United Services Automobile Assn. v. Baggett, H003239

• Decision Date: 26 April 1989
• Docket Number: No. H003239,H003239
• Citation: 209 Cal.App.3d 1387,258 Cal.Rptr. 52
• Court: California Court of Appeals Court of Appeals
• Parties: UNITED SERVICES AUTOMOBILE ASSOCIATION, Plaintiff and Respondent, v. Harry William BAGGETT, et al., Defendants and Appellants.

Page 52

258 Cal.Rptr. 52

209 Cal.App.3d 1387

UNITED SERVICES AUTOMOBILE ASSOCIATION, Plaintiff and Respondent, v. Harry William BAGGETT, et al., Defendants and Appellants.

No. H003239.

Court of Appeal, Sixth District, California.

April 26, 1989.

Rankin, Oneal, Center, Luckhardt & Lund and Mark G. Hyde, San Jose, John S. Crosley, for defendants and appellants.

Gassett, Perry & Frank and L. Christian Spieller, San Jose, for plaintiff and respondent.

AGLIANO, Presiding Justice.

1. Introduction

Plaintiff United Services Automobile Association ("insurer") filed this action against defendants Harry Baggett ("insured") and Christina and Hyun Ku Lee ("heirs") seeking a declaration of insurer's obligation under an automobile insurance policy. Heirs had filed an underlying action against insured and another driver for the wrongful death of their decedent and for damage to decedent's car following two consecutive automobile collisions. Here insured and heirs appeal from a judgment favoring insurer. They specifically challenge a summary adjudication that "only one automobile accident occurred within the meaning of said insurance policy." Heirs also challenge a determination after a court trial that the policy unambiguously limits maximum bodily injury coverage to $100,000 per person and $300,000 total per accident.

Insured and heirs assert either there were two accidents according to the policy's limits of liability or these policy provisions are ambiguous and should be interpreted to provide the higher coverage reasonably expected by insured. We reject their contentions and affirm the judgment.

2. Undisputed facts

The following facts emerge as undisputed from a review of insurer's motion for either summary adjudication or judgment and separate oppositions by insured and heirs. ¹

Shortly before midnight on October 17, 1984, insured's vehicle struck the decedent's vehicle from behind on an expressway. After driving a short distance farther, decedent stopped her vehicle in the center lane and insured did likewise. They both left their vehicles and briefly discussed the accident. Within a minute, a third vehicle struck insured's vehicle from behind, driving insured's vehicle into decedent and her vehicle and killing decedent. The police prepared two accident reports.

In the underlying action, heirs alleged that insured was negligent in (1) driving his vehicle, (2) stopping it without displaying hazard or operating lights or setting out reflective devices or flares or directing traffic around the stopped vehicles, and (3) guiding decedent to a position of danger.

At the time of the collisions, insured had an auto insurance policy from insurer providing liability coverage in the following pertinent terms. "We will pay damages for bodily injury or property damage for which any covered person becomes legally responsible because of an auto accident." A part captioned "limit of liability" states: "The limit of liability shown in the Declarations for 'each person' for Bodily Injury Liability is our maximum limit of liability for all damages for bodily injury sustained by any one person in any one auto accident. Subject to this limit for 'each person', the limit of liability shown in the Declarations for 'each accident' for Bodily Injury Liability is our maximum limit of liability for all damages for bodily injury resulting from any one auto accident. The limit of liability shown in the Declarations for 'each accident' for Property Damage Liability is our maximum limit of liability for all damages to all property resulting from any one auto accident. This is the most we will pay regardless of the number of: [p] 1. Covered persons; [p] 2. Claims made; [p] 3. Vehicles or premiums shown in the Declarations; or [p] 4. Vehicles involved in the auto accident. [p] We will apply the limit of liability to provide any separate limits required by law for bodily injury and property damage liability. However, this provision will not change our total limit of liability."

The declarations page states, among other things, the following liability coverage and limits of liability:

"BODILY INJURY EA PER $100,000 EA ACC $300,000

PROPERTY DAMAGE EA ACC $ 25,000."

Insured believed the policy provided for treatment of circumstances like those described above as two accidents and for coverage of $300,000 for each accident. He did not understand what "EA PER $100,000" meant.

