Harden v. Monroe Guar. Ins. Co.

• Decision Date: 29 December 1993
• Docket Number: No. 41A01-9207-CV-210,41A01-9207-CV-210
• Citation: 626 N.E.2d 814
• Parties: Lisa HARDEN and Ancel Harden, Appellants-Plaintiffs, v. MONROE GUARANTY INSURANCE COMPANY, Appellee-Defendant.
• Court: Indiana Appellate Court

Page 814

626 N.E.2d 814

Lisa HARDEN and Ancel Harden, Appellants-Plaintiffs, v. MONROE GUARANTY INSURANCE COMPANY, Appellee-Defendant.

No. 41A01-9207-CV-210.

Court of Appeals of Indiana,

First District.

Dec. 29, 1993.

Peter Campbell King, Cline, King & King, P.C., Columbus, for appellants-plaintiffs.

Julie L. Michaelis, Wooden, McLaughlin & Sterner, Indianapolis, for appellee-defendant.

NAJAM, Judge.

STATEMENT OF THE CASE

Lisa and Ancel Harden ("Hardens") appeal from a declaratory judgment for Monroe Guaranty Insurance Company ("Monroe Guaranty") denying Lisa coverage for injuries from an automobile accident which occurred while Lisa was a customer of Independent Auto Brokers ("IAB"). Monroe Guaranty insured IAB under a garage dealers policy. The trial court held that Lisa was neither an insured nor an underinsured motorist under the policy.

We affirm.

ISSUES

The Hardens purport to raise eighteen issues on appeal. ¹ We consolidate and restate the issues as follows:

1. Whether the trial court erred in concluding that the underinsured motorist coverage endorsement under the policy was unambiguous.

2. Whether the trial court erred in concluding that Lisa was not an "insured" under the liability section of the policy.

3. Whether the trial court erred in concluding that Lisa was not driving an IAB-owned vehicle at the time of her accident and was, therefore, not an "insured" under the underinsured motorist endorsement nor entitled to underinsured coverage.

FACTS

On November 25, 1988, Ancel Harden visited IAB's used car lot and inspected a 1986 Ford Bronco. The vehicle was part of IAB's inventory held for sale under an "exclusive listing agreement" between Billie Bush, the vehicle's owner, and IAB. IAB allowed Ancel to take the vehicle home over the weekend so that his wife, Lisa, could test-drive the vehicle.

Lisa was driving the vehicle on November 26, 1988, when she was involved in an automobile accident with Leslie Wilson on U.S. Highway 31 in Franklin, Indiana. On the date of the accident, IAB was insured under a garage dealers insurance policy issued by Monroe Guaranty. Lisa was insured by United Farm Bureau Mutual Insurance Company ("Farm Bureau") for an amount equal to the compulsory financial responsibility limits.

In their declaratory judgment action, the Hardens sought coverage from Monroe Guaranty for the injuries Lisa sustained in the accident in excess of the coverage which her Farm Bureau policy provided. The trial court entered judgment for Monroe Guaranty. The Hardens appeal.

DISCUSSION AND DECISION

Standard of Review

Upon written motion, the trial court entered findings of fact and conclusions thereon in support of its judgment, pursuant to Indiana Trial Rule 52(A). When reviewing special findings, we first determine whether the evidence supports the findings and then determine whether the findings support the judgment. Williams v. Rogier (1993), Ind.App., 611 N.E.2d 189, 192, trans. denied. We will reverse the trial court's judgment only if its findings are clearly erroneous. Id. "In deciding whether the special findings are clearly erroneous, we consider only the evidence which supports the judgment, and we will affirm the judgment unless the record is devoid of facts or inferences supporting the trial court's findings." Id. at 192-93.

Issue One: Ambiguity

We first address the Hardens' contention that the policy is ambiguous and should be construed in their favor. In the policy, the term "owned autos only" is used to describe "covered autos" under the underinsured motorist coverage endorsement. Because the term "owned autos only" is not defined, the Hardens contend that there is an ambiguity with respect to underinsured motorist coverage. We disagree.

There is no rule of construction that every term in an insurance contract must be defined, and the mere fact that a term is not defined does not render it ambiguous. Whether a contract is ambiguous is a question of law, and where the court determines there is no ambiguity, the terms of the contract are conclusive and the construction of those terms is also a matter of law to be determined by the court. Indiana Industries, Inc. v. Wedge Products, Inc. (1982), Ind.App., 430 N.E.2d 419, 423. An insurance contract is ambiguous "when it is susceptible to more than one interpretation and reasonably intelligent men would honestly differ as to its meaning." Anderson v. State Farm Mutual Automobile Insurance Co. (1984), Ind.App., 471 N.E.2d 1170, 1172. Ambiguity does not exist simply because a controversy exists between the parties, with each favoring a different interpretation. Id. Courts will give an insurance contract its plain and ordinary meaning when no ambiguity is present in the language of the contract. Id.

