the liability imposed by law upon the Insured for loss or damage arising from the use or operation of any automobile not owned in whole or in part by or licensed in the name of the Insured, and resulting from

"BODILY INJURY TO OR THE DEATH OF ANY PERSON OR DAMAGE TO PROPERTY OF OTHERS NOT IN THE CARE, CUSTODY OR CONTROL OF THE INSURED: * * *."

A proviso follows which excludes liability under circumstances which are here of no significance. Obviously, the judgment here under discussion imposes no liability on the insured Moore's Business Forms, Inc. and these provisions of the policy do not afford a remedy to plaintiff.

Plaintiff argues that his judgment is covered by Item 2¹ of the application for insurance, in that the automobile in question was being used in the applicant's business at the time of the accident in question. Plaintiff overlooks the fact that his rights are governed by the insuring agreement. Although the language of the policy must be liberally construed in favor of plaintiff, I am not permitted to re-write the policy and create an obligation which would not otherwise exist. American Insurance Co. of City of Newark, N. J. v. Keane, 98 U.S.App.D.C. 152, 1956, 233 F.2d 354; cert. den. 352 U.S. 913, 77 S.Ct. 147, 1 L.Ed.2d 118; Kaifer v. Georgia Casualty Co., 9 Cir., 1933, 67 F.2d 309.

On the face of the policy it is designated as a "STANDARD NON-OWNED AUTOMOBILE POLICY." The clear intent of the policy is to afford coverage under Item 2 of the application, and the Insuring Agreement, to those automobiles used in the applicant's business with its consent and which were not owned in whole or in part by nor licensed in the name of the Insured or those defined as an additional insured. Under Item 4, coverage was afforded to hired automobiles and under Item 5 to automobiles operated under contract, none of which were owned in whole or in part by or licensed in the name of the insured or any partner, officer or employee of the insured. Such non-owner policies have been recognized as valid by the Oregon Supreme Court. Ohm v. Fireman's Fund Indemnity Co., 211 Or. 596, 317 P.2d 575.

An unambiguous insurance policy must be enforced, like any other contract, according to its terms. United States Fidelity & Guaranty Co. v. Guenther, 281 U.S. 34, 50 S.Ct. 165, 74 L.Ed. 683; Bradley v. Prudential Insurance Co. of America, 9 Cir., 1934, 70 F.2d 988. The intention of the parties to an insurance policy is to be gathered from the policy alone, except when the language is ambiguous. Home Insurance Co. v. Baltimore Warehouse Co., 93 U.S. 527, 23 L.Ed. 868.

Although insurance contracts are to be liberally construed in favor of the insured, Aschenbrenner v. United States Fidelity & Guaranty Co., 292 U.S. 80, 54 S.Ct. 590, 78 L.Ed. 1137, such construction is not to be invoked unless the contract is ambiguous, United States Fidelity & Guaranty Co. v. Guenther, supra; Insurance Co. v. Boon, 95 U.S. 117, 24 L.Ed. 395, and the rule has no application where the language of the policy is clear and definite. United States Shipping Board Merchant Fleet Corporation v. Aetna Casualty & Surety Co., 68 App. D.C. 366, 1938, 98 F.2d 238; Matsuo Yoshida v. Liberty Mutual Insurance Co., 9 Cir., 1957, 240 F.2d 824; American Aviation & General Insurance Co. v. Georgia Telco Credit Union, 5 Cir., 1955, 223 F.2d 206, 51 A.L.R.2d 316. It is fundamental that all parts of an insurance policy must be read together. Matsuo Yoshida v. Liberty Mutual Insurance Co., supra; Schwartz v. Northern Life Insurance Co., 9 Cir., 1928, 25 F.2d 555; cert. den. 278 U.S. 628, 49 S.Ct. 29, 73 L.Ed. 547; Aetna Insurance Co. v. Sacramento-Stockton S. S. Co., 9 Cir., 1921, 273 F. 55.

Applying the foregoing rules of construction to the insurance contract in question, I find no difficulty in arriving at the conclusion that plaintiff is not afforded coverage by the contract and cannot maintain this action. This holding is entirely in accord with other decisions on non-ownership policies, such as American Mutual Liability Insurance Co. of Boston v. Meyer, 3 Cir., 1940, 115 F.2d 807, and Fertig v. General Accident, Fire & Life Assurance Corp. (1939), 171 Misc. 921, 13 N.Y.S.2d 872.

Other coverage provided by the policy is that outlined and defined under "General Provisions" as follows:

"1. ADDITIONAL INSUREDS — The Insurer agrees to indemnify in the same manner and to the same extent as if named herein as the Insured, every partner, officer or employee of the Insured, who, with the consent of the Insured and in the business of the

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