3. Standard of review

Insured and heirs criticize the reasoning of the law-and-motion judge preceding his summary adjudication. On appeal, we are concerned with the validity of the summary judgment ruling, not its reasoning. (Snider v. Snider (1962) 200 Cal.App.2d 741, 756, 19 Cal.Rptr. 709; D'Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 18-19, 112 Cal.Rptr. 786, 520 P.2d 10; Malmstrom v. Kaiser Aluminum & Chemical Corp. (1986) 187 Cal.App.3d 299, 308, 231 Cal.Rptr. 820.) This is particularly true when we review a summary adjudication interpreting an insurance policy based on undisputed extrinsic evidence. "Since a summary judgment motion raises only questions of law regarding the construction and effect of the supporting and opposing papers, we independently review them on appeal, applying the same ... analysis required of the trial court. (Code Civ.Proc., § 437c....)" (AARTS Productions, Inc. v. Crocker National Bank (1986) 179 Cal.App.3d 1061, 1064, 225 Cal.Rptr. 203.) Interpretation of the insurance policy presents a question of law which we answer independently because the trial court's interpretation did not depend on conflicting extrinsic evidence. (Continental Cas. Co. v. Phoenix Constr. Co. (1956) 46 Cal.2d 423, 429-430, 296 P.2d 801; Bareno v. Employers Life Ins. Co. (1972) 7 Cal.3d 875, 881, 103 Cal.Rptr. 865, 500 P.2d 889; Lumbermens Mutual Casualty Co. v. Vaughn (1988) 199 Cal.App.3d 171, 179, 244 Cal.Rptr. 567.) It is a question of law whether an insurance policy is ambiguous by virtue of being susceptible to two or more reasonable interpretations. (Producers Dairy Delivery Co. v. Sentry Ins. Co. (1986) 41 Cal.3d 903, 912, 226 Cal.Rptr. 558, 718 P.2d 920.)

4. General principles of insurance policy interpretation

Reserve Insurance Co. v. Pisciotta (1982) 30 Cal.3d 800, 806-807, 180 Cal.Rptr. 628, 640 P.2d 764, articulates established principles of insurance policy interpretation, including: "Words used in an insurance policy are to be interpreted according to the plain meaning which a lay[person] would ordinarily attach to them. Courts will not adopt a strained or absurd interpretation in order to create an ambiguity where none exists." (Id. at [209 Cal.App.3d 1392] p. 807, 180 Cal.Rptr. 628, 640 P.2d 764; accord Hyer v. Inter-Insurance Exchange, etc. (1926) 77 Cal.App. 343, 347, 246 P. 1055.) " 'Whereas coverage clauses are interpreted broadly so as to afford the greatest possible protection to the insured [citations], exclusionary clauses are interpreted narrowly against the insurer. [Citations.]' ... '[A]n insurer cannot escape its basic duty to insure by means of an exclusionary clause that is unclear.... [T]hus, "the burden rests upon the insurer to phrase exceptions and exclusions in clear and unmistakable language." ...' " (Reserve Insurance Co., supra, 30 Cal.3d at p. 808, 180 Cal.Rptr. 628, 640 P.2d 764.)

Insurance policy terms are construed in the context of the policy and the circumstances of the case and should not be found ambiguous in the abstract. (Producers Dairy Delivery Co., supra, 41 Cal.3d 903, 916, fn. 7, 226 Cal.Rptr. 558, 718 P.2d 920; Blumberg v. Guarantee Ins. Co. (1987) 192 Cal.App.3d 1286, 1296, 238 Cal.Rptr. 36.) Courts become interested in an insured's reasonable expectations of coverage " 'only where there is an ambiguity in the policy.' [Citations.]" (Lumbermens Mutual Casualty Co., supra, 199 Cal.App.3d at p. 179, 244 Cal.Rptr. 567; emphasis omitted; cf. Producers Dairy Delivery Co., supra, 41 Cal.3d 903, 912, 226 Cal.Rptr. 558, 718 P.2d 920.)

5. Interpretation of coverage limitation for "any one auto accident"

The principal issue on appeal is how to interpret the insurance policy limitation of liability coverage to specified maximums "for all damages ... resulting from any one auto accident."

The leading California case on interpretation of a similar policy limitation is Hyer v. Inter-Insurance Exchange, etc., supra, 77 Cal.App. 343, 246 P. 1055. There the insured's vehicle collided with one car, sustained broken steering, and collided with another car. (Id. at pp. 345-346, 246 P. 1055.) In issue was the interpretation of an insurance policy maximum limit of liability "with respect to claims ... arising from one accident...." (Id. at p. 345, 246 P. 1055; emphasis omitted.)

Hyer contains the following reasoning. "The word 'accident' probably has been discussed in adjudications as often as any other word in the English language. It is not a technical term, with a clearly defined meaning, and it has been used in more than one sense." (77 Cal.App. at p. 348, 246 P. 1055.) "[A]s commonly used in liability insurance policies, the word 'accident' is predicated of an occurrence which is the cause of the injury. That is to say, as used in liability insurance contracts the word is employed to denote the cause, rather than the effect." (Id. at p. 349, 246 P. 1055; emphasis added.) "Where ... one negligent act or omission is the sole proximate cause ... there is, as a general rule, but one accident, even though there be several resultant injuries or losses." (Id. at p. 350, 246 P. 1055.) "That part of the continuous sequence of events which embraces the second collision in this case ... may well be described ... as 'the incident of the accident.' " (Id. at p. 351, 246 P. 1055.) In the context of the insurance policy's limits of liability, the parties apparently contemplated that "one accident" could involve two or more vehicles. (Cf. id. at pp. 352-354, 246 P. 1055.)

Hyer exemplifies the prevailing interpretation...