STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff and Appellee, v. Leon LaROQUE, Defendant, and Monica Baker, a minor child, and Donna White Tail, individually and as parent and guardian of Monica Baker, a minor child, Defendants and Appellants.
Civ. No. 910352.
Supreme Court of North Dakota.
June 25, 1992.
In this no-fault statute, “occupying” means “to be in or upon a motor vehicle or engaged in the immediate act of entering into or alighting from the motor vehicle.”
After John noticed that his car was on fire, he ran to Jack‘s residence, a distance of about three-eighths of a mile. When John arrived, Jack said that he was “kind of shaken up,” “breathing heavy,” and “tired.” Yet, John ran back to the burning car, another three-eighths of a mile. Once back at the car, John “never went into the vehicle,” nor did he get onto the car, while attempting to extinguish the fire.
The trial court concluded:
There is clearly no indication that [John] was attempting to get back in the vehicle. What he was attempting to do was rescue the vehicle from fire and that has nothing to do with entering, except maybe remotely by saying, well, if he gets the fire out maybe he will be able to get back into it. But I think the occupancy has to be there. And ... it isn‘t satisfied in this case.
There is no evidence to indicate that John was experiencing pain or acute distress until just before he collapsed. When John collapsed from the heart attack, the record tells us that he was at least 15 to 20 feet, if not as much as 40 feet, away from the car.
Viewing the evidence in the light most favorable to Margaret, we conclude that no genuine questions of material fact exist to preclude summary judgment. John‘s unfortunate and unexpected death from a heart attack was not an “[a]ccidental bodily injury ... arising out of the operation of a motor vehicle.” Also, there is no evidence that John was “occupying” his car when his heart attack occurred.
We affirm the trial court‘s summary judgment for EMCASCO.
ERICKSTAD, C.J., and LEVINE, VANDE WALLE and JOHNSON, JJ., concur.
Thomas E. Rutten (argued) of Traynor, Rutten & Traynor, Devils Lake, for plaintiff and appellee.
Maureen White Eagle (argued) of Foughty, Christianson, White Eagle & Berg, Devils Lake, for defendants and appellants.
Monica Baker, a minor child, and Donna White Tail, individually and as parent and guardian of Baker, appeal from a summary judgment declaring that a motor vehicle liability policy issued by State Farm Mutual Automobile Insurance Company [State Farm] to Leon LaRoque did not provide coverage for injuries sustained by Baker and White Tail. We affirm.
In June 1988, White Tail and Baker began living with LaRoque in a house rented by him in Sheyenne, North Dakota. LaRoque and White Tail were not married, and Baker is not LaRoque‘s biological or adopted child. On December 4, 1989, White Tail and Baker were seriously injured while riding in a vehicle owned by White Tail but driven by LaRoque.
White Tail and Baker received basic no-fault benefits from White Tail‘s insurer, but they also sought coverage under a policy issued by State Farm to LaRoque for his 1974 Chevrolet Blazer. That policy covered LaRoque‘s use of a “non-owned car,” which it defined as “a car not: ... furnished or available for the regular or frequent use of: you.” According to a claim superintendent, State Farm issued the policy to LaRoque in June 1988 with Amendatory Endorsement 6025J, effective July 7, 1988. The endorsement said that the definition of a “non-owned car” was changed to read “a car not owned by or registered or leased in the name of ... any other person residing in the same household as you....”
State Farm commenced this declaratory judgment action against LaRoque, White Tail, and Baker to determine its obligations under its policy with LaRoque. The district court granted summary judgment, declaring that State Farm‘s policy with LaRoque did not provide coverage for the
White Tail initially contends that State Farm‘s policy with LaRoque is ambiguous and should be strictly construed against State Farm. She argues that a reasonable person would conclude that State Farm‘s policy provided liability coverage when LaRoque drove a “non-owned car.” She contends that State Farm created an ambiguity by defining “non-owned car” to exclude coverage in some instances and by amending that definition. State Farm responds that Amendatory Endorsement 6025J unambiguously excludes coverage for White Tail‘s claims because it clearly defines a “non-owned car” as a car not owned by “any other person residing in the same household as” the insured.
