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

• Decision Date: 27 April 1981
• Parties: Edith Clara PALMER, Administratrix of the Estate of Leonard D. Palmer, Plaintiff-Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellee.
• Court: Tennessee Supreme Court

Page 788

614 S.W.2d 788

Edith Clara PALMER, Administratrix of the Estate of Leonard D. Palmer, Plaintiff-Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellee.

Supreme Court of Tennessee.

April 27, 1981.

William I. McLain and Philip J. Cooper, Memphis, for plaintiff-appellant.

Jerry E. Mitchell, Memphis, for defendant-appellee.

OPINION

BROCK, Justice.

The husband of the plaintiff-administratrix was killed in an automobile accident on August 25, 1972. The driver of the other automobile, John Warner, was also killed in the accident. Plaintiff-administratrix obtained a judgment in the sum of $50,000.00 against Mr. Warner's estate for the wrongful death of her husband and in this action seeks to recover that judgment from the defendant insurance company which at the time of the accident insured a 1967 Nova Chevrolet automobile by a policy issued to Mrs. Warner, the wife of the decedent John Warner, the tortfeasor. At the time of the accident Mr. Warner was not driving the 1967 Nova described in the policy but, instead, was driving a 1963 Cadillac which he had acquired three days prior to the accident. The policy of automobile liability insurance issued by the defendant to Mrs. Warner afforded coverage not only to the described vehicle, the Nova, but also to "a newly acquired automobile" which was defined in the policy as follows:

"Newly acquired automobile Means an automobile, ownership of which is acquired by the named insured or his spouse, if a resident of the same household, if

"(1) It replaces an automobile owned by either and covered by this policy, or the company insures all automobiles owned by the named insured and such spouse on the date of its delivery, and

"(2) provided that no insurance shall be applicable to such newly acquired automobile unless as a condition precedent the named insured within thirty (30) days following such delivery date applies to the company for insurance on such newly acquired automobile." (Emphasis added.)

The defendant insurance company has denied coverage of the Cadillac driven by the insured's husband in this accident, asserting that it did not replace an automobile covered by the policy and that the Company did not insure all automobiles owned by the named insured and her spouse on the date of the delivery of the Cadillac.

The insured and the plaintiff do not insist that the Cadillac replaced an automobile covered by the policy but do contend that the Company insured all automobiles owned by the named insured and her husband on the date of delivery of the Cadillac.

The Company's assertion that it did not insure all automobiles owned by the named insured and her spouse on the date of delivery of the Cadillac is based upon the fact that the insured's husband, Mr. Warner, who was employed at an auto paint and body shop, had purchased a wrecked 1967 model Sunbeam Alpine automobile on July 18, 1972, and owned it at the time the Cadillac was delivered three days prior to this accident.

The Company asserts that this wrecked Sunbeam was an automobile within the meaning of the policy but the insured and the plaintiff assert that it was not such an automobile because it was severely damaged and was by no means operable.

This wrecked Sunbeam had been wrecked by its previous owner, was in an inoperable condition, had a bent frame and other extensive damage, and was at no time driveable after its purchase by Mr. Warner. It was described as in "permanently inoperable" condition but the record indicates that Mr. Warner, who had special skills in repairing automobiles, intended to attempt to restore the Sunbeam at some future time to an operable condition. Thus, the question posed for our decision is whether the Sunbeam was an "automobile" within the meaning of this policy; if it was such an automobile, then the Company did not insure all automobiles owned by the insured and her spouse at the time of delivery of the Cadillac and no coverage would be afforded to the Cadillac in this accident, but, if it was not such an automobile, then the Company did insure all automobiles owned by the insured and her spouse on the date of the delivery of the Cadillac and thus the Cadillac would be a "newly acquired automobile" and would be afforded coverage.

The policy defines "automobile" as follows:

"Automobile Means a four wheel and motor vehicle designed for use principally upon public roads, ..."

In construing contracts of insurance, we attempt to ascertain the intent of the contracting parties and, since the policy was drafted by the insurance company, we must resolve all ambiguity and doubt in favor of the insured. We need not abandon common sense; indeed, we are required to exercise common sense in construing these policies.

Approaching the problem with this attitude, we conclude that "automobile" within the "newly acquired automobile" coverage clause of this policy does not connote a totally wrecked, totally inoperable vehicle such as the wrecked Sunbeam here in question. Such a wrecked vehicle is nothing more...