Larson v. Occidental Fire & Cas. Co., 8558

• Decision Date: 21 October 1968
• Docket Number: No. 8558,8558
• Citation: 79 N.M. 562,1968 NMSC 160,446 P.2d 210
• Parties: R. H. LARSON and Virginia Larson, Husband and wife, Plaintiffs- Appellants, v. OCCIDENTAL FIRE AND CASUALTY COMPANY, Garnishee-Appellee. OCCIDENTAL FIRE AND CASUALTY COMPANY, Plaintiff-Appellee, v. R. H. LARSON and Virginia Larson, his wife, Defendants-Appellants.
• Court: New Mexico Supreme Court

Page 210

446 P.2d 210

79 N.M. 562

R. H. LARSON and Virginia Larson, Husband and wife, Plaintiffs- Appellants, v. OCCIDENTAL FIRE AND CASUALTY COMPANY, Garnishee-Appellee.

OCCIDENTAL FIRE AND CASUALTY COMPANY, Plaintiff-Appellee, v. R. H. LARSON and Virginia Larson, his wife,

Defendants-Appellants.

No. 8558.

Supreme Court of New Mexico.

Oct. 21, 1968.

[79 NM 562] Smith, Ransom, Deaton & Reagan, Albuquerque, for appellants.

Rodey, Dickason, Sloan, Akin & Robb, Joseph J. Mullins, Albuquerque, for appellee Occidental Fire and Casualty Co.

Modrall, Seymour, Sperling, Roehl & Harris; Frank H. Allen, Jr., Albuquerque, for appellee James W. Rutherford and State Insurance Agency.

OPINION

NOBLE, Justice.

R. H. and Virginia Larson (hereafter referred to as Larson) obtained a default judgment in Arizona against Triangle Oil Company (hereafter referred to as Triangle) for personal injuries sustained by Larson in an accident occurring in Arizona between the Larson automobile and a Triangle truck. The Arizona judgment was domesticated in New Mexico. Larson sought to subject an Occidental Fire and Casualty Company (hereafter referred to as Occidental) policy of liability insurance on Triangle's trucks to payment of the judgment. Occidental brought a declaratory judgment action against Larson; State Insurance Agency, an insurance broker; and James W. Rutherford, its agent, to determine the extent of its liability under its insurance policy. Judgment in the declaratory suit dismissed the writ of garnishment against Occidental and determined that Occidental was not obligated under its policy. The Larsons have appealed.

This case turns on whether the Triangle truck involved in this accident was covered by the Occidental policy. Triangle's president, realizing that insurance was not ordinarily afforded for vehicles leased to others, discussed its insurance problems with Rutherford. The trial court found that Rutherford agreed to procure a policy covering leased vehicles but that Triangle agreed that insurance for the truck involved in this accident need only be provided within the territorial limits of the State of New Mexico, including the Navajo Indian Reservation. Larson has challenged the territorial limits finding but our review of the record convinces us that it has substantial support in the evidence.

The Occidental policy procured by Rutherford contained (1) an exclusion of coverage for injuries caused by Triangle's vehicles while leased to others, and (2) a 'restricted territory and radius endorsement' limiting coverage on certain trucks to the territorial boundaries of New Mexico, including the Navajo Indian Reservation. By reason of our disposition of this case, we need not resolve the question of whether the exclusion of leased vehicles was effective. Because this accident occurred outside of the territorial limits applicable to the truck involved in this accident, the trial court correctly determined that Occidental had no liability and dismissed the writ of garnishment.

We are not impressed by the argument that the New Mexico Motor Vehicle Financial Responsibility Law requires a different result. New Mexico has no general statutory provision making insurance compulsory in all cases. The statute in force at the time of this accident pertaining to proof of financial responsibility for the future, ch. 182, Laws 1955, applied only to drivers who had had prior accidents and who would otherwise have been prohibited from continuing to operate a motor vehicle. Farmer Ins. Exchange v. Ledesma, 214 F.2d 495 (10th Cir. 1954) (construing predecessor provisions). A policy covering insurance for the future pursuant to this act constituted proof of a driver's future financial responsibility necessary to his continued operation of a vehicle. The owner or person covered by the policy must have been brought within the scope of the statute by prior accident before its provisions applied. American Serv. Mut. Ins. Co. v. Parviz, 153 Colo. 490, 386 P.2d 982; Safeco Ins. Co. of America v. Gonacha, 142...