California State Auto. Ass'n Inter-Insurance Bureau v. Dearing

• Decision Date: 01 March 1968
• Docket Number: INTER--INSURANCE
• Citation: 259 Cal.App.2d 717,66 Cal.Rptr. 852
• Court: California Court of Appeals Court of Appeals
• Parties: CALIFORNIA STATE AUTOMOBILE ASSOCIATIONBUREAU, a reciprocal inter-insurance exchange, Plaintiff and Respondent, v. Joyce E. DEARING, Gary D. Dearing, Hartford Insurance Company, a corporation, Muriel Brown Johansen and Hans Milton Johansen, Defendants and Appellants. Civ. 23793.

Page 852

66 Cal.Rptr. 852

259 Cal.App.2d 717

CALIFORNIA STATE AUTOMOBILE ASSOCIATION INTER--INSURANCE BUREAU, a reciprocal inter-insurance exchange, Plaintiff and Respondent, v. Joyce E. DEARING, Gary D. Dearing, Hartford Insurance Company, a corporation, Muriel Brown Johansen and Hans Milton Johansen, Defendants and Appellants.

Civ. 23793.

Court of Appeal, First District, Division 1, California.

March 1, 1968.

Rehearing Denied March 20, 1968.

Hearing Denied April 24, 1968.

Raymond H. Hawkins, Oakland, for appellants Dearing.

Russell W. Federspiel, Oakland, for appellants Hartford Ins. and Johansens.

Marquart, Hutchins & Staiger, Warren A. Staiger, San Francisco, for respondent.

SIMS, Associate Justice.

In this action for declaratory relief, commenced by an insurer (California State Automobile Association Inter-Insurance Bureau, a reciprocal inter-insurance exchange), the named insured (Joyce E. Dearing), her minor son (Gary R. Dearing), who resided in her household, the victims (Muriel Brown Johansen and Hans Milton Johansen) of an accident in which an automobile operated by the minor son was involved, and their insurer (Hartford Insurance Company, a corporation) which furnished them property damage and uninsured motorists coverage, have all appealed from a judgment which absolved the Bureau of any responsibility for furnishing coverage for the accident in question. The automobile operated by the minor at the time of the accident was not the vehicle particularly described in the policy, and the controversy revolves about its status at that time.

The insurer agreed as follows: 'To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of: (a) bodily injury * * *; (b) injury to or destruction of property, * * *; arising out of the ownership, maintainance or use of the owned automobile or any non-owned automobile, * * *'

The persons insured were defined in the following terms: '(a) With respect to the owned automobile, (1) the named insured, (2) any other person using such automobile, provided the actual use thereof is with the permission of the named insured; (b) with respect to a non-owned automobile, (1) the named insured, (2) any relative, but only with respect to a private passenger automobile, * * *, provided the actual use thereof is with the permission of the owner; * * *'

Definitions in the policy included the following:

"relative' means a relative of the named insured who is a resident of the same household;

"owned automobile' means a private passenger, * * * automobile owned by the named insured and described in the declarations,

"non-owned automobile' means an automobile * * * not owned by or furnished for the regular use of either the named insured or any relative, * * *'

Under the heading 'Conditions,' subheading 'Premium,' the policy stated, '* * * If the named insured acquires sole ownership of an additional private passenger, * * * automobile * * *, he shall inform the Bureau within thirty days following the date of its delivery. Any premium adjustment necessary shall be made as of the date of such change or acquisition * * *.'

The named insured and her minor son contend that the vehicle the latter was driving at the time of the accident was a 'non-owned automobile' within the terms of the policy, and that the Bureau is therefore obligated to furnish coverage. The victims and their insurer argue that the vehicle was covered as an additionally acquired owned automobile within the provisions last quoted. Each have attacked the findings of fact and conclusions of law which have led to a contrary result, and each contends that the evidence requires a judgment declaring that the Bureau should furnish coverage. A review of the record reflects that within thirty days prior to the accident there was such a transfer of the vehicle as to bring it within the coverage the Bureau offered for an additionally acquired automobile. The judgment must be reversed.

