Sperling v. Great Am. Indem. Co.

• Decision Date: 24 March 1960
• Citation: 7 N.Y.2d 442,199 N.Y.S.2d 465
• Parties: , 166 N.E.2d 482 May E. SPERLING, as Executrix of Richard H. Sperling, Deceased, Respondent, v. GREAT AMERICAN INDEMNITY COMPANY, Appellant.
• Court: New York Court of Appeals Court of Appeals

Page 465

199 N.Y.S.2d 465

7 N.Y.2d 442, 166 N.E.2d 482

May E. SPERLING, as Executrix of Richard H. Sperling Deceased, Respondent, v. GREAT AMERICAN INDEMNITY COMPANY, Appellant.

Court of Appeals of New York.

March 24, 1960.

Samuel Gottesman, Harold H. Wolgel and gerald M. Smith, New York City, for appellant.

Henry J. Smith, White Plains, for respondent.

FROESSEL, Judge.

This is an action by a judgment creditor under section 167 of the Insurance Law, Consol.Laws, c. 28, to compel the defendant insurer to pay a judgment to the extent of its coverage under an automobile liability policy. Plaintiff is the widow and executrix of one Richard Sperling, who was killed in an automobile accident on December 30, 1957. In a wrongful death action instituted against one Christine Nystrom, the latter's negligence was adjudged to have been the proximate cause of the death of plaintiff's husband, and plaintiff recovered a judgment of approximately $125,000.

The judgment debtor, Christine Nystrom (herein called Christine), was 16 years of age at the time of the accident. She had a learner's permit to operate a motor vehicle. Sometime between 12:30 and 1:00 p. m. on December 30, 1957, she appropriated a 1956 Chevrolet automobile bearing Ohio license plates, without the permission of the owner. The car was parked on a public street in Mount Vernon, and Christine started the motor merely by turning the ignition switch. While driving south on Hutchinson River Parkway she was pursued by a police officer who recognized her, and whose suspicion was aroused by the Ohio plates. In her attempt to outrace him, the car she was driving swerved into the extreme right lane of southbound traffic, and she negligently struck the rear of decedent's vehicle, as a result of which decedent was fatally injured. Christine was subsequently adjudged a youthful offender.

Ruth Nystrom, Christine's mother, was the named insured in a 'Family Automobile Policy' which was in full force and effect on the day of the accident. The policy specifically covered a 1956 Buick car owned by Mrs. Nystrom, and also provided family protection with respect to nonowned automobiles. Under the heading 'Persons Insured', the policy provided in pertinent part:

'The following are insureds under Part I (Liability):

'(a) With respect to the owned automobile, (1) the named insured and any resident of the same household, (2) any other person using such automobile, provided the actual use thereof is with the permission of the named insured;

'(b) With respect to a non-owned automobile, (1) the named insured, (2) any relative, but only with respect to a private passenger automobile or trailer not regularly furnished for the use of such relative.' (Emphasis supplied.)

The term 'relative' was defined in the policy as meaning 'a relative of the named insured who is a resident of the same household', and the term 'non-owned automobile' was defined as meaning 'an automobile or trailer not owned by the named insured or any relative, other than a temporary substitute automobile'. An 'owned automobile' was defined is meaning 'a private passenger or utility automobile or trailer owned by the named insured, and includes a temporary substitute automobile' (used 'as a substitute for the owned automobile' when 'withdrawn from normal use'). The term 'named insured' was defined as including a spouse resident in the same household.

Thus, under the express terms of the policy, permission to operate an automobile was relevant only in the case of a nonresident third person driving Mrs. Nystrom's Buick or a temporary substitute therefor. With respect to a nonowned vehicle, the coverage afforded the named insured was without qualification, i. e., it included any utility or private passenger automobile, while the coverage of a relative was limited to private passenger automobiles not regularly furnished for his or her use. In neither of the latter situations was the permission of the owner of the nonowned automobile called for.

The insurer refused to defend Christine in the wrongful death action, disclaiming liability under the policy, and refused to pay any part of the judgment entered against her. Plaintiff thereupon commenced the instant action to recover the policy limit of $100,000, plus costs awarded against Christine in the wrongful death action and interest on the judgment, and was awarded summary judgment as prayed for. It is conceded that plaintiff's rights against the insurer under section 167 of The Insurance Law are no greater than Christine's (Wenig v. Glens, Falls Ind. Co., 294 N.Y. 195, 198-199, 61 N.E.2d 442, 443-444, and cases therein cited.)

On this appeal, the insurer 'concedes that Christine Nystrom, as the daughter of the named insured and a resident of the same household, is a relative within the definition of that term in defendant's policy'. It also concedes that the Ohio car 'was not regualrly furnished for the use of Christine Nystrom', since a 'stolen' car is 'not 'furnished' at all'. It contends, however, that 'the word 'furnished' implies consent and permission, so that the phrase 'not regularly furnished for the use of' can only be interpreted to mean an automobile voluntarily supplied by the owner to such relative for occasional as distinguished from regular use.'

