IN THE

ARIZONA COURT OF APPEALS DIVISION ONE

SALLY ANN BEAVER, a single woman, Plaintiff/Appellee,

v.

AMERICAN FAMILY MUTUAL INSURANCE COMPANY, a Wisconsin 

corporation, Defendant/Appellant.

No. 1 CA-CV 13-0407

Appeal from the Superior Court in Maricopa County

No. CV2012-095983

The Honorable David M. Talamante, Judge

The Honorable James Padish, Judge, Retired

REVERSED AND REMANDED

COUNSEL

Rowley Chapman & Barney Ltd., Mesa 

By Kevin J. Chapman

Counsel for Plaintiff/Appellee

Lewis Brisbois Bisgaard & Smith, LLP, Phoenix

By Greg S. Como, Spencer T. Proffitt

Counsel for Defendant/Appellant

OPINION

Acting Presiding Judge Patricia K. Norris delivered the opinion of the 

Court, in which Judge Maurice Portley and Chief Judge Diane M. Johnsen 

joined.

N O R R I S, Judge:
BEAVER v. AMERICAN FAMILY

Opinion of the Court

2

¶1 The principal question in this appeal is whether Arizona’s 

Uninsured/Underinsured Motorist Act prohibits an insurer from denying 

underinsured motorist coverage to a family member who lives with the 

named insured and who otherwise would be entitled to such coverage but 

for her ownership of a motor vehicle. When, as here, the policy does not 

include the family member as a person insured under the policy, the 

answer is no. 

FACTS AND PROCEDURAL BACKGROUND

¶2 Sally Ann Beaver was injured by another driver’s negligence 

while riding a motorcycle she owned. The negligent driver’s insurance 

company offered Beaver the policy limits under its insured’s policy, but 

that amount was not sufficient to compensate Beaver for her injuries. 

Because Beaver lived with her father at the time of the accident, she made

a claim for underinsured motorist (“UIM”) coverage under his American 

Family “Family Car Policy” (“the Policy”). The Policy did not cover 

Beaver’s motorcycle.

¶3 The Policy identified Beaver’s father as the named insured

and, as relevant here, defined an “[i]nsured person” as “you,” a reference 

to Beaver’s father as the named insured, “or a relative.” The Policy also 

defined “[r]elative” as “a person living in your household, related to you

by blood, marriage or adoption. This includes a ward or foster child. It 

excludes any person who, or whose spouse, owns a motor vehicle other than an 

off-road motor vehicle” (“Relative Definition”). (Last emphasis added.)

These definitions applied to both the liability and UIM coverage 

provisions of the Policy.

¶4 American Family denied Beaver’s UIM claim. She then sued 

American Family seeking, as relevant here, a declaration she was an 

“[i]nsured person” and a “[r]elative” under the Policy and therefore 

entitled to UIM coverage. Essentially characterizing the Relative 

Definition as an “other vehicle” exclusion, she also sought a declaration 

the Relative Definition was void under Arizona’s Uninsured/

Underinsured Motorist Act (“UMA”). Ariz. Rev. Stat. (“A.R.S.”) § 20-

259.01 (Supp. 2013). As discussed in more detail below, in the uninsured 

motorist (“UM”) and UIM context, an “other vehicle” exclusion is one that 

excludes UM and UIM coverage for an insured who is injured in or by a 

vehicle owned by the named insured or another insured but which is not 

insured for liability coverage under the policy. Taylor v. Travelers Indem. 

Co. of Am., 198 Ariz. 310, 315 n.5, ¶ 13, 9 P.3d 1049, 1054 n.5 (2000); Higgins 
BEAVER v. AMERICAN FAMILY

Opinion of the Court

3

v. Fireman’s Fund Ins. Co., 160 Ariz. 20, 21, 770 P.2d 324, 325 (1989); Calvert 

v. Farmers Ins. Co., 144 Ariz. 291, 293, 697 P.2d 684, 686 (1985). 

¶5 American Family moved to dismiss the complaint arguing

that because Beaver owned the motorcycle, she was not her father’s 

“relative” and, therefore, was not an “insured person” under the Policy.1

The superior court rejected American Family’s argument and agreed with 

Beaver that the Relative Definition was void because it violated Arizona 

public policy as reflected in the UMA:

Though the policy’s terms exclude [Beaver] as 

an insured, she is inarguably a relative residing 

in the insured’s home who would otherwise be 

afforded underinsured coverage but for her 

ownership of a motor vehicle. . . . [T]he 

American Family policy exclusion is the 

functional equivalent of the “other vehicle” 

exclusions determined to be void for violating 

the public policy purpose for which the 

legislature enacted § 25-259.01. 

