Case Title: State Farm Mut. Auto. Ins. Co. v. Lewis

Citation: 514 So. 2d 863

Docket Number: 

State: alabama

Court: Alabama Supreme Court

Date: 1987-08-14T00:00:00Z

Document:
514 So. 2d 863 (1987)
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
v.
Howard C. LEWIS III and James Rhodel Baker.
James Rhodel BAKER
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, et al.
85-1213, 85-1214.

Supreme Court of Alabama.
August 14, 1987.
Rehearing Denied September 25, 1987.
Robert E. Jones III of Poellnitz, Cox & Jones, Florence, for appellant/cross-appellee.
Roger H. Bedford, Sr., of Bedford, Bedford & Rogers, Russellville, for appellee/cross-appellant James Rhodel Baker.
Howard Lewis III, pro se.
MADDOX, Justice.
This appeal and cross-appeal arise from a declaratory judgment holding that State Farm Mutual Automobile Insurance Company is obligated to pay under a policy it issued to Howard C. Lewis III, but which *864 denied Lewis's claim that the liability coverage under another policy issued to him "stacked." The policies in question were issued on Lewis's personal vehicles. State Farm contends that the policies do not extend coverage to damage incurred while Lewis was driving a pickup truck, while acting within the line and scope of his employment with Keith and Howard Grissom, d/b/a Grissom Dairy. James R. Baker, the driver of the other damaged vehicle, cross-appeals. He asks us to reverse the trial court's determination that the coverage under Lewis's two policies could not be combined, or "stacked."
The facts in these cases, as they relate to the dispute at hand, were stipulated to by the parties. The stipulation reads:
The parties also stipulated to the pertinent portions of the policies in question, which read:
"* * *
"PRIVATE PASSENGER CAR means a car:
"1. with four wheels;
"2. of the private passenger or station wagon type; and
"3. designed solely to carry persons and their luggage.
"* * *
"THERE IS NO COVERAGE FOR NON-OWNED CARS:
"2. WHILE:
"* * *
"If there is other coverage
"1. Policies Issued by Us to You.
"2. Coverage Available From Other Sources.
"3. Temporary Substitute Car, Non-Owned Car or Trailer.
State Farm argues in its brief that the policy is clear, as written. State Farm relies on what it says is the plain language of the exclusion of non-owned cars, "used in any other business or occupation." State Farm also relies upon judicial construction of similar phrases in King v. Woodward, 464 F.2d 625 (10th Cir.1972), Home Indemnity Co. v. Northwestern Nat'l. Ins. Co., 280 F. Supp. 446 (D.Mont. 1968), and Seaford v. Nationwide Mutual Ins. Co., 253 N.C. 719, 117 S.E.2d 733 (1961).
In support of the trial court's ruling, Baker sets forth the general rules of insurance contract construction and cites the case of Pontico v. Roussel, 380 So. 2d 649 (La.App.1980), for the proposition that the extent of the "other business or occupation" exception is unclear. Baker thus argues that an ambiguity was created through the use of that language, and that the trial court correctly construed the language of the policy in favor of coverage.
The law of construction of insurance contracts in Alabama is well established. Exceptions to coverage are to be interpreted as narrowly as possible in order to provide maximum coverage for the insured, Georgia Cas. & Sur. Co. v. Universal Underwriters Ins. Co., 534 F.2d 1108 (5th Cir.1976), and such clauses must be construed most strongly against the company that issued the policy, American Liberty Ins. Co. v. Soules, 288 Ala. 163, 258 So. 2d 872 (1972). However, insurance contracts, like other contracts, are construed to give effect to the intention of the parties thereto, and when the intention is clear and unambiguous, the policy must be enforced as written. Ketona Chemical Corp. v. Globe Indem. Co., 404 F.2d 181 (5th Cir. 1968); Newman v. St. Paul Fire & Marine Ins. Co., 456 So. 2d 40 (Ala.1984); Southern Guaranty Ins. Co. v. Wales, 283 Ala. 493, 218 So. 2d 822 (1969). Finally, in determining the intention of the parties, the court must examine more than an isolated sentence or term; it must read each phrase in the context of all other provisions, in order to arrive at the true intent of the parties. North River Ins. Co. v. Jackson, 278 Ala. 604, 179 So. 2d 731 (1965); Mobile Psychiatric Service, Inc. v. Employers Life Ins. Co., 362 So. 2d 244 (Ala.Civ.App.1978).
In applying the above-stated principles, we must conclude that the policies in question did not provide coverage for an accident involving the insured while he was driving "a non-owned car ... while ... used in any other business or occupation," unless the car was a "private passenger car." Baker argues that the policy is ambiguous, but when the "non-owned car" exclusion is read in its entirety, it cannot reasonably be said to be ambiguous. Part two of the exclusion omits coverage for non-owned cars while being serviced or being used by anyone in the car business, or while being used in any other business or occupation. We recognize that while the exclusion of non-owned cars used in a business or occupation "does not apply to a private passenger car driven or occupied by the first person named in the declarations, his or her spouse or their relatives" (emphasis in policy), we think it applies here. The "[f]irst person named in the declarations" (Lewis) was driving the "non-owned car" (a pickup truck) "used in any other business or occupation" (Grissom Dairy). The critical question is whether the pickup truck he was driving was a "private passenger car." The policy defines a "private passenger car" as meaning *866 a "car," "with four wheels," "of the private passenger or station wagon type," "and designed solely to carry persons and their luggage." Unquestionably, the pickup truck here was not "designed solely to carry persons and their luggage"; therefore, it was not a "private passenger car."
Lewis, the insured, could not have reasonably expected that the two State Farm policies he bought would cover him while he was operating a company pickup truck in the line and scope of his employment.
Because we have concluded that the policies do not extend Lewis's coverage to the accident in question, the trial court's decision on the stacking issue is due to be affirmed.
In light of the foregoing, the judgment of the trial court is due to be, and it hereby is, affirmed on the cross-appeal, and reversed and remanded on the appeal.
Case 85-1213, REVERSED AND REMANDED.
Case 85-1214, AFFIRMED.
ALMON, BEATTY, ADAMS and HOUSTON, JJ., concur.