Our review is under the standards applicable to summary judgment. Summary judgment is a procedural device for the prompt and expeditious disposition of a controversy without a trial if there is no genuine issue of material fact or inferences to be drawn from undisputed facts, or if
Our first task is to consider which of the two definitions of “non-owned car” governs this case. State Farm issued its automobile liability insurance policy to LaRoque in June 1988 and that policy was in effect when the accident occurred on December 4, 1989. State Farm‘s preprinted policy with LaRoque defined “non-owned car” as a “car not ... furnished or available for the regular or frequent use of” LaRoque.1 However, the uncontroverted affidavit of the company‘s claim superintendent says that Amendatory Endorsement 6025J was effective July 7, 1988, and was attached to the policy form issued by State Farm to LaRoque.2 It defined a “non-owned car” as “a car not owned by ... any other person residing in the same household as” LaRoque. If there is a conflict between the provisions of a policy form and an attached endorsement, the provisions of the endorsement prevail. Haugen v. Auto-Owners Ins. Co. of Lansing, 191 N.W.2d 274 (N.D.1971). We conclude that Amendatory Endorsement 6025J was in effect on the date of the accident. We therefore review the insurance contract with that definition of “non-owned car.”
The construction of a written insurance contract is a question of law which is fully reviewable by this court. E.g., Cormier v. National Farmers Union Property & Casualty Co., 445 N.W.2d 644 (N.D. 1989). If the language of an insurance contract is unambiguous, we construe that language according to its clear meaning.
A definition of a term in an insurance contract may exclude coverage if the language of the contract, as a whole, is clear. Haugen v. Auto-Owners Ins. Co. of Lansing, supra;
White Tail does not dispute that she resided in the same household as LaRoque and that he was driving her vehicle when the accident occurred. Under those circumstances, we conclude that there is no genuine issue of material fact that LaRoque was not driving a “non-owned car” as that term is defined in the insurance contract. LaRoque‘s insurance policy did not provide coverage for the claims by White Tail, and the district court properly granted summary judgment on that issue.
Relying upon Richard v. Fliflet, 370 N.W.2d 528 (N.D.1985), and Hughes v. State Farm Mutual Automobile Insurance Co., 236 N.W.2d 870 (N.D.1975), White Tail also argues that the definition of “non-owned car” is contrary to
In Hughes, we considered the validity of a “household or family exclusion”3 clause in a motor vehicle liability policy. We recognized that the basic purpose of
In Richard v. Fliflet, supra, we held that
In this case, White Tail cites language in our financial responsibility laws referring to an “operator‘s policy” [
The Oregon Court of Appeals rejected a similar argument in Farmers Insurance Co. v. Stout, 82 Or.App. 589, 728 P.2d 937 (1986), rev. den., 302 Or. 657, 733 P.2d 1381 (1987). In that case, the insured‘s automobile insurance policy provided coverage for his use of a non-owned automobile, which was defined as “an automobile not owned by ... any resident of the same household” as the insured. Stout, supra, 728 P.2d at 938. The insured lived with the defendant in her mobile home for approximately five months and was driving her car when they were involved in an automobile accident in which the insured was killed and the defendant was seriously injured.
The defendant argued that the definition of “non-owned automobile” was contrary to public policy and void because it excluded a household member from coverage. She asserted that the policy for Oregon‘s financial responsibility laws was to protect innocent victims of vehicular accidents. Relying upon Dowdy v. Allstate Insurance Co., 68 Or.App. 709, 685 P.2d 444 (1984), rev. den., 298 Or. 172, 691 P.2d 481 (1984), a case invalidating a “family exclusion” clause, the defendant contended that any clause in an insurance policy which had the effect of denying coverage to an innocent victim of an automobile accident was contrary to public policy and void.
In Stout, supra, 728 P.2d at 939, the court concluded that Dowdy was not controlling because it
“voided a ‘family exclusion’ clause that excluded from coverage family members residing in the same household when the
insured was driving a covered automobile.... In this case, the question is whether, under the terms of his insurance policy, decedent was driving a covered automobile. Because he was not, all persons, including household members, who suffered injuries in the accident were not covered under his policy. Therefore, although the non-owned automobile clause has the effect of denying coverage to a household member in this case, it does not fall within the Dowdy analysis.” [Emphasis in original.]
The court went on to characterize the defendant‘s argument as requiring an insured‘s automobile insurance policy to cover every car that the insured might conceivably drive and, that if that coverage were not provided, the insurance policy violated the public policy of protecting innocent victims. However, the court also rejected that argument because Oregon‘s financial responsibility laws demonstrated a legislative intent to allow insurance companies to insure fewer than all vehicles driven by an insured.5
We believe the rationale of Stout is persuasive. In Hughes, we emphasized that the “household or family exclusion” clause excluded an entire class of beneficiaries from coverage when the insured was driving an insured motor vehicle. As in Stout, the issue in this case is whether or not LaRoque was driving an insured vehicle under the terms of his insurance policy. Because he was not, all persons, including household members, who suffered injuries in the accident were not covered under his policy.
