Wildman v. Government Emp. Ins. Co.

• Decision Date: 19 February 1957
• Citation: 307 P.2d 359,48 Cal.2d 31
• Court: California Supreme Court
• Parties: Marion WILDMAN and Elvaree H. Wildman, Husband and Wife, Plaintiffs and Appellants, v. GOVERNMENT EMPLOYEES' INSURANCE COMPANY, a Corporation, Defendant and Respondent. L. A. 24123.

Page 359

307 P.2d 359

48 Cal.2d 31

Marion WILDMAN and Elvaree H. Wildman, Husband and Wife, Plaintiffs and Appellants, v. GOVERNMENT EMPLOYEES' INSURANCE COMPANY, a Corporation, Defendant and Respondent.

L. A. 24123.

Supreme Court of California, In Bank.

Feb. 19, 1957.

Rehearing Denied March 20, 1957.

Swing, Scharnikow & Staniforth and Robert O. Staniforth, San Diego, for appellants.

Luce, Forward, Kunzel & .scripps and James L. Focht, Jr., San Diego, for respondent.

CARTER, Justice.

Plaintiffs marion Wildman and Elvaree Wildman, husband and wife, appeal from a judgment in favor of Government employees' Insurance Company.

On February 3, 1955, Eusebio Bonifacio and Cecilia Bonifacio were the owners of a 1953 Cadillac coupe automobile. Plaintiff Elvaree suffered personal injuries and the property of both plaintiffs ws damaged, on February 3, 1955, as the result of the negligent operation of the Cadillac which, at the time of the accident, was being operated by Victoria Villanueva with the permission and consent of the Bonifacios. Plaintiffs obtained a judgment, which is now final, against Victoria Villanueva and Cecilia Bonifacio in the sum of $5,000 and costs in the sum of $66.90. The judgment is unsatisfied and the Bonifacios are insolvent.

Prior to the time of the accident defendant insurance company had issued to Eusebio Bonifacio a policy of insurance. Plaintiffs brought an action in declaratory relief to obtain a declaration of the legal rights and duties of the defendant insurance company under the policy and for a judgment requiring it to pay the judgment theretofore obtained by plaintiffs against Cecilia Bonifacio. The trial court concluded that plaintiffs take nothing by their complaint and entered judgment to the effect that the insurance afforded by the defendant's policy did not cover the accident.

Plaintiffs contend that the restrictive endorsement on the policy is ambiguous. Under the terms of the insurance policy involved, defendant agreed to indemnify Eusebio Bonifacio and Cecilia Bonifacio against any liability not exceeding the sum of $10,000, together with taxed court costs and interest which might arise against Eusebio and Cecilia in favor of any person or persons who should sustain any damage to their persons or property by reason of an accident incurred while Eusebio or Cecilia were using the automobile or legally responsible for the use thereof, provided the use was with the consent and permission of Eusebio or Cecilia. An endorsement was attached to the policy, dated December 3, 1954, and provided:

'1. The first sentence of Insuring Agreement III, Definition of Insured, is eliminated and is hereby replaced by the following:

'With respect to the insurance for Bodily Injury Liability and Property Damage Liability the unqualified word insured' includes the named insured, the individual named below, and any member of the insured's immediate family

No Exceptions

while using the automobile or legally responsible for the use thereof, provided the actual use of the automobile is with the permission of the named insured.

'2. Such insurance as is afforded by this policy does not apply while any person not an insured as defined in Paragraph 1 above is using the automobile, except that such insurance as is afforded for Medical Payments applies with respect to bodily injury to or sickness, disease or death of the named insured, the individual named below, and any member of the insured's immediate family.

'3. As evidenced by the signature below of the named insured, the named insured acknowledges and agrees that this endorsement forms a part of the above captioned policy issued by the Government Employees Insurance Company and is effective as of 12:01 A.M. Standard Time on the effective date of the endorsement.'

Defendant contends that the endorsement controls, is unambiguous, and provides coverage only when the automobile in question is driven by the insured or one of his immediate family.

