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

Decision Date06 October 1983
Docket NumberNo. 1,CA-CIV,1
Citation678 P.2d 459,139 Ariz. 274
PartiesSTATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff-Appellant and Cross-Appellee, v. Jean GIBBS, Personal Representative of the estate of Robert Michael Gibbs, and Clyde Gibbs and Jean Gibbs, husband and wife and surviving parents of Robert Michael Gibbs, Defendants-Appellees and Cross-Appellants. 5764.
CourtArizona Court of Appeals


This appeal involves the question of whether the decedent, Michael Gibbs, was covered under the uninsured motorist provision of either of two forms of the same insurance policy. Appellant State Farm Mutual Automobile Insurance Company (State Farm), has conceded that insurance coverage is available if applicable under either its policy form 9803.2 or form 9803.3.

The cross-appeal involves the question of whether either of the policy forms provide liability coverage for the decedent when he was killed while a passenger in his own vehicle which was driven by another person, Peter Sanchez.

The declaratory judgment action upon which this appeal and cross-appeal is based arises from an underlying tort suit involving an automobile accident which occurred on April 23, 1978. At the time of the accident, the decedent was a passenger in a 1977 Ford Ranger pickup truck which was registered in his name. The truck was being driven by Sanchez, a defendant in the trial court action. The vehicle was involved in a one-car accident on Interstate 8 in California. Gibbs died as a result of the injuries he sustained in that accident.

Appellee Jean Gibbs as personal representative of the estate of Michael Gibbs and appellees Clyde Gibbs and Jean Gibbs, husband and wife and surviving parents of Michael Gibbs, filed a negligence action against Sanchez. Sanchez requested that State Farm defend him and provide coverage for the lawsuit.

State Farm declined to represent Sanchez and instituted this declaratory judgment action to determine whether coverage was extended to Sanchez in the negligence action. Appellees filed an answer to State Farm's complaint for declaratory relief wherein they alleged that the policy provided liability insurance coverage for the death of Michael Gibbs (decedent) or, in the alternative, that the uninsured motorist provisions of the policy covered the accident.

State Farm filed a motion for summary judgment alleging that the insurance policy did not provide coverage as a matter of law.

The trial court granted State Farm's motion for summary judgment concerning State Farm's obligation to extend coverage to Sanchez and its obligation to pay any damages to its own insured under the personal liability portions of the policy. The trial court granted appellee's cross-motion for summary judgment on the uninsured motorist issue, thereby extending uninsured motorist coverage to decedent. State Farm filed a timely appeal challenging the partial summary judgment granted in favor of appellees on the uninsured motorist issue. Appellees filed a cross-appeal challenging the summary judgment granted in favor of State Farm on the issue of personal liability coverage. This court has jurisdiction pursuant to A.R.S. § 12-2101(B) and (D).

Personal Liability Coverage

At the time of the accident and for sometime prior thereto, decedent was the named insured under State Farm policy 1410-160-B22-03E. This policy as originally written was State Farm form 9803.2. However, effective April 1, 1978, State Farm changed the language of all its automobile liability policies in force so as to make the policy provisions "easier to read." This "plain language policy," State Farm form 9803.3, superseded the old policy form 9803.2 held by the decedent and was effective on the date of the accident. The question of whether the decedent was aware of this change is not relevant to this appeal because State Farm has admitted that if coverage is found to exist under either policy form, there will be coverage for the accident in which Michael Gibbs was killed.

We will review the summary judgments entered by the trial court in light of State Farm's plain language policy, form 9803.3. In so doing, we note that there is no practical difference between the substance of the policy terms under either form. However, we will later address a claim that an exclusion contained in the easy read policy is ambiguous.

The Ford pickup owned by decedent was the vehicle described in the policy as the automobile covered by the policy. Decedent was specifically excluded from liability coverage under the policy. The exclusion reads:

When [Liability] Coverage A Does Not Apply






c. YOU.

The policy defines the term "YOU" as follows:

You or Your--means the named insured or named insureds shown on the declaration page.

The named insured under the policy was the decedent. This particular provision is specifically designed to exclude coverage for bodily injury to the named insured in return for a lower premium rate.

It is State Farm's position that there is no bodily injury coverage on the ground that the policy excluded coverage for bodily injuries to the named insured. State Farm argues that this exclusion extends to situations where the heirs of the named insured bring suit against a permissive user who was operating the insured's vehicle at the time of the accident causing the named insured's death. In other words, its argument is that there is no coverage for Sanchez in the wrongful death suit brought by Mrs. Gibbs, the mother of the decedent, because there would be no coverage for decedent had he survived. We agree.

Ever since the decision of our Supreme Court in New York Underwriters Ins. Co. v. Superior Court, 104 Ariz. 544, 456 P.2d 914 (1969), it has been undisputed that the owner of an automobile may contract with his insurance carrier to exclude insurance coverage for bodily injury to himself. The court in New York Underwriters held:

... [T]he question is whether or not the statute [Arizona financial responsibility act] is intended to restrict the privilege of an individual to contract with his insurance carrier to exclude his own personal recovery under the terms of the policy in the event of his own injury. We read nothing in the statutes which state such a restriction nor do we find ourselves compelled by public policy to so construe this statute.


