Yosemite Ins. Co. v. State Farm Mut. Auto. Ins.
| Decision Date | 03 November 1982 |
| Docket Number | No. 12996,12996 |
| Citation | 653 P.2d 149,98 Nev. 460 |
| Parties | YOSEMITE INSURANCE COMPANY, Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE and Thomas Kevin Pursel, Respondents. |
| Court | Nevada Supreme Court |
1:
Appellant Yosemite Insurance Company (hereinafter "Yosemite") contends that the trial court erred in granting summary judgment to State Farm Mutual Automobile Insurance (hereinafter "State Farm") and applying Yosemite's general policy limits to determine proration of settlement payments.
In 1977 Thomas Pursel, insured by State Farm, was involved in an automobile accident while test driving an automobile for prospective purchase. The vehicle was owned by Justin Enterprises, Inc., d/b/a Justin Auto Sales and Leasing and was insured by Yosemite under a garage liability insurance policy. That policy provides coverage for bodily injury liability at $100,000 per person, $300,000 per occurrence and $50,000 in property damage. However, an endorsement, A375, attached to that policy, limits coverage for garage customers such as Pursel. The endorsement provides coverage only in the event other insurance is insufficient or unavailable and then only in an amount equal to the minimum required by Nevada's Motor Vehicle Insurance Act, NRS Ch. 698, repealed by 1979 Nev. Stats. ch. 660 § 9. 2 At the time of the accident these statutory minimum limits were $15,000 per person, $30,000 per occurrence for bodily injury and $5,000 for property damage.
The damages claimed by third parties as a result of the accident totaled $100,254.38. State Farm and Yosemite contributed to a settlement on a pro rata basis, the latter in accordance with its "garage customer" endorsement coverage of $15,000/$30,000/$5,000. State Farm filed a motion for summary judgment, claiming that Yosemite's garage customer endorsement was invalid and that Yosemite's higher coverage limits should govern its pro rata share. The trial court granted respondents' summary judgment motion.
Contrary to respondents' contention, we determine that variance in coverage between the named and omnibus insured does not violate public policy. See Neal v. Farmers Insurance Exchange, 93 Nev. 348, 566 P.2d 81 (1977); Arceneaux v. State Farm Mutual Automobile Insurance Co., 113 Ariz. 216, 550 P.2d 87 (1976).
However, we find that the garage customer endorsement in this case fails to effectively limit coverage for omnibus insureds such as Pursel. The endorsement provides that coverage to the statutory minimum is entirely dependent on the sufficiency of other valid and collectible insurance. In Travelers v. Lopez, 93 Nev. 463, 567 P.2d 471 (1977), we declared such "other insurance" clauses to be void where, as here, they conflict with similar clauses in the other policy of insurance. In Travelers, we determined that an insurance company could not seek to "defer or limit its liability" on the basis of the availability of other insurance. Clearly, that is what Yosemite sought to do in its garage customer endorsement. The endorsement is, therefore, void.
We recognize that other courts have construed similar endorsements to limit coverage to the statutory minimum although the "other insurance" language is deemed void. See, e.g., Rocky Mountain Fire and Casualty Co. v. Allstate Insurance Co., 107 Ariz. 227, 485 P.2d 552 (1971). We decline to overlook the ambiguity created by the invalid "other insurance" language in such a provision and elect to follow our well-established policy of construing ambiguities in insurance policies against the drafter. See Catania v. State Farm Life Insurance Company, 95 Nev. 532, 598 P.2d 631 (1979).
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