Lavin v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 09 May 1964
• Docket Number: No. 43502,43502
• Citation: 391 P.2d 992,193 Kan. 22
• Parties: Richard E. LAVIN, by and Through His Next Friend and Natural Guardian, John R. Lavin, Appellant, v. The STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Bloomington, Illinois, Appellee.
• Court: Kansas Supreme Court

Page 992

391 P.2d 992

193 Kan. 22

Richard E. LAVIN, by and Through His Next Friend and Natural Guardian, John R. Lavin, Appellant, v. The STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Bloomington, Illinois, Appellee.

No. 43502.

Supreme Court of Kansas.

May 9, 1964.

Rehearing Denied June 17, 1964.

Syllabus by the Court

In an action wherein the insured owned three automobiles upon which the insurer issued three separate and distinct policies requiring full payment of premiums on each, as more fully reflected in the opinion, it is held: (1) The two exclusion clauses in question create confusion and ambiguity whereby general rules of construction are applicable; and (2) the trial court committed reversible error in its orders sustaining the insurer's demurrers to the insured's amended petition.

Robert L. Boyce, Jr., Kansas City, argued the cause, and Howard Washburn and John C. Eisele, Kansas City, were with him on the briefs for appellant.

Gerald L. Rushfelt, Kansas City, argued the cause, and J. Milton Sullivant, Lewis C. Smith, Clifford T. Mueller, Richmond M. Enochs, Jr., and Ralph D. Lamar, Kansas City, were with him on the briefs for appellee.

ROBB, Justice.

This is an appeal from certain orders of the trial court sustaining demurrers to counts I and II of plaintiff's amended petition and entering judgment for defendant thereon, overruling plaintiff's objection to the submission of defendant's motion to make definite and certain, and the sustaining of defendant's motion to make definite and certain.

The specifications of error follow the statements in the notice of appeal.

Count I of plaintiff's amended petition alleged that John R. Lavin owned three motor vehicles insured by defendant in three separate and distinct insurance policies each of which contained a provision for payment of medical expenses in the amount of $500. Richard Lavin, son of John, who resided in his father's household, was injured on June 10, 1961, while occupying a 1955 Chevrolet convertible, one of Lavin's three insured vehicles, when it was struck by an automobile operated by Richard Greenlee at Forty-second and Gibbs Road in Wyandotte county. Richard Lavin's resulting medical and hospital expenses totaled in excess of $1500. The other two insured vehicles owned by John Lavin were a 1954 Chevrolet half ton truck and a 1961 Ford sedan.

All requirements devolving upon plaintiff in furnishing proof of claim under the conditions of the policy were compled with including payment to defendant of all premiums due. Defendant paid plaintiff the sum of $500 under the medical payment coverage on the 1955 Chevrolet convertible but was indebted to plaintiff on its policy issued on September 23, 1960, covering the 1954 Chevrolet truck. It denied plaintiff's claim and failed and refused to pay the $500 under the policy covering such truck.

Count II showed that on June 2, 1961, defendant had issued a policy covering the 1961 Ford sedan delivered to John Lavin about June 1, 1961. Other allegations were identical with those set forth in count I except that count II in addition relied on the clause of the policy under 'Definitions' headed 'Newly Acquired Automobile', reading '* * * or the company insures all automobiles owned by the named insured on the date of its delivery * * *', and giving the named insured thirty days following such delivery date in which to notify the company, on the basis that the 1961 Ford was alleged to be a 'newly acquired automobile.' On this count plaintiff also sought recovery of $500 under the medical payment coverage aggregating the sum of $1,000 on both counts, plus the costs of the action, including $1,000 attorney fees divided into $500 on each count.

Plaintiff had filed his original petition on March 7, 1962, and that petition was attacked by a motion to strike the words, '* * * and in all things repudiated the same, stalling and postponing and advancing no valid excuse for not paying plaintiff the benefits provided under said policy,' which motion was sustained. On May 24, 1962, defendant moved to make the petition definite and certain by attaching copies of the insurance policies and setting out facts making the 1961 Ford a newly acquired automobile. At the hearing on the motion to make definite and certain on June 1, 1962, plaintiff objected thereto on the ground that all objections to the form of a pleading should be taken up at one time, but the trial court overruled such objection and then sustained both parts of defendant's motion to make definite and certain, which ruling is, therefore, one of the issues here for appellate review.

On August 2, 1962, defendant attacked the amended petition by a demurrer to each count (1) for its failure to allege facts sufficient to constitute a cause of action (2) plaintiff had no legal capacity to sue and (3) the action was not prosecuted by the real party in interest.

