Mayflower Ins. Exchange v. Kosteriva

• Decision Date: 27 December 1961
• Docket Number: No. 8892,8892
• Citation: 84 Idaho 25,367 P.2d 572
• Parties: MAYFLOWER INSURANCE EXCHANGE, a Washington corporation, Plaintiff-Appellant, v. Betty J. KOSTERIVA, Ernest DeLeeuw and Phyllis DeLeeuw, husband and wife, Defendants-Respondents, Jack E. Latham and Billy J. Piper, Defendants.
• Court: Idaho Supreme Court

Page 572

367 P.2d 572

84 Idaho 25

MAYFLOWER INSURANCE EXCHANGE, a Washington corporation, Plaintiff-Appellant, v. Betty J. KOSTERIVA, Ernest DeLeeuw and Phyllis DeLeeuw, husband and wife, Defendants-Respondents, Jack E. Latham and Billy J. Piper, Defendants.

No. 8892.

Supreme Court of Idaho.

Dec. 27, 1961.

Hawkins & Miller, Coeur d'Alene, for appellant.

J. Ward Arney, Pat W. Arney, Coeur d'Alene, for respondent.

McFADDEN, Justice.

Mayflower Insurance Exchange, a Washington corporation, instituted this action for declaratory judgment against the named defendants, of whom only Betty J. Kosteriva, Ernest DeLeeuw and wife are respondents. The other defendants named did not appear in the trial of the action in the District Court and are not represented on this appeal.

Appellant sought a declaration of its obligations under one of its insurance policies issued in the State of Washington to defendant Latham, an Airman First Class in the United States Air Force. The policy provided that the Insurance Exchange agreed to pay on behalf of Latham, the insured, all sums he should become legally obligated to pay as damages for bodily injury, death or property damage, caused by accidental occurrence and arising out of the ownership, maintenance or use of the specified 1956 Oldsmobile. The Insurance Exchange also agreed to defend any suits seeking damages against the insured.

The contract defined the term 'Insured', as follows:

'With respect to coverages A and B [bodily injury and property damage liability], the unqualified word 'insured' includes the named insured and, except where specifically stated to the contrary, also includes any person while using the automobile and any person or organization legally responsible for the use thereof, when used with the permission of the named insured.'

The contract had endorsed on its face the following:

'This Policy Is Endorsed. Please Read Carefully.

'This policy does not afford coverage while the insured vehicle is operated by a member of the Armed Forces of the United States or any other power, except the named insured and spouse.'

Latham admitted that he had read and was aware of this endorsement.

On the afternoon of June 11, 1957, Latham, with one Piper, another Airman, both stationed at Fairchild Air Base, near Spokane, Washington, drove from the base to Coeur d'Alene, Idaho. During the course of the afternoon, during dinner at the home of Latham's wife's mother, and after dinner, Latham was drinking beer, eventually becoming intoxicated. Piper, who was with Latham at all times during the afternoon and evening, did not drink. After visiting a couple of taverns after dinner, Latham, feeling he wasn't in condition to drive, told Piper to get the insured car from a parking lot, where it had been left.

Piper, took the car, picked up Latham, Latham's wife and her sister. The sister entered the front seat with Piper, and Latham and his wife entered the rear seat. Mrs. Latham was taking care of her husband, who by that time was becoming ill. Mrs. Latham directed Piper to drive to an establishment for coffee for all, primarily, however, for Latham's benefit. En route to the cafe, the car, driven by Piper, struck and injured three pedestrians, one of whom succumbed to her injuries.

Respondent Betty J. Kosteriva, the daughter of the pedestrian killed in the accident, brought an action against Latham and Piper for damages for the death of her mother. Mr. and Mrs. DeLeeuw, the other two persons injured in the accident, instituted another action against both Latham and Piper for damages for their injuries.

Neither Latham nor his wife notified the Insurance Exchange of the accident. They were first contacted by agents of the Exchange some three or four months after the Kosteriva and DeLeeuw suits were filed.

The trial court head the matter without a jury and entered Findings of Fact, Conclusions of Law and Judgment declaring that appellant was obligated to defend the actions pending against defendants Latham and Piper and to pay any judgment entered against them in such actions up to the policy limits.

From this judgment appellant appeals, assigning as error the finding of the trial court that the word 'operated', as used in the restrictive endorsement was ambiguous; the finding that Piper, a member of the Armed Forces, was the driver, but not the operator, of the vehicle; and the judgment and decree against the appellant.

Specifically the trial court held, by its Conclusions of Law II:

'Under the facts and circumstances in the instant case, Piper was 'driving' the car but he was doing so in the presence of Jack E. Latham and Ramona Latham, his wife, the insureds, and was 'driving' the car as the agent of and under the direction and control of the Lathams and solely on a mission or errand and for the purposes of the Lathams, and in their presence.

'Under the facts in this case, the Lathams 'operated' the car.'

Appellant urges that the word 'operated', as used in the indorsement, is definite and not ambiguous, and specifically that the court erred in finding ambiguity in the use of the word. It is contended that there should be no application of the rule that where a clause in an insurance policy is susceptible of more than one construction the one most favorable to the insured should be adopted. Such rule has been adopted by this court in the case of Rauert v. Loyal Protective Ins. Co., 61 Idaho 677, 106 P.2d 1015, and Rollefson v. Lutheran Brotherhood, 64 Idaho 331, 132 P.2d 758. Application of such rule of construction against the insurance company is dependent on determining whether the terms in its policy are ambiguous.

Dictionary definitions can be found to support the contentions of both the parties to this appeal. Webster, New International Dictionary, 3rd Ed. 1961; Funk & Wagnalls, New Standard Dictionary (1937); the term 'operated' has not acquired a single clear legal meaning. An examination of many cases shows a sharp division of authority as to whether the term is limited in meaning to actual physical control or whether a vehicle may be 'operated' by one other than the driver. E. g., Witherstine v. Employers' Liability Assur. Corp., 235 N.Y. 168, 139 N.E. 229, 28 A.L.R. 1298; contra, Trans-Continental Mut. Ins. Co. v. Harrison, 262 Ala. 373, 78 So.2d 917, 51 A.L.R.2d 917. See also, 5 A Am.Jur., Automobile Ins. § 36, p. 38, and current supplement. Snyder for Use of Brooks v. United States Mut. Ins. Co., 312 Ill.App. 337, 38 N.E.2d 540, 542.

Examination of the statutory law is of little help. I.C. § 49-303(b) defines the term 'operator': 'Every person, other than a chauffeur, who is in actual physical control of a motor vehicle upon a highway.' I.C. § 49-1501(g) defines the term 'operator' as: 'Every person who is in actual physical control of a motor vehicle.' These definitions of the term operator are somewhat in conflict with themselves, for the exception in I.C. § 49-303(b) excluding the term 'chauffeur' from the definition of operator recognizes that actual physical control is not always requisite to be an operator. Aside from the fact that this policy of insurance was a Washington contract and thus presumably not drafted in the light of a particular Idaho statute, these statutes are regulatory and penal in...