Foremost Ins. Co. v. Putzier

• Decision Date: 16 April 1981
• Docket Number: No. 12934,12934
• Parties: FOREMOST INSURANCE COMPANY, Plaintiff and Counterdefendant and Appellant, v. Harold PUTZIER and Bob Crandall, Defendants and Counterclaimants and Cross- claimants, and Antonio R. Guanche, Defendant and Counterclaimant and Cross-claimant and Respondent, and O. K. Swenson, Darrell Clark, Brent Hunter, Lee J. Brindley, Twin Falls Jaycees, Inc., and Marion Swenson, Defendants and Cross-defendants, and Stanley Associates, Virginia Dane, Personal Representative of the Estate of Dudley C. Dane, Deceased, The Estate of Dudley C. Dane, Virginia Dane, and Sheriff Paul Corder, Cross-defendants.
• Court: Idaho Supreme Court

Page 317

627 P.2d 317

102 Idaho 138

FOREMOST INSURANCE COMPANY, Plaintiff and Counterdefendant and Appellant, v. Harold PUTZIER and Bob Crandall, Defendants and Counterclaimants and Cross- claimants and Antonio R. Guanche, Defendant and Counterclaimant and Cross-claimant and Respondent and O. K. Swenson, Darrell Clark, Brent Hunter, Lee J. Brindley, Twin Falls Jaycees, Inc., and Marion Swenson, Defendants and Cross-defendants,

and

Stanley Associates, Virginia Dane, Personal Representative of the Estate of Dudley C. Dane, Deceased, The Estate of Dudley C. Dane, Virginia Dane, and Sheriff Paul Corder, Cross-defendants.

No. 12934.

Supreme Court of Idaho.

April 16, 1981.

John A. Doerr and Kevin F. Trainor, Twin Falls, for plaintiff and counterdefendant and appellant.

Paul M. Beeks of Smith & Beeks, Webb, Burton, Carlson, Pedersen & Paine, Donald A. Ronayne of Rayborn, Rayborn, Ronayne & Ritchie, Twin Falls, Michael Morfitt of Coulter & Reid, Elam, Burke, Jeppesen, Evans & Boyd, Boise, for defendants and counterclaimants and cross-claimants.

BISTLINE, Justice.

Antonio Guanche was named as a defendant in Civil Action No. 27353, Fifth Judicial District of the State of Idaho, which action produced two other appeals in addition to this. Those other two appeals, which were consolidated, were decided in Foremost Insurance Co. v. Putzier, 100 Idaho 883, 606 P.2d 987 (1980). In that opinion this Court upheld the trial court's determination as to the extent of liability coverage under the Foremost policy.

This appeal was taken by Foremost from the trial court's decision that Foremost is liable to Antonio Guanche, as a first party insured. The relationship of Foremost and Guanche is well stated in the trial court's findings of fact:

"Insofar as the issues framed by the complaint and defendant Guanche's answer to that complaint are involved in these proceedings, the following additional findings and conclusions are made.

"14. The defendant Antonio R. Guanche speaks English in a heavy French-Italian dialect, which makes communication in the English language difficult between Guanche and third parties. At all times material to this proceeding he was engaged as a chef and entrepreneur. He had permission of the defendant Snake River Canyon Enterprises to erect a food stand on the premises to be used in selling food and drink to the spectators attending the public spectacle. He was told by one Veccio, an agent of the defendants Knievel and Snake River Canyon Enterprises, that he was required to have insurance before he began the operation of his food concession, and that it was obtainable through the plaintiff. (Foremost)

"15. Sometime prior to August 28, 1977, the defendant Guanche delivered his check in the amount of $300 to Cardell W. Smith in return for insurance coverage. Guanche's $300 was accepted by Smith on behalf of the plaintiff, and Smith told Guanche that he was 'covered.' The record will not support any finding that Guanche ever advised plaintiff of the type or kind of insurance he desired, nor will it support a find that Guanche was ever advised by plaintiff as to the specific insurance coverage his $300 was purchasing. He has never been provided with any insurance policy. He has not read any insurance policy purporting to evidence his insurance contract with the plaintiff. He simply paid his money and was told that he was 'covered.'

"16. The defendant Guanche intended to insure his property against loss caused by theft or the elements, and at all times material to this action believed that upon payment of $300 to the plaintiff the property located at the jump site in which he had an interest was insured by plaintiff against loss by theft, fire or other calamity. This belief was a reasonable belief under the facts in this case.

"17. Sometime prior to September 7, 1974, the defendant Guanche had purchased, and had delivered to the jump site, a large truckload of provisions consisting of beer, melons, meat and ice cream. The activity described in Finding 13 involved property owned by the defendant Guanche." ¹ (Emphasis added.)

The trial court entered the following conclusions of law:

"F When the plaintiff accepted a premium from Guanche, it had a duty to provide him with the insurance policy or advise Guanche in detail of the risks it was assuming in return for the premium. Failure to do so makes Guanche's intentions and expectations paramount in interpreting the terms of any insurance contract existing between Guanche and the plaintiff.

"G Under the theories expounded in Corgatelli v. Globe Insurance, 96 Idaho 616 (533 P.2d 737), a valid contract of insurance existed between the plaintiff and the defendant Guanche, supported by ample consideration, which provided Guanche with first party coverage for loss of and damage to property in which Guanche had an interest, and which was located at the jump site between August 28, 1974 and September 10, 1974." (Emphasis added.) Foremost moved to delete the foregoing findings and conclusions, contending that:

"The basis for said Motion is that the question of whether or not there was first party coverage for Guanche under the insurance policy issued by Foremost was not to be tried in the trial on January 13 and 14 and March 28, 1977. The plaintiff Foremost did not contemplate that this issue would be tried and therefore did not, in fact, present any evidence on the issue of whether or not there was any first party coverage for Guanche." (Emphasis added.)

The trial court by order denied Foremost's motion, but gave leave to Foremost to renew it within two weeks "upon an offer of competent evidence in defense of the issues determined ... in favor of ... Guanche and against plaintiff (Foremost)." No such offer was ever made.

Thereafter a monetary summary judgment in favor of Guanche and against Foremost was entered for Guanche's damages. The judgment contains a recitation of the procedure which led to the entry:

"Defendant filed 'Motion for Summary Judgment' October 28, 1977, based upon accompanying affidavits and findings of fact and conclusions of law dated August 11, 1977. The motion was heard December 5, 1977, at which time counsel stipulated that defendant's damages were $29,979.63 and counsel for defendant indicated there were no objections to the entry of a summary judgment for that sum. Thereafter a stay order was entered staying further proceedings in this action pending a determination by the Supreme Court of an appeal of the findings of fact and conclusions of law by other parties to this action. On December 20, 1977, and upon stipulation of counsel, the stay order was vacated by the Chief Justice of the Supreme Court. There appears to be no reason why Summary Judgment should not now be entered.

"It is, therefore, ORDERED, ADJUDGED and DECREED that the defendant Antonio R. Guanche recover from the plaintiff Foremost Insurance Company $29,979.63 damages, together with his costs taxed at $3,746.10, and that the claims of Foremost against Guanche and Guanche against Foremost be severed from this action and the remainder of the case be proceeded with according to law."

Following the entry of the monetary judgment above set forth, Guanche moved for an amendment so as to provide for interest. In a written decision allowing the amendment, the trial court observed as to Foremost's renewed contention that the entry of findings and conclusions in favor of Guanche was procedurally improper: ²

"But Foremost filed complaint against Guanche alleging that it extended Guanche no insurance coverage under policy GAL672-7187006 and was not liable to Guanche for any losses suffered by him, and Guanche filed answer denying these allegations. It seems to me that the overall issue presented by Foremost's complaint and Guanche's answer was whether there existed any insurance coverage for Guanche, and that the issue was not limited only to whether policy GAL672-7187006 provided insurance coverage. In addition, at the close of the trial Foremost asked for and was given additional time in which to present evidence that was not readily available to it on the date of trial. And on at least one other occasion counsel was given the opportunity to present an offer of proof with the assurance that if the offer of proof indicated the availability of evidence which would tend to change or modify the findings and conclusions with respect to Guanche-Foremost then entered that the court would reopen the case to allow such proof to be submitted for the record. No offer of proof was ever submitted. I do not think that Foremost can now complain that the court has determined issues not before it to the unfair advantage of Guanche." (Emphasis added.)

Following the entry of an amended judgment which included interest, costs, and attorney fees, Foremost appealed to this Court.

On appeal Foremost challenges (1) the finding of the trial court that Guanche intended to and believed he had purchased first party coverage, and that this belief was reasonable, and (2) the legal theory of the doctrine of reasonable expectations, thought to have been utilized by the trial court.

We note at the outset that the doctrine of reasonable expectations has since been declared not to be the law in Idaho. Foremost Insurance Co. v. Putzier, 100 Idaho 883, 606 P.2d 987 (1980); Casey v. Highlands Insurance Co., 100 Idaho 505, 600 P.2d 1387 (1980). Rather, where there is an ambiguity in an insurance contract, special rules of construction apply to protect the insured. Casey v. Highlands, supra. Under these special rules, insurance policies are to be construed most liberally in favor of recovery, with all ambiguities being resolved in favor of the insured. Abbie Uriguen Oldsmobile Buick, Inc. v. United States Fire Insurance Co., 95 Idaho 501, 511 P.2d 783 (1973). "Where language may be given two meanings, one of which permits recovery and the other does not, it is to be given the construction most...