Herendeen v. U.S. Fidelity & Guaranty Co.

• Decision Date: 21 March 1973
• Docket Number: CA-CIV,No. 2,2
• Citation: 19 Ariz.App. 399,507 P.2d 1011
• Parties: Laura HERENDEEN, Appellant, v. UNITED STATES FIDELITY & GUARANTY COMPANY, Appellee. 1282.
• Court: Arizona Court of Appeals

Page 1011

507 P.2d 1011

19 Ariz.App. 399

Laura HERENDEEN, Appellant, v. UNITED STATES FIDELITY & GUARANTY COMPANY, Appellee.

No. 2 CA-CIV 1282.

Court of Appeals of Arizona, Division 2.

March 21, 1973.

Rehearing Denied April 25, 1973.

Review Denied May 22, 1973.

Bernard I. Rabinovitz, Tucson, for appellant.

Everett & Bury, P.C. by David C. Bury, Tucson, for appellee.

HATHAWAY, Chief Judge.

This is an appeal from a judgment granting appellee a motion for summary judgment against appellant.

In September, 1969, Laura Herendeen, appellant herein, was crossing Stone Avenue in Tucson, Arizona, when she was struck by a 1959 Ford automobile driven by Juan P. Chavarria, Jr., a minor. A lawsuit was filed against Juan Jr. and his parents alleging Inter alia that the parents had been negligent on two counts; first, that they were liable under the Family Purpose Doctrine and secondly, that they had been negligent in providing the defendant with the said motor vehicle or in permitting him to drive the same. Mr. and Mrs. Chavarria, Juan Jr.'s parents, were insured by United States Fidelity & Guaranty Co., appellee herein, which insurance company refused to defend under the automobile policy, claiming that the automobile driven by Juan Jr. was not insured under the policy. Appellant then proceeded to trial against the Chavarrias and obtained a judgment against them in the sum of $22,000.

Laura Herendeen, as a third party beneficiary under the insurance policy, brought an action against the Chavarria's insurance company alleging that it violated and disregarded its obligation to its insured, Juan Sr., and by reason of its failure and refusal to settle plaintiff's claim, it became liable for the entire unpaid balance of plaintiff's judgment. Appellee answered admitting failure to negotiate, alleged no coverage under the policy and denied that the vehicle in question was owned by Juan Sr. The insurance company's motion for summary judgment was granted, hence this appeal.

The appeal presents various questions challenging the propriety of summary judgment in that several disputed issues of material fact were before the trial court.

WAS THERE A QUESTION AS TO THE OWNERSHIP OF THE FORD AUTOMOBILE THAT STRUCK LAURA HERENDEEN?

Juan Jr. did not obtain a certificate of title when he purchased the automobile in question from his uncle. Appellant cites Dairyland Insurance Co. v. Richards, 13 Ariz.App. 324, 476 P.2d 530 (1970), vacated in 108 Ariz. 89, 492 P.2d 1196 (1972) for the proposition that because Juan Jr. did not obtain a certificate of title for the automobile, he was not the owner and therefore this was only a temporary substitute automobile being used by a member of the insured's household and was covered under the policy. We have recently ruled in St. Paul Fire & Marine Ins. Co. v. Muniz, 19 Ariz.App. 5, 504 P.2d 546 (1972) that a person may still be the owner of an automobile even though he did not obtain a certificate of title when he purchased it. It is uncontroverted that the agreement between Juan Jr. and his uncle, the seller of the automobile, was valid and ownership of the automobile was in fact transferred. This conclusion is supported in the depositions which were filed for purposes of ruling on summary judgment.

WAS THE VEHICLE IN QUESTION 'AN OWNED AUTOMOBILE' WHICH WOULD HAVE BEEN ADDED TO JUAN CHAVARRIA, SR.'S AUTOMOBILE INSURANCE POLICY DURING THE 30-DAY PERIOD PROVIDED IN THE POLICY?

The policy of insurance provides that:

'If the Named insured disposes of, acquires ownership, of, or replaces a private passenger, farm or utility automobile or, with respect to Part III, a trailer, any premium adjustment necessary shall be made as of the date of such change in accordance with the manuals in use by the company. The named insured shall, upon request, furnish reasonable proof of the number of such automobiles or trailers and a description thereof.' (Emphasis added)

Appellant cites Hughes v. Glens Falls Ins. Co., 15 Ariz.App. 7, 485 P.2d 597 (1971) for the proposition that under the above clause of the insurance policy, the Ford automobile was necessarily insured by the appellee since Juan Jr. intended to insure the automobile under his father's policy. Appellant's reliance upon Hughes, supra, is misplaced because that case dealt with an automobile which had been purchased by the named insured. The named insured gave notice of the purchase to his automobile insurance company, but the insurance company refused to insure the new automobile. There, we stated that refusal to insure the automobile had been improper and held...