Keplinger v. Mid-Century Ins. Co.

• Decision Date: 14 March 1977
• Docket Number: MID-CENTURY,No. 2,CA-CIV,2
• Citation: Keplinger v. Mid-Century Ins. Co., 565 P.2d 893, 115 Ariz. 387 (Ariz. App. 1977)
• Parties: Jack L. KEPLINGER and Janice E. Keplinger, husband and wife, Appellants, v.INSURANCE COMPANY, Preferred Risk Insurance Companies, and Roger S. Roof, Appellees. 2205.
• Court: Arizona Court of Appeals

Page 893

565 P.2d 893

115 Ariz. 387

Jack L. KEPLINGER and Janice E. Keplinger, husband and wife, Appellants, v.MID-CENTURY INSURANCE COMPANY, Preferred Risk Insurance Companies, and Roger S. Roof, Appellees.

No. 2 CA-CIV 2205.

Court of Appeals of Arizona, Division 2.

March 14, 1977.

Rehearing Denied April 15, 1977.

Review Denied May 24, 1977.

Leslie J. Gilbertson, Tucson, for appellants.

Everett, Bury & Moeller, P.C. by David C. Bury and Dan A. Sinema, Tucson, for appellee Mid-Century.

Pain & Julian, P.C. by Theodore A. Julian and Warren S. McCord, Phoenix, for appellee Preferred Risk.

HOWARD, Chief Judge.

This appeal is from a declaratory judgment decreeing that policies of insurance issued by the appellees-insurers (hereinafter referred to as Mid-Century and Preferred Risk) did not provide liability insurance coverage to appellee Roof for an automobile accident in which appellant-wife was injured.The court expressly found that the automobile driven by Roof was a "non-owned" automobile and that during the period of time in issue, it was being regularly and frequently used and driven by him in the course of his employment by appellants in delivering newspapers, and that Mid-Century's insurance policy issued to Roof provided no coverage since it excluded coverage for Roof while operating a vehicle not owned by him but which had been furnished for his regular or frequent use.The court also found that the insurance policy issued by Preferred Risk to Mr. Keplinger provided no coverage since the insured vehicle was used in the transportation of goods within the meaning of an exclusionary provision in the policy and further, that representations made by Mr. Keplinger were false and fraudulent, material and relied upon by Preferred Risk, thereby vitiating the coverage on the policy.

The facts are as follows.Roof was employed by appellants to help Mrs. Keplinger deliver newspapers to Ajo.Appellants owned a 1971 Datsun pickup truck and a station wagon.On the morning of January 13, 1973, Roof was driving the truck towards Ajo with Mrs. Keplinger riding as passenger.Roof apparently fell asleep and the pickup truck rolled over, throwing Mrs. Keplinger from the vehicle and causing her serious bodily injury.Mrs. Keplinger began delivering newspapers to Ajo about 4 months prior to the accident and had hired Roof to help her shortly after undertaking the Ajo route.Roof accompanied Mrs. Keplinger every day of the week with the exception of his one day off, and from the middle of November until January 13, 1973, the date of the accident, the Datsun pickup was used to deliver newspapers to Ajo.

MID-CENTURY POLICY

The insurance policy issued to Roof by Mid-Century provided that Mid-Century would pay all damages the insured became legally obligated to pay because of bodily injury to any person and/or damage to property arising out of the use of a non-owned automobile.The policy defined a non-owned automobile:

"Non-owned automobile means an automobile not owned by or regularly or frequently used by the named insured or any resident of the same household, other than a substitute vehicle."(Emphasis added)

Thus we see that if Roof's use of the pickup truck was regular or frequent, there was no coverage for the accident under the Mid-Century policy.The purpose of a "drive other cars" provision is to cover the occasional or incidental use of other cars without the payment of an additional premium, but concomitantly, to exclude habitual use of other cars which would increase the insurer's risk without a corresponding increase in premium.In other words, the insurance policy is not intended to cover the insured with respect to the use of another automobile which he frequently uses or has the opportunity to use frequently, 13 Couch on Insurance 2d, 45:1052.

