Lumbermens Mut. Cas. Co. v. Continental Cas. Co.
| Decision Date | 05 September 1963 |
| Docket Number | Nos. 292,293,s. 292 |
| Parties | LUMBERMENS MUTUAL CASUALTY COMPANY, Appellant, v. CONTINENTAL CASUALTY COMPANY, Ernest P. LaBate, Administrator of the Estate of Juanita Jelich, Deceased, Carl Ahistrom and Mary Carolyn Ahistrom, Appellees. CONTINENTAL CASUALTY COMPANY, Appellant, v. LUMBERMENS MUTUAL CASUALTY COMPANY, Ernest P. LaBate, Administrator of the Estate of Juanita Jelich, Deceased, Carl Ahistrom and Mary Carolyn Ahistrom, Appellees. |
| Court | Alaska Supreme Court |
James J. Delaney, Jr., Plummer, Delaney & Wiles, Anchorage, for appellant, Lumbermens Mut. Cas. Co.
David H. Thorsness, Hughes, Thorsness & Lowe, Anchorage, for appellant, Continental Cas. Co.
Russell Arnett, Anchorage, for appellees, Carl Ahlstrom and Mary Carolyn Ahlstrom.
Robert E. Hammond, Anchorage, for appellee, administrator of the estate of Juanita Jelich, deceased.
These cross-appeals grow out of a dispute over the proper construction and application of certain provisions in automobile liability insurance policies issued by Lumbermens Mutual Casualty Company, hereinafter referred to as Lumbermens and Continental Casualty Company, referred to herein as Continental.
The basic facts are that Juanita Jelich, wife of the named insured, George Jelich, was killed while driving an automobile that had been rented from a car rental company by Troy Cummings. Cummings was riding in the front seat with Juanita Jelich and the appellees Carl and Mary Ahlstrom were riding in the rear seat. The latter were injured and brought suit against the administrator of the estate of Juanita Jelich based on deceased's alleged negligence. The administrator demanded that Lumbermens defend that suit on the ground that operation of a non-owned automobile by Juanita was covered by the policy issued to George Jelich. Lumbermens then commenced a separate action for declaratory judgment, which is the suit now before us, asking the court to declare that its policy of insurance issued to George Jelich furnished no coverage to Juanita Jelich nor to the administrator of her estate under the circumstances. It also asked the court to declare that a policy of insurance issued by Continental to Federal Automotive Services Corp., doing business under the name of Avis Renta-Car, from whom Troy Cummings had rented the car Juanita Jelich was driving, did furnish insurance coverage to Juanita Jelich and her administrator. Continental's responsive pleading denied that its policy of insurance furnished any coverage to Juanita Jelich and alleged that Lumbermens' policy did cover her at the time of the accident.
The first question to be decided is whether the trial court erred in holding that Juanita Jelich was a resident of the same household as George Jelich within the meaning of Lumbermens' policy which stated in part, as to persons insured:
The following are insureds under Part I:
provided the actual use thereof is with the permission of the owner;
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'Definitions
'Under Part I:
George and Juanita Jelich had been living together as man and wife with their three children in the family home being purchased by them as tenants by the entirety. On August, 9, 1960 Juanita filed suit for divorce. For approximately two weeks prior to the filing of the suit George had been staying with relatives or at a downtown hotel. On August 19, 1960 Lumbermens' policy of insurance was issued. George had signed an appearance and waiver in the divorce action. Juanita and the children continued to reside in the family home. George visited at the family home several times a week and spent Sundays there. He was paying the house and utility payments, buying all groceries used by the family, kept his tools and equipment in the home, and occasionally took Juanita and the children out for meals. It was George's wish to effect a reconciliation with his wife. The matter had been discussed between them but no decision had been reached. George received most of his mail at the family home and the balance at his office. The automobile covered by Lumbermens' policy had been used by both George and Juanita during their separation and up to the time of Juanita's death.
Lumbermens argues that the phrase 'resident of the same household' should be interpreted as including only persons living 'under the same roof' with the named insured. The insurer's theory apparently being that where the named insured, his spouse and relatives all live in the same house, all would have normal opportunity to use the same automobile rather than resort to the use of non-owned automobiles. The argument infers that the likelihood that a spouse and relatives would more frequently use non-owned automobiles when not living in the same house with the named insured is an increased risk not intended to be covered by the policy provisions under consideration.
No general rule for the interpretation and application of the policy clause under consideration occurs to us. The facts of the particular case must be examined in order to determine when the named insured, or his spouse or relatives are or cease to be residents of the same household. If either of them was eating and sleeping away from the family residence for a temporary period of time with the intention of returning, it could not ordinarily be said that their usual residence had been abandoned in favor of the temporary arrangement. Temporary absences frequently occur in the normal household because of family emergencies, business requirements, vacations and for a variety of other reasons. It would seem that the policy provision under consideration was specifically designed to cover such situations and provide protection while the absent person happened to be operating a nonowned automobile. If the provision were given the restricted interpretation urged by Lumbermens, protection would not extend to any situation where the spouse or relative was temporarily not eating and sleeping in the same house as the named insured. Such an interpretation of the meaning of the clause would be narrower than that intended by the policy in our opinion.
In the case before us George Jelich advised Lumbermens that his residence was 3800 Barbara Drive, Spenard, when he procured the policy. Actually he had been eating and sleeping away from the family home for approximately three weeks and a divorce action was pending when the policy issued. The fact that he advised Lumbermens that his residence was at the place where he had normally resided and where he then maintained a home and family indicates that his intention was not to give up his residence at that address. This reasoning is reinforced by his testimony that he was attempting to effect a reconciliation with his wife at the time of her death and by the fact that he used the family home for every usual purpose except that of sleeping and eating.
George Jelich's situation at the time his wife Juanita had occasion to drive a nonowned automobile was hardly different, from the standpoint of the insurer's risk, than it would have been had he been away from home on business, on vacation, or because of some family emergency of a different nature. He had no intention of giving up his residence at 3800 Barbara Drive where his spouse was residing. We shall not assume that his separation from his wife and family was irreconcilable and that existing marital difficulties would not be settled. Under these facts we hold that the trial court was correct in finding that George and Juanita Jelich were residents of the same household at the time she met her death while operating a non-owned automobile. 2
The next point raised is the claim of both Lumbermens and Continental that the trial court erred in finding that Juanita Jelich had the implied permission of the owner of the automobile to operate it.
At the time Cummings rented the vehicle from Avis he signed a document entitled Standard Rental Agreement provided by the compnay. This agreement contained twelve paragraphs in fine print on the back of the cover page of the rental agreement booklet. Paragraph 10 stated in part:
'10. THE RENTER EXPRESSLY AGREES THAT THE MOTOR VEHICLE LEASED TO HIM SHALL NOT BE OPERATED:
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Both Lumbermans and Continental argue that under the quoted provisions Cummings as renter had no authority to permit the operation of the automobile by any person except one entitled to coverage under the insurance policy referred to. To determine who is covered by the policy, they argue, it is only necessary that one refer to paragraph III of that document where 'insured' is defined. Eight classifications of persons are mentioned in this paragraph and since none of them seem to cover a mere permittee of the renter, then it follows, appellants say, that Cummings was not authorized to give Juanita Jelich permission to operate the automobile.
Legal title to the vehicle was in Federal Automotive Services Corp. which engaged extensively in the car rental business in Alaska under the business name of Avis Rent-a-Car. The Commissioner of Public Safety for Alaska had had some difficulty during 1960 in obtaining written assurance from Federal Automotive...
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