The superior court entered a final judgment that, inter alia, declared 

Beaver a “relative” and “insured person” under the Policy and therefore 

entitled to UIM coverage.

DISCUSSION 

I. The UMA 

¶6 American Family argues the UMA does not bar it from 

denying UIM coverage to Beaver -- a resident family member of her 

father’s household who otherwise would be entitled to such coverage but 

for her ownership of a motor vehicle. Exercising de novo review, we 

agree. See Cundiff v. State Farm Mut. Auto. Ins. Co., 217 Ariz. 358, 360, ¶ 8, 

174 P.3d 270, 272 (2008) (construction of A.R.S. § 20-259.01 presents issue 

of law subject to de novo review).

 

1At oral argument on the motion, Beaver’s counsel informed 

the court that although Beaver had her own liability policy for her 

motorcycle, she did not have UIM coverage. 
BEAVER v. AMERICAN FAMILY

Opinion of the Court

4

¶7 The UMA “establishes a public policy that every insured is 

entitled to recover damages he or she would have been able to recover if 

the uninsured” or underinsured2 had maintained an adequate policy. 

Calvert, 144 Ariz. at 294, 697 P.2d at 687. UIM coverage allows “the 

consumer to protect himself and family members against the possibility 

that, in any given accident, there will be . . . insufficient liability coverage 

to compensate for the actual damages sustained.” Taylor, 198 Ariz. at 316, 

¶ 18, 9 P.3d at 1053. Accordingly, as relevant here, A.R.S. § 20-259.01(B)

requires every insurer issuing a motor vehicle liability policy in Arizona to 

offer UIM coverage to the “named insured.” If the named insured 

requests such insurance, the statute directs that UIM coverage be 

extended to “all persons insured under the policy.” Id. A.R.S. § 20-

259.01(B) reads as follows:

Every insurer writing automobile liability or 

motor vehicle liability policies shall also make 

available to the named insured thereunder and 

shall by written notice offer the insured and at 

the request of the insured shall include within 

the policy underinsured motorist coverage 

which extends to and covers all persons insured 

under the policy, in limits not less than the 

liability limits for bodily injury or death 

contained within the policy. . . . At the request 

of the insured, the insured may purchase and the 

insurer shall then include within the policy 

underinsured motorist coverage that extends to and 

covers all persons insured under the policy . . . .

(Emphases added.) 

¶8 Section 20-259.01(B) does not, however, define who is a 

“person[] insured under the policy.” And, as we have recognized, 

“[p]ublic policy does not restrict the parties’ right to agree on who is an 

insured.” Am. States Ins. Co. v. C & G Contracting, Inc., 186 Ariz. 421, 426, 

924 P.2d 111, 116 (App. 1996) (citing Alcala v. Mid-Century Ins. Co., 171 

 2The policy considerations that apply to UM coverage also 

apply to UIM coverage. See Taylor, 198 Ariz. at 313 n.3, ¶ 5, 9 P.3d at 1052 

n.3 (citations omitted); Brown v. State Farm Mut. Auto. Ins. Co., 163 Ariz. 

323, 327 n.6, 788 P.2d 56, 60 n.6 (1989) (citation omitted).

 
BEAVER v. AMERICAN FAMILY

Opinion of the Court

5

Ariz. 121, 123, 828 P.2d 1262, 1264 (App. 1992)). Thus, on its face, the 

statute does not bar the Relative Definition. See Cundiff, 217 Ariz. at 360, 

¶ 8, 174 P.3d at 272 (when statutory language is clear and unambiguous, 

we will not “look beyond the language, but rather simply apply it without 

using other means of construction” (citation omitted) (internal quotation 

marks omitted)). 

¶9 Beaver argues, however, that the Relative Definition is what 

the superior court characterized as the “functional equivalent” of an

“other vehicle” exclusion and, as our supreme court has held, violates the 

UMA and is void as against public policy. See Higgins, 160 Ariz. at 23, 770

P.2d at 327; Calvert, 144 Ariz. at 294, 297, 697 P.2d at 687, 690. Although 

we must construe the UMA liberally, Taylor, 198 Ariz. at 314, ¶ 11, 9 P.3d 

at 1053 (citations omitted), and any exception to UIM coverage not 

permitted by the UMA is void, Am. Family Mut. Ins. Co. v. Sharp, 229 Ariz. 

