Valdez v. Interinsurance Exchange of Auto. Club of Southern Cal.

• Decision Date: 12 September 1966
• Court: California Court of Appeals Court of Appeals
• Parties: Sylvia Ann VALDEZ et al., Plaintiffs and Appellants, v. INTERINSURANCE EXCHANGE OF the AUTOMOBILE CLUB OF SOUTHERN CALIFORNIA et al., Defendants and Respondents. Civ. 8025.

Page 906

54 Cal.Rptr. 906

246 Cal.App.2d 1

Sylvia Ann VALDEZ et al., Plaintiffs and Appellants, v. INTERINSURANCE EXCHANGE OF the AUTOMOBILE CLUB OF SOUTHERN CALIFORNIA et al., Defendants and Respondents.

Civ. 8025.

District Court of Appeal, Fourth District,

Division 2, California.

Sept. 12, 1966.

[246 Cal.App.2d 2] Marsh, Moore & Cologne, Indio, for plaintiffs and appellants.

Gilbert, Thompson & Kelly, Everett W. Thompson and Jean Wunderlich, Los Angeles, for defendants and respondents.

OPINION

KERRIGAN, Justice.

Barbara Ann Valdez, deceased, was killed in a one-car automobile accident, and plaintiffs herein subsequently filed an action as heirs of the decedent for the purpose of recovering money damages against the driver of the vehicle, Charles Rudy Montez, who was driving the car which the insured owner's consent. The plaintiff-minors, natural children of the decedent, and the plaintiff, Richard J. Valdez, surviving spouse of the decedent and father of the said minors, recovered judgment in a wrongful death action in their capacity as heirs of said deceased in the sum of $60,000.00, and the surviving spouse, Richard J. Valdez, recovered judgment individually in the sum of $2500.00 for personal injuries sustained by him in such accident.

The defendant, Interinsurance Exchange of the Automobile Club of Southern California, had issued to Virginia Montez, the owner of the 1957 Chevrolet in which Barbara was riding at the time of the accident which culminated in her demise, an automobile public liability insurance policy with $10,000/$20,000 limits, which provided coverage for the owner and any person driving the insured vehicle with the owner's permission.

Following rendition of the judgment in favor of the heirs jointly and Richard J. Valdez, individually, the defendant-insurance company paid plaintiffs the sum of $10,000 as heirs of the deceased, together with the sum of $2500.00 to Richard J. Valdez, individually. Plaintiffs then filed this suit claiming they are entitled to the further sum of $7500.00 in damages under the terms of the policy.

The pertinent sections of the policy issued by defendant-company by which it undertook to indemnify the assured against loss for injury or death resulting from the operation of the insured automobile provide as follows:

'COVERAGE A--BODILY INJURY LIABILITY

'A. bodily injury sustained by any person.

"bodily injury' means bodily injury, sickness or disease, including death resulting therefrom;

'57 Chev

10/20

'(6) Ten Thousand Dollars Each Person Twenty Thousand Dollars each accident

'4. LIMITS OF LIABILITY--* * * Coverage A. * * * The limit of the bodily injury liability stated in the declarations for * * * coverage A * * * for:

'(a) 'each person' is the limit of the Exchange's liability for all damages including damages for care and loss of services, arising out of bodily injury sustained by one person as the result of any one occurrence or accident; and

'(b) 'each occurrence' or 'each accident' is, subject to the limit for 'each person,' the total limit of the Exchange's liability for all such damages arising out of a bodily injury sustained by two or more persons as the result of any one occurrence or accident.'

It should be particularly noted that 'bodily injury' also means 'death resulting therefrom.' The numerals '10/20' denote $10,000 bodily injury liability for each person, and $20,000 bodily injury liability for each occurrence. Thus, provision 4 defining the limits of liability is the provision requiring interpretation herein for the purpose of determining the extent of defendant's liability under the policy.

The issue involved is whether the extent of the liability of the issuance company to the heirs of Barbara Ann Valdez is in the sum of $10,000 or in the sum of $20,000. The parties frankly and fairly concede that the determination of this issue involves an interpretation of the issuance contract and constitutes solely a question of law since no oral evidence was introduced in aid of interpretation and the parties are in agreement as to the facts involved. (Harabedian v. Zurich Ins. Co., 218 Cal.App.2d 702, 32 Cal.Rptr. 813.)

Plaintiffs contend on appeal that the higher limit of coverage applies to two premises: (1) that a reasonable interpretation of the issuance contract language is that 'one person' refers to the person Damaged, not the person Killed; (2) that if there is ambiguity in the language of the insurance contract as to whether 'one person' refers to the person Damaged or the person Killed, under California law where the language of an insurance contract is ambiguous or susceptible of two constructions, it should be strongly construed in favor of the insured and against the insurance carrier.

Because plaintiffs contend that the $10,000 limits of liability in the policy should be construed as giving Each person who suffers a loss by reason of the death of one person the right to recover on the policy to the extent of $10,000, providing that the total recovery by all persons for any one accident resulting in death to one person may not exceed $20,000, it is necessary to determine whether the 'one person' defined in the policy refers to the person Damaged or the person Killed.

In Williams v. Standard Accident Insurance Company, 188 F.2d 206 (5th Cir. 1951), a liability policy providing coverage of $5,000/$10,000 was issued containing language ¹ almost identical with the wording of the policy issued by the defendant herein. The claimants were the widow and two minor daughters of the deceased, and sought to recover damages of $10,000, which represented the maximum liability of the company under the policy. The trial court jury returned a verdict in favor of the heirs in the sum of $10,000, and the trial judge ordered that the verdict be reduced to $5,000, and judgment was entered in the reduced sum. On appeal, the U.S. Circuit Court of Appeals affirmed the action of the trial court in reducing the judgment to the single limit, and held that the limit of $5,000 to 'each person' relates to the person suffering bodily injury or death and not to the person or persons who may suffer damages in consequence of such injury. Summarily stated, the court held that the term 'each person' in an automobile liability policy means the person Killed and not each person who may suffer damages as a result of such injury or death.

In HUTTON V. MARTIN, 43 WASH.2D 574, 262 P.2D 202,² the Supreme Court in Washington held in an action for wrongful death filed by a widow upon behalf of herself individually and as representative of her two minor children that the words of limitation ³ contained in a public liability indemnity policy restricting liability for bodily injury to $5,000 for 'each person' referred to the person injured or killed and not to each person who might suffer damages by reason of said injury or death. The limit of the insurance company's liability for damages under a $5,000/$25,000 policy in which only one person was killed was held to be $5,000 regardless of the number of heirs who sustained damages as a proximate cause of the accident.

While there are apparently no California cases in which this precise question involving the limits of a carrier's liability in a single Death case has been resolved, there are analogous situations involving damage claims arising out of a single Injury. In Perkins v. Fireman's Fund Indemnity Company, 44 Cal.App.2d 427, 112 p.2d 670, the wife sustained injuries in an auto accident and was paid $10,000 under the automobile public liability policy with $10,000/$20,000 limits. Later, the husband and wife filed a separate action against the insured for special damages consisting of loss of services and medical and hospital expenses and sought recovery under the total or maximum limits of the policy. ⁴ The husband and wife contended that the words limiting the insurer's liability were ambiguous and that the terminology 'one person' applied to the person suffering loss rather than to the person injured. In a well-reasoned opinion, ...