Industrial Indem. Co. v. U.S. Fidelity & Guaranty Companies

• Decision Date: 29 May 1969
• Docket Number: No. 10349,10349
• Citation: 93 Idaho 59,454 P.2d 956
• Parties: INDUSTRIAL INDEMNITY COMPANY, a corporation, Plaintiff-Appellant, v. UNITED STATES FIDELITY AND GUARANTY COMPANIES, a corporation, and Louis Eugene Stauffer and Stanley D. Zweigart, Defendants-Respondents.
• Court: Idaho Supreme Court

Page 956

454 P.2d 956

93 Idaho 59

INDUSTRIAL INDEMNITY COMPANY, a corporation, Plaintiff-Appellant, v. UNITED STATES FIDELITY AND GUARANTY COMPANIES, a corporation, and Louis Eugene Stauffer and Stanley D. Zweigart, Defendants-Respondents.

No. 10349.

Supreme Court of Idaho.

May 29, 1969.

Racine, Huntley, Herzog, Olson & Zener, Pocatello, for appellant.

Baum & Peterson, Pocatello, for respondents.

McFADDEN, Chief Justice

On December 5, 1964, a 1964 Corvette, owned by Stanley Zweigart and driven by Eugene Stauffer, collided with an automobile occupied by Wallace J. and Larue Cook. The Cooks sustained personal injuries and instituted an action in the district court against Stanley Zweigart and Eugene Stauffer to recover damages. Mr. Stauffer was insured by respondent United States Fidelity and Guaranty Company. Whether Mr. Zweigart and Mr. Stauffer were also covered by an insurance policy issued by appellant Industrial Indemnity Company is the issue presented to this court for consideration.

Industrial Indemnity had issued a comprehensive liability policy to the Zweigart Packing Corporation, Fred A. Zweigart, Sr., Fred A. Zweigart, Jr., and Thayne Bargason, all of whom are listed as named insureds in the policy. This policy contained a physical damage endorsement which listed the automobiles covered by the physical damage provision of the policy. Included in this endorsement was a 1961 Corvette, listed as a private passenger vehicle owned by Fred A. Zweigart, Sr.

In the fall of 1964 Stanley Zweigart, the 18 year old son of Fred A. Zweigart, Sr., purchased a 1964 corvette for which the title was taken in Stanley Zweigart's own name. He contacted Mr. A. R. Ebel, now deceased, of Bryan & Company (the agency which handled this insurance policy issued to Zweigart Packing Corporation), for the purpose of obtaining insurance on the new Corvette. According to the affidavit of Stanley Zweigart, he advised Mr. Ebel that

'he had acquired a 1964 Corvette and that that Corvette should replace the 1961 Corvette previously listed on the policy * * *.'

He did not explicitly advise Mr. Ebel that title to the car was in his own name.

Mr. Ebel then contacted Industrial Indemnity and requested that they make the appropriate change in the policy. Industrial Indemnity, however, requested further information regarding ownership of the vehicle, the name of the principal driver, and the disposition of the 1961 Corvette. Without further communicating with Stanley Zweigart, Mr. Ebel replied to this request, stating

'1964 Corvette owned by Zweigart Packing and driven by Stanley Zweigart. '61 Corvette replaced by '64.'

It can be seen in retrospect that this information was incorrect because title to the vehicle was actually in Stanley Zweigart's name. He was, however, as stated by Mr. Ebel, the principal driver. Upon receipt of the information from Mr. Ebel, Industrial Indemnity made the requested change in the policy, effective October 20, 1964.

The automobile accident which precipitated the instant litigation subsequently occurred on December 5, 1964. Eugene Stauffer was driving the Corvette at the time of the accident with the permission and in the company of Stanley Zweigart. When the Cooks filed their personal injury action against Stauffer and Zweigart, each defendant requested his insurance company to assume the defense. United States Fidelity refused, and Industrial Indemnity, after obtaining a reservation of rights against United States Fidelity, assumed the defense. The present action was then instituted to determine which of the two insurance companies was liable. Meanwhile, an opportunity for settlement of the Cooks' tort action arose, which was accepted with each company paying to the Cooks $9,500.00. The companies then entered into a stipulation regarding reimbursement of the $9,500.00 plus attorney fees, depending upon the outcome of the present action.

On March 7, 1968 the respondent moved for summary judgment, which motion was granted. On August 28, 1968 the trial court entered its findings of fact and conclusions of law, and on September 26, 1968 rendered its judgment in favor of the respondent. Industrial Indemnity has appealed to this court from the findings of fact, conclusions of law, and judgment.