487, 488, ¶ 1, 277 P.3d 192, 193 (2012), we disagree with Beaver that the 

Relative Definition is the functional equivalent of an “other vehicle” 

exclusion.

¶10 As stated, supra ¶ 4, an “other vehicle” exclusion excludes 

UM/UIM coverage for an insured who is injured in or by a motor vehicle 

owned by the named insured or another insured but which is not insured 

for liability coverage under the policy. See 3 Alan I. Widiss & Jeffrey E. 

Thomas, Uninsured and Underinsured Motorist Insurance § 33.5 (3d ed. 

2005). Such an exclusion is void because the UMA gives the named 

insured the right to purchase UIM coverage for all persons insured under 

the policy and therefore bars the insurer from excluding those persons 

from that coverage. See Higgins, 160 Ariz. at 23, 770 P.2d at 327. 

¶11 An “other vehicle” exclusion, thus, is prohibited when it 

strips UIM coverage from someone who, in the language of the statute, is 

a “person[] insured under the policy.” But, nothing in Higgins or Calvert 

requires an insurer to include within the definition of a “person[] insured 

under the policy” a family member who lives with the named insured and 

owns a motor vehicle. As our supreme court has recognized, UIM 

coverage must be “portable” for a person insured under the policy such 

that the insured person is covered in all manner of situations, Calvert, 144 

Ariz. at 296, 697 P.2d at 689, but the UMA only affords that protection to 

persons who are insured under the policy in the first instance. The UMA 

requires that UIM coverage be offered “to the named insured thereunder,” 

and if the named insured purchases that coverage, it must be extended to 

“all persons insured under the policy.” A.R.S. § 20-259.01(B). This 
BEAVER v. AMERICAN FAMILY

Opinion of the Court

6

language allows the parties to restrict the family members that can be 

included in the class of “all persons insured under the policy.”

¶12 Here, the Relative Definition defines in the first instance 

those included within the class of “persons insured under the policy” and 

omits family members, such as Beaver, who both live with the named 

insured and own their own motor vehicle. In contrast to the policies in 

Higgins and Calvert, the Policy did not afford coverage to Beaver for some 

purposes and not for others. Instead, Beaver was a stranger to the policy, 

not a “person insured,” for any purpose.

¶13 Other courts have upheld definitions identical or similar to 

the Relative Definition even though, as is the case in Arizona, they have

interpreted their state UM/UIM statute as barring the “other vehicle”

exclusion. For example, in Famuliner v. Farmers Insurance Co., 619 S.W.2d 

894, 897 (Mo. App. 1981), the court held that a son who lived with his 

parents -- the named insureds -- was not entitled to UM coverage under 

his parents’ policies because he was not included within the policies’

definitions of relative, which omitted any resident relative who owned an 

automobile. In so holding, the court explained that the Missouri UM 

statute

contains no requirement that automobile 

insurance policies provide uninsured motorist 

protection to any particular class or group of 

persons whether they be residents of the same 

household or family members. The statute 

does require, however, that all policies of 

liability insurance must also include uninsured 

motorist coverage to “persons insured 

thereunder.” There is no violation of the 

statute unless a policy condition limits 

uninsured motorist protection as to persons 

who otherwise qualify as insureds for liability 

purposes. [The son] was not an insured under 

his parents’ policies and the policy conditions 

of which he complains do not offend the 

mandate of [the statute]. 
BEAVER v. AMERICAN FAMILY

Opinion of the Court

7

Id. at 897.3

¶14 The court in Farmers Insurance Co. of Washington v. Miller, 549 

P.2d 9 (Wash. 1976), reached the same conclusion. It held that the 

Washington UM statute, which it had applied in Touchette v. Northwestern 

Mutual Insurance Co., 494 P.2d 479 (Wash. 1979), to invalidate an “other 

vehicle” exclusion, did not prohibit an insurer from omitting a resident 

relative who owned an automobile from the definition of an insured.

Miller, 549 P.2d at 12. The court reasoned that “the question [presented] 

revolves around the initial extension of coverage to defendants. The 

definition of who is and who is not an ‘insured’ under the policy is 

consistently applied throughout the insurance contract. For these reasons, 

Touchette is distinguishable and the public policies expressed therein are 

not violated.” Id. 

