Valdez v. Federal Mut. Ins. Co.

• Decision Date: 23 April 1969
• Citation: 77 Cal.Rptr. 411,272 Cal.App.2d 223
• Court: California Court of Appeals Court of Appeals
• Parties: Mary VALDEZ, individually, Frank Sanchez, a minor, Dennis Sanchez, a minor, Pamela Sanchez, a minor, Bessie Sanchez, an incompetent, by Mary Valdez, their Guardian ad Litem, Plaintiffs and Appellants, v. FEDERAL MUTUAL INSURANCE COMPANY, a corporation, Defendant and Respondent. Civ. 25276.

Page 411

77 Cal.Rptr. 411

272 Cal.App.2d 223

Mary VALDEZ, individually, Frank Sanchez, a minor, Dennis Sanchez, a minor, Pamela Sanchez, a minor, Bessie Sanchez, an incompetent, by Mary Valdez, their Guardian ad Litem, Plaintiffs and Appellants, v. FEDERAL MUTUAL INSURANCE COMPANY, a corporation, Defendant and Respondent.

Civ. 25276.

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

April 23, 1969.

Forrest G. Winningham, San Jose, for appellants.

George W. Bonney, San Jose, for respondent.

SIMS, Associate Justice.

Plaintiff, individually as a named insured and policyholder, and as guardian ad litem of the incompetent widow and three minor surviving children of her deceased son, has appealed from a judgment in an action for declaratory relief which adjudged that the defendant insurer has no legal obligation to defend or pay any claims for damages alleged to be due to the plaintiffs by reason of the death of the named insured's son.

The son was a resident of the named insured's household at the time he was killed in a collision between a motorcycle he was operating and an uninsured motor vehicle. Admittedly, under the terms of the policy and the applicable statute, ¹ his heirs would be insured for all sums within the policy limits which they would be legally entitled to recover for his wrongful death from the owner or operator of the uninsured motor vehicle, unless such coverage had been deleted in the manner provided by law. The controversy involves the scope of an endorsement entitled 'Exclusion of Named Driver,' which reads: 'It is agreed that such insurance as is afforded by this policy does not apply with respect to any claim arising from accidents which occur while any automobile is being operated by: SAMUEL SANCHEZ.'

It is concluded that the endorsement did not serve to limit the coverage under the uninsured motorist part of the policy. It is therefore unnecessary to determine whether the word 'automobile' as used in the endorsement includes a motorcycle.

The action was tried upon an agreed statement of facts which was embodied in the pretrial order. In addition to what has been related above, the facts show that at the time of the accident the motorcycle which the decedent was operating was registered to his mother, and was owned by either the decedent or his mother. At the time of the accident there was no uninsured motorist's coverage attributable to the motorcycle because the decedent, who carried liability insurance which covered the operation of the motorcycle, had voluntarily waived it in writing.

The policy involved in this action had been issued to the mother and described two automobiles owned by her. The record shows that this policy, a family automobile policy, had been renewed semiannually or annually since October 20, 1959 when its term, including uninsured motorist's coverage for which a separate premium was charged, first began. The endorsement quoted above bears an effective date of November 14, 1966. It was signed by the mother, and was countersigned by a representative of the insurer on November 21, 1966. The accident occurred on March 6, 1967.

'Insurance Code section 11580.2 is a part of a pattern of statutes which are 'designed to give monetary protection to that ever changing and tragically large group of persons who while lawfully using the highways themselves suffer grave injury through the negligent use of those highways by others.' Continental Cas. Co. v. Phoenix Constr. Co., 46 Cal.2d 423, 434, 296 P.2d 801, 57 A.L.R.2d 914) Such statutes must be liberally construed to carry out this objective of providing compensation for those injured through no fault of their own. (Citations.)' (Katz v. American Motorist Ins. Co. (1966) 244 Cal.App.2d 886, 890--891, 53 Cal.Rptr. 669, 672. See also, Mission Ins. Co. v. Brown (1965) 63 Cal.2d 508, 510, 47 Cal.Rptr. 363, 407 P.2d 275; Lopez v. State Farm Fire & Cas. Co. (1967) 250 Cal.App.2d 210, 212, 58 Cal.Rptr. 243; Hanover Insurance Co. v. Carroll (1966) 241 Cal.App.2d 558, 560--561, 50 Cal.Rptr. 704; Mills v. Farmers Ins. Exchange (1964) 231 Cal.App.2d 124, 128, 41 Cal.Rptr. 650; and Hendricks v. Meritplan Ins. Co. (1962) 205 Cal.App.2d 133, 136, 22 Cal.Rptr. 682.)