Since permission to use a nonowned automobile was not made a condition of coverage with respect to a relative of the named insured, 'The court is not at liberty to inject a clause into the policy or to make a new contract for the protection of the insurance company' (Taylor v. United States Cas. Co., 269 N.Y. 360, 363, 199 N.E. 620, 621, 115 A.L.R. 822). When the insurer wished to indicate that permission of the owner of a vehicle was a condition of coverage, it clearly did so, as noted, in the case of a nonresident third person driving the named insured's vehicle, or a temporary substitute therefor. The policy did not exclude, as an insured, a relative who was driving a nonowned automobile without the permission of the owner, and, as the court noted in AEtna Casualty & Surety Co. v. General Cas. Co. (285 App.Div. 767, 770), 140 N.Y.S.2d 670, 672, cited 'with other reliable authorities' in Greaves v. Public Serv. Mut. Ins. Co. (5 N.Y.2d 120, 125, 181 N.Y.S.2d 489), 'If an exclusion of liability is intended which is not apparent from the language employed, it is the insurer's responsibility to make such intention clearly known. (Morgan v. Greater New York Taxpayers Mut. Ins. Ass'n, 305 N.Y. 243, 248, 112 N.E.2d 273, 275 * * *.)'.

To read the requirement of permission into the word 'furnished' would not only entail rewriting the phrase 'not regularly furnished' so as to read 'occasionally furnished, with the permission of the owner' thereby converting the negative condition 'not regularly furnished' into an affirmative condition that the car be 'furnished' but would distort the purpose which the limitation of coverage was plainly designed to serve. The exclusion of coverage for relatives driving nonowned automobiles was, by its terms, concerned with regularity of use, not permissiveness of use, and was designed to protect the company from being subjected 'to greatly added risk without the payment of additional premiums' (Vern v. Merchants Mut. Cas. Co., 21 Misc.2d 51, 52, 118 N.Y.S.2d 672, 674).

The 'greatly added risk' which the insurer was unwilling to incur for a single premium was not the prospect of a relative appropriating a car without the owner's permission and then negligently causing injury, but the multiplication of potential liability situations where a nonowned automobile was regularly used or available for regular use by a relative (see Vern v. Merchants Mut. Cas. Co., supra; Rodenkirk, for Use of Deitenbach v. State Farm Mut. Auto. Ins. Co., 325 Ill.App. 421, 433, 60 N.E.2d 269; Lumbermen's Mut. Cas. Co. v. Pulsifer, D.C., 41 F.Supp. 249, 251; Campbell v. AEtna Cas. & Sur. Co., 4 Cir., 211 F.2d 732, 736; Wyatt v. Cimarron Ins. Co., 10 Cir., 235 F.2d 243, 246; Pennsylvania Threshermen & Farmers' Mut. Cas. Ins. Co. v. Robertson, 4 Cir., 259 F.2d 389, 393). ^*

While the insurer agreed, for a single premium, to afford coverage to the named insured while driving any nonowned vehicle, whether regularly furnished or not, it limited its single premium coverage of relatives of the named insured to nonowned private passenger automobiles 'not regularly furnished for the use of' said relative. So long as the insurer is not called upon to indemnify a relative for any liability incurred while driving a car 'regularly furnished' for his or her use, the limitation of coverage has been satisfied and the insurer has no just cause for complaint.

Moreover, if the policy is construed as affording coverage to a relative only when the owner of the 'non-owned automobile' consented to its use, then the relative would, in many, if not most cases, be obtaining no more coverage than he would already have under the policy issued to the owner of that automobile. At the time the policy in question was issued (October 17, 1957), automobile liability insurance was compulsory (Vehicle and Traffic Law, Consol.Laws, c. 71, art. 6-A, eff. Feb. 1, 1957), and every policy issued to a car owner in this State had to contain an ommibus clause insuring, in addition to the named insured, any person operating the vehicle with the permission of the named insured (Insurance Reg. 35; N.Y.Off.Comp. of Codes, Rules & Regulations (12th Off.Supp.) p. 697; adopted pursuant to Insurance Law, § 21, and Vehicle and Traffic Law, § 93-a). The person so operating the vehicle with the permission of the owner is afforded coverage as an additional insured, and is treated as if he had a separate policy (Greaves v. Public Serv. Mut. Ins. Co., 5 N.Y.2d 120, 181 N.Y.S.2d 489, supra). By not requiring the permission of the owner of a nonowned automobile in the policy before us, the insurer must be deemed to have intended to afford...