¶15 For the foregoing reasons, we reject Beaver’s argument the 

Relative Definition was void under the UMA as the “functional 

equivalent” of an impermissible “other vehicle” exclusion.4

 3In Shepherd v. American States Insurance Co., 671 S.W.2d 777, 

780 (Mo. 1984), the Missouri Supreme Court recognized that, under 

Famuliner, when an individual “lacked status as an insured, named or 

otherwise, under the primary coverage of the policy, there was no 

uninsured motorist coverage for that individual.” 

4Beaver also argues the Relative Definition violates the UMA 

because it is a “backdoor household exclusion.” Although there are

“various permutations” of the household exclusion, Steven Plitt, Arizona 

Liability Insurance Law § 6.16, at 235 (Supp. 2006), it commonly excludes 

liability coverage for bodily injury sustained by a family member who is 

injured by the negligence of another family member driving an insured 

vehicle. Taylor, 198 Ariz. at 317, ¶ 19, 9 P.3d at 1056. Such an exclusion is 

invalid up to the minimum limits of liability coverage required by 

Arizona’s Vehicle Insurance and Financial Responsibility Act, A.R.S. § 28-

4009(A)(2) (2013), but generally valid in excess of those limits. Averett v. 

Farmers Ins. Co. of Ariz., 177 Ariz. 531, 534, 869 P.2d 505, 508 (1994); 

Arceneaux v. State Farm Mut. Auto. Ins. Co., 113 Ariz. 216, 218, 550 P.2d 87, 

89 (1976). As Beaver’s counsel acknowledged at oral argument, the 

household exclusion cases “have nothing to do with this case.” We agree; 

Beaver’s father did not cause the accident. Further, although Beaver 

argues the Policy precluded recovery of the statutory minimum by an 
BEAVER v. AMERICAN FAMILY

Opinion of the Court

8

II. Reasonable Expectations 

¶16 Beaver also argues she is nevertheless entitled to UIM 

coverage under the doctrine of reasonable expectations. Under that 

doctrine, a court “will not enforce even unambiguous boilerplate terms in 

standardized insurance contracts in a limited variety of situations.” 

Gordinier v. Aetna Cas. & Sur. Co., 154 Ariz. 266, 272, 742 P.2d 277, 283 

(1987) (emphasis omitted). The superior court did not consider this

argument. Because the superior court may consider it on remand, we

address American Family’s argument that, as a matter of law, Beaver is 

not entitled to raise the reasonable expectations doctrine because her 

reasonable expectations are irrelevant. 

¶17 First, Beaver has not argued her reasonable expectations of 

coverage under the Policy are relevant to application of the doctrine. 

Instead, she has argued her father could not have reasonably anticipated 

the Relative Definition, which she contends was inconspicuously placed in 

a separate section of the Policy, would bar his daughter, a resident of his 

home, from UIM coverage. Second, Beaver is not precluded from 

attempting to prove her father’s reasonable expectations in buying the 

Policy. See Cullen v. Koty-Leavitt Ins. Agency, Inc., 216 Ariz. 509, 517-18, 

¶ 24, 168 P.3d 917, 925-26 (App. 2007) (plaintiff’s complaint sufficient if 

facts alleged permit inference that named insured had reasonable 

expectation plaintiff would have portable UIM coverage under policy 

purchased by named insured), aff’d in part, vacated in part on other grounds

sub nom. Cullen v. Auto-Owners Ins. Co., 218 Ariz. 417, 189 P.3d 344 (2008); 

Duran v. Hartford Ins. Co., 157 Ariz. 125, 129, 755 P.2d 430, 434 (App. 1988)

(disregarding reasonable expectations argument asserted by plaintiff who 

made no showing of named insured’s reasonable expectations). 

III. Attorneys’ Fees and Costs on Appeal

¶18 Because American Family and Beaver have each partially 

prevailed on appeal, we deny Beaver’s request for attorneys’ fees under 

A.R.S. § 12-341.01 (Supp. 2013). We award American Family its costs on 

appeal contingent upon its compliance with Arizona Rule of Civil 

Appellate Procedure 21. See Henry v. Cook, 189 Ariz. 42, 44, 938 P.2d 91, 93 

(App. 1996) (appellant who obtained partial success entitled to recover all

taxable costs). 

 

insured family member, the Policy contained an endorsement that 

complied with the Vehicle Insurance and Financial Responsibility Act.
BEAVER v. AMERICAN FAMILY

Opinion of the Court

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CONCLUSION

¶19 For the foregoing reasons, we reverse the judgment of the 

superior court and remand for further proceedings consistent with this 

opinion.