Hemel v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 10 February 1947
• Docket Number: 38225.
• Citation: 29 So.2d 483,211 La. 95
• Court: Louisiana Supreme Court
• Parties: HEMEL v. STATE FARM MUT. AUTO. INS. CO.

29 So.2d 483

211 La. 95

HEMEL v. STATE FARM MUT. AUTO. INS. CO.

No. 38225.

Supreme Court of Louisiana

February 10, 1947

S. Sanford Levy, of New Orleans, for Louis Hemel plaintiff, appellant and respondent.

Porteous & Johnson, of New Orleans, for defendant, appellee and relator.

FOURNET Justice.

This suit was instituted by Louis Hemel to recover damages to his automobile (allegedly resulting from a fire in his motor) on an insurance policy issued by the State Farm Mutual Automobile Insurance Company and the case is now before us on a writ of certiorari issued by this court on the application of the defendant insurer to review the judgment of the Court of Appeal for the Parish of Orleans reversing the judgment of the district court dismissing the plaintiff's suit and rendering judgment in favor of the plaintiff in the sum of $490.78, with interest and costs.

The plaintiff based his action on the comprehensive clause of the policy wherein the insurer agreed to 'pay for loss of or damage to the automobile due to any cause, except collision or upset.'

The defendant, on the other hand, contends that the damage to the motor was caused by a mechanical breakdown, a risk specifically excluded under the terms of the policy.

The policy in question is styled NATIONAL STANDARD COMBINATION AUTOMOBILE POLICY, affording to the insured, as the title indicates, a combination of insuring agreements covering various risks and hazards in the operation of a car for a stated premium. In the preamble it is provided that the insurer 'Does hereby agree with the insured * * * in consideration of the payment of the premium and of the statements contained in the Declarations and subject to the limits of liability, exclusions, conditions, and other terms of this policy.' Immediately following, under the heading INSURING AGREEMENTS are listed the risks and hazards covered by the policy. In the paragraph titled 'Coverage C-Comprehensive' the insurer agrees 'To pay for loss of or damage to the automobile due to any causc, except collision or upset. * * *.' At the end of these coverage clauses are listed, under the heading appropriate thereto EXCLUSIONS. Among these is to be found the stipulation that 'This policy does not apply: * * * (i) Under Coverage C * * * to mechanical or electrical breakdown * * *.'

While three members of the Court of Appeal agreed that the loss was occasioned by a mechanical breakdown in the motor of the plaintiff's car and that he should be entitled to recover for such loss, each member of the court assigned different reasons for reaching this conclusion.

The presiding judge, who was the author of the main opinion, concluded that as the terms of the policy were ambiguous, in that 'In Coverage 'C' the insurer assumes the risk of all damage to the insured's automobile from 'any cause' except collision and upset and in the exclusion clause there is contained a denial of this comprehensive coverage because of other exceptions which render the coverage must less comprehensive,' the defendant was liable.

One of the concurring opinions is based on the fact that in the opinion of the author the provision excluding coverage loss due to mechanical breakdown is so ambiguous, besides being repugnant to, contradictory of, and inconsistent with the comprehensive coverage clause 'C,' as to render the same unenforceable.

The other judge found nothing ambiguous in either the exclusion or comprehensive clause but felt that if the defendant intended to rely on the exclusion clause, it was its duty to either show that all of the damage was caused by mechanical breakdown or show what part of the damage was so caused and having failed to do this, it was liable for the entire loss.

'An insurance policy is a contract and the rules established for the construction of written instruments apply to contracts of insurance.' 14 R. C. L. 925, � 102. See, also, Wallace v. Insurance Co., 4 La. 289; Parks v. Hall, 189 La. 849, 181 So. 191. Effect must be given to every part of the agreement if it is possible and while it is the universal rule of construction that all ambiguities must be construed in favor of the insured and against the insurer, when the intent of the parties is evident from the terms of the contract there is nothing for the court to construe and the policy must be given a reasonable interpretation consonant with the apparent object and plain intent of the parties. See, Muse v. Metropolitan Life Ins. Co., 193 La. 605, 192 So. 72, 125 A.L.R. 1075.

These rules are sound and have for their foundation the pronouncements to be found in our Revised Civil...