It is established, as a corollary to the rule of liberal construction to promote the objectives of the Legislature, that any exception or exclusion must be strictly construed. In Mission Ins. Co. v. Brown, supra, the court stated: 'The Legislature, by providing that the liability imposed by the statute can be avoided only by means of an agreement in writing, signed by the insurer and the insured, deleting the provision for uninsured motorist coverage, clearly showed an intent that there be no 'fine print,' unilateral waiver or limitation of the requirement.' (63 Cal.2d at p. 510, 47 Cal.Rptr. at p. 364, 407 P.2d 275, 276. See also, Utah Home Fire Ins. Co. v. McCarty (1968) 266 A.C.A. 971, 973, 72 Cal.Rptr. 460; and Hendricks v. Meritplan Ins. Co., supra, 205 Cal.App.2d 133, 139, 22 Cal.Rptr. 682.) Accordingly, although the courts have upheld agreements to delete the statutory provisions when executed in compliance with the statutory formalities (see Holland v. Universal Underwriters Ins. Co. (1969) 270 A.C.A. 447, 449--451, 75 Cal.Rptr. 669; Myers v. National Automobile & Cas. Ins. Co. (1967) 252 Cal.App.2d 599, 603, 60 Cal.Rptr. 743; and Weatherford v. Northwestern etc. Ins. Co. (1966) 239 Cal.App.2d 567, 569--572, 49 Cal.Rptr. 22), they have struck down attempts to delete the coverage where the policy and related documents are ambiguous and uncertain and fail to show a clear intent to delete such provisions. (See Allstate Ins. Co. v. Dean (1969) 269 A.C.A. 471, 474--476, 76 P.2d 543; and Utah Home Fire Ins. Co. v. McCarty, supra, 266 A.C.A. 971, 973--974, 72 Cal.Rptr. 460.)

In Hendricks v. Meritplan Ins. Co., supra, the statutory provisions then in effect (Ins.Code, § 11580.2, as added by Stats.1959, ch. 817, § 1, p. 2835) extended uninsured motor vehicle insurance to '* * * the named insured and any other person legally responsible for the use of, or using the motor vehicle with the consent, express or implied, of the named insured * * *.' (205 Cal.App.2d at p. 138, 22 Cal.Rptr. at p. 684.) The policy contained a restrictive endorsement that the insurance afforded by the policy would not apply while the insured vehicle was being operated by a person under the age of 25 years. The court noted that the two provisions were in direct conflict with one another, and held the restrictive endorsement void. The court concluded, 'Mere acceptance by the named insured of a policy of automobile liability insurance containing an endorsement making the coverage inapplicable during operation of the motor vehicle by a person under 25 years of age does not come within what the Legislature contemplated as a Waiver by Supplemental agreement of uninsured motorist coverage.' (205 Cal.App.2d at p. 138, 22 Cal.Rptr. at p. 685.)

In 1961 (Stats.1961, ch. 1189, § 2, p. 2921), section 11580.2 was revised, and the language of the provision providing for the deletion of coverage was revised to read as it presently does (see fn. 1, supra). The insurer and the named insured concededly agreed in writing to the subject matter of the endorsement in question. The endorsement, however, does not meet other criteria suggested in Hendricks, which appear to be equally pertinent to the proviso as redrafted. The court stated, 'Further, we believe an express, not implied, waiver is required; the Legislature intended that when the named insured did execute such a waiver that it would clearly and specifically refer to the subject matter (uninsured motorist coverage) with which it was concerned. There was no such express waiver by 'supplemental agreement' in the instant case.' (Id., at pp. 138--139, 22 Cal.Rptr. at p. 686.) Here the endorsement does not specifically mention uninsured motorist coverage. It does refer to 'such insurance as is afforded by this policy,' but the exclusion does not purport to apply to all uninsured motorist coverage, nor even to all uninsured motorist coverage for the named relative. The exclusion, if applicable, applies only to such uninsured motorist liability as might occur under the circumstances set forth in the endorsement. On this score the endorsement conflicts with a second pronouncement in Hendricks. The court noted, 'It is true that plaintiffs were not parties to the insurance contract but they are clearly members of a class for whom the benefits of the uninsured motorist law are intended to apply. Defendant argues that since uninsured motorist coverage may be waived In toto it may be waived in part. Nowhere in the law is there any provision for waiving of coverage based upon age classifications or on the basis of other nonpreferred risks. The only permissible exclusion is the one expressly provided for in the statute under which the insurer and the insured may by supplemental agreement expressly waive application of the statute.' (Id., at p. 139, 22 Cal.Rptr. at p. 686.) This second principle was referred to with approval in Mission Ins. Co. v. Brown, supra. There the court ruled that an attempt to limit the application of the uninsured motorist coverage to a smaller geographical area than that provided in the liability coverage was void because it was contrary to public policy. (63 Cal.2d at p. 510, 47 Cal.Rptr. 363, 407 P.2d 275.) The court concluded, 'The statute clearly does not contemplate a piecemeal whittling away of liability, either territorially or under certain driving conditions, for injuries caused by uninsured motorists.' (Id., at p. 511, 47 Cal.Rptr. at p. 365, 407 P.2d at p. 277.)

In Costa v. St. Paul etc. Ins. Co. (1964) 228 Cal.App.2d 651, 39 Cal.Rptr. 774, two insurers successfully contended in the trial court that because of the syntax of the section, as adopted in 1959, the definition of 'insured,' which referred to relatives in...