State Farm Mut. Auto. Ins. Co. v. Jacober
| Decision Date | 15 October 1973 |
| Docket Number | S.F. 22933 and L |
| Citation | 10 Cal.3d 193,514 P.2d 953,110 Cal.Rptr. 1 |
| Parties | , 514 P.2d 953 STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff and Appellant, v. Joyce JACOBER et al., Defendants and Respondents. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff and Appellant, v. Gail STAPLER, as Administratrix, etc., et al., Defendants and Respondents. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff and Appellant, v. Virginia Louise THOMPSON et al., Defendants and Respondents. L.A. 30042,A. 30045. |
| Court | California Supreme Court |
Spray, Gould & Bowers, Daniel O. Howard, James L. Crandall, Los Angeles, Bledsoe, Smith, Cathcart, Johnson & Rogers and Robert A. Seligson, San Francisco, for plaintiff and appellant.
Herbert H. Hiestand, Jr., Los Angeles, Burnhill, Rode, Moffitt & Moore, Oakland, Cyril Viadro, San Francisco, Parker, Stanbury, McGee & Roberts, and White McGee, Jr., Los Angeles, for defendants and respondents.
These three appeals, consolidated for hearing before this court, involve the interpretation of a form policy of automobile liability insurance issued by plaintiff State Farm Mutual Automobile Insurance Company. In each of these cases the owner of an automobile, while riding as a passenger in his own car, was injured or killed in an accident allegedly caused by the negligence of the driver of the car. These owners held policies issued by State Farm which provided coverage to protect permissive users of the owned automobile from liability to 'other persons,' but which excluded liability coverage for 'bodily injury to the insured.' In these actions for declaratory relief State Farm sought a judicial determination as to whether that exclusion avoided any obligation on its part to defend the drivers accused of negligence and to pay any judgments which might be rendered against them. The trial courts, in each instance, found against State Farm, which appeals from those judgments.
For the reasons discussed below, we affirm the judgments of the trial courts. The State Farm policy protects a permissive user of the insured car against liability to 'other persons' and, from the permissive user's point of view, the owner of the car is clearly among the 'other persons' against whom he may reasonably expect, and claim protection. Although State Farm attempts to avoid liability by relying on a clause excluding coverage for injuries 'to the insured,' this exclusionary provision fails to satisfy the established requirement that such a provision must be 'conspicuous, plain and clear' in order to relieve the insurer of liability. As we shall point out, the exclusionary provision in question is susceptible of at least three distinct interpretations; indeed, the insurer itself suggests two differing readings.
As we explain, we have no occasion to determine which of the various proposed interpretations of the clause is the 'correct' one, for under settled principles so long as coverage is available under any reasonable interpretation of an ambiguous clause, the insurer cannot escape liability. As a number of decisions have previously recognized, the exclusionary clause at issue--negating coverage for injuries sustained by 'the insured'--may be interpreted as withdrawing coverage only for injuries to that 'insured' who himself claims the protection of the policy (the permissive users in the instant cases); the exclusion, as written, could well be thought inapplicable when a car owner is injured by the carelessness of a permissive user. Given this possible interpretation, we conclude that the language of exclusion does not permit State Farm to deny its duties of defense and indemnification. Accordingly, we affirm the judgments in favor of the claimants rendered by the superior court in each of the cases before us.
1. Statement of Facts
On April 11, 1968, State Farm issued an automobile liability policy to Warren and Joyce Jacober. On July 2 of that year Roger Dell was driving the Jacober's car with Warren's permission; Warren Jacober, three of his children, and two of Dell's children were passengers. The car struck a power pole, causing Warren's death and injuring the other occupants. Joyce Jacober, Warren's wife, and his children (appearing through guardians ad litem) filed suit against Dell for wrongful death. State Farm undertook to defend this action under a nonwaiver of rights agreement with Dell.
