Sullivan v. Royal Exchange Assur.

• Citation: 181 Cal.App.2d 644,5 Cal.Rptr. 878
• Court: California Court of Appeals
• Decision Date: 09 June 1960
• Parties: Michael Leo SULLIVAN, Plaintiff and Appellant, v. ROYAL EXCHANGE ASSURANCE, Defendant and Respondent. Civ. 24334.

Page 878

5 Cal.Rptr. 878

181 Cal.App.2d 644

Michael Leo SULLIVAN, Plaintiff and Appellant, v. ROYAL EXCHANGE ASSURANCE, Defendant and Respondent.

Civ. 24334.

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

June 9, 1960.

Svenson & Garvin, John F. Garvin, Van Nuys, for appellant.

Crider, Tilson & Ruppe, Robert C. Todd and Abe Mutchnik, Los Angeles, for respondent.

LILLIE, Justice.

Plaintiff brought this action in declaratory relief to secure an interpretation of an insurance policy designated 'Family Combination Auto Policy,' and a declaration of his rights thereunder. The facts are not disputed. Two automobiles owned by plaintiff were covered by the policy issued to him by defendant; among other coverages, the contract of insurance included medical payments for '$2000 each person' upon which a $13 premium was paid on 'Car No. 1' and a lesser premium ($8.25) on 'Car No. 2.' On December 19, 1958, the policy then being in full force and effect, plaintiff's minor child was struck by a car not covered by the policy and sustained injuries in excess of $4,000. The trial court concluded that the limit of defendant's liability under the 'Medical Payments' coverage was $2,000 and gave judgment in that amount. Plaintiff by this appeal claims that under the terms of its policy the defendant's liability for medical payments is $4,000.

The pertinent parts of the policy with reference to the issue above stated are as follows:

'1. Declarations

'Item 3. The insurance afforded is only with respect to such of the following coverages as are indicated by specific premium charge or charges. The limit of the company's liability against each such coverage shall be as stated herein subject to all the terms of this policy having reference thereto.

Premiums Limits of Liability Coverages

---------------- ------------------- ------------------

Car No. 1 13.00 $2000 each person C Medical Payments

Car No. 2 8.25

'2. Coverage C--Medical Payments: To pay all reasonable expenses incurred within one year from the date of accident for necessary medical, surgical, X-ray and dental services * * *.

'Division 1. To or for the named insured and each relative who sustains bodily injury, sickness or disease, including death resulting therefrom, hereinafter called 'bodily injury,' caused by accident, while occupying or through being struck by an automobile.

'3. Limit of Liability: (under Part II) The limit of liability for medical payments stated in the declarations as applicable to 'each person' is the limit of the company's liability for all expenses incurred by or on behalf of each person who sustains bodily injury as the result of any one accident.

'4. Conditions:

'Conditions 1, 2, 3, 4, 6, 13, 14, 15 and 16 apply to all Parts.

'5. Condition 4. Two or More Automobiles: When two or more automobiles are insured hereunder, the terms of this policy shall apply separately to each. * * *'

Plaintiff contends that Condition 4 controls and that the limitation of $2,000 should be applied separately and individually to each automobile insured; defendant company, on the other hand, relies on the Limit of Liability clause, 3 supra, asserting that 'Although Condition 4 is on the face of the policy described as applying to all parts of the contract * * * the aforesaid 'Limit of Liability' provision is to be found expressly within that part of the policy concerning Medical Payments--the classification at issue.'

'It is elementary in insurance law that any ambiguity or uncertainty in an insurance policy is to be resolved against the insurer' (Continental Casualty Co. v. Phoenix Constr. Co., 46 Cal.2d 423, 437, 296 P.2d 801, 809, 57 A.L.R.2d 914); however, it is equally well established that 'where the terms of the policy are plain and explicit, the court will indulge in no forced construction so as to case liability upon the insurance company which it has not assumed (citations)'. New York Life Ins. Co. v. Hollender, 38 Cal.2d 73, 81, 237 P.2d 510. 'In the interpretation of any written instrument, the primary object is to ascertain and carry out the intention of the parties (citations)' (New York Life Ins. Co. v. Hollender, supra, 38 Cal.2d 81, 237 P.2d 514); to this end, '(E)ach clause * * * must be considered with reference to every other clause upon which it has any bearing and all provisions are to be construed together * * *' (Protex-A-Kar Co. v. Hartford Acc. Etc. Co., 102 Cal.App.2d 408, 413, 227 P.2d 509, 511) or, as has been stated, 'the intention being gathered from the whole instrument taking it by its four corners * * *' (Ogburn v. Travelers Ins. Co., 207 Cal. 50, 52-53, 276 P. 1004, 1005).

It appears that the precise problem at bar has not heretofore been the subject of judicial review in our state courts. There is much force to respondent's claim that Condition 4 and the Limit of Liability clause are complementary rather than contradictory; if not, there is further force to its argument that the specific limitation provision would prevail over the general Condition 4 which applies to 'all parts of the contract.' Thus, '* * * in the construction of the instrument * * * when a general and (a) particular provision are inconsistent, the latter is paramount to the former. So a particular intent will control a general one that is inconsistent with it' (Code Civ.Proc. Sec. 1859). However, at least by analogy, the problem has been adjudicated in other jurisdictions and by the United States Circuit Court of Appeals (9 Cir.) applying the law of California. In Lowery v. Zorn, 184 La. 1054, 168 So. 297, the plaintiff and his son were awarded damages of $5,858.25 and $150 respectively; on appeal the father's share was increased to $8,358.25, the full amount of his prayer. The policy sued upon had a limit of liability of $5,000 'each person' and '$10,000 for any accident causing bodily injury to more than one person.' The father contended that since the accident involved more than one person, the full $10,000 applied and since his son only claimed $150, there still remained $9,850 under the policy to satisfy his own claim. The Supreme Court of Louisiana Reduced the father's award to $5,000, stating at page 298: 'The garnishee, as insurer, is not liable for more than $5,000 for the damages suffered by * * * Lowery, because the limit of liability as fixed in the policy is $5,000 for bodily injuries to one person and 'subject to the same limit for each person' $10,000 for any one accident causing bodily injury to more than one person. Such limitations mean that if two or more persons have suffered bodily injuries in one accident, and if the amount of damages suffered by one of the persons injured exceeds the limit of liability for injuries to one person, he cannot recover from the insurer more than the limit of liability for injuries to one person, even though the total amount of damages due to all of the injured persons is less than...