United Services Automobile Assn. v. U.S. Fire Ins. Co.

• Decision Date: 21 December 1973
• Citation: 111 Cal.Rptr. 595,36 Cal.App.3d 765
• Court: California Court of Appeals Court of Appeals
• Parties: UNITED SERVICES AUTOMOBILE ASSOCIATION, Plaintiff and Appellant, v. UNITED STATES FIRE INSURANCE COMPANY et al., Defendants and Respondents. Civ. 31528.

Page 595

111 Cal.Rptr. 595

36 Cal.App.3d 765

UNITED SERVICES AUTOMOBILE ASSOCIATION, Plaintiff and Appellant, v. UNITED STATES FIRE INSURANCE COMPANY et al., Defendants and Respondents.

Civ. 31528.

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

Dec. 21, 1973.

Rehearing Denied Jan. 18, 1974.

Hearing Denied Feb. 27, 1974.

Hoge, Fenton, Jones & Appel, Inc., by Henry T. Morrow, San Jose, for plaintiff and appellant.

Bronson, Bronson & McKinnon by Paul H. Cyril, San Francisco, for defendants and respondents.

MOLINARI, Presiding Justice.

This is an appeal by United Services Automobile Association (hereinafter the 'Association') from a judgment in a declaratory relief action brought by it against United States Fire Insurance Company (hereinafter the 'Company'), John Chandler, Stephen Boyle and Henry M. Boyle. The Association sought to have determined the respective rights and duties of the parties as to certain insurance coverage. The trial court determined that the policy of insurance issued by the Association covered any liability that Chandler had to the Boyles with respect to an accident occurring on April 12, 1969; that the Company's policy did not cover any such liability, and that the Association had the sole responsibility to defend and indemnify Chandler with respect to said accident.

The insurance policy issued by the Association was an automobile insurance policy covering Carolyn L. Chandler as the named insured; that issued by the Company was a homeowner's insurance policy in which Carolyn L. Chandler was the named insured. It was stipulated at the trial that John Chandler, the son of the named insured, was covered by both of these policies.

On April 12, 1969, an accident occurred at the Boyle residence. A number of Stephen Boyle's friends had gathered to work on a Pontiac automobile owned by Boyle. John Chandler attempted to start the car while pouring gasoline into the carburetor and the gasoline from the can ignited. Apparently the carburetor had backfired causing the gasoline to ignite. Chandler backed way from the car with the burning gasoline can in his hands, stated to set it down and then threw it towards the open garage door. This movement took from four to five seconds. The burning gasoline can struck Stephen Boyle as he was running out of the garage. For the injuries allegedly sustained Stephen Boyle filed an action against John Chandler.

Under the pertinent portions of its policy the Association agreed 'To pay on behalf of the insured all sums which the insured shall be legally obligated to pay as damages because of: A. bodily injury, . . . sustained by any person; B. . . . arising out of the ownership, maintenance or use of . . . any non-owned automobile, . . .' With respect to a nonowned automobile the policy included in the definition of 'persons insured' the following: '. . . (2) any relative, but only with respect to a private passenger automobile . . . provided his actual operation or (if he is not operating) the other actual use thereof is with the permission, or reasonably believed to be with the permission, of the owner and is within the scope of such permission, . . .' This policy also contained a clause with respect to 'Other Insurance' which read, in pertinent part, as follows: '. . . provided, however, the insurance with respect to a . . . nonowned automobile shall be excess insurance over any other valid and collectible insurance.'

The Company's policy, in pertinent part, provided that it would pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury but specifically provided that this coverage did not apply '. . . to the ownership, maintenance, operation, use, loading or unloading of . . . automobiles . . . while away from the premises . . ..' This policy also provided that '. . . (c) If the insured has other insurance against a loss covered by this policy, this Company shall not be liable under this policy for a greater proportion of such loss than the applicable limit of liability stated in the Declarations bears to the total applicable limit of liability of all valid and collectible insurance against such loss, provided that with respect to loss arising out of the ownership, maintenance, operation, use, loading or unloading of (1) any automobile . . . at the premises . . . this insurance shall not apply to the extent that any valid and collectible insurance, whether on a primary, excess or contigent basis, is available to the Insured.'

