Dike v. American Family Mutual Insurance Co.

• Decision Date: 29 August 1969
• Docket Number: Nos. 41399,41466,s. 41399
• Citation: 170 N.W.2d 563,284 Minn. 412
• Parties: Edward D. DIKE, Respondent, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Appellant.
• Court: Minnesota Supreme Court

Page 563

170 N.W.2d 563

284 Minn. 412

Edward D. DIKE, Respondent, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Appellant.

Nos. 41399, 41466.

Supreme Court of Minnesota.

Aug. 29, 1969.

Syllabus by the Court

1. Plaintiff's automobile liability insurance policy did not provide automatic coverage under its 'newly acquired' automobile provision for a Jeep which was not acquired as a replacement for the automobile described in the policy.

2. The evidence supports a finding that defendant was bound by the oral agreement of its general agent, whose authority was not questioned, to provide liability coverage for plaintiff's Jeep by substituting it for an inoperable described automobile under plaintiff's existing policy.

3. The trial court erred by refusing under Minn.St. 602.01 to permit defendant to introduce, as impeachment of plaintiff in this non-personal injury action, a statement Carl E. Erickson, Brainerd, for appellant.

taken from him within 30 days after the accident which materially contradicted key parts of his testimony on the ground that plaintiff had not been given a copy thereof.

Ryan & Ryan, Aitkin, for respondent.

Heard before KNUTSON, C.J., and OTIS, ROGOSHESKE, SHERAN and PETERSON, JJ.

OPINION

ROGOSHESKE, Justice.

Defendant appeals from a judgment entered pursuant to a special verdict in a third-party declaratory judgment action to establish automobile liability insurance coverage and from the trial court's denial of its alternative motion for judgment notwithstanding the verdict or a new trial.

On September 7, 1962, plaintiff, a wholesale and retail bait dealer, obtained automobile liability insurance on his 1959 pickup truck from the defendant through the Hamilton Insurance Agency in Crosby, Minnesota. The Hamilton Insurance Agency, consisting of Harold Hamilton and his son Earl, had its office on a balcony of a Crosby hardware store formerly owned by Harold. This insurance was continued in force by annual endorsements, the last of which extended the policy period from September 7, 1966, to September 7, 1967.

In 1964, plaintiff traded in his 1959 truck on a new Chevrolet pickup. He called the Hamilton Agency, and they substituted the new pickup for the old one under the same policy. Sometime before November 1965, plaintiff also acquired a 1952 Jeep. Since he did not intend to use it on a public highway but rather to use it only for clearing show around his home and occasionally to haul minnows for his business, he did not procure any insurance on it. On Saturday, November 12, 1966, the 1964 pickup was completely destroyed when plaintiff crashed into a tree while returning from deer hunting.

Plaintiff testified that on November 12, 1966, after the accident, he called Harold Hamilton's home for information regarding recovery for the wrecked pickup and insurance for the Jeep, which he now intended to use on the highways. Mrs. Harold Hamilton told plaintiff that her husband was deer hunting and that she could do nothing about it. The next day plaintiff's wife called Mrs. Earl Hamilton, plaintiff's niece, reported the accident, and requested coverage for the Jeep. Mrs. Earl Hamilton explained that she did not know much about insurance, but said that she would give her husband the message when he returned from deer hunting.

On November 15 plaintiff and his wife took the Jeep's registration card and went to both Harold and Earl Hamilton's homes in Crosby to finalize the insurance coverage for the Jeep but found no one at home. They did not go to the hardware store, since neither had done any insurance business there after Harold had sold the store, and neither knew that the Hamiltons still maintained an office there. Earl testified that when he returned home on November 15, his wife told him about the destruction of plaintiff's pickup, but did not mention the request for insurance coverage on the Jeep. On November 16, Mrs. Earl Hamilton called plaintiff's wife and told her that Earl said that he 'would take care of things.'

Four days later, on November 19, 1966, plaintiff, while driving the Jeep, was involved in a collision with another vehicle. Two occupants of the other vehicle were killed and plaintiff was seriously injured. On November 22, while plaintiff was still in the hospital, defendant took a statement from him to the effect that he had not mentioned insurance for the Jeep during his conversation with Mrs. Harold Hamilton after the pickup was wrecked. Plaintiff received no copy of that statement.

