Jones v. Horace Mann Ins. Co.

Decision Date16 May 1997
Docket NumberNo. 4821,4821
Citation937 P.2d 1360
PartiesFrank JONES, Sr., as the Natural Parent and Guardian of Frank Jones, Jr., Appellant, v. HORACE MANN INSURANCE COMPANY, a Florida Corporation, Appellee.
CourtAlaska Supreme Court

Richard G. Haggart, Maloney & Haggart, Anchorage, for Appellant.

Larry Z. Moser, Pletcher, Weinig, Moser & Merriner, Anchorage, for Appellee.

Before COMPTON, Chief Justice, RABINOWITZ, MATTHEWS, EASTAUGH and FABE, JJ.

OPINION

RABINOWITZ, Justice.

I. INTRODUCTION

This appeal arises from the superior court's grant of summary judgment in favor of Horace Mann Insurance Company. The superior court held that a homeowner's policy issued by Horace Mann did not cover a snowmachine accident, which occurred on a public road.

II. FACTS AND PROCEEDINGS

On November 24, 1991, Frank Jones, Jr. was struck by a snowmachine operated by ten-year-old Christopher Chezik and sustained serious injuries to his right leg. Chezik had been giving rides to friends on the machine that day. The accident occurred on Ridgeway Road, a public road about four-tenths of a mile from the Chezik home. Ridgeway Road is the access road to Georges Drive, which abuts the Cheziks' property.

At the time the Cheziks purchased their home on Georges Drive, they also purchased a homeowners' policy from Horace Mann Insurance Company. Subsequent to the accident the Cheziks informed Horace Mann of the event. After an investigation, Horace Mann notified the Cheziks that it declined coverage. 1

Thereafter Frank Jones, Sr. sued the Cheziks on his son's behalf. He sued Christopher Chezik for negligent operation of the snowmachine, and the parents for negligent supervision of Christopher. The Cheziks settled the lawsuit by paying $25,000 to Jones, assigning to him any claims they may have had against Horace Mann or its agents, and permitting a judgment to be entered against them. Following an uncontested damage presentation, the judgment amount was determined to be $333,547.78.

Frank Jones, Sr. then sued Horace Mann and Curtis Bates, an insurance broker, requesting specific performance and damages for negligence and breach of contract. 2 The Superior Court granted Horace Mann's subsequent motion for summary judgment. The linchpin of the ruling was its conclusion that the homeowners' policy issued to the Cheziks did not cover the snowmachine accident because it did not occur on "insured premises."

Frank Jones, Sr. now brings this appeal from the superior court's grant of summary judgment in favor of Horace Mann.

III. DISCUSSION
A. Standard of Review

This court will uphold summary judgment if no issues of material fact are in dispute and the moving party is entitled to judgment as a matter of law. Bishop v. Municipality of Anchorage, 899 P.2d 149, 153 (Alaska 1995). Interpretation of contract language is a question of law, subject to de novo review. Cox v. Progressive Casualty Ins. Co., 869 P.2d 467, 468 n. 1 (Alaska 1994) (citations omitted). "This court interprets insurance contracts by looking to the language of the disputed policy provisions, the language of other provisions of the policy, and to relevant extrinsic evidence. In addition, we also refer to case law interpreting similar provisions." 3 Id.

B. The Cheziks' Homeowners' Insurance Policy Does Not Cover the Snowmachine Accident.
1. The accident did not occur on insured premises.

Horace Mann denied coverage because in its opinion the accident did not occur on the "insured premises." The following policy provisions are relevant to resolution of this issue:

Coverage L--Personal Liability--We pay, up to our limit, all sums for which an insured is liable by law because of bodily injury or property damage caused by an occurrence to which this coverage applies. We will defend a suit seeking damages if the suit resulted from bodily injury or property damage not excluded under this coverage....

....

INCIDENTAL LIABILITY COVERAGES

....

5. Motorized Vehicles--We pay for the bodily injury or the property damage which:

a. occurs on the insured premises and is a result of the ownership, maintenance, use, loading or unloading of:

1) a motorized vehicle if it is not subject to motor vehicle registration because of its type or use; or

2) a recreational motor vehicle;

b. results from:

...

3) a motorized vehicle which is designed only for use off public roads and which is used mainly to service the insured premises....[ 4

DEFINITIONS

....

b. Under Coverages L and M, insured premises also includes:

...

6) premises used by you in connection with the described location;

7) all access ways immediately adjoining the insured premises....