We also believe that our financial responsibility laws do not evidence a clear public policy that a motor vehicle liability policy cover the named insured for every automobile that the insured might drive. Instead, we believe our financial responsibility laws demonstrate a legislative intent to allow insurance companies to insure fewer than all vehicles driven by an insured.
Our no-fault statutes follow a similar theme and require an “owner of a motor vehicle” to provide “with respect to the motor vehicle ... basic no-fault benefits and the liabilities covered under the motor vehicle liability insurance.”
Although the basic purpose of our financial responsibility laws is to protect innocent victims of motor vehicle accidents from financial ruin, our statutory scheme accomplishes that objective by requiring the owner to purchase insurance coverage for the operation of a designated vehicle. Hughes, supra. See Dairyland Ins. Co. v. Beekman, 118 Ariz. 294, 576 P.2d 153 (Ariz.Ct.App.1978) [insurance policy covers the vehicle].
The purpose of a “non-owned car” clause is to prevent an insured from purchasing an automobile liability insurance policy for only one designated vehicle at a premium charged for one vehicle and thereafter claiming coverage under that policy for the regular use of other vehicles without paying an additional premium for the added risk. Annot., Exclusion from “drive other cars” provision of automobile liability insurance policy of other automobile owned, hired, or regularly used by insured or member of his household, 86 A.L.R.2d 937, § 2 (1962). Our statutory scheme corresponds with the reason behind the “non-owned car” clause.
We hold that there is no public policy and no statutory requirement that an insured have coverage for all vehicles operated but not owned by the insured.
Accordingly, we affirm the summary judgment.
ERICKSTAD, C.J., and VANDE WALLE, J., concur.
PEDERSON, S.J., sitting as a member of the Court to fill the vacancy created by the resignation of Justice H.F. GIERKE III.
Justice JOHNSON, not being a member of this Court at the time this case was heard, did not participate in this decision.
MESCHKE, Justice, dissenting.
I respectfully dissent. I believe that there is a material issue of fact about which definition controls.
If the main policy definition of “non-owned car” applies, summary judgment was improper. There is a material issue of fact about whether White Tail‘s car was
If the definition in the claimed Amendatory Endorsement controls, the majority opinion is correct. That definition is unambiguous. Since White Tail‘s car was clearly owned by a “person residing in the same household as” LaRoque, the Amendatory Endorsement would exclude coverage.
The majority states that “the uncontroverted affidavit of the company‘s claim superintendent says that Amendatory Endorsement 6025J was effective July 7, 1988, and was attached to the policy form issued by State Farm to LaRoque.” However, the claim superintendent did not attach either the policy or the Amendatory Endorsement to his affidavit, but only attached several forms. One form shows LaRoque‘s signature acknowledging changes to the policy effective on 5/31/88, but that form does not refer to the Amendatory Endorsement. The other form, without LaRoque‘s signature and labeled “AUTO POLICY TRANSACTIONS—STREAMED,” shows changes to the same policy. Among the changes stated is “6025J AMENDATORY ENDORSEMENT: CHANGE NON-OWNED COVERAGE—EFF JUL-07-88.” However, this latter form displays various dates on it, including “05-31-88,” “06-02-90,” “06-08-90,” and “06-15-90.” One inference may be that the Amendatory Endorsement was issued to the insured effective July 7, 1988, but that certainly is not the only inference to be made.
Other summary judgment standards apply here.
Under
Moreover, when State Farm first moved for summary judgment on October 1, 1990, it relied solely on the policy definition, not the definition in the claimed Amendatory Endorsement. Later, on November 15, 1990, State Farm claimed that the definition in the Amendatory Endorsement supported summary judgment. State Farm filed an attorney‘s affidavit that attached a proposed form of the Amendatory Endorsement with an intercompany letter, dated December 18, 1987, enclosing a “suggested agency release,” and suggesting “this release should be reproduced and released as soon as possible.” The claim superintendent‘s affidavit came still later on December 3, 1990. An Amendatory Endorsement attached to the policy was never produced. As White Tail argued to this court, (Appellant‘s Brief, p. 19), “[a]lthough [State Farm] has argued the policy is clear and easily interpreted, it has been confused as to the correct definition.” If an insurance company cannot readily understand its own policy, certainly an insured cannot be expected to do so.
