Sellers v. Allstate Ins. Co.

• Decision Date: 06 January 1976
• Docket Number: CA-CIV,No. 1,1
• Citation: 544 P.2d 699,25 Ariz.App. 482
• Parties: Gerald D. SELLERS, Doris Sellers, Danny Sellers, a minor, Timothy Sellers, a minor, Barbara Sellers, a minor, by and through their Guardian ad Litem, Gerald D. Sellers, Appellants, v. ALLSTATE INSURANCE COMPANY, Appellee. 2557.
• Court: Arizona Court of Appeals

Page 699

544 P.2d 699

25 Ariz.App. 482

Gerald D. SELLERS, Doris Sellers, Danny Sellers, a minor, Timothy Sellers, a minor, Barbara Sellers, a minor, by and through their Guardian ad Litem, Gerald D. Sellers, Appellants, v. ALLSTATE INSURANCE COMPANY, Appellee.

No. 1 CA-CIV 2557.

Court of Appeals of Arizona, Division 1, Department B.

Jan. 6, 1976.

Rehearing Denied March 8, 1976.

Review Granted March 30, 1976.

Matz & Jurkowitz, P.C. by Theodore Matz, Phoenix, for appellants

Robbins, Green, O'Grady & Abbuhl, P.A. by Robert H. Green, Phoenix, for appellee.

OPINION

JACOBSON, Presiding Judge.

This appeal asks us to determine whether a wife's automobile insurance policy acquired prior to marriage covers her husband's automobile accident after marriage while driving a car acquired by him prior to marriage and not named as an 'owned' automobile in the wife's policy.

This litigation arose as the aftermath of an automobile accident occurring on May 26, 1970, involving Jerry Collison (Jerry) while he was driving a 1957 Cadillac, and appellant Sellers. As a result of this accident, Sellers brought suit against Jerry alone which ultimately resulted in a judgment in Sellers' favor in the sum of $830,000.

At the time of the accident, Jerry was married to Evelyn Wagner (Evelyn). Their marriage had taken place on April 1, 1970, approximately 60 days prior to the accident. Prior to the marriage, Jerry owned the 1957 Cadillac involved in the accident, which was insured by State Farm Insurance Company under a policy which had maximum liability limits of $40,000. Also, prior to the marriage, Evelyn owned a 1964 Chrysler which was insured by appellee, Allstate Insurance Company (Allstate). Subsequent to the marriage, Jerry generally drove the Cadillac and Evelyn generally drove the Chrysler. At the time the accident occurred, Evelyn's automobile was inoperative. The accident occurred when Jerry was going to a tavern to have a beer and cash a check, Jerry contending that he would not have made this trip except for the fact he needed some money in his possession when he went to pick up his wife from work because the Chrysler had broken down. He further testified that he probably would not have gone out that evening at all had Evelyn's Chrysler been operative.

The 1957 Cadillac was never added to the Allstate policy nor was there a request prior to the accident to add this automobile to that policy.

Apparently during the course of the investigation by Allstate of this accident (Allstate also insured Sellers), a claims agent of Allstate indicated that Allstate would provide excess coverage under Evelyn's policy for the Sellers' accident. Subsequently, on June 30, 1971, Allstate denied any coverage under Evelyn's policy for Jerry's accident. Prior to trial, State Farm offered to Sellers its policy limit in the sum of $40,000. As a result of that offer, and the payment of $40,000, Sellers on October 7, 1971, executed a covenant not to execute, discharging Jerry and Evelyn from any personal liability in exchange for which Jerry and Evelyn assigned their claim against Allstate to Sellers. After obtaining judgment, Sellers caused a writ of garnishment to be issued against Allstate, and Allstate by a tender of issues denied coverage for Jerry's accident. On cross-motion for summary judgment, the trial court granted judgment to Allstate and Sellers has appealed.

Sellers' basic contention on appeal is that the trial court erred in granting summary judgment to Allstate because of material issues of disputed fact arising in three critical areas:

(1) That under the Allstate policy the Cadillac driven by Jerry was an 'additional automobile' because Evelyn as the insured acquired a community property ownership in that automobile upon her marriage to Jerry.

(2) That as to Evelyn, the Cadillac was a 'temporary substitute automobile' since the Chrysler named under the policy was inoperative and Jerry was using the Cadillac to pick Evelyn up from work, and

(3) That Allstate is estopped to deny coverage due to representations and conduct on the part of several Allstate employees subsequent to the accident.

Sellers first contends that the Cadillac became an 'additional automobile' and therefore covered under the policy. The pertinent portion of the Allstate policy dealing with this coverage provides that an "additional automobile' means an additional private passenger . . . automobile of which the Named insured acquires ownership.'

Sellers contends that As to Evelyn, the Cadillac became an 'additional automobile' upon her marriage to Jerry by operation of the community property laws of the state of Arizona, thus 'ownership' was acquired by Evelyn during the term of the Allstate policy. From this premise, Sellers argues that the Cadillac was insured under the Allstate policy.

The problem with Sellers' analysis of the Allstate policy insofar as this provision is concerned, is that in order to make the provision relied upon applicable to the Cadillac, it must be viewed from Evelyn's standpoint. As a matter of law, under the Allstate policy, this provision must be construed as it applies to Jerry, not Evelyn. The Allstate policy clearly provides that the 'named insured' under the Allstate policy 'means the individual named on the supplemental page (Evelyn), And his spouse if a resident of the same household.' It is thus clear that Jerry became a 'named insured' on the Allstate policy as of the date of his marriage to Evelyn. Boyd v. United States Fidelity & Guaranty Co., 256 So.2d 1 (Fla.1971).

As such 'named insured' the provisions of the insurance contract granting coverage to an ...