Connolly v. Great Basin Ins. Co.

• Decision Date: 12 September 1967
• Docket Number: CA-CIV,No. 2,2
• Citation: 431 P.2d 921,6 Ariz.App. 280,73 A.L.R.2d 1
• Parties: Joseph P. CONNOLLY, a minor, by his guardian ad litem, Margaret Connolly, Joseph A. Connolly and Margaret Connolly, husband and wife, Appellants, v. GREAT BASIN INSURANCE COMPANY, a corporation, Appellee. 407.
• Court: Arizona Court of Appeals

Page 921

431 P.2d 921

6 Ariz.App. 280

Joseph P. CONNOLLY, a minor, by his guardian ad litem, Margaret Connolly, Joseph A. Connolly and Margaret Connolly, husband and wife, Appellants, v. GREAT BASIN INSURANCE COMPANY, a corporation, Appellee.

No. 2 CA-CIV 407.

Court of Appeals of Arizona.

Sept. 12, 1967.

Rees, Estes & Browning, by Paul G. Rees, Jr., Tucson, for appellants.

Spaid, Fish, Briney & Duffield, by William S. Spaid, Tucson, for appellees. MOLLOY, Judge.

This is an appeal from a summary judgment rendered in favor of a liability insurance company against three individuals, who bear to one another the relationship of father, mother, and son, and who will be referred to in this opinion as 'the Connollys.' The judgment decrees that the Connollys and a certain Donaldson had no coverage under a liability policy issued by the defendant insurance company as to claims arising out of an accident because of provision in the policy excluding coverage for automobiles 'furnished for regular use' of the son. In addition to the problem of insurance coverage posed by the briefs, this court finds a problem of 'indispensable parties' involved in this appeal.

The facts upon which the judgment below is based were established by pretrial discovery procedures, including depositions, interrogatories and requests for admission. The father and mother, hereinafter referred to as 'the parents,' were covered by another insurance company, Home Indemnity Company, for liability on two automobiles owned by them, a 1962 Chevrolet Impala, two-door coupe, a 1963 Volkswagen, two-door sedan (neither of these cars were involved in the accident in question). Home Indemnity, because of the driving record of the son, had placed in its liability policy an endorsement excepting all coverage for the son.

The insurance agent from whom the Connollys regularly purchased insurance thereafter attempted to secure insurance for the son through the 'Automobile Assigned Risk Plan,' with offices in San Francisco, California. This agency referred the request to the appellee, Great Basin Insurance Company, and a policy of insurance was issued with the son as the named insured, which policy is the subject of this appeal. The policy issued was on a standard form usually used to provide insurance for a specific motor vehicle, or vehicles. However, there is no vehicle described in the policy and in that part of the policy in which the description of the insured vehicle would ordinarily be placed, there were typed the words 'NON-OWNER POLICY.' Under 'Insuring Agreement V' of the policy, it provided coverage for 'use of other automobiles,' which coverage will hereinafter be discussed in more detail.

The written application in pursuance of which this policy was issued had typed at the beginning: 'PLEASE ISSUE A NONOWNER POLICY.' Under 'Item 5' of the application, under which there was to be given a description of 'ALL motor vehicles owned by applicant or any member of the same household' (the son lived with his parents), there were listed only the two cars covered by the other insurance company. The application under 'Item 7' indicated that there were no motor vehicles furnished for the regular use of the applicant or his spouse (the son was not married). As to the two motor vehicles covered by Home Indemnity, it was indicated ('Item 13') that neither vehicle was 'owned or principally operated by an unmarried male under 25.' The applicant was 18 years of age at the time of the application.

When this application was made, the son had been constructing a custom-built roadster for more than a year, fabricating it out of a 1964 Corvette frame and engine and parts specially purchased. The car was not actually test driven until after the issuance of the Great Basin liability policy. Registration for the car was issued after the policy, and the registration indicated the father to be the owner of the new car.

The policy issued by Great Basin in Insuring Agreement V, pertaining to 'Use of Other Automobiles,' states in pertinent part:

'V. Use of Other Automobiles. If the named insured is an individual or husband and wife and if during the policy period such named insured, or the spouse of such individual if a resident of the same household, owns a private passenger automobile covered by this policy, such insurance as is afforded by this policy * * * with respect to said automobile applies with respect to any other automobile, subject to the following provisions:

'(a) With respect to the insurance for bodily injury liability and for property damage liability the unqualified word 'insured' includes (1) such named insured and spouse, and (2) any other person or organization legally responsible for the use by such named insured or spouse of an automobile not owned or hired by such other person or organization.'