We hold that the exclusion cited above as limited to the named insured himself is not contradictory to the provisions of A.R.S. § 28-1170 and is not illegal or void.

104 Ariz. at 545, 456 P.2d at 915. The New York Underwriters decision clearly established that in Arizona an exclusion for bodily injury to the named insured is valid and does not violate the financial responsibility act. This position was reaffirmed by our Supreme Court in State Farm Mut. Automobile Ins. Co. v. Transport Indem. Co., 109 Ariz. 56, 505 P.2d 227 (1973).

In Schwab v. State Farm Fire & Casualty Co., 27 Ariz.App. 747, 558 P.2d 942 (1976), division two of this court was presented with a factual situation identical to that which is before us. In that case, the named insured under the policy issued by State Farm was killed while she was a passenger in her own vehicle which was driven by a permissive user. The surviving child of the named insured brought suit against the permissive user. State Farm denied coverage, and a declaratory judgment action followed. The plaintiff in Schwab argued that the financial responsibility act prevented the application of the exclusion to the injury of the named insured under the factual situation presented. The court rejected the argument relying on New York Underwriters, supra. The court upheld the exclusion and found that it did not violate public policy of Arizona as set forth in the financial responsibility act.

In the present case, the decedent was in the exact same position as the decedent in Schwab. He was a passenger in his own truck while it was being driven by a permissive user. Decedent Gibbs had willingly elected to exclude himself from coverage under his own policy for his bodily injury in exchange for a lower premium payment. Nothing in the law of Arizona, or the policy behind that law, is offended by permitting a party to contract to so exclude himself. Therefore, we find that the trial court properly found that there was no personal liability coverage for decedent under coverage A of the subject policy.

Appellees urge this court to find that both State Farm policy form 9803.2 and form 9803.3 are ambiguous. We have carefully reviewed these forms and find no ambiguity under the bodily injury sections of the policy forms.

Uninsured Motorist Coverage

The threshold question presented by State Farm's appeal is whether the decedent's truck was an uninsured motor vehicle at the time of the accident. To make this determination, we must review the provisions of the decedent's policy. The relevant portions of that policy are set forth in "SECTION III--UNINSURED MOTORIST VEHICLE--COVERAGE U." In that section the State Farm policy states:

We will pay damages for bodily injury an insured is legally entitled to collect from the owner or driver of an uninsured motor vehicle. The bodily injury must be caused by an accident arising out of the operation, maintenance or use of an uninsured motor vehicle.

Uninsured Motor Vehicle--means:

1. a land motor vehicle not insured or bonded for bodily injury liability at the time of the accident; ...


(Emphasis added in last clause.) The policy continues:

An uninsured motor vehicle does not include a land motor...

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11 cases
  • Locey By and Through Locey v. Farmers Ins. Co. of Idaho
    • United States
    • Idaho Court of Appeals
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    ...of reasons, a majority of states permit such an exclusion. See Ex Parte O'Hare, 432 So.2d 1300 (Ala.1983); State Farm Mut. Auto. Ins. Co. v. Gibbs, 139 Ariz. 274, 678 P.2d 459 (1983) (but cf. Darner Motor Sales v. Universal Underwriters, 140 Ariz. 383, 682 P.2d 388, 396 n. 6 (1984)); Reid v......
  • Jobe v. International Ins. Co., Civ. 93-0074 PHX CAM.
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    • March 7, 1995 This rule applies with even greater force where the ambiguity appears in an exclusionary clause. State Farm v. Gibbs, 139 Ariz. 274, 279, 678 P.2d 459, 464 (Ct.App.1983). In this case the key phrase is "arising from or attributable to" because Endorsement 2 this Policy does not co......
  • Darner Motor Sales, Inc. v. Universal Underwriters Ins. Co., 16551-PR
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    • March 29, 1984 order to rewrite the policy. Cf. Barber v. Old Republic Life Ins. Co., 132 Ariz. 602, 604, 647 P.2d 1200, 1202 (App.1982) with State Farm v. Gibbs, supra. However, we also follow the rule of construction that where different jurisdictions reach different conclusions regarding the languag......
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    ...of the average purchaser of insurance who is not trained in law or in the insurance business. State Farm Mut. Auto. Ins. Co. v. Gibbs, 139 Ariz. 274, 678 P.2d 459, 464 (Ct.App.1983); see also Draughon v. CUNA Mut. Ins. Soc'y, 771 P.2d 1105, 1108 (Utah Ct.App.1989). However, we construe any ......
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2 books & journal articles
  • 6.5 Named Insured Exclusion
    • United States
    • State Bar of Arizona Liability Insurance Law Chapter 6 Automobile Policies (Sections 6.1 to 6.19)
    • Invalid date
    ...Schwab v. State Farm Fire & Cas. Ins., 27 Ariz. App. 747, 558 P.2d 942 (1976), review denied; State Farm Mutual Auto. Ins. Co. v. Gibbs, 139 Ariz. 274, 678 P.2d 459 (Ct. App. 1983), review denied. The Ninth Circuit in State Farm Mutual Automobile Insurance Co. v. Falness, 39 F.3d 966 (9th C......
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    • State Bar of Arizona Liability Insurance Law Chapter 1 Interpreting the Insurance Con­tract: Rules of Construction (Sections 1.1 to 1.22)
    • Invalid date
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