Preferred Accident Ins. Co. v. Onali, 12054.

• Decision Date: 05 February 1942
• Docket Number: No. 12054.,12054.
• Citation: 125 F.2d 580
• Parties: PREFERRED ACCIDENT INS. CO. OF NEW YORK v. ONALI et al.
• Court: U.S. Court of Appeals — Eighth Circuit

125 F.2d 580 (1942)

PREFERRED ACCIDENT INS. CO. OF NEW YORK v. ONALI et al.

No. 12054.

Circuit Court of Appeals, Eighth Circuit.

February 5, 1942.

Ernest E. Watson, of Minneapolis, Minn., for appellant.

E. L. Rosenbloom, of Minneapolis, Minn., for appellee Jeremiah Onali.

Before STONE and JOHNSEN, Circuit Judges, and OTIS, District Judge.

OTIS, District Judge.

One of the questions presented is whether a clause in a policy of automobile indemnity insurance excluding from coverage injuries to "any relative" of the assured, excludes from coverage an injury to a sister-in-law.

The Preferred Accident Insurance Company of New York, appellant here, issued to Jerry Onali on May 1, 1937, a policy of automobile indemnity insurance. By one of the provisions of that policy any obligation of the assured on account of the injury or death of "any relative" was excluded from coverage. The insurance provided in the policy ended May 1, 1938. A renewal certificate, not in the record, extended the insurance to May 1, 1939. A second renewal certificate, issued May 1, 1939, which included a provision presently to be noted, extended the insurance to May 1, 1940. On August 27, 1939, Onali's automobile, when he was driving it, was involved in a collision in which Onali's sister-in-law (sister of his wife), Hilma Sarvie, who was a guest in his automobile, was injured. Thereafter Hilma Sarvie and her husband, Harold J. Sarvie, sued Onali on account of the injuries to Mrs. Sarvie. Subsequent to the filing of that suit, the present proceeding was instituted by the insurance company asking a declaratory judgment that the company is not liable, for that, so the company alleged in the complaint, injury to a sister-in-law, is not covered by the policy. A sister-in-law, such was plaintiff's theory, is a "relative." Defendants (appellees here) prevailed. The decree appealed from included a reformation of the policy and a judgment that the policy as reformed covered an injury to Mrs. Sarvie.

The second renewal certificate contained the following language: "* * * during the term of this renewal the automobile, as defined in the policy, * * * the limit of the company's liability for each such automobile and the premium therefor shall be as follows, and not as shown in the policy * * *. The insurance afforded is with respect to the following coverages. The limit of the company's liability against each such coverage shall be as stated herein subject to all of the terms of the standard form of Motor Vehicle Liability-Policy as now issued by this company. Emphasis ours. * * * Coverage A — Bodily Injury Liability. $10,000 each person * * *."

The Motor Vehicle Liability Policy "as now issued" by the company, i.e., as issued on May 1, 1939 (it was the form of policy which had been issued since July 1, 1937) contained an exclusion clause different in a single respect from that in the policy issued to Onali on May 1, 1937. The new clause excluded coverage "for * * * bodily injury to or death of an insured or to any of the following relatives of any person insured hereunder: husband or wife; child or children; father or mother; brother or sister, or father-in-law or mother-in-law." As we have seen, the original policy excluded coverage on account of the injury or death "of any relative of an assured."

The parties are agreed that on this appeal we are empowered to review the evidence and make such order or decree as the court of first instance ought to have made. In determining what that order or decree should be the chief problem presented is one of construction. What was the meaning of the contract in force between the company and assured on the date Mrs. Sarvie was injured? What exclusion clause was embodied in that contract? Was it the old clause excluding injury to "any relative" of an assured or the new clause excluding only injuries to husband, wife, child, father, mother, brother, sister, father-in-law and mother-in-law?

1. A possible and reasonable interpretation to be placed on the contract as evidenced by the renewal certificate of May 1, 1939, is that it embodied the second of the two exclusion clauses set out. The renewal certificate expressly provides that: "The limit of the company's liability against each such coverage shall be as stated herein the limit for liability for bodily injury is fixed in the renewal certificate at $10,000 for each person subject to all the terms of the standard form of Motor Vehicle Liability Policy as now issued by this company." In other words, the limit is not $10,000 absolutely and for injuries to any person. That maximum possible liability is "subject to all the terms of the standard form of Motor Vehicle Liability Policy as now issued by the company." One of the terms of that policy is that injuries, not to "any relative," but to certain enumerated blood and marriage connections, not including a sister-in-law, are excluded. That term of the policy has a direct bearing on whether the company is or is not liable and, hence, on the limit of its liability. It was subject to that term (because subject "to all the terms" of the new form of policy relevant to liability) that the limit of liability for bodily injury to any person was fixed at $10,000. Since the renewal certificate adopted the new exclusion provision, which is more favorable to the assured than the old, the contract should be construed as not excluding an injury to a sister-in-law.

Not only is the interpretation we have suggested a possible and reasonable interpretation of the contract evidenced by the renewal certificate in the particular here discussed, it appears also to be the only conceivable interpretation. When it is said that "The limit of the company's liability shall be as stated in the renewal certificate subject to all the terms of the standard form of Motor Vehicle Liability Policy as now issued by this company" certainly it is meant that the limit of the company's liability should be subject to some terms of that policy. Since there are no terms of the policy which affect the maximum liability except those terms which affect what can be recovered within the maximum and whether there is any liability, the reference either is to those terms (including the exclusion clauses) or it is meaningless. Moreover, since a comparison of the two policies, the original policy and the policy "now issued" referred to in the renewal certificate, discloses as the only difference the one changed exclusion clause, the only purpose served by the words "as now issued" in the language — "subject to all the terms of the standard form...