'(d) This insuring agreement does not apply: (1) to any automobile owned by or furnished for regular use to either The named insured or a member of the same household other than a private chauffeur or domestic servant of such named insured or spouse;' * * *.' (Emphasis added.)

At about the time the custom-built roadster began to be used, the parents' insurance agent wrote to Great Basin as follows:

'The named insured may become a principal driver of an automobile owned by his parents. We have excluded coverage for this boy on the family contract and would like to have your recommendations as to what changes, if any, should be made.'

To this letter, Great Basin responded that if the named insured became the 'principal driver of an automobile owned by his parents,' there would be an additional premium, raising the premium from the sum of $288, which had previously been paid by the parents, to the sum of $542. This information, according to the deposition of the insurance agent, was transmitted to the parents, who never indicated that they wished the additional coverage, never paid the additional premium, and hence the Great Basin policy was never changed. The testimony of this insurance agent stands unrefuted. Requests for admissions, which were not answered by the Connollys, establish for the purposes of this record, Rule 36(a) Rules of Civil Procedure, 16 A.R.S., that the custom-built roadster was a vehicle 'bought and maintained' by the parents for the 'regular use of the son' and that the son was the 'principal driver of said vehicle.'

At the time of an accident which occurred on May 17, 1964, a date within the time limits of the Great Basin policy, a Robert Donaldson was driving the roadster, with the son and a Donna Morrison as passengers.

The only tort claims mentioned in the complaint are those of the passenger, Donna Morrison, 'against the plaintiffs, Joseph A. Connolly and Margaret Connolly, husband and wife, claiming negligence.' The complaint alleges that serious injuries were sustained by the son in the collision in question, but refers to no claims or contentions of liability made by him. There is no suggestion in the record that the parents or Donaldson have any claims arising out of the accident. Neither Morrison nor Donaldson were joined in this action.

The 'complaint for declaratory judgment' alleges that 'an actual controversy' exists between the parties '* * * relating to the legal rights and duties of the parties under any by virtue of said contracts of insurance by reason of the accident herein before described.' It is further alleged that Great Basin has denied '* * * any claims or rights of the plaintiffs * * *' by reason of the subject policy of insurance. These allegations are admitted by Great Basin in its answer.

In dismissing a prior appeal in this action, 5 Ariz.App. 117, 423 P.2d 732 (1967), this court has already noted the lack of specificity as far as the nature of the 'actual controversy' between these parties is concerned. The nebulous state of the pleadings in this regard was a factor in causing this court to declare that a previous 'judgment' granting a motion for summary judgment was not an appealable order. On remand to the trial court, a judgment was entered which held, inter alia, that there is 'no coverage for the said custom-made roadster under the said policy of insurance upon which this suit is based because of failure of consideration,' and:

'There is no liability under the said Great Basin Insurance Company policy for claims arising out of the accident resulting from the use of the said custom-made roadster:

'(A) By or against the minor, Joseph P. Connolly;

'(B) By Donna Morrison, a passenger, against the said minor, the said minor's parents or Donaldson, the driver of the roadster;

'(C) By or against Donaldson, the driver of said roadster.'

It has been held in this state that in order to give a court jurisdiction of an action in declaratory judgment, sufficient facts must be stated in the complaint so as to establish that there is a justiciable controversy. Kleck v. Wayland, 53 Ariz. 432, 90 P.2d 179 (1939). In Kleck, our Supreme Court said, Inter alia:

'* * * we are satisfied the complaint fails to state facts sufficient to give the court jurisdiction.' (53 Ariz. at 437, 90 P.2d at 181)

'Facts should be alleged from which the court could determine for itself whether there exists a real controversy. The plaintiff's allegation that there is such a controversy is a conclusion of the pleader.' (53 Ariz. at 438, 90 P.2d at 181)

'* * * but the law insists that there must be an actual controversy upon a present state of facts and not an anticipated one upon an assumed state of facts. It must be a real controversy and not a hypothetical or fictitious one.' (53 Ariz. at 439, 90 P.2d at 182.)

The above statements are in accord with the general law. One such statement is as follows:

'The 'actual' controversy which will justify a court's entertaining a suit for declaratory judgment must be a controversy of a 'justiciable nature.' While some courts have found it inadvisable to define the term 'justiciable...