Appellants rely on Travelers Indemnity Company v. Hudson, 15 Ariz.App. 371, 488 P.2d 1008(1971), andCoombs v. Lumbermen's Mutual Casualty Company, 23 Ariz.App. 207, 531 P.2d 1145(1975), for the proposition that "regular use" denotes continuous, uninterrupted possession of the vehicle with the privilege and opportunity of its use at such times and for such purposes as Roof wished.We need not, however, discuss the applicability of the "regular use" exception as to which, a reading of the cases discloses, no hard and fast rule has been established and each case depends upon the particular facts.SeeAnnot.86 A.L.R.2d 937, § 6.

The Mid-Century exclusion applies either to regular use or to frequent use.The term "frequent use" has been held to mean an often-repeated but irregular, casual, or incidental use as distinguished from a regular use.Continental Casualty Company v. Suttenfield, 236 F.2d 433(5th Cir.1956).Roof drove the Datsun pickup at least six times a week for the two months preceding the accident, and therefore it cannot be denied that his use of the truck, albeit for a special purpose, was repeated often.We believe the evidence supported the conclusion of the trier of fact that Roof's use of the Datsun pickup was not a mere occasional use so as to come within the coverage of the Mid-Century policy.Since resolution of this question is for the trier of fact, Brooks v. Link, 212 Kan. 690, 512 P.2d 374(1973), we defer to the trial court's determination.

PREFERRED RISK POLICY

The next question is whether the trial court erroneously concluded that the Preferred Risk automobile policy did not provide coverage for the accident.As noted above, the court found that the Datsun pickup truck was used in the transportation of goods within the meaning of a policy provision excluding coverage "while the automobile is used as a public or livery conveyance unless such use is specifically declared and described in the policy."The court also found that representations made by Mr. Keplinger were false and fraudulent, material and relied upon by Preferred Risk, thereby vitiating the coverage of the policy.

We do not agree with the trial court that the policy exclusion as to use as a public or livery conveyance applied to the Keplingers' use of the pickup for delivering newspapers.True the term "public livery or conveyance" encompasses freight as well as persons.Sonoco Products Company v. Travelers Indemnity Company, 315 F.2d 126(10th Cir.1963).However, there must be an indiscriminate holding out of the vehicle for public use.Smith v. Stonewall Casualty Company, 212 Va. 765, 188 S.E.2d 82(1972);American Fidelity Fire Insurance Co. v. Pardo, 32 A.D.2d 536, 299 N.Y.S.2d 521(1969);Lakeshore Development Corp. v. Gulf Insurance Company, 353 F.2d 163(5th Cir.1965);Canal Insurance Company v. Gensco, Inc., 404 S.W.2d 908(Tex.Civ.App.1966); 13 Couch on Insurance 2d 45:1040;seeAnnot.30 A.L.R.2d 273.The facts presented here do not show that the pickup truck was available to the public generally and therefore the exclusion did not prevent coverage.

We also disagree with the trial court's conclusion that the policy coverage was vitiated by misrepresentations of Mr. Keplinger in the insurance application.

The application indicated that the Datsun pickup would be used for pleasure and driven to work five miles each way, that the number of trips per week would be five, and that no passengers would be carried.Mrs. Keplinger was named as another driver in the household and the application, which Mr. Keplinger admitted having read, recited:

"I declare the facts stated on both sides of this application are true, and request the company to issue the insurance and any renewals thereof in reliance thereon."

In the section of the policy denominated CONDITIONS, we find the following:

"26.Declarations:

By acceptance of this policy the named insured agrees that the statements in the declarations are his agreements and representations, that this policy is issued in reliance upon the truth of such representations and that this policy embodies all agreements existing between himself and the company or any of its agents...