Lowry v. Kneeland
| Decision Date | 21 September 1962 |
| Docket Number | No. 38579,38579 |
| Citation | 263 Minn. 537,117 N.W.2d 207 |
| Parties | Raymond LOWRY, Respondent, v. H. H. KNEELAND and Mitchell Boyer, Inc., Respondents, and H. H. KNEELAND, third-party plaintiff, Respondent, v. UNIVERSAL UNDERWRITERS INSURANCE COMPANY, third-party defendant, Appellant. |
| Court | Minnesota Supreme Court |
Syllabus by the Court
1. Words used in contracts of insurance, like other contracts, in the absence of ambiguity, must be given their plain, ordinary, and popular meaning.
2. Where words have acquired a legal meaning different from their popular meaning, and the legal meaning is used in drafting legal instruments, it must be assumed that the parties intended the words to have their legal meaning.
3. Where words are susceptible of two meanings, they must be construed most strongly against the one who drafted the instrument in which they are used.
4. The term 'employee,' as used in the insurance contract involved in this case, may encompass a person performing a gratuitous service for another.
Peter F. Walstad, Mordaunt, Walstad, Cousineau & Hagglund, Minneapolis, for appellant.
Warren B. King, King & MacGregor, Minneapolis, Thomas J. Burke, St. Paul, for respondent Kneeland.
Grose & Von Holtum, Worthington, for respondent Lowry.
This is an appeal from an order of the trial court denying a motion of third-party defendant for summary judgment. The questions involved were certified by the court as important and doubtful, thereby making the order appealable.
The facts are not seriously in dispute. E. W. Boyer is part owner of Mitchell Boyer, Inc., a Lincoln-Mercury dealership. On February 24, 1959, Boyer and his wife were to fly to a meeting of automobile dealers in Las Vegas, Nevada, and, after completion of the meeting, were to continue on to Hawaii for a vacation. H. H. Kneeland is a longtime friend of Boyer, and on occasion Boyer has consulted with him about some business activities. Kneeland is not connected with the Mitchell Boyer corporation as stockholder or director. Customarily, Boyer would have his son-in-law take him to the airport, but on the day in question his son-in-law was to attend a breakfast meeting of automobile dealers so Boyer asked Kneeland if he would drive the Boyers to the airport in a company-owned automobile and then return the automobile to the garage. The automobile to be used was a demonstrator and was for sale, and it was necessary to return it to the garage after the trip. The exact hour during which it was to be returned to the garage was left up to Kneeland. He was to call the garage and ascertain when someone could return him to his home or wherever he wanted to go after taking the car back.
Pursuant to this arrangement, Kneeland and his wife drove to the Boyer home, where they left their own automobile, and, in the car owned by Mitchell Boyer, Inc., with Kneeland at the wheel, drove the Boyers to the airport. Kneeland then returned to the Boyer home, where Mrs. Kneeland picked up their car, and they both returned to the Kneeland home. After spending about 35 to 40 minutes there, having called the garage and arranged for someone to drive him back to his home, Kneeland started for the garage. En route there, he collided with an automobile in which plaintiff was a passenger.
An action was commenced by plaintiff against Mitchell Boyer, Inc., and Kneeland. Answer was interposed by appellant as the insurer on the garage liability insurance policy carried by Mitchell Boyer, Inc., in behalf of the corporation, but it declined to represent Kneeland on the ground that he was not within the coverage of the policy as an insured. Thereupon appellant was brought in as a third-party defendant. Depositions were taken of Kneeland and Boyer, and, based on the depositions, pleadings, and an affidavit, a motion was made by appellant for summary judgment on the third-party complaint.
The policy of insurance carried by Mitchell Boyer, Inc., is one of restricted liability. The provision of the policy giving rise to the present dispute is found in an endorsement attached to the policy and enables the company to procure insurance at a reduced rate. It reads as follows:
'The unqualified word 'insured' includes the named insured and also includes (1) any partner, employee, director or stockholder thereof while acting within the scope of his duties as such, and any person or organization having a financial interest in the business of the named insured covered by this policy, and (2) any partner or employee or director or stockholder thereof or a member of the household of the named insured or such partner or employee or director or stockholder, while using an automobile covered by this policy or when legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or with his permission, and (3) any other person or organization legally responsible for the use thereof only while such automobile is operated by the named insured or any such partner or employee or director or stockholder or member of the household of the named insured or partner or employee or director or stockholder, provided the actual use of the automobile is by the named insured or with his permission.'
It is the position of appellant that Kneeland is not an employee of Mitchell Boyer, Inc., and therefore does not qualify as an insured within the terms of the policy. It is admitted that he does not come under the other provisions as a partner, director, or stockholder of the company. It is likewise admitted that he is not a paid employee. The trial court held that a fact issue at least existed whether Kneeland could be considered an employee within the meaning of this insurance policy. The court also held that, even if he is not an employee, coverage might still be found within clause (3) of the quoted portion of the policy in that it could be said that Boyer, even though not present in the automobile himself, was the operator thereof.
1. We have frequently held that words used in contracts of insurance, like any other contract, must be given the meaning they ordinarily convey to the popular mind and that, in the absence of ambiguity, they must be given their plain, ordinary, and popular meaning. 1
In the recent case of Simon v. Milwaukee Auto. Mutual Ins. Co., 262 Minn. 378, 385, 115 N.W.2d 40, 45, we said with respect to the rule that a contract of insurance must be construed most strongly against the insurance company who chose the language of it:
2. The term or word 'employee,' like many others frequently encountered in attempting to construe an insurance contract, or other contracts, apparently defies exact definition. On the face of it, it would seem to be unambiguous, but, considered in its context with a contract of one kind or another, it is apparent that it may have differing meanings. To an ordinary person it probably means someone who is hired or employed for a particular period of time, but it is obvious that such a restricted meaning cannot apply to all cases. It is possible for a word to convey to an ordinary layman a meaning quite different from a legal meaning which it may have acquired by usage, and, if it is given its legal meaning in drafting legal documents, it is reasonable to assume that the parties intended it to have that meaning. After all, the cardinal rule of construction of any instrument is to ascertain the intent of the parties from the language which they have chosen to use. It is obvious that here the word 'employee' might well have acquired a different legal meaning from that which ordinarily would be given it by people not versed in the use of legal language.
3. It is elementary that if there is doubt as to its meaning it must be construed most strongly against the one who chose the language in drafting the instrument. 2
4. While appellant contends that neither Kneeland nor Boyer considered Kneeland was an employee of Mitchell Boyer, Inc., their concept of the meaning of the word may not be conclusive. Kneeland did testify that he never considered himself an employee of Mitchell Boyer, Inc., or of E. W. Boyer individually.
The relationship between Kneeland and Mitchell Boyer, Inc., must have been that of bailor-bailee, master and servant, principal and agent, employer and employee, or an independent contractor. It seems quite clear that the term 'employer and employee' is an outgrowth of and synonymous with master and servant, at least in the context used here. In 35 Am.Jur., Master and Servant, § 2, we find the following:
In Frankle v. Twedt, 234 Minn. 42, 47 N.W.2d 482, we had occasion to consider the question whether the negligence of a driver of a car was imputed to the owner of the car so as to bar his right of recovery under circumstances not too unlike those found in the instant case. With respect to the relationship of master and servant we said (234 Minn. 47, 47 N.W.2d 487):
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