Before the wrongful death action went to trial, however, State Farm instituted the present proceeding for declaratory relief against the Jacobers, the Dells, and Volkswagen Insurance Company, Dell's carrier. The Los Angeles Superior Court found that State Farm owed a duty to defend the wrongful death action against Dell and, subject to the policy limits, to pay any liability found owing from Dell to the Jacobers; State Farm appeals from this judgment. 1
State Farm issued an automobile liability policy to Paul Smith. On May 18, 1968, while this policy was in effect, Smith was riding in his own car which was being driven, with Smith's permission, by James Stapler. An accident killed Stapler and injured Smith. Smith subsequently sued Gail Stapler as administratrix of the estate of James Stapler. State Farm then brought the present action for declaratory relief against Smith and Gail Stapler. The Alameda Superior Court adjudged that the policy did not exclude coverage for the injuries of Smith, and State Farm appeals from that judgment.
On September 1, 1966, State Farm issued an automobile liability policy to Gail Thompson. On February 4, 1967, Gail and his son Todd were passengers in the Thompson's car, which was being driven with Gail's permission by Ed Rhoades. A collision resulted in Gail's death and injuries to Todd. Virginia Thompson, Gail's wife, and Todd Thompson filed suit against Rhoades for wrongful death and for Todd's injuries. State Farm then brought an action for declaratory relief against the Thompsons, Rhoades, and Rhoades' insurance carrier, Government Employees Ins. Co. The Ventura Superior Court found that State Farm's policy provided coverage for damages for the death of Gail and the injuries to Todd, and further held that as to these claims State Farm's coverage was primary, and Government Employees' coverage excess. State Farm appeals from this judgment. 2
In all relevant particulars the policies issued by State Farm to Warren and Joyce Jacober, Paul Smith, and Gail Thompson are identical. In the insuring agreement, the company agrees 'to pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of (a) bodily injury sustained by other persons' arising from the use of the owned automobile, and to defend all suits alleging such bodily injury. 3 Bodily injury, as defined in the policy, includes death. In subsequent sections the policy refers to coverage for bodily injury as 'coverage A.'
Following the insuring agreement, the policy defines the term 'insured' under coverage A: 'the unqualified word 'insured' includes: (1) the named insured, and (2) if the named insured is a person or persons, also includes his or their spouse(s), if a resident of the same household, and (3) if residents of the same household, the relatives of the first person named in the declarations, or of his spouse, and (4) any other person while using the owned automobile, provided the operation and the actual use of such automoble are with the permission of the named insured or such spouse and are within the scope of such permission, and (5) . . . any person or organization legally responsible for the use of such owned automobile by an insured. . . .'
Following these definitions the policy lists 16 exclusions. The exclusion relied upon by the insurer in the present cases is designated by the letter 'i'; it states that the insurance does not apply under 'coverage A, To bodily injury to the insured or any member of the family of the insured residing in the same household as the insured.' (Emphasis added.) We take note also of two other exclusions which use the term 'insured,' since cases construing such exclusions may be relevant to the construction of exclusion 'i': exclusion 'h' bars coverage, under specified conditions, for 'bodily injury to any employee of the insured'; 4 and exclusion 'j' denies liability coverage for 'injury to or destruction of property owned or transported by the insured. . . .' 5
2. In agreeing to pay for all liability resulting from bodily injury sustained by 'other persons,' the insuring clause of the policy provides coverage to a permissive user for injuries sustained by the owner of the car.
Vehicle Code section 16451 requires that an automobile liability policy 'insure the person named therein and any other person, as insured, using any owned motor vehicle with the express or implied permission of said assured' to the extent provided in that section. Pursuant to this mandate, the State Farm policy defines permissive users as persons insured under the policy, and agrees '(to) pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of (A) bodily injury sustained by Other persons. . . .' (Emphasis added.)
The preponderance of authority supports the interpretation that, with respect to the driver, who is insured as a permissive user, the named insured would normally be considered to be an 'other person'; his injuries therefore would be covered by the policy. 'The courts feel that the case must be examined from the point of view of the Driver, who expects and demands protection in such an instance, it not mattering to him who the plaintiff is, but rather, the matter of consequence being that he has become liable to pay a judgment and...
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