Thomas v. Liberty Mut. Ins. Co.

• Court: Arizona Court of Appeals
• Writing for the Court: CONTRERAS
• Citation: Thomas v. Liberty Mut. Ins. Co., 173 Ariz. 322, 842 P.2d 1335 (Ariz. App. 1992)
• Decision Date: 09 July 1992
• Docket Number: No. 1,CA-CV,1
• Parties: James THOMAS and Diane Thomas, husband and wife, Plaintiffs Garnishors-Appellees, v. LIBERTY MUTUAL INSURANCE CO., Defendant Garnishee-Appellant. 89-442.

Page 1335

842 P.2d 1335

173 Ariz. 322

James THOMAS and Diane Thomas, husband and wife, Plaintiffs Garnishors-Appellees, v. LIBERTY MUTUAL INSURANCE CO., Defendant Garnishee-Appellant.

No. 1 CA-CV 89-442.

Court of Appeals of Arizona Division 1, Department C.

July 9, 1992.

Review Denied Jan. 20, 1993.

[173 Ariz. 323] Gage & Mathers, Ltd. by G. David Gage, Phoenix, for plaintiffs garnishors-appellees.

O'Connor, Cavanagh, Anderson, Westover, Killingsworth & Beshears, P.A. by Larry L. Smith, Steven D. Smith, Phoenix, for defendant garnishee-appellant.

OPINION

CONTRERAS, Presiding Judge.

The dispositive question in this appeal is whether the term "maintenance" in an automobile insurance policy includes the named insured's act of providing a family member with the named insured's insurance policy number so that the family member can register a vehicle that is not covered by the policy. We conclude that the meaning of the term "maintenance" does not include such an act. We therefore reverse the trial court's grant of summary judgment in favor of appellees and remand with directions that summary judgment be entered for appellant.

I. FACTS AND PROCEDURAL HISTORY

The parties do not dispute the material facts. Jason Kartak, who was 18 years old and lived with his mother, Janet Kartak, purchased with his own money a 1971 Ford LTD in January or February of 1986. At that time, Arizona law required the owner of a motor vehicle to certify when registering the vehicle that it was covered by a liability insurance policy or that the owner otherwise complied with state financial responsibility laws. See Ariz.Rev.Stat.Ann. ("A.R.S.") §§ 28-1161 through 28-1225 (1989). Although Jason wanted to register the automobile in his name, he had not yet obtained liability insurance. He informed his mother that he needed an insurance policy number so that he could register his automobile. Mrs. Kartak provided Jason with the number of her Liberty Mutual automobile insurance policy, which Jason was going to use to register his automobile. She did not tell her Liberty Mutual Agent or anyone associated with Liberty Mutual that she had provided Jason with her policy number for this purpose.

Jason signed the insurance certification on the vehicle registration form for his automobile, which included his mother's Liberty Mutual policy number, on May 12, 1986. Four days later, in the early evening of May 16, 1986, he was driving his automobile when it struck and killed appellees' five-year-old son, Michael Thomas.

Appellees filed a civil action against Jason to recover damages for the wrongful death of their son. As the result of a Damron agreement, Jason made an offer of judgment in the amount of $3,000,000. Appellees accepted the offer, and the trial court entered judgment against Jason alone. ¹

Following entry of the judgment, appellees filed an application for writ of garnishment naming appellant Liberty Mutual as the garnishee-defendant. In its answer to the writ, Liberty Mutual asserted that it was not indebted to Jason.

Appellees objected to Liberty Mutual's answer and moved for summary judgment based on their claim that Liberty Mutual insured Jason's automobile at the time of the accident that resulted in the death of their son. They acknowledged that Jason, while driving his own automobile, ordinarily would not be covered by his mother's Liberty Mutual policy. Appellees argued, however, that the exclusion of Jason was inapplicable due to the exception that afforded coverage if his mother, Mrs. Kartak, provided "maintenance" to a vehicle owned by a family member. Contending that Mrs. Kartak's act of supplying her insurance policy number to her son so that he could register his automobile constituted "maintenance" of his automobile, appellees concluded that the policy covered Jason's use of his automobile at the time of the accident and that Liberty Mutual was therefore bound to pay the judgment against Jason. In response and in its cross-motion for summary judgment, Liberty Mutual argued that the plain, ordinary meaning of "maintenance" would not include Mrs. Kartak's act of providing her policy number to her son in order for him to register his automobile. It also contended that there was no causal connection between the act of providing the policy number to Jason and the accident and that the exception to the policy exclusion therefore could not apply to cover Jason's liability for the accident.

The trial court concluded that Jason Kartak and his vehicle were covered by the Liberty Mutual policy, and it entered partial summary judgment on the "maintenance" issue in appellees' favor. The judgment included Rule 54(b) language, and following denial of its motion for new trial, Liberty Mutual appealed from the judgment and from the order denying its motion for new trial. We have jurisdiction over this appeal pursuant to A.R.S. section 12-2101(B).

