14 A.D.2d 55 | N.Y. App. Div. | 1961
This appeal involves the construction of a non-owner automobile liability policy issued by the defendant insurance company to the plaintiff Wyatt as proof of financial responsibility to comply with the provisions of the Motor Vehicle Safety Responsibility Act (former Vehicle and Traffic Law, art. 6-A, subsequently renum. art. 6-B by L. 1956, ch. 655, now Vehicle and Traffic Law, art. 7). Wyatt resided with his mother who owned an automobile which was insured by another insurance company. While Wyatt was driving his mother’s auto - mobile, an accident occurred, as a result of which the plaintiff Cooper was injured. A judgment in the amount of $22,466.90 was rendered in favor of the plaintiff Cooper against both the owner and the operator. The owner’s insurance company paid to the extent of its limits, but the operator’s carrier, the defendant, had disclaimed liability and refused to defend and it refused to pay any part of the judgment. This action is for a declaratory judgment to determine the defendant’s liability.
The policy issued to the operator was in a nonowner form and contained a provision that the insurance did not apply ‘ ‘ to any automobile owned by the Named Insured or a member of the same household”. It is this exclusion upon which the defendant relies. However, the statute (former Vehicle and Traffic Law, § 94-q, subd. [c], now Vehicle and Traffic Law, § 345, subd. [c]) provided that an operator’s policy of liability insurance issued in compliance with the statute must cover the operator for all damages ‘ ‘ arising out of the use by bim of any motor vehicle not owned by him ’ ’. Wyatt was required to procure the insurance as a condition of his obtaining an operator’s license. The defendant filed a certificate pursuant to the statute that it had issued to Wyatt a policy in compliance with the statute. The policy specifically provided that " When this policy is certified as proof of financial responsibility under the
The provision in the policy excluding coverage of any automobile owned by “a member of the same household ” was in conflict with the statute and therefore was void and ineffective. Under the terms of the statute and under the terms of the policy itself, the policy must be deemed to have been rewritten so as to limit the exclusion to that permitted by the statute, namely, the exclusion only of motor vehicles owned by the named insured himself. “ Inasmuch as the [policy] ® * * was given pursuant to this statute, the statutory text is to be read into the instrument.” (Graybar Elec. Co. v. New Amsterdam Cas. Co., 292 N. Y. 246, 251; see, also, Green Bus Lines v. Ocean Acc. & Guar. Corp., 287 N. Y. 309; McNamara v. Allstate Ins. Co., 3 A D 2d 295; Western New York Med. Plan v. Wikler, 8 A D 2d 988; New York Life Ins. Co. v. Truesdale, 79 F. 2d 481; see, also, Insurance Law, §§ 143, 167.) Wyatt’s operation of his mother’s car was therefore covered by the policy.
The decisions in other jurisdictions are in accord with this conclusion (Indiana Lumbermens Mut. Ins. Co. v. Parton, 147 F. Supp. 887; Bonfils v. Pacific Auto Ins. Co., 165 Cal. App. 2d 152; Milwaukee Ins. Co. v. Morrill, 100 N. H. 239; cf. Polonitz v. Wasilindra, 155 Pa. Superior Ct. 62).
The defendant does not question the soundness and applicability of the authorities cited above, but it argues that under another provision of the statute it was free to insert in the policy any exclusion which it pleased, going beyond the exclusions permitted by statute. The statutory provision upon which the defendant relies is subdivision (f) of section 94-q of the former Vehicle and Traffic Law (now subd. [f] of § 345 of the Vehicle and Traffic Law), which reads as follows: “ Such motor vehicle liability policy may, however, grant any lawful coverage in excess of or in addition to the coverage herein specified and such excess or additional coverage shall not be subject to the provisions of this article.” The defendant argues that, since the automobile which Wyatt was driving was insured, the policy issued to Wyatt constituted ‘ ‘ excess or additional coverage ” within the meaning of this provision, and that therefore the policy was not “ subject to the provisions of this article ”. The Special Term accepted this argument and accordingly
The quoted provision has no bearing upon this ease. It refers to coverage * ‘ in excess of or in addition to the coverage herein specified ’ ’, that is, coverage going beyond, or in addition to, the minimum statutory coverage in a safety responsibility policy. Thus, for example, an insurance company writing a required safety responsibility policy may provide in the policy, pursuant to a voluntary agreement with the insured for an additional premium, that the named insured shall be covered in a sum in excess of the $10,000 to $20,000 statutory minimum (§ 94-1 of the former Vehicle and Traffic Law, now § 341 of the Vehicle and Traffic Law and § 94-q, subd. [b], par. [3] of the former Vehicle and Traffic Law, now § 345, subd. [b], par. [3] of the Vehicle and Traffic Law) and as to the excess or additional coverage the insurance company is free to impose any conditions or exclusions which it chooses. However, as to the statutory minimum, under the sections cited above, the insurance company may not impose any conditions or exclusions which are in conflict with the statutory provisions. The policy in the present case was written for the statutory minimum amounts which Wyatt was required to carry; no question of additional or excess coverage within the meaning of the quoted provision is involved in this case. (See § 94-q, subd. [i], par. [1] of the former Vehicle and Traffic Law, now § 345, subd. [i], par. [1] of the Vehicle and Traffic Law, for a similar distinction drawn in the statute between the statutory minimum coverage and excess coverage voluntarily provided in the policy, in connection with the availability of certain defenses.)
The defendant’s construction of the statute would lead to unreasonable results. It would mean that whenever an operator covered by a nonowner’s safety responsibility policy happened to drive a car which was covered by an owner’s policy of insurance, the operator’s policy would cease to be, for the time being, a statutory policy and would be subject to any conditions or exclusions which the insurance company had seen fit to write into it, but whenever the operator drove an uninsured automobile his policy would revert to the statutory form, with all conflicting provisions written out of it.
We reach the conclusion that the contention advanced by the insurance company, which prevailed at Special Term, should be rejected, and that the decision of Special Term should be reversed.
However, there is a problem in the case, not raised by the defendant, which requires further discussion. The policy was
By reason of the amendment, Wyatt was no longer required, at the time of the accident, to carry an insurance policy under the Safety Responsibility Act. But the policy was in fact outstanding, the premium having been paid by Wyatt for the full policy term. The question then arises whether the termination of Wyatt’s obligation to carry the policy has any effect upon the construction of the policy. In our opinion, it has not. The policy was issued in accordance with the statute at a time when Wyatt was required to obtain a policy in conformity with the statute, and Wyatt paid a premium for a statutory policy and received one. Any subsequent change in Wyatt’s statutory
The subsequent change in the statute cannot properly be given retroactive effect so as to allow a new rewriting of the provisions of the outstanding policy. To give the statute such retroactive effect would constitute an impairment of Wyatt’s contractual rights, in violation of the State and Federal Constitutions. (New York Life Ins. Co. v. Truesdale, supra; Worthen Co. v. Kavanaugh, 295 U. S. 56; Weiler v. Dry Dock Sav. Inst., 258 App. Div. 581, affd. 284 N. Y. 630.)
The judgment appealed from should be reversed and the defendant’s motion for summary judgment should be denied and plaintiffs’ motion for summary judgment should be granted.
All concur. Present — Williams, P. J., Bastow, Halpeen, McClusky and Henry, JJ.
Judgment unanimously reversed, with costs, and defendant’s motion denied and plaintiffs’ motion for summary judgment granted, with $10 costs.