Subsequently plaintiff was sued by the trustee for the heirs of one of the victims of the collision under Minn.St. 573.02. Plaintiff then brought this third-party declaratory judgment action against defendant to determine whether or not defendant had afforded liability coverage for the Jeep. During the trial of this action, the court ruled that Minn.St. 602.01 precluded defendant's use of the prior inconsistent statement taken from plaintiff in the hospital as impeachment. At the close of the trial, the following special question was submitted to the jury:

'Did the policy of insurance issued by Farmers Mutual now known as American Family Insurance Company, provide liability coverage to the plaintiff, Edward Dike, while operating the 1952 Jeep automobile on November 19, 1966?'

The jury answered 'Yes.'

The trial court accepted this finding and accordingly concluded that defendant had afforded liability coverage for the Jeep under plaintiff's policy prior to the November 19 accident.

On appeal defendant contends (1) that plaintiff's liability insurance policy did not provide automatic coverage for the Jeep; (2) that the evidence does not support the jury's implicit finding that plaintiff and defendant agreed to substitute the Jeep for the pickup under the policy; and (3) that the trial court erred in refusing to permit defendant to introduce, for the purpose of impeachment, the statement taken from plaintiff in the hospital.

1. The trial court failed to hold either that the Jeep was, as a matter of law, automatically covered by the policy or that it was not. While the trial court may have intended to submit this issue to the jury, its instructions, as we read them, in effect submitted the question of whether or not the parties had specifically agreed that the Jeep would be covered under the policy.

The policy provided under paragraph IV for automatic coverage of a vehicle not described in the policy as follows:

'(4) Temporary Substitute Automobile--under coverages A, B and C(a) (liability), an automobile not owned by the named insured or his spouse if a resident of the same household, while temporarily used as a substitute for the described automobile when withdrawn from normal use because of its breakdown, repair, servicing, loss or destruction;

'(5) Newly Acquired Automobile--an automobile, ownership of which is acquired by the named insured or his spouse if a resident of the same household, if (i) it replaces an automobile owned by either and covered by this policy, or the company insures all automobiles owned by the named insured and such spouse on the date of its delivery, and (ii) the named insured or such spouse notifies the company within thirty days following such delivery date; but such notice is not required under coverages A, B and C(a) if the newly acquired automobile replaces an owned automobile covered by this policy. * * * The named insured shall pay any additional premium required because of the application of the insurance to such newly acquired automobile.'

It is clear that the Jeep was not covered under paragraph IV(4) as a 'Temporary Substitute Automobile' since it was owned by plaintiff. It is also clear that all of plaintiff's automobiles were not insured by defendant. Thus, the only way the Jeep could have been automatically covered is if, as plaintiff contends, it had qualified under paragraph IV(5) as a 'Newly Acquired Automobile,' which is defined as 'an automobile, ownership of which is acquired by the named insured or his spouse * * *, if * * * it replaces an automobile owned by either and covered by this policy.'

Construction of this provision is a matter of first impression in this state, but it has been construed in varying factual contexts in a number of other jurisdictions. With only two exceptions, every court which has considered this provision has held that it is not ambiguous and that in order to be 'newly acquired' within its plain meaning, an automobile must have been acquired after the commencement of the policy period and must replace the automobile described in the policy. E.g., Lynam v. Employers' Liab. Assur. Corp. (D.Del.) 218 F.Supp. 383, affirmed (3 Cir.) 331 F.2d 757; Commercial Standard Ins. Co. v. Central Produce Co. (M.D.Tenn.) 42 F.Supp. 31, affirmed sub nom. Central Produce Co. v. Commercial Standard Ins. Co. (6 Cir.) 122 F.2d 1021; Coleman v. Atlantic Nat. Ins. Co. (Fla.App.) 166 So.2d 620; Country Mutual Ins. Co. v. Murray, 97 Ill.App.2d 61, 239 N.E.2d 498; Howe v. Crumley, Jones & Crumley...