The trial court's journal entry of judgment filed on January 9, 1963, was in conformity with its earlier letter to the parties dated November 7, 1962, which reads:

'November 7, 1962

'Re: Lavin v. State Farm, No. 10411-B

'Gentlemen:

'In analyzing this case, which was argued to the Court on September 19, 1962, and taken under advisement pending submission and study of briefs, I start with the proposition that if an insurer undertakes to restrict coverage by excluding certain eventualities, it must clearly and definitely be so stated in the policy, and that otherwise, the policy will be deemed to cover the risk. This proposition is supported by Chicago Rock Island and Pac. R. Co. v. Aetna Ins. Co., 180 Kan. 730, 308 P.2d 119. I am not persuaded, in line with the argument of defendant's counsel, that a different rule of law should prevail here because of the fact that the defendant is a mutual company.

'As plaintiff's counsel points out in his answering brief, under Insuring Agreement, Coverage C, the defendant agrees to pay reasonable medical expenses to or for the named insured or a relative who sustains bodily injury, caused by accident.

'(1) while occupying the owned auto, or

'(2) through being struck by the owned auto, or

'(3) while occupying any other land motor vehicle, or

'(4) through being struck by any other land motor vehicle.

'Under the Insuring Agreement, the Court is of the opinion plaintiff is covered here. He clearly falls within the fourth category.

'So, we must look to the exclusions.

'Defendant's counsel relies on Exclusion (i)(2), which provides that this insurance does not apply under coverage C to bodily injury to any person while occupying * * * any automobile * * * if such vehicle is owned by the named insured or a relative and is not included in the definition of 'owned automobile.'

'I think it is conceded that the 1955 Chevvy convertible in which plaintiff was riding at the time he was injured is not an 'owned automobile' insofar as either of the policies of insurance involved in the instant case is concerned.

'So, if we have nothing more than the insuring agreement, and this one exclusionary clause (i)(2), plaintiff clearly has no cause of action here. He falls squarely within that particular exclusionary clause.

'At the time of the oral arguments, plaintiff's counsel argued the Exclusion (i)(3) cancelled Exclusion (i)(2)--that the defendant first gave coverage (in the insuring agreement), then took it away (in Exclusion (i)(2)), then gave it back (in Exclusion (i)(3)). The Court was somewhat impressed with this argument.

'However, the Reply Brief of defendant's counsel convinces the Court that this is not so--that an exclusionary clause cannot be transformed into an insuring clause--that each of the exclusionary clauses refers back to the insuring clause and takes something away therefrom or limits its applicability.

'Plaintiff's counsel also argued that Conditions--Insuring Agreements 14 takes care of plaintiff, but the Court does not read this as being in any way in conflict with Exclusion (i)(2). This particular provision of the policy simply governs cases falling within the insuring agreement, and not excepted by an exclusionary clause.

'To this point I have no trouble in my own thinking. However, another question then arises:

'Exclusion (i)(2) clearly excludes plaintiff from coverage here. Exclusion (i)(3) not only does not exclude plaintiff here, but seems to reaffirm coverage to plaintiff as granted in the insuring agreement. I have spent some time checking law as to whether (1) Is a person who is excluded by any of the exclusionary provisions of a policy unable to recover, or (2) If one exclusionary clause cuts out a plaintiff but another exclusionary clause points in the other direction, is there, then, ambiguity so that the doctrine of construction most favorable to the insured comes into play?

'I have resolved this question in favor of the first of the two alternatives mentioned in the preceding paragraph which decision is supported by the ruling of the court in the Mallinger case, 111 N.W.2d 647, at page 651.

'I am persuaded, then, that the decision of this court must be the same as that of the court in the Mallinger case cited by defendant's counsel--that an insurance company has the right to make a contract and to have it enforced as written, providing that it is clear and unambiguous--that this policy is not ambiguous--that plaintiff falls within Exclusion (i)(2) and is not entitled to recover here. I will so hold. The demurrers will be sustained.'

On page 2 of the policy (exhibit 'A') we find insuring agreement I, in pertinent part, reads as follows:

'COVERAGE C--Medical Payments. To pay reasonable expenses incurred within one year from the date of accident for necessary medical * * * services. * * *

'Division 1. To or for the named insured and each relative who sustains bodily injury, caused by accident, while occupying or through being struck by the owned automobile, or any other land motor vehicle. * * *.'

On page 4 of...