Jones contends that Ridgeway Road is an access way and that the situs of the accident on Ridgeway Road immediately adjoins the Cheziks' insured premises. More particularly, Jones argues the accident site was an "insured premises" because it is "immediately adjacent" to land used by the Cheziks in connection with their home. 5 Charles Chezik testified that the Chezik family used the land immediately adjacent to the scene of the accident for snowmobiling. Jones notes that "it is uncontested that Chezik's testimony and diagram show the Chezik family used the area immediately adjacent to the accident site on Ridgeway Road for snow machining and that such use occurred as a result of recreational snow machine rides initiated at the Chezik's home and returning to [it]." (Emphasis added.)

Horace Mann asserts that the situs of the accident, some four-tenths of a mile from the Cheziks' residence, does not fall within the policy definition of "insured premises." It argues the accident is excluded because it did not happen on the Cheziks' property, or on any adjacent premise used by the Cheziks in connection with their property, or on an access way immediately adjoining the insured premises.

In rejecting Jones's contentions the superior court stated, "While the policy contains no express geographical limit on the expansive definition of the insured premises, ... plaintiffs' reasonable expectations would have included such a limit." 6 Having studied the provisions in question and the relevant case law, we hold that the superior court correctly interpreted and applied the relevant policy provisions in concluding the accident did not occur on "insured premises."

In United States Fire Insurance Co. v. Schnackenberg, 88 Ill.2d 1, 57 Ill.Dec. 840, 429 N.E.2d 1203, 1207 (1981), the Illinois Supreme Court was called upon to interpret the phrase "ways immediately adjoining" the insured premises. The court found that "[i]f [Schnackenberg's] interpretation of the coverage clause were adopted, the 'insured premises' definition would be rendered meaningless for there would be no geographical limit to coverage and liability for conduct which originated on the premises and could be said to be incidental thereto." Therefore the Supreme Court of Illinois concluded that a bicycle accident which occurred on a public road two and one half blocks from the insured's dwelling was not covered. Id.

The Schnackenberg court quoted with approval an annotation on premises liability:

"It is generally agreed that the term 'adjacent' means 'near' or 'close to'; that the term 'adjoining,' although more restrictive than the term 'adjacent,' has often been loosely used interchangeably with it; but that when the word 'immediately' modifies 'adjacent' or 'adjoining,' definite contact is meant, allowing no intervening space. In the application of these definitions, the courts have held injuries on sidewalks bounding the particularly described property to be covered by the policy, except when there is a clear indication to the contrary. And although there is authority to the contrary, a policy purporting to cover certain named premises and 'ways immediately adjoining' covers injury on the street bounding the premises, that is, injury sustained within the roadway directly in front of the property." Annot., 23 A.L.R.3d 1230, 1232-33 (1969).

Id. 57 Ill.Dec. at 843, 429 N.E.2d at 1206.

If Jones's arguments were accepted, there would be no "logical geographical limit" to coverage under the homeowners' policy. See id. at 843-44, 429 N.E.2d at 1206-07 ("If bicycle riding 2 1/2 blocks away from the insured premises is a use incidental to those premises because it originated there, it is just as incidental if the rider is 2 1/2 miles or any greater distance from home."). A number of courts have accepted the Schnackenberg rationale. See, e.g. Herzog v. National American Ins. Co., 2 Cal.3d 192, 84 Cal.Rptr. 705, 465 P.2d 841, 844 (1970) (homeowner's policy that disclaimed liability for accidents "away from the premises or the ways immediately adjoining" did not cover an accident on a freeway, three to five miles from the insured's premises); Safeco Ins. Co. v. Brimie, 163 Ill.App.3d 200, 114 Ill.Dec. 422, 516 N.E.2d 577, 581 (1987) (homeowner's policy did not cover accident occurring on school grounds on which insured regularly rode where accident site was separated from residence by playground, public street, and fence); Farm Bureau Mut. Ins. Co. v. Sandbulte, 302 N.W.2d 104, 109 (Iowa 1981) (for policies with the "ways immediately adjoining" language, claims arising from accidents "on ways not actually contiguous to or touching the insured premises have been uniformly held, as a matter of law, to be excluded from coverage"). Cf. Huggins v. Yoshiwara, 2 Cal.3d 200, 84 Cal.Rptr. 709, 465 P.2d 845, 846 (1970) (homeowner's policy that provides coverage for automobile accidents in certain limited instances does not become a motor vehicle insurance policy).

Based on the terms of the Horace Mann policy and the reasoning of these authorities, we agree with the superior court's ruling that the accident did not occur on insured premises. A construction of the relevant provisions that included coverage for an accident occurring on a public road, four-tenths of a mile from the Cheziks' residence, would be...

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