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

• Decision Date: 30 September 1988
• Docket Number: No. D005978,D005978
• Citation: 205 Cal.App.3d 223,252 Cal.Rptr. 162
• Court: California Court of Appeals Court of Appeals
• Parties: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff and Respondent, v. Dorothy G. HAIGHT, Defendant and Appellant.

Page 162

252 Cal.Rptr. 162

205 Cal.App.3d 223

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff and Respondent, v. Dorothy G. HAIGHT, Defendant and Appellant.

No. D005978.

Court of Appeal, Fourth District, Division 1, California.

Sept. 30, 1988.

Review Denied Dec. 15, 1988.

[205 Cal.App.3d 227]

Monaghan & Metz, Brian D. Monaghan, John H. Metz, Elizabeth E. Kline and Linda G. Workman, San Diego, for defendant and appellant

Shifflet, Sharp & Walters, William C. Shifflet, Gregory C. Kane, and Christie Morgan, San Diego, for plaintiff and respondent.

STANIFORTH ^*, Associate Justice.

Plaintiff State Farm Mutual Automobile Insurance Company (State Farm) filed a complaint for declaratory relief against Johnson-Kinsey, Inc., Edward Allen Wenz, Jr., Mary L. Johnson, James Johnson, Paul Kinsey, Blake Bowen and Dorothy G. Haight (Haight), claiming the driver exclusion endorsement agreement in the State Farm automobile policy excluded Edward Allen Wenz, Jr. from protection under the policy. State Farm disputed Wenz's entitlement to a defense and indemnity, Johnson-Kinsey's entitlement to indemnity, and Bowen's and Haight's claim of entitlement for personal injuries.

Johnson-Kinsey cross-complained for bad faith against State Farm. Upon State Farm's motion to sever, the court ordered the trials for declaratory relief and the bad faith claim to be heard separately. After a non-jury trial in the declaratory relief action the court issued its statement of decision finding no insurance coverage under the State Farm policy. The court reasoned that Wenz was not hired to drive as that term is used in Insurance Code section 670. ¹ Haight appeals the judgment.

FACTS

Wenz was driving a 1970 Dodge Tradesman van on October 10, 1983, when it collided with an automobile driven by Haight at 70th Street and [205 Cal.App.3d 228] Alma Way in La Mesa. Haight suffered serious injuries as a result of the accident.

Johnson-Kinsey has been the employer of Wenz since August 1981. Johnson-Kinsey is a building subcontractor firm specializing in drywall and suspended acoustical ceilings. The Dodge van driven by Wenz was owned by Johnson-Kinsey. Wenz contends there was insurance coverage because he was an employee and the collision occurred while he was on company time, that is, before 5 p.m. in the evening.

Wenz was an acoustical tile supervisor for Johnson-Kinsey. His work required him to travel daily throughout San Diego County and on occasion outside the county. As a general practice Johnson-Kinsey required him to travel to and from the job sites in his own vehicle. Wenz delivered materials and large equipment to the work sites. In order to carry this type of equipment, Wenz needed a truck. Normally he used his personal vehicle, a Chevrolet truck to perform these duties.

On the date of the collision with Haight, Wenz was returning home from a job site in Mission Valley. He had stopped at the office and then at the store for groceries while on his way home. His personal truck was in the garage for repairs. For that reason he was using the company van to transport materials and travel to and from home and to the work sites. Wenz intended to use the company van to travel to his work site the next day. At the time of the collision there were materials in the company van which pertained to the job.

On February 19, 1982, State Farm had issued an automobile insurance liability policy (No. 386-0298-619-55) to Johnson-Kinsey covering its company Dodge van. The policy contained a special endorsement excluding Wenz from coverage under the policy because he had received four prior speeding tickets while driving his personal vehicle on his own time. The principals for Johnson-Kinsey had signed this driver exclusion endorsement on February 19, 1982. It purported to exempt State Farm from responsibility for any loss caused by Wenz while driving the company van.

