No. 88-001 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1988 

COLONIAL INSURANCE COMPANY 

OF CALIFORNIA, 

Plaintiff and Respondent, 

-vsROGER LEE BLANKENSHIP, 

Defendant, 

-andDAVID P. SANDFORD, 

Defendant and Appellant. 

APPEAL FROM: District Court of the First Judicial District, 

In and for the County of Lewis and Clark, 

The Honorable Thomas C. Honzel, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

James T. Harrison, Jr.; Harrison Loendorf and Poston, P.C. 

Helena, Montana (David P. Sandford) 

Glen L. Drake, Keller, Reynolds, Drake, Sternhagen and 

Johnson, Helena, Montana (Roger Lee p lank ens hip) 

For Respondent: 

Stephen M. Frankino; Hughes, Kellner, Sullivan and 

Alke, Helena, Montana 

Submitted on Briefs: March 24, 1988 

Decided: May 3, 1988 

Clerk 
Mr. Chief Justice J. A. Turnage delivered the Opinion of the 

Court. 

Plaintiff David P. Sandford appeals an order of the 

First Judicial District Court, Lewis and Clark County, granting summary judgment in favor of respondent Colonial National 

Insurance Company (Colonial). