Wilson v. Allstate Ins. Co.

• Citation: 186 N.W.2d 879,85 S.D. 553
• Decision Date: 18 May 1971
• Docket Number: No. 10834,10834
• Parties: Frederick William WILSON, Plaintiff and Respondent, v. ALLSTATE INSURANCE COMPANY, Defendant and Appellant.
• Court: South Dakota Supreme Court

Page 879

186 N.W.2d 879

85 S.D. 553

Frederick William WILSON, Plaintiff and Respondent, v. ALLSTATE INSURANCE COMPANY, Defendant and Appellant.

No. 10834.

Supreme Court of South Dakota.

May 18, 1971.

Costello, Porter, Hill, Banks & Nelson, Rapid City, Donn Bennett, Buffalo, for plaintiff and respondent.

Thomas P. Ranney and Robert F. Lafleur, Rapid City, for defendant and appellant.

BIEGELMEIER, Judge.

Defendant Allstate Insurance Company issued a liability policy to plaintiff to three notor vehicles including a 1965 Chrysler, the title to which was registered in plaintiff's wife, Barbara Wilson.

On September 9, 1969, plaintiff bought and took possession of a 1967 Chrysler and the 1965 Chrysler was given to his son who was a student-teacher. Thereafter, though the certificate of title was never assigned to him, the son had exclusive possession of the 1965 Chrysler and used it to travel to his practice teaching duties from the college in Spearfish to Lemmon, South Dakota.

On October 10, 1969, thirty-one days after acquiring the 1967 model and while driving it, plaintiff was involved in an automobile accident; on the same day he reported the accident and purchase of the new car to defendant's issuing agent. A month later an action was brought by one Karen Wilhelm against present plaintiff for damages as a result of that accident and defendant was notified thereof and furnished the suit papers.

Later Allstate notified plaintiff it was denying coverage and refusing to defend the action because of nonnotification of additional automobile and for other reasons not enumerated. Plaintiff employed his own counsel to defend and, when a judgment for $2,500 was entered against him for damages, plaintiff brought the present suit for breach of contract for those damages and attorneys' fees in both actions.

By paragraph I, coverages A and B provide insurance for bodily injury and property damage liability of insured, and by paragraph V the same coverage is provided his spouse, arising out of the use of the automobile described in the policy. Paragraph VI(4) defines the automobile as including:

'Newly Acquired Automobile--an automobile, ownership of which is acquired by the named insured or his spouse if a resident of the same household, if (i) it replaces an automobile owned by either and covered by this policy, or the company insures all automobiles owned by the named insured and such spouse on the date of its delivery, and (ii) the named insured or such spouse notifies the company within thirty days following such delivery date; but such notice is not required under coverage, A, B and division 1 of coverage C if the newly acquired automobile replaces an owned automobile covered by this policy.'

The present action was tried to the court which found the issuance of the liability policy; that on or before September 9, 1969, plaintiff disposed of the 1965 Chrysler and transferred it to the exclusive, permanent care, custody and control of plaintiff's son, and plaintiff's testimony with reference to the gift of the 1965 Chrysler to the son was true; that on or about the date plaintiff acquired possession of the 1967 Chrysler it replaced the 1965 Chrysler; that on October 2, 1969, the 1967 Chrysler was titled in the name of plaintiff and his wife. The court concluded that having found, as a fact, that the 1967 Chrysler was a replacement vehicle for the 1965 Chrysler, under the terms of the policy plaintiff was under no obligation to notify defendant of the acquisition of the 1967 Chrysler; that plaintiff had performed all conditions and covenants under the policy on his part but defendant had refused to carry its part without reasonable cause and plaintiff was entitled to judgment for the amount of the Wilhelm recovery and attorneys' fees for both actions. Judgment was entered thereon and Allstate has appealed.

Plaintiff claims defendant has failed to comply with rules of court and asserts the assignments or error are not sufficient and present no question for review in that they state mere assertions of error and are unsupported by particulars as to the specific claim of error and references to the record required by SDCL 15--29--6 and 15--29--17 are absent. There is much merit in this claim; compliance with our rules does advise opposing counsel of claims of error so that they may answer them and the court determine the issue thus raised.

Turning to the merits of defendant's contention that the evidence does not support the findings on the replacement issue we have reviewed the evidence and conclude it supports, rather than negates (as defendant argues), the finding the 1965 Chrysler was given to the son and likewise supports the findings the 1967 Chrysler replaced the 1965 Chrysler. Under SDCL 15--6--52(a) 'Findings of fact shall not be set aside unless clearly erroneous'. See In re Estate of Hobelsberger, S.D., 181 N.W.2d 455.

If there is any uncertainty or ambiguity in a contract of insurance it must be construed most strongly against the insurer and in favor of the insured. Aetna Insurance Company v. Labor, S.D., 179 N.W.2d 271; Couch on Insurance, 2d Ed., § 15:73.

The courts have upheld findings that another car purchased by the insured replaced the vehicle described in the policy. Even

'The fact that the car described in the policy was retained by the insured and was in a legally usable condition has been held not to preclude transfer of coverage to a newly acquired car, where such car was actually purchased to replace the first car for the same use. Merchants Mut. Casualty Co. v. Lambert (1940), 90 N.H. 507, 11 A.2d 361, 127 A.L.R. 483.' Ammot., 34 A.L.R.2d 936 at 945.

There the insured retained title and possession of the 1930 car described in the policy but kept it in his garage as it was worn out and not fit to be driven on the public highway. The trial court found a 1935 car purchased by insured replaced the 1930 model under a clause of the policy which read the "insurance applies to such other automobile, if it replaces an automobile described in this policy". The court wrote:

'The plaintiff, if it had seen fit, might have inserted a provision that the insurance should not attach to the replacing car until the insured had parted with the ownership and possession of the replaced car, but in the absence of any such provision in the policy, these factors of the situation were properly regarded by the trial court as indecisive.

'The finding of the court that the 1935 car 'was purchased for the defendant Lambert's business to replace the 1930 car for the very same use previously made of the 1930 automobile' is fully sustained by the evidence and the conclusion that 'the said policy covered the 1935 Pierce-Arrow sedan at the time of the accident' follows as a logical conclusion.'

Further the Annotation in 34 A.L.R.2d 936 at 945, states:

'Similarly, in Dean v. Niagara Fire Ins. Co. (1937), 24 Cal.App.2d Supp. 762, 68 P.2d 1021, * * * it was held that the fact that the car described in the policy was still registered in the insured's name, while the car he was driving at the time of the accident was not yet registered in his name, did not preclude coverage of the second car, the court emphasizing that coverage of the replacing car commenced with its delivery, provided the insurer acquired the legal status of registered owner either prior or subsequent to delivery.'

In Dean clauses of the policy provided the "insurance * * * shall also apply * * * to any other automobile, ownership of which is acquired by the Named Insured" and "the insurance shall be applicable only to such other automobile if it replaces an...