Dairyland Mut. Ins. Co. v. Andersen

• Decision Date: 24 November 1967
• Docket Number: No. 8519,8519
• Citation: 102 Ariz. 515,433 P.2d 963
• Parties: DAIRLAND MUTUAL INSURANCE COMPANY, Appellant and Cross-Appellee, v. James ANDERSEN, O. K. Meat Packing Company, Inc., an Arizona corporation, and Great Basin Insurance Company, Appellees and Cross-Appellants.
• Court: Arizona Supreme Court

Page 963

433 P.2d 963

102 Ariz. 515

DAIRLAND MUTUAL INSURANCE COMPANY, Appellant and Cross-Appellee, v.James ANDERSEN, O. K. Meat Packing Company, Inc., an Arizona corporation, and Great Basin Insurance Company, Appellees and Cross-Appellants.

No. 8519.

Supreme Court of Arizona, In Banc.

Nov. 24, 1967.

Rehearing Denied Dec. 19, 1967.

Cavness, DeRose, Senner & Foster, Phoenix, for appellant and cross-appellee.

Minne & Sorenson, Phoenix, for appellee and cross-appellantJames Andersen.

Moore & Moore, Phoenix, for appellee and cross-appellantO. K. Meat Packing Company, Inc.

Stanley Z. Goodfarb, Phoenix, for appellee and cross-appellantGreat Basin Ins. Co.

STRUCKMEYER, Justice.

Edward and Ruth Samuelson recovered a $7,500 judgment against James Andersen for their personal injuries arising out of an automobile accident.Thereafter, they caused garnishments to be issued against the Dairyland Mutual Insurance Company and the Great Basin Insurance Company.From the judgment on garnishment, this appeal has been prosecuted.

At the time of the accident, Andersen was driving a Lincoln automobile owned by the O. K. Meat Packing Company, a corporation.The O. K. Meat Packing Company had a comprehensive general liability policy issued by the Great Basin Insurance Company covering its vehicles.Anderson had a policy of insurance issued by the Dairyland Mutual Insurance Company which contained a 'non-ownership' clause extending coverage to other vehicles driven by him.After tender of issue in garnishment, the superior court entered judgment against Great Basin, holding, among other things, that it was primarily obligated to defend and pay any judgment arising out of the accident.

The Great Basin policy has an 'other insurance' clause ¹ apportioning the loss where there is other valid and collectible insurance.The Dairyland policy has a similar clause in identical language but with the added proviso that, where the insured is using a non-owned vehicle, its insurance is excess over any other available insurance.²The appeal focuses on which company is obligated to pay the loss under the terms of the respective policies.

It may be first observed that the problem here is not unique.Cases having a like or somewhat analogous problem have arisen in many jurisdictions in this country.See8 Appleman, Insurance Law and Practice§ 4914, and annotation 76 A.L.R.2d 502.In light of the host of words which have been written on the subject, we express doubt as to whether anything further could be added which would substantially enlighten the bench or bar.We are therefore, satisfied to point out what we believe to be the obvious, that the dispute is amenable to the settled and usual rules for the construction of contracts of insurance.

'In the absence of a statutory provision which will be read into each policy issued thereunder and cannot be contracted away by either party, United States Fidelity and Guaranty Company v. Hirsch, 94 Ariz. 331, 385 P.2d 211(1963), the principles to be applied in construing an insurance policy have been stated by this Court in a series of decisions and may be summarized as follows: The cardinal principle pertaining to the construction and interpretation of insurance contracts is that the intention of the parties should control.An insurance policy is a contract, and in an action based thereon the terms of the policy must govern.* * * (W)here the provisions of the contract are plain and unambiguous upon their face, they must be applied as written, and the court will not pervert or do violence to the plain and ordinary meaning or add something to the contract which the parties thing to the contract which the parties have not put there.(Citation of cases.)'D.M.A.F.B. Federal Credit Union v. Employers Mut. Liability Ins. Co. of Wis., 96 Ariz. 399, 396 P.2d 20.

The two policies, insofar as their provisions control the disposition of this case, are unambiguous.They neither conflict nor are they inconsistent.Great Basin's policy provides that it will pay a proportion of the loss where there is other valid and collectible insurance.Dairyland's policy similarly provides that it will pay a proportion of the loss where there is other valid and collectible insurance But only if the insured owns the vehicle--that, as to nonowned vehicles, its insurance is excess to any other insurance.The 'other insurance' clauses, being plain and unambiguous, must be applied as written.Palpably, Dairyland intended to sell less coverage than Great Basin.By the express words of Dairyland's policy, it had no liability until the insurance afforded by the Great Basin policy was exhausted.Continental Casualty Co. v. Zurich Insurance Co., 57 Cal.2d 27, 17 Cal.Rptr. 12, 366 P.2d 455;Burcham v. Farmers Insurance Exchange, 255 Iowa 69, 121 N.W.2d 500;O'Brien v. Traders and General Ins. Co., La.App., 136 So.2d 852;LeFelt v. Nasarow, 71 N.J.Super. 538, 177 A.2d 315;Motorist Mutual Ins. Co. v. Lumberman's Mutual Ins. Co., 1 Ohio St.2d 105, 205 N.E.2d 67;Safeco Insurance Co. of Am. v. Pacific Indemnity Co., 66 Wash.2d 38, 401 P.2d 205.

Great Basin points to a written endorsement to its policy which provides that its insurance does 'not apply with respect to any claim arising from accidents which occur while any automobile is being operated by' Andersen.From this, Great Basin concludes that it has specifically excluded coverage of any accident occurring while Andersen was driving the Lincoln automobile and,...