We agree with plaintiffs that the endorsement is ambiguous. If the words 'No Exceptions' were not present, the policy would reads as follows: 'the unqualified word 'insured' includes the named insured, the individual named below, and any member of the insured's immediate family while using the automobile or legally responsible for the use thereof, provided the actual use of the automobile is with the permission of the named insured.' (Emphasis added.) Paragraph 2 provides that the policy does not apply while any person not an insured as defined in Paragraph 1 is using the car 'except that' the provision for medical payments applied to the named insured and members of his immediate family. The question is, to what do the words 'No Exceptions' relate? Immediately following the words 'No exceptions' comes the statement 'while using the automobile or legally responsible for the use thereof, provided the actual use of the automobile is with the permission of the named insured.' It appears that the 'no exceptions' applies to the named insured and members of his immediate family while any of them were using the automobile or had consented and permitted its use by some one else. The phrase referring to use with consent and permission would, otherwise, have no effect whatsoever inasmuch as Eusebio, Cecilia and members of their immediate family were directly covered by the policy in the first part of paragraph 1. 'It is elementary in insurance law that any ambiguity or uncertainty in an insurance policy is to be resolved against the insurer. (Arenson v. National Auto. & Cas. Ins. Co. (1955), supra, 45 Cal.2d 81 (83), 286 P.2d 816; Coit v. Jefferson Standard Life .ins. Co. (1946), supra, 28 Cal.2d 1, 3, 168 P.2d 163, 168 A.L.R. 673; 5 Am.Jur. 790, § 507.) If semantically permissible, the contract will be given such construction as will fairly achieve its object of securing indemnity to the insured for the losses to which the insurance relates. (Fageol Truck & Coach Co. v. Pacific Indem. Co. (1941), 18 Cal.2d 748, 751, 117 P.2d 669.) If the insurer uses language which is uncertain any reasonable doubt will be resolved against it; if the doubt relates to extent or fact of coverage, whether as to peril insured against (Fageol Truck & Coach Co. v. Pacific Indem. Co. (1941), 18 Cal.2d 731, 746-747 (16, 17), 117 P.2d 661; Ocean, etc., Corp., Ltd. v. Industrial Acc. Com. (1924), 194 Cal. 127, 132, 228 P. 1; Miller v. United Ins. Co. (1952), 113 Cal.App.2d 493, 248 P.2d 113; Pendell v. Westland Life Ins. Co. (1950), 95 Cal. App.2d 766, 770, 214 P.2d 392; see also Christoffer v. Hartford Acc., etc., Co. (1954), 123 Cal.App.2d Supp. 979,267 P.2d 887), the amount of liability (Hobson v. Mutual Benefit H. & A. Assn. (1950), 99 Cal.App.2d 330, 333 et seq., 221 P.2d 761; see also Narver v. California State Life Ins. Co. (1930), 211 Cal. 176, 180 et seq., 294 P. 393, 71 A.L.R. 1374) or the person or persons protected (Olson v. Standard Marine Ins. Co. (1952), 109 Cal.App.2d 130, 135 (1, 5), 240 P.2d 379; see also Island v. Fireman's Fund Indem. Co. (1947), 30 Cal.2d 541, 543, 548, 184 P.2d 153, 173 A.L.R. 896; Sly v. American Indem. Co. (1932), 127 Cal.App. 202, 15 P.2d 522), the language will be understood in its most inclusive sense, for the benefit of the insured.' Continental Casualty Co. v. Phoenix Constr. co., 46 Cal.2d 423, 437, 438, 296 P.2d 801, 809, 810.

In the case under consideration the ambiguous words are 'no exceptions.' Webster's New International Dictionary defines 'exception' as an exclusion or taking out by exception something that would otherwise be included. Inasmuch as use by another with the consent and permission of the insured is specifically set forth later in the same paragraph the words 'no exceptions' can hardly be construed to apply to that situation. Paragraph 2 provides that the medical payments provided for in the policy apply only when bodily injury or sickness or death is suffered by the named insured or any member of his immediate family. It appears that paragraphs 1 and 2 cannot be reconciled insofar as coverage is concerned. Finding II of the trial court (Cl.Tr. 12) is inconsistent in itself. In that finding the court found that the defendant agreed to 'indemnify the said Eusebio P. Bonifacio and Cecelia Bonifacio against any liability not exceeding the sum of $10,000.00, together with taxed court costs and interest, which should arise against the said Eusebio P. Bonifacio or Cecelia Bonifacio in favor of any person or persons who should sustain any damage to their property and also in favor of any person or persons who should sustain any bodily injuries by reason of an accident occurring while the said Eusebio P. Bonifacio or Cecelia Bonifacio were using the said automobile or legally responsible for the use thereof, provided such use was with the permission and consent of the said Eusebio P. Bonifacio or Cecelia Bonifacio, and provided further that said automobile was not being used at said time by any person other than the said Eusebio P. Bonifacio or Cecelia Bonifacio or members of their immediate family. * * *' (Emphasis added.) It is apparent from this finding that the coverage afforded by the policy cannot apply two ways at the same time: it cannot apply only when one of the name insureds, or members of their immediate family, are using the car and also when some one else is driving with the consent and permission of the insured. The insurer, having caused the uncertainty and ambiguity which exists in the policy under consideration, must have that ambiguity and uncertainty resolved against it under the well settled rule in this state and elsewhere. See Continental Casualty Co. v. Phoenix Constr. Co., 46 Cal.2d 423, 437, 438, 296 P.2d 801 heretofore quoted, and cases cited therein. 'The language will be understood in its most inclusive sense, for the benefit of the insured.' Continental Casualty Co. v. Phoenix Constr. Co., supra, 46 Cal.2d at page 438, 296 P.2d at page 810...