Statement of Facts

The following facts, gleaned from the findings, are uncontroverted. On June 19, 1961, Tom Martin and Margaret Martin, the grandparents of Jeffery R. Hadden, then a minor, ¹ were the registered owners, under the laws of Michigan, where they resided, of a 1956 Chevrolet sedan bearing Michigan license plates $ UL 4217. In June 1962, Hadden left this automobile, which was then inoperable because of a damaged engine, in Alameda County in the care and custody of his friend Dave Rosen, a minor, and gave him authorization to find a purchaser for the car. Rosen at the time was living in the home of Mrs. Dearing. In August 1962, Gary Dearing, with the consent and permission of Rosen, but without the knowledge of Hadden, who had returned to Michigan, commenced working on the automobile to make it operable. Thereafter and until the accident, with the express or implied permission of his mother, Gary repaired, assembled, disassembled, pushed, towed, drove, used and otherwise assumed and exercised control over the automobile, which was usually parked and worked on in front of the Dearing home. ²

Meanwhile, on July 5, 1962, the Martins affixed their signatures to a certificate of title assigning to Hadden all of their interest in the Chevrolet. On August 29, 1962, the Michigan authorities issued license plates $ UL 5249 for that automobile to Hadden, and on September 12, 1962, they issued a certificate of title numbered D 728305 to Hadden covering the same car. Hadden had previously, in June 1962, paid the sum of $129 to extinguish a recorded bank lien against the vehicle.

In January 1963, a telephone call was made to Hadden. (According to Hadden this call was from Mrs. Dearing. Mrs. Dearing denied that she ever discussed the purchase of the car with Hadden. Rosen testified that he telephoned Hadden concerning Mrs. Dearing's offer to purchase the car, and the court so found.) The content and effect of this conversation is disputed and is hereinafter discussed. On February 4, 1963, a money order for $150 was purchased and forwarded to Hadden for the purchase price of the car.

On February 26, 1963, while Gary was driving the 1956 Chevrolet, it collided with the Johansens' vehicle. Thereafter, the Johansens recovered a judgment against Mrs. Dearing and her son for a substantial sum of money. Hartford paid the victims for the damage to their car and for personal injuries to the limits of the uninsured motorists coverage and became subrogated to the Johansens' rights to that extent.

The original license plates, $ UL 4217, issued to the Martins remained on the automobile at all times up to the time it was ultimately dismantled or destroyed sometime in April or May 1963. Although no finding was made on the matter, it was established, without contradiction, that Hadden did not sign the Michigan certificate of title, and send it, with the Michigan passenger certificate of registration, to Mrs. Dearing until May 6, 1963, almost ten weeks after the accident.

The controverted findings and conclusions are considered below.

Coverage as Additionally Acquired Automobile

The trial court found as follows with respect to the January telephone call: 'Rosen told Hadden that (Mrs. Dearing) wanted to purchase the Chevrolet; Hadden told Rosen that if (she) would send him $150 and the Michigan license plates on the Chevrolet (License $ UL 4217) that he would convey title to her; * * * that prior to May 6, 1963, Hadden did not intend to transfer title to the Chevrolet to (Mrs. Dearing) until he had physical possession of said license plates ($ UL 4217).'

In its conclusions of law the court stated, 'That the 1956 Chevrolet * * * owned by * * * Hadden and operated by Gary R. Dearing when it was involved in that occurrence of February 26, 1963, * * * was a non-owned automobile regularly furnished for the use of Gary R. Dearing, * * * within the meaning of the terms of that policy of insurance * * * issued by * * * (the) Bureau to Joyce E. Dearing, * * *; that said 1956 Chevrolet was not an additionally acquired vehicle within the meaning of * * * said Policy of Insurance.' A second conclusion echoed this result in more general terms.

The victims and Hartford contend that these findings and conclusions are not sustained by the evidence. They assert in the first place that there is no mention of any conditional passage of title in the conversation which Rosen testified he had with Hadden. Alternatively, they point out that even if the content of the conversation which Hadden testified he had with Mrs. Dearing properly may be interpolated into the conversation to which Rosen testified, there is no evidence to show that Rosen communicated any condition to Mrs. Dearing. Finally, they allege that in any event Rosen was authorized to sell the car and did so. In short, they contend the sale was completed on the payment of the purchase price.

Preliminarily, it is necessary to determine whether the Bureau's policy covers a newly acquired automobile. In cases in which such coverage has been reviewed, the policy has had an express 'Newly Acquired Automobile' clause, generally applicable to a replacement automobile, or to an additional automobile, if the company insures all automobiles owned by the named insured. (See State Farm Mut. Auto. Ins. Co. v. Price (1966) 242 Cal.App.2d 619, 622--623, 51 Cal.Rptr. 554; Williams v. Standard Accident Ins. Co. (1958) 158 Cal.App.2d 506, 508, 322 P.2d 1026; Everly v. Creech (1956) 139 Cal.App.2d 651, 652, 294 P.2d 109; and Birch v. Harbor Insurance Co. (1954) 126 Cal.App.2d 714, 716, 272 P.2d 784.) In the Bureau's policy the insuring agreement refers to the 'ownership, maintenance or use of the owned automobile or any non-owned automobile.' The policy states: "owned automobile' means a private passenger, * * * automobile, Owned By the named insured and described in the Declarations, * * *' (Emphasis added.) The declarations refer only to Mrs. Dearing's 1958...