Hartford Ins. Group v. Winkler

• Decision Date: 02 April 1973
• Docket Number: No. 6924,6924
• Citation: 508 P.2d 8,89 Nev. 131
• Parties: The HARTFORD INSURANCE GROUP, aka Hartford Fire Insurance Company, aka Hartford Accident and Indemnity Company, an insurance corporation, Appellant, v. Eugene WINKLER, Individually, et al., Respondents.
• Court: Nevada Supreme Court

Page 8

508 P.2d 8

89 Nev. 131

The HARTFORD INSURANCE GROUP, aka Hartford Fire Insurance Company, aka Hartford Accident and Indemnity Company, an insurance corporation, Appellant, v. Eugene WINKLER, Individually, et al., Respondents.

No. 6924.

Supreme Court of Nevada.

April 2, 1973.

Rose, Norwood & Edwards, Ltd. and Roger L. Hunt, Las Vegas, for appellant

Beckley, DeLanoy & Jemison, Las Vegas, for respondents.

OPINION

MOWBRAY, Justice:

This is an appeal from an order of the district court denying appellant's motion for a judgment notwithstanding the verdict or, in the alternative, a new trial. NRCP 50(b). ¹

The Winklers, who are the respondents on appeal and who were the plaintiffs below, commenced this action against the appellant, The Hartford Insurance Group, as a second insurer of Tonya Webb, to recover damages the Winklers suffered when the vehicle in which they were riding was struck by an automobile driven by Tonya but owned by the parents, Mr. and Mrs. Archie Hughes. The Winklers first sued Tonya. Her parents' insurer provided a defense and later offered full policy limits in an effort to settle the case. Upon advice of her counsel, Tonya stipulated that judgment be entered in favor of the Winklers and against her and that the policy limits of her parents' insurer be accepted as partial satisfaction of the judgment. Additionally, Tonya assigned to the Winklers whatever rights she had under the policy of her former husband, Edward Webb, in exchange for the Winklers' agreement not to levy execution on any of Tonya's property, but to look solely to the policy for recovery on the judgment. ²

Hartford initially denied liability on the ground that Tonya was not a resident of her husband's household at the time of the accident, and later upon the additional ground that Tonya was not driving a 'nonowned' vehicle when she struck the Winklers' car. A jury trial was held on the issue of whether Tonya Webb was covered under her former husband's policy. The jury found that Tonya was so covered and returned a verdict in favor of the Winklers for $58,450.

After the jury's verdict was returned, appellant moved for a judgment notwithstanding the verdict or, in the alternative, for a new trial. The motion was predicated upon Hartford's contentions that Tonya Webb was barred as a matter of law from recovery under the policy because (1) Tonya was not a named insured at the time of the accident, since she was not then a resident of her husband's household and (2) if she were, she was precluded from recovery because she was not operating a nonowned vehicle when the accident occurred.

Edward and Tonya were married on December 24, 1963, and they took up residence in Arizona. During the latter part of March or early April 1965, Tonya visited her parents in Mesquite, Nevada. While she was visiting her parents, she filed for a divorce in Nevada, on May 13, 1965. On June 25, 1965, after the divorce action had been filed, but before the divorce was granted, Tonya, while driving her parents' car in Utah, failed to heed a stop sign at a highway intersection and collided with the Winkler vehicle. Tonya and Edward were divorced on August 16, 1965.

After their marriage, Edward applied to Hartford for an insurance policy in his and Tonya's names. The policy was issued on January 8, 1964, in the name of Edward only. ³ The policy was purchased with funds of the community. It was Edward's intention to obtain coverage for Tonya as well as for himself. The premium was the same whether or not Tonya was specifically named therein as an insured. When the policy was issued, Tonya also received a card from Hartford indicating she was insured under the policy, as did Edward. The definition of the named insured as set forth in section 1, page 2, of the policy is as follows: "(N)amed insured' means the individual or husband and wife named in Item 1 of the declarations, but if only one individual is named the term 'named insured' also includes his spouse, if a resident of the same household.'