II. DISCUSSION

The interpretation of an insurance contract, including whether its terms are ambiguous or uncertain, is a question of law for the court to decide. Sparks v. Republic Nat'l Life Ins. Co., 132 Ariz. 529, 534, 647 P.2d 1127, 1132, cert. denied, 459 U.S. 1070, 103 S.Ct. 490, 74 L.Ed.2d 632 (1982); Farmers Ins. Co. v. Zumstein, 138 Ariz. 469, 474, 675 P.2d 729, 734 (App.1983). This court may interpret an insurance contract independently of the trial court's legal conclusions. Sparks, 132 Ariz. at 534, 647 P.2d at 1132; Phillips v. Flowing Wells Unified Sch. Dist. No. 8, 137 Ariz. 192, 194, 669 P.2d 969, 971 (App.1983).

The portions of the insurance policy that must be considered in order to determine whether the Liberty Mutual policy covered Jason at the time of the accident are as follows:

DEFINITIONS

Throughout this policy, "you" and "your" refer to:

1. The "named insured" shown in the Declarations.... [Janet Kartak is the named insured.]

* * * * * *

"Family Member" means a person related to you by blood, marriage or adoption who is a resident of your household.

* * * * * *

PART A--LIABILITY

COVERAGE

INSURING AGREEMENT. We [Liberty Mutual] will pay damages for bodily injury or property damage for which any covered person becomes legally responsible because of an auto accident.

* * * * * *

"Covered person" as used in this Part means:

1. You or any family member for the ownership, maintenance or use of any auto or trailer.

* * * * * *

EXCLUSIONS. B. We do not provide Liability Coverage for the ownership, maintenance or use of:

* * * * * *

3. Any vehicle, other than your covered auto, which is:

a. owned by any family member....

However, this exclusion does not apply to your maintenance or use of any vehicle which is:

a. owned by a family member....

In light of these provisions, the policy would cover Jason, a family member and thus a covered person, when he used his mother's covered automobile. However, it would not cover him when he used his own, uncovered automobile unless the exception to the exclusion applied to him. In this regard, appellees argue that the exception applied because Mrs. Kartak provided "maintenance" to Jason's vehicle by supplying him with her insurance policy number so that he could register his automobile. Liberty Mutual contends that the term "maintenance" does not include such an act.

It is well settled that any ambiguity in an insurance policy will be construed against the insurer. Beaugureau v. Equitable Life Assurance Soc'y, 132 Ariz. 596, 598, 647 P.2d 1194, 1196 (App.1982). This is particularly true if the ambiguity involves an exclusionary clause. Security Ins. Co. v. Andersen, 158 Ariz. 426, 428, 763 P.2d 246, 248 (1988). This rule applies, however, only if a provision is actually ambiguous. Id. As the Andersen court stated:

Where the policy language is clear, a court may not take "the easy way out" by inventing ambiguity, and then resolving it to find coverage where none exists under the policy.... [A] "court should not attempt to revise the policy to increase the risk or extend liability just to accomplish a so-called good purpose."

Id. (citations omitted) (quoting Stearns-Roger Corp. v. Hartford Accident & Indem. Co., 117 Ariz. 162, 165, 571 P.2d 659, 662 (1977)).

Furthermore, in construing a term in an insurance policy that on its face is not ambiguous, we must interpret it according to its ordinary meaning and effect. Mid-Century Ins. Co. v. Duzykowski, 131 Ariz. 428, 430, 641 P.2d 1272, 1274 (1982); Rodemich v. State Farm Mut. Auto. Ins. Co., 130 Ariz. 538, 539, 637 P.2d 748, 749 (App.1981). In other words, we should examine the language from the standpoint of a person not trained in law or in the insurance business. Sparks, 132 Ariz. at 534, 647 P.2d at 1132.

It is acknowledged by the parties that the meaning of the term "maintenance" in an automobile insurance policy has not yet been interpreted in Arizona case law. However, courts in other jurisdictions have interpreted the term. An early determination of the meaning of the term "maintenance" in an insurance policy was made in Morris v. American Liability & Surety Co., 322 Pa. 91, 185 A. 201 (1936). In deciding that the repair of a truck tire constituted "maintenance," the Morris court stated:

The word "maintenance," used in this policy, covers all acts which come within its ordinary scope and meaning. To "maintain" means to preserve or keep in an existing state or condition and embraces acts of repair and other acts to prevent a decline, lapse, or cessation from that state or condition. In a wide variety of situations the word "maintain" has been taken to be synonymous with "repair." This is the usual meaning, the dictionary meaning, and the meaning which must control in the absence of a clear expression of a contrary intention.

Id. at 94-95, 185 A. at 202 (citations omitted).

The court in Wall v. Windmann, 142 So.2d 537 (La.App.1962), used the Morris definition of "maintenance" as well as the dictionary's definition of maintenance as "the upkeep of property,...