Because I believe that there is a material issue of fact about whether the Amend-
VERNON R. PEDERSON, Surrogate Judge, dissenting.
In Hughes v. State Farm Mut. Ins. Co., 236 N.W.2d 870, 885 (N.D.1975), a majority of this court said that a policy of insurance is an adhesion contract and for that reason concluded “it must be construed most strongly against the insurance company.” Calling the language that excluded coverage unambiguous and clear, this court, nevertheless, voided the exclusion for public policy reasons. That prompted me to dissent.
The majority in this case does not say that this insurance policy is an adhesion contract nor that public policy voids the clear language of the exclusion.
Ordinarily, this court‘s opinions in insurance policy cases have said that only the language that is ambiguous is construed strongly against the insurance company. If the language was deemed to be clear, the words were applied according to the sense or meaning of those words. Some of the cases which covered at least the period of the 1950‘s through the 1980‘s are: Schmitt v. Paramount Fire Ins. Co., 92 N.W.2d 177 (N.D.1958); Universal Underwriters Ins. Co. v. Johnson, 110 N.W.2d 224 (N.D.1961); Stetson v. Blue Cross of North Dakota, 261 N.W.2d 894 (N.D.1978); and Walle Mut. Ins. Co. v. Sweeney, supra. There have been some notable exceptions. Hughes, supra, for example.
I believe that the time has come for this court to state that insurer-insuree obligations arise, at least in part, out of the relationship. There are circumstances in which a clearly stated exclusion in an insurance policy can be just as unconscionable as one which is ambiguous and, as in Bekken v. Equitable Life Assur. Soc., 70 N.D. 122, 293 N.W. 200 (1940), no words and no contract can still result in a relationship which creates obligations that are enforceable. Whether the interpretation relies upon the words “reasonable expectations,” or “equitable estoppel,” or “public policy” should not be that significant. See Mills v. Agrichemical Aviation, Inc., 250 N.W.2d 663 (N.D.1977), and Auto-Owners Ins. Co. v. Jensen, 667 F.2d 714 (Ca.1981). See also Farmers Cooperative Ass‘n of Churches Ferry v. Cole, 239 N.W.2d 808 (N.D.1976).
Notes
In Kunze, supra, we held that the facts of that case did not establish, as a matter of law, that an insured‘s boyfriend‘s vehicle was not furnished or available for her frequent or regular use. We upheld the jury‘s determination that the insured used her boyfriend‘s vehicle for a special purpose and not for frequent or regular use.
In American Hardware, supra, we affirmed a trial court‘s finding of fact that an automobile dealer who allowed a customer to use a pickup on a trial basis did not provide the pickup for the customer‘s regular use within the meaning of an exclusion in the customer‘s automobile liability policy.
“Driving without liability insurance prohibited—Penalty. A person may not drive a motor vehicle in this state without a valid policy of liability insurance in effect in order to respond in damages for liability arising out of the ownership, maintenance, or use of that motor vehicle in the amount required by chapter 39-16.1. Upon being stopped by a law enforcement officer for the purpose of enforcing or investigating the possible violation of an ordinance or state law or during the investigation of an accident, the person driving the motor vehicle shall provide to the officer upon request satisfactory evidence of the policy required under this section. If unable to comply with the request, that person may not be charged with a violation of this section if that person submits such evidence to the officer or the officer‘s agency within twenty days of the date of the request. Violation of this section is a class B misdemeanor and the sentence imposed must include a fine of at least one hundred fifty dollars.”
ORS 486.011(11) provided:
“’ “Motor vehicle liability insurance policy” means a policy or part of a policy either designating by explicit description or by appropriate reference all motor vehicles for which coverage is provided * * *.’ ”
ORS 486.506 provided:
“(1) Every certificate of insurance [issued as evidence of financial responsibility] shall:
“* * * * *
“‘(c) Describe all vehicles covered by the policy, unless such policy is issued with respect to all vehicles operated by the assured.’ ”
“44. ‘Operator’ means every person who drives or is in actual physical control of a motor vehicle upon a highway or who is exercising control over or steering a vehicle being towed by a motor vehicle.
“45. ‘Owner’ means a person, other than a lienholder, having the property in or title to a vehicle. The term includes a person entitled to the use and possession of a vehicle subject to a security interest in another person, but excludes a lessee under a lease not intended as security.”