According to the testimony of witnesses, Mr. Weldon, a State Farm agent for 15 years, allegedly told Johnson-Kinsey and Wenz that this exclusion would remain in

effect until Wenz was 25 years old. At trial, however, Weldon denied representing the exclusion would expire when Wenz reached the age of 25. Wenz had turned 25 on March 25, 1983, 7 months before the collision with Haight. The court made no finding regarding any such representation

[205 Cal.App.3d 229]

CONTENTIONS

Haight contends California section 670 precludes State Farm from refusing coverage to a company for an employee hired to drive because the driver has been convicted of certain traffic infractions while operating his personal vehicle. Section 670 (enacted in 1973) provides:

"(a) No admitted insurer licensed to issue motor vehicle liability policies, as defined in Section 16450 of the Vehicle Code, shall cancel, or refuse to renew, a motor vehicle liability insurance policy covering drivers hired to drive by a commercial business establishment nor execute the agreement specified in paragraph (1) of subdivision (d) of Section 11580.1 with respect to those drivers for the reason that those drivers have been convicted of violations of the Vehicle Code or the traffic laws of any subdivision of the state which were committed while operating private passenger vehicles not owned or leased by their employer." (Italics added.)

Vehicle Code section 16450 (referred to in section 670) provides as follows:

"A 'motor vehicle liability policy,' as used in Chapters 2, 3 and 4 of this division, means an owner's policy or an operator's policy, or both, of liability insurance, certified as provided in [Vehicle Code] Section 16431 as proof of ability to respond in damages, issued by an insurance carrier authorized to transact such business in this State to or for the benefit of the person named therein as assured...."

Vehicle Code section 16431 (referred to in section 16450) provides as follows:

"Proof of ability to respond in damages may be given by the written certificate or certificates of any insurance carrier duly authorized to do business within the state, that it has issued to or for the benefit of the person named therein a motor liability policy as defined in [Vehicle Code] Section 16450, which, at the date of the certificate or certificates is in full force and effect." (Italics added.)

Section 11580.1, subdivision (d) (referred to in section 670) provides as follows:

"Notwithstanding the provisions of paragraph (4) of subdivision (b), or the provisions of Article 2 (commencing with section 16450) of Chapter 3 of Division 7, or Article 2 (commencing with section 17150) of Chapter 1 of Division 9, of the Vehicle Code, the insurer and any named insured may, by the terms of any policy of automobile liability insurance to which subdivision (a) applies, or by a separate writing relating thereto, agree as to either or both of the following limitations, such agreement to be binding upon every insured to whom such policy applies and to every third party claimant:

"(1) that coverage and an insurer's obligation to defend under such policy shall not apply nor accrue to the benefit of any insured or any third [205 Cal.App.3d 230] party claimant while any motor vehicle is being used or operated by a natural person or persons designated by name."

Section 670 further authorizes a named driver exclusion ("may be issued") if the driver has been convicted of certain serious Vehicle Code violations of greater significance than a common speeding violation as were Wenz's.

Haight contends the plain, explicit words of section 670 expressly prohibit the type of exclusion which State Farm imposed here; she argues if there is any requirement to resort to extrinsic circumstances to ascertain the intent of the drafters, the history of section 670 as well as the interpretation placed on it by scholars in the field lead to one conclusion: both the employer and Wenz were covered.

State Farm, alternatively, contends the effect of the language of section 670 and particularly its reference to Vehicle Code section 16450 ("as defined in Vehicle Code section 16450") incorporates and limits the section to only that type of policy which is

referred to in Vehicle Code section 16450. It is argued section 670 is, by this language, limited to a liability policy which is issued after there has been an accident and where a person involved in the accident seeks to submit proof of ability to respond in damages. State Farm contends section 670 is limited in its applicability to motor vehicle liability policies which have been certified as proof of ability to respond in damages as provided in Vehicle Code section 16431 after an accident has occurred

State Farm argues these various code sections when read in pari materia require a person who has been involved in an accident as described in Vehicle Code section 16000 to establish proof of financial responsibility with the Department of Motor Vehicles; such "certified policy" is a post accident policy. State Farm argues because the policy here was issued to Johnson-Kinsey before the accident, Vehicle Code section 16450 permits exclusion of named drivers like Wenz by its reference to section 11580.1, subdivision (d)(1).

DISCUSSION

I

There are several problems with the argument made by State Farm. First, the language of section 670 as well as the incorporated section are clear and unambiguous. Section 670 applies to "a motor vehicle liability insurance [205 Cal.App.3d 231] policy " and specifically prohibits application of the section 11580.1, subdivision (d)(1), driver exclusion in certain specified circumstances.

A court is required to give effect to the plain meaning of a statute where its language is clear and unambiguous. (Donahue v. LeVesque (1985) 169 Cal.App.3d 620, 215 Cal.Rptr. 388.) Section 670, subdivision (a), clearly states "No admitted insurer licensed to issue motor vehicle liability policies, as defined in Section 16450 of the Vehicle Code, shall cancel, or refuse to renew, a motor vehicle...