Hardware Mut. Cas. Co. v. Home Indem. Co.

Citation50 Cal.Rptr. 508,241 Cal.App.2d 303
CourtCalifornia Court of Appeals
Decision Date01 April 1966
PartiesHARDWARE MUTUAL CASUALTY COMPANY, a corporation, Plaintiff and Appellant, v. HOME INDEMNITY COMPANY, a corporation, Thomas E. Gee, Marian Gee, Frederick Bowens, Lonnie Madden, Cornelius Jones, Defendants and Respondents. Civ. 22427.

W. W. Kitchel, Oakland, for appellant, D. W. Brobst, Oakland, of counsel.

Hagar, Crosby & Rosson, Justin M. Roach, Jr., Oakland, for respondents The Home Indemnity Co., Thomas E. Gee and Marian Gee.

Joseph Landisman, Berkeley, for Frederick Bowens and Lonnie Madden.

Joseph W. Jay, Jr., Oakland, for Cornelius Jones.

SULLIVAN, Presiding Justice.

In this action for declaratory relief we are called upon to determine whether defendant Frederick Bowens was an additional insured under the automobile policy issued by plaintiff to Bowens' aunt and uncle. As will appear we have concluded that he was and that the judgment of the trial court declaring plaintiff's obligations to Bowens under said policy should be affirmed.

The background facts are not in dispute. On June 25, 1961 Bowens, while driving a 1940 Chevrolet owned by his counsin Lonnie Madden, was involved in a collision in Berkeley with an automobile driven by Thomas Gee in which Marian Gee was riding. As a result of the collision, the Gees were injured.

At the time of the above accident there was in effect a family automobile policy issued by plaintiff Hardware Mutual Casualty Company (Hardware) on which Cornelius Jones and Carrie Etta Jones, his wife, were the named insureds. 1 Carrie Etta was Bowens' aunt. In pertinent part this policy provided in Part I thereof that among the persons insured were: '(b) With respect to a Non-owned automobile, * * * (2) any Relative, but only with respect to a private passenger automobile or trailer, provided the actual use thereof is with the Permission of the Owner; * * *' (Emphasis added.) In the 'Definitions' under Part I the policy stated that "relative' means a relative of the Named insured who is a Resident of the same household.' (Emphasis added.)

On June 25, 1962 Thomas and Marian Gee commenced an action in the Superior Court of Alameda County naming Bowens and Madden as defendants and seeking damages in the sum of $55,000. On February 1, 1963 said defendants tendered the defense of said action to Hardware upon the ground that Bowens was a relative and resident of the household of the named insured. Hardware refused the tender of defense and on April 1, 1963 commenced the instant action for declaratory relief which is the subject of the appeal at bench. 2

The trial court found, so far as is here pertinent, that Hardware's policy was in full force and effect at the time of the aforementioned accident; that the defense of the action filed by the Gees had been tendered and refused as stated above; that at all times material Bowens was a nephew of Carrie Etta Jones and as such was a relative of the named insured under the terms of the policy; that on June 25, 1961 Bowens was a resident of the household of Carrie Etta Jones and Cornelius Jones under the terms of the policy; and that at the time of the collision on said day the actual use by Bowens of Madden's Chevrolet was 'with the permission and consent' of Madden. The court concluded that Bowens was an additional insured under the policy and that Hardware was obligated to pay on behalf of Bowens all sums recoverable against him by the Gees and to defend and pay all costs incurred by Bowens in the defense of action filed by the Gees. Judgment was entered accordingly. This appeal followed. 3

Hardware contends before us that Bowens was not an additional insured under the terms of the policy because (1) he was not a resident of the household of Mr. and Mrs. Jones and (2) he was driving a nonowned automobile without the permission of the owner Madden. Basically these contentions present questions on the sufficiency of the evidence.

To resolve the first question we must first determine what is meant by the phrase 'resident of the same household.' On this subject, the parties take divergent positions. Hardware argues that the evidence must show that Bowens 'was a member of the family living at that home permanently as one unit headed by Cornelius Jones for the promotion of their mutual interest and social happiness.' Justification for this position is sought in Island v. Fireman's Fund Indemnity Co. (1947) 30 Cal.2d 541, 184 P.2d 153, 173 A.L.R. 896. Defendants 4 argue that the critical phrase has a broader meaning than merely 'member of the family' or 'member of the household.' As defendants see it, Hardware's policy merely requires that the relative reside in the household, not that he live there permanently as a member of the family. We agree.

