Case Title: American Service Mutual Insurance Co. v. Parviz

Citation: 386 P.2d 982

Docket Number: 

State: colorado

Court: Colorado Supreme Court

Date: 1963-11-18T00:00:00Z

Document:
386 P.2d 982 (1963) AMERICAN SERVICE MUTUAL INSURANCE COMPANY, an Alabama corporation, Plaintiff in Error, v. Abolghassem PARVIZ, Ernest Weston and Earl Rissi, Defendants In Error. No. 20105. Supreme Court of Colorado, In Department. November 18, 1963. *983 H. Myers Bumgardner, Charles D. Pierce, Pueblo, for plaintiff in error. Phelps, Fonda & Hays, Pueblo, for defendants in error Weston and Rissi. Lindner, Arkin & Davis, Denver, for defendant in error Abolghassem Parviz. DAY, Justice. We will refer to the individual parties by name and the plaintiff in error as the Company. This is a damage action instituted by Weston and Rissi to recover for the wrongful death of their respective wives in a two car head-on collision three miles north of Walsenburg, Colorado. Parviz was the owner of a car being driven by one Soleimani, who was also killed in the collision. Parviz was the defendant and third party plaintiff in the trial court. The Company was third party defendant in an action by Parviz to compel it to provide counsel for defense of the suit and to pay, to the limits of a liability insurance policy held by Parviz, any judgment which might be entered against him. Trial was to the court and resulted in a finding that the negligence of the driver of Parviz' car was the sole proximate cause of the accident. Judgment on the third party action was entered against the Company in favor of Parviz in the amount of $10,000.00, the dollar limit of the policy. The latter judgment is the one to which writ of error is directed. Parviz has not assigned any cross error to the two judgments against him entered in favor of Weston and Rissi. They were made defendants in error in this court because of their financial interest in the issues between the Company and Parviz. Error is assigned to two findings of the trial court: 1. That the driver of the car, Soleimani, was the joint owner; 2. that the Company "in issuing the insurance policy, made said policy subject to the provisions of the Colorado Motor Vehicle Safety Responsibility Act * * *." There was no question that the negligence of Soleimani was imputed to Parviz. Weston *984 and Rissi, with the help of Parviz, attempted to establish joint ownership in Soleimani because of the following limitation of liability in the policy: Soleimani, of course, was not the named insured nor was he a member of the immediate family. It was the theory of those attempting to establish joint ownership that by such fact Soleimani as a joint owner would be an "implied insured", even though not named in the policy. We need not determine whether a joint owner is automatically insured by a limitation such as contained in the subject policy or whether or not he is actually named as an insured, for the reason that the finding by the court that the deceased Soleimani jointly owned the automobile is not supported by any competent evidence in the record. Parviz testified that his companion paid half of the purchase price of the car. This falls short of establishing ownership. It is admitted that the company had no notice of such contention; record title was solely in Parviz; at the time of the purchase Soleimani had no driver's license, and the application for insurance did not disclose any person's interest other than Parviz. The policy contained the usual proviso: It has generally been held that representations as to the identity of the named insured and the precise nature of his interests relate to a subject material to the carrier's risk, and thus entitle the latter to disclaim liability if full disclosures are not made. 33 A.L.R.2d 948. The theory upon which ownership is deemed material goes to the heart of the insurance operation. Acceptance of a mathematically categorized risk in return for a computed premium commensurate with that risk is the basis upon which such contracts are written. In the instance of automobile insurance, moreover, there are situations in which the particular risk, because of general age grouping, personal accident records, or otherwise, is considered too high to justify coverage at any cost; in such a case the insuror may refuse to enter into a contract with the applicant in question. Didlake v. Standard Insurance Co., 10 Cir., 195 F.2d 247, 33 A.L.R.2d 941. The Company might have declined coverage in this case had full disclosure of facts as now claimed been made. Also the premium might have varied considerably. For these reasons the court cannot alter the contract to include other and different coverage. At most the evidence disclosed a share-expense arrangement, and the court also found the parties involved in a "joint venture" [sic]. "In consideration for the premium for which this policy is written, the *985 named insured, by acceptance of this policy, agrees that: On the second point the court was also in error. It cannot be determined from the terse statement in the "Conclusions of Law" whether judgment of liability was imposed upon the company by reason of the court's interpretation of the provisions of the policy or by reason of the interpretation of the statutes comprising the "Safety Responsibility Law", C.R.S. '53, 13-7-1 et seq. But liability cannot be found on either ground. The only statement in the record on this point made by the court is: "VII. That the Third Party Defendant in issuing the Insurance policy in the name of Captain Parviz, made said policy subject to the provisions of the Colorado Motor Vehicle Safety Responsibility Act to the extent of the limits of liability covered by said policy." The policy does not warrant the conclusion of the trial court as to the Company's liability. The so-called omnibus clause making the policy subject to the laws of other states is limited by its terms and is as follows: There is no ambiguity in the language of the policy. To give effect to the requirement for certification and to the words "for the future" we conclude that the Company has agreed to bind itself when it has certified its policy in a particular state that the insured will be covered for future liability. It is admitted the Company did not so certify the policy in Colorado. A reading of the statutes touching on the matter of proof of liability and certification (C.R.S. '53, 13-7, 16, 17, 18, 21 and 22) also indicates that the certificate be filed by the Company and that the permit or license to drive in Colorado, or the lifting of a suspended license be in reliance upon the certification that the driver is covered for future liability. The pertinent statutes provide as follows: There was no written certificate filed by the Company, no "acceptance by the director" and no imposition of the conditions contained in 13-7-21, all emphasized by italics in the quoted portions of the statute. By the laws of Colorado, therefore, it is not a condition precedent to the right to drive upon the highways of the state that one have insurance. Parviz had a few hours prior to the accident entered the state from New Mexico and had an Alabama driver's license. He filed a report of the accident with the Motor Vehicle Department pursuant to a section of the statute, C.R.S. '53, 13-7-6, which we in People v. Nothaus, 147 Colo. 210, 363 P.2d 180, declared unconstitutional. In the report he said that he had a policy of insurance issued to him by the Company and listed its name and Alabama address. The Company filed its statement with the Department as follows: The interpretation of C.R.S. '53, 13-7-19, was before this court in Safeco Ins. Co. of America v. Gonacha, 142 Colo. 170, 350 P.2d 189. There it was said the statute The Company in this case not being authorized to do business in this state does not come within 13-7-9. *987 Assuming for the purpose of argument that the report by Parviz and his declaration of having insurance would constitute proof of financial responsibility, it would only apply to the future. The rationale of the Safeco case applies in like manner to a non-resident owner of a foreign vehicle owning a policy issued in another state. To hold otherwise would make the statute non-uniform by affording different treatment to a resident of this state having a policy issued by a company subject to the laws of this state. The state of Illinois has a "Safety Responsibility Act" similar to that of Colorado. It was interpreted in McCann for Use of Osterman v. Continental Casualty Co., 6 Ill.App.2d 527, 128 N.E.2d 624. The court noted that Illinois (and this is also true in Colorado) has no general statutory provision making insurance compulsory in all cases. In interpreting a provision that requires "omnibus coverage" in an insurance policy so as to cover those driving with permission (similar to secs. 13-7-22 and 23) when the policy is used as proof of compliance with the financial responsibility laws, the Illinois court held that the owner of the policy must by prior accident or otherwise be brought within the scope of the statute before its provisions can apply. Though not precisely on the point, this court in the Nothaus case indicated that any different interpretation would amount to legislation for a private purpose, namely "payment of a private obligation" already incurred rather than providing for future protection of the public, and would be unconstitutional. Parviz, Weston and Rissi also have attempted to read into the policy the provisions required by C.R.S. '53, 13-7-22 and 13-7-23, and cite Traders & General Ins. Co. v. Pioneer Mutual Comp. Co., 127 Colo. 516, 258 P.2d 776. These sections apply only to policies issued by an insurance carrier authorized to transact business in this state and to insurance policies issued in this state by companies organized under the insurance laws of Colorado. The Company is not subject to either section of the statute. By the terms of the policy it agreed to have read into its contracts such provisions of a state statute and to make them a part of the policy only when it certified the policy for future responsibility. The finding of the court against the Company not being supported either by the record or the Financial Responsibility Act is reversed. MOORE and SUTTON, JJ., concur.