At the outset it should be pointed out that findings of fact are not necessary in disposing of a case by summary judgment. In the present case, however, we will treat the court's findings as a statement of facts which in the trial court's opinion are not genuinely in dispute and as a statement of the basis for the trial court's decision. See 3 Barron & Holtzoff, Federal Practice and Procedure (Wright ed. 1958) § 1242, pp. 201-202.

The appellant has assigned as error the trial court's purported finding of fact and conclusion of law that the insurance policy issued to Mr. Stauffer by respondent is 'excess coverage' while the policy issued by appellant covering Stanley Zweigart is 'primary coverage.' Appellant, however, has not supported this assignment of error with points and authorities or argument. It is well settled that under such circumstances the assignment will not be considered. Bolen v. Baker, 69 Idaho 93, 203 P.2d 376 (1949); Michael v. Zehm, 74 Idaho 442, 263 P.2d 990 (1953); Bjornstad v. Perry, 93 Idaho 402, 443 P.2d 999 (1968).

Appellant's principal contention is that the trial court erred in granting respondent's motion for summary judgment. It seeks to avoid liability under the insurance policy issued to Zweigart Packing Corporation mainly on the ground that Stanley Zweigart is the legal owner of the 1964 Corvette. Appellant contends that Stanley Zweigart falsely represented to Mr. Ebel that the corporation owned the vehicle and that this was a misrepresentation of material fact which, under I.C. § 41-1811, precludes any recovery under the insurance policy. The appellant maintains that the 1964 Corvette was added as an endoresement on the corporation's policy while appellant was under the erroneous impression, created by Stanley Zweigart, that the vehicle was owned by the corporation, and that had the true facts been known appellant could not have insured Stanley Zweigart under that policy because he was not a named insured on the policy.

It is our opinion that the appellant's reliance upon an alleged misrepresentation of ownership is untenable. Stanley Zweigart did not directly misrepresent the ownership of the Corvette. He made no statements that the Zweigart Packing Corporation owned the vehicle. His statement to Mr. Ebel to the effect that he had acquired a new Corvette would seem to indicate that he was the owner. Yet it is our conclusion that Stanley Zweigart, who stated in his unrefuted affidavit that he was unfamiliar with insurance procedures, at most innocently omitted the facts regarding ownership. Mr. Ebel did not inquire into the ownership of the vehicle, even after this specific information had been requested by the appellant, his principal. Rather he answered his principal's inquiry on his own volition, without further communicating with Stanley Zweigart, assuming that the corporation owned the vehicle. Appleman states that 'Where no question was directed to the fact concealed and there is no evidence to show that the insured thought that the matter concealed was material, there could be no concealment unless such fact was material as a matter of law.' 7 Appleman, Insurance Law and Practice, § 4252, p. 8.

The next reason for our conclusion that appellant cannot avoid liability on the grounds of a misrepresentation of ownership is that under these circumstances presented, a misrepresentation of ownership, assuming that it occurred, is not a misrepresentation of a material fact which would preclude recovery under the policy. I.C. § 41-1811 provides that

'* * * Misrepresentations, omissions, concealment of facts, and incorrect statements shall not prevent a recovery under the policy or contract unless either:

(a) Fraudulent; or

(b) Material either to the acceptance of the risk, or to the hazard assumed by the insurer; or

(c) The insurer in good faith would either not have issued the policy or contract, or would not have issued it at the same premium rate, or would not have issued a policy or contract in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss, if the true facts had been made known to the insurer as required either by the application for the policy or contract or otherwise.'

There is no suggestion in any of the evidence or arguments of the parties that the misrepresentation, if any, was fraudulent. Also, nothing was 'required' of Stanley Zweigart by an application or inquiry regarding ownership, and there is nothing in the record to indicate that Industrial Indemnity would not have insured Stanley Zweigart if the true facts had been known, and the record reflects that appellant had insured Stanley Zweigart while he was operating the 1961 Corvette which was in his father's name. Consequently it is our opinion that I.C. § 41-1811(a) and (c) are inapplicable to the present case.

Appellant argues, however, that the issue of ownership is material to the risk assumed by appellant and that recovery is therefore barred by I.C. § 41-1811(b). Ownership of an automobile is undoubtedly material to the risk assumed by an insurance company in some cases. See Travelers Indemnity Co. v. American Cas. Co., 226 F.Supp. 354 (S.D.W.Va.1964); Merchants Indem. Corp. of New York v. Eggleston, 68 N.J.Super. 235, 172 A.2d 206 (N.J.1961); Southern Farm Bureau Cas. Ins. Co. v. Allen, 388 F.2d 126 (5th Cir. 1967); Didlake v. Standard Ins. Co., 195 F.2d 247, 33 A.L.R.2d 941 (10th Cir.1952). In each of these cases the court held that misrepresentation of ownership even though innocent, barred recovery by the true owner of the automobile under a policy issued in the name of a person represented as the owner.

These decisions are,...