At the trial it was stipulated that the Boyle automobile was a nonowned automobile and that John Chandler was a 'relative' of the named insured as defined in the Association's policy. It was also stipulated that the accident occurred 'away from the premises' as defined in the Company's policy.

The Association contends that its policy does not apply to the subject accident and, alternately, that its coverage is secondary to the coverage provided by the Company. It should be noted here that on conflicting evidence the court found that John Chandler's activities relative to the Boyle automobile were reasonably believed by him to have been done with the permission of the owner. This finding is not contested.

The Association's policy is basically an automobile liability policy. As to the coverage provided for nonowned automobiles, the named assured is covered as well as any relative 'provided his actual operation or (if he is not operating) the other actual use thereof is with the permission, or reasonably believed to be with the permission, of the owner . . ..' Accordingly, the essential issue in this case is whether John Chandler's activity on April 12, 1969, constituted 'other actual use' of the Boyle automobile. In focusing upon this issue we first observe that in determining whether a peripheral activity involving a vehicle amounts to a 'use' we are governed by the rule that 'uncertainties in policy language are construed in favor of imposing liability on the insurer; hence that 'use' must be understood in its most comprehensive sense. The term is not confined to motion on the highway, but extends to any activity in utilizing the insured vehicle in the manner intended or contemplated by the insured.' (Pacific Indem. Co. v. Truck Ins. Exch., 270 Cal.App.2d 700, 703, 76 Cal.Rptr. 281, 283; Hartford Accident & Indem. Co. v. Civil Service Employees Ins. Co., 33 Cal.App.3d 26, 31, 108 Cal.Rptr. 737; see Cocking v. State Farm Mut. Automobile Ins. Co., 6 Cal.App.3d 965, 969--970, 86 Cal.Rptr. 193.)

In Cocking, where we held that the plaintiff, who was engaged in placing chains on a car and was hit by an uninsured motorist, was 'using' the car, we noted that the policy of this state is to provide compensation for those injured by the use of automobiles and that contractual provisions in the policies must be construed in the light of this public policy. (6 Cal.App.3d at p. 969, 86 Cal.Rptr. 193; see Barrera v. State Farm Mut. Auto. Ins. Co., 71 Cal.2d 659, 670--672, 79 Cal.Rptr. 106, 456 P.2d 674; Interinsurance Exchange of Auto. Club v. Ohio Cas. Ins. Co., 58 Cal.2d 142, 154, 23 Cal.Rptr. 592, 373 P.2d 640.)

In determining whether a person was in such a position in relation to the vehicle as to be injured in its use, consideration must be given, not only to what the person was doing when injured, but also to his purpose and intent. (Cocking v. State Farm Mut. Auto. Ins. Co., supra, 6 Cal.App.3d 965, 970, 86 Cal.Rptr. 193.)

The Association contends that its policy clearly intends to limit the situation involving a relative and a nonowned vehicle. In support of this contention it is pointed out that coverage for the named insured includes 'ownership, maintenance or use of any nonowned vehicle' while the coverage for the relative includes only actual operation or 'other actual use.' It is asserted that the elimination of the word 'maintenance' and the inclusion of the word 'actual' is indicative of a more limited coverage for a relative.

We perceive that the distinction urged by the Association lies in the differences between the meaning of 'use' and 'actual use.' That distinction, if it exists, appears to lie in the difference between conduct that is passive and conduct that is active. Accordingly, we apprehend that the insured may be covered for conduct that is passive as well as active, while that of the relative is restricted to active conduct. Our concern here is not with any district that may be posed by the language of the policy but simply whether John Chandler was using the Boyle automobile at the time of the accident and whether such use was an 'actual use.'

As already pointed out, the word 'use' can be construed to extend to any utilization of the insured vehicle in a manner intended or contemplated by the insured. The term 'actual use' must be construed to mean 'present or active use' or a 'use existing in fact or reality' (see definition of 'actual,' Webster's Third New Internat. Dict.) as distinguished from an imputed or constructive use. (See Cahill Bros., Inc. v....