Under the interpretation urged by the Hardens, Lisa was an insured because she occupied a vehicle which was "owned" by IAB and was, therefore, a covered auto. However, the policy term "owned autos only" is unambiguous and does not support that interpretation. The Hardens cannot assert and then exploit an alleged ambiguity in the meaning of this term merely by contending that IAB was the equitable owner because it controlled the vehicle, or was the registered owner because IAB's dealer plate was on the vehicle, or was the statutory owner as a conditional sales vendee. ² The Hardens cannot "bootstrap The exclusive listing agreement gave IAB only a limited right to possession and control of the vehicle for the purpose of selling it. There are no indicia of ownership which would support a reasonable construction under the policy that IAB owned the vehicle. See Issue Three. Accordingly, there was no error in the trial court's conclusion as a matter of law that the policy was unambiguous with respect to underinsured motorist coverage.

[their] position by 'interpreting' ambiguities into the [policy]." See Indiana Industries, 430 N.E.2d at 423.

Issue Two: Liability Coverage

The Hardens raise a plethora of issues and sub-issues, but whether or not there is coverage for Lisa as an insured under the Monroe Guaranty policy presents a direct question of contract interpretation. The provisions of an insurance contract are subject to the same rules of construction as are other contracts. Selleck v. Westfield Insurance Co. (1993), Ind.App., 617 N.E.2d 968, 970, trans. denied. The construction of a written contract is a question of law. Id.

Simply put, Lisa seeks underinsured motorist coverage under an endorsement to the Monroe Guaranty policy. ³ Indiana's uninsured motorist statute requires that insurers make uninsured and underinsured motorist coverage available to insureds in every automobile liability policy. IND.CODE Sec. 27-7-5-2. In interpreting this statute, we have held that the legislature intended only those persons insured under the liability portion of the policy should be entitled to coverage under the uninsured motorist provision. Indiana Farmers Mutual Insurance Co. v. Speer (1980), Ind.App., 407 N.E.2d 255, 258-59. Uninsured motorist coverage is for the protection of persons insured and not for vehicles. ⁴ Id. at 257. Accordingly, whether Lisa is entitled to underinsured motorist coverage turns upon whether she is an "insured" under the liability provision of the policy.

Here, the policy declarations state that liability coverage is provided for "any auto" driven by an "insured." The policy specifies that the customers of an auto dealership are not "insureds" unless a customer has no other available insurance, or has other available insurance that is less than the compulsory or financial responsibility law limits. ⁵ In any case, the policy The Hardens contend, nevertheless, that Lisa is entitled to coverage by operation of law because (1) the definition of an "insured" under the liability coverage section of the policy is a "super escape clause" which contravenes the public policy of this state and (2) the definition of "insured" denies underinsured motorist coverage to a person insured under the liability portion of the policy. Appellants' Brief at 31-32. Monroe Guaranty counters that the Hardens have waived this issue because they did not present it to the trial court and, in any event, that there is no merit to these contentions. Without regard to whether the Hardens waived this issue, we conclude the policy's definition of an "insured" does not violate the public policy of this state and that Lisa is not entitled to coverage by operation of law.

only insures customers for an amount equal to those limits. Lisa was insured under her Farm Bureau policy for the minimum amount required by law. Thus, Lisa does not qualify as an "insured" under the liability component of the Monroe Guaranty policy.

Language in an insurance policy which limits or diminishes the protection required by the uninsured motorist statute is contrary to public policy. Whitledge v. Jordan (1992), Ind.App., 586 N.E.2d 884, 886. However, there is no violation of the Indiana uninsured motorist statute "unless an insurance policy specifically limits uninsured motorist protection as to persons who would otherwise qualify as insureds for liability purposes." Anderson, 471 N.E.2d at 1175. The limitation clause in the Monroe Guaranty policy neither diminishes the coverage required by the uninsured motorist statute nor limits uninsured motorist protection to a person who otherwise qualifies as an insured, because Lisa does not qualify as an insured under the liability coverage section of the policy.

We recently held that a provision limiting an insurer's liability to the statutory minimum for permissive users was not against public policy. See Allstate Insurance Co. v. United Farm Bureau Mutual Insurance Co. (1993), Ind.App., 618 N.E.2d 31, 35. In Allstate, the insured gave his sister-in-law permission to use his car, and she was involved in an accident resulting in severe injury to the other driver. The insured's policy limited bodily injury and...