It would appear from the record that, even though Tonya was not specifically named as an insured in the policy when issued, she was covered at that time. Mr. James Burns, Hartford's expert witness, testified in substance that a wife would receive the same coverage as her husband, whether or not she was named in the policy, providing she was a resident of her husband's household at the time the policy was issued. Indeed, during oral argument, counsel for Hartford, upon questioning by the court, conceded that Tonya was a named insured within the provisions of the policy at the time of its issuance. It is only reasonable to assume that at the time the policy was written the parties who purchased it believed that both of them were covered by the policy. In this case, the policy is silent as to when the wife had to be a resident of her husband's household. The trier of fact could properly conclude that, when the wife was a resident of the household at the time the policy was issued and the policy is silent as to the time the wife had to be a resident of her husband's household, she qualified as a 'named insured' as long as she remained the husband's spouse. As the Arizona court declared in Eureka-Security Fire & Marine Ins. Co. v. Simon, 1 Ariz.App. 274, 401 P.2d 759, 762--763 (1965), rehearing denied June 10, 1965, review denied July 6, 1965:

'. . . The courts have said:

"Contracts of insurance are not to be construed to relieve insurance companies that write them from coverages broader than they intended and from coverages they would not advisedly have taken, it to do so is to leave one without protection who might reasonably be held to be within the policy's provisions. Contracts of insurance are always construed most strongly against the insurance company. Garnsky v. Metropolitan Life Insurance Co., 232 Wis. 474, 287 N.W. 731, 124 A.L.R. 1489; 32 C.J. 1152; 29 Am.Jur., Secs. 166--167.' Johnson v. Maryland Casualty Co., 4 Cir., 125 F.2d 337 at 340 (1942).

'Stated another way , a policy of insurance is to be construed liberally in favor of the insured and strictly against the insurer. North British & Mercantile Ins. Co. v. San Francisco Securities Corporation, 30 Ariz. 599, 249 P. 761 (1926); Maryland Cas. Co. v. Hoffman, 75 Ariz. 103, 252 P.2d 82 (1952). It has been stated that the reason for this rule is that the insured usually has no choice in the selection or means employed in drafting insurance contracts, and that because these contracts are drawn and selected with great care and deliberation by expert legal advisers either employed by or acting exclusively in the interest of the insurance company, any ambiguity or uncertainty therein is the fault of the insurer. Berry v. Acacia Mutual Life Ass'n, 49 Ariz. 413, 67 P.2d 478 (1937).'

In this case the trial judge so instructed the jury, and properly so. ⁴

In Aetna Casualty and Surety Company v. Miller, 276 F.Supp. 341 (D.Kan.1967), a policy was issued only in the name of the husband. At the time of the accident a divorce was pending between the husband and wife, and they were living in different states. In Aetna, the court held as a matter of law, quoting from Cal-Farm Insurance Company v. Boisseranc, 151 Cal.App.2d 775, 312 P.2d 401 (1957), that the term 'resident' had no absolute meaning, and that the meaning varied according to circumstances. Accordingly, the federal court in Kansas said that the wife was a resident of the same household as her husband at the time of the accident. 276 F.Supp. at 347, 348, the federal court stated:

'Other cases in point (besides Cal-Farm) are Olson v. Standard Marine Insurance Co., 109 Cal.App.2d 130, 240 P.2d 379; Mazzilli v. Accident & Casualty Ins. Co., 35 N.J. 1, 170 A.2d 800; Central Manufacturers' Mutual Ins. Co. of Van Wert, Ohio v. Friedman, 213 Ark. 9, 209 S.W.2d 102, 1 A.L.R.2d 557.

'The Court has no difficulty in concluding, as a matter of law under the factual situation here posed and well-grounded court decisions, the particular provisions of the automobile liability insurance policy before the Court are ambiguous, uncertain and equivocal in phraseology, and thus incapable of uniform connotation.

'. . . 'One of the great shames of American society is the ever-increasing divorce rate and breakup of families which lead to increased crime, social and economic irresponsibility, and a lessening of the moral fiber of good citizenship. Couple this with the population explosion and great increase in motor vehicle traffic in a mobile-minded nation. If it were necessary as a condition precedent to driving an automobile on a public highway under the protection of the Financial Responsibility law, to examine the marital status of every driver to find out whether he was married, divorced or separated temporarily from his fireside, bed and spouse, by duty, business, or a family quarrel, no citizen using the highway could ever reasonably expect to be protected by the other motorists' compliance with the state laws requiring the carrying of automobile liability insurance.

'This Court does not believe that an insurance company, doing business as a quasi-public institution, can or should be able to avoid liability under ambiguous provisions of a policy--by attempting to require the spouse of the policy owner as an 'insured' to remain under the same roof and in the same physical household during the legal existence of a marriage. Neither does this Court believe it is incumbent upon a user of the highways to conduct a 'bed check' to see if another motorist is fully and safely insured by the fact that conjugal bliss is present in his home at the time.'

The jury could properly conclude that Tonya was a named insured under the provisions of the policy at the time of the accident.

We turn to consider Hartford's contention that, even if Tonya was covered by her prior husband's policy, she is barred from recovery in this case because she was not driving...