Essentially, therefore, we face a two-fold problem. Initially, it is one of interpreting the particular provision of the insurance contract; secondarily, it is one of determining whether there is sufficient evidence in the record to make operative the policy provision as thus interpreted. On the first phase of the problem we are not unmindful of the following rule of construction set forth in Continental Cas. Co. v. Phoenix Constr. Co. (1956) 46 Cal.2d 423, 437--438, 296 P.2d 801, 809, 57 A.L.R.2d 914: 'It is elementary in insurance law that any ambiguity or uncertainty in an insurance policy is to be resolved against the insurer. (Citations.) If semantically permissible, the contract will be given such construction as will fairly achieve its object of securing indemnity to the insured for the losses to which the insurance relates. (Citation.) If the insurer uses language which is uncertain any reasonable doubt will be resolved against it; if the doubt relates to extent or fact of coverage, whether as to peril insured against (citations), the amount of liability (citations) or the person or persons protected (citations), the language will be understood in its most inclusive sense, for the benefit of the insured.' (In accord: Southwestern Funding Corp. v. Motors Ins. Corp. (1963) 59 Cal.2d 91, 94, 28 Cal.Rptr. 161, 378 P.2d 361; Continental Cas. Co. v. Zurich Ins. Co. (1961) 57 Cal.2d 27, 32, 17 Cal.Rptr. 12, 366 P.2d 455; Exchange Cas. & Surety Co. v. Scott (1961) 56 Cal.2d 613, 619, 15 Cal.Rptr. 897, 364 P.2d 833; Prickett v. Royal Ins. Co. Ltd. (1961) 56 Cal.2d 234, 237, 14 Cal.Rptr. 675, 363 P.2d 907, 86 A.L.R.2d 711; Wildman v. Government Employees' Ins. Co. (1957) 48 Cal.2d 31, 35--36, 307 P.2d 359; Continental Cas. Co. v. Hartford Acc. & Indem. Co. (1963) 213 Cal.App.2d 78, 89, 28 Cal.Rptr. 606.) Under the foregoing principles we must therefore construe the policy provision under examination so as to give Bowens 'the benefit of any reasonable interpretation that may bring him within its coverage.' (Cal-Farm Ins. Co. v. Boisseranc (1957) 151 Cal.App.2d 775, 781, 312 P.2d 401, 404.) To paraphrase our observation in Cal-Farm, the precise question which we face in the instant case is whether or not under any reasonable interpretation of the policy Bowens was a resident of the household of Mr. and Mrs. Jones at the time of the accident.

In Moore Shipbuilding Corp. v. Industrial Acc. Com. (1921) 185 Cal. 200, 207, 196 P. 257, 259, 13 A.L.R. 676, it was said: 'There is little to be gained by reviewing the numerous definitions given by the courts and lexicographers of the words 'family' and 'household.' They mean different things under different circumstances. * * * (T)he word 'household' Is variously used to designate people, generally, who live together in the same house, including the family, servants, and boarders; or it may be used as including only members of the family relation.' (Emphasis added.)

In Island v. Fireman's Fund Indemnity Co., supra, 30 Cal.2d 541, 547, 184 P.2d 153, 156, 173 A.L.R. 896 the court said: 'One of the definitions of the word 'household' given in Webster's New International Dictionary is, 'Those who dwell under the same roof and compose a family; a domestic establishment.' The courts have noted that the term may have different meanings under different circumstances. (Citations.)' The court thereafter quoted from Moore Shipbuilding the except set forth by us above.

In Cal-Fram Ins. Co. v. Boisseranc, supra, 151 Cal.App.2d 775, 312 P.2d 401, this court had occasion to interpret the terms 'resident' of the 'household' as used in a comprehensive liability policy extending coverage to such a person. It was there said: 'These quoted terms have no absolute meaning. Their meaning may vary according to the circumstances. (Citations.) An important factor is to ascertain the purpose of the terms of inclusion and exclusion. (Citations.)' (P. 781, 312 P.2d p. 404, citing Inter alia both Moore Shipbuilding and Island.) We also pointed out in that case that 'insofar as the cases involve insurance policies, they can be roughly divided into cases involving policies excluding from coverage of the policies members of the insured's household, and those extending coverage to such persons. Both attempt to apply the rules of construction above discussed. As a result, in the extension cases the questioned terms are broadly interpreted, while in the exclusion cases the same terms are given a much more restricted interpretation. This is necessary because in both situations the courts favor an interpretation in favor of coverage.' (P. 782, 312 P.2d p. 405.) Finally, after a discussion of a number of cases, our opinion concluded: 'These cases illustrate that the interpretation of the terms involved is not fixed but varies according to the circumstances of the case. They also demonstrate that most courts will interpret the terms so as to extend the coverage if this can be done under any reasonable interpretation of the facts.' (P. 783, 312 P.2d p. 406.)

The evidence in the instant record viewed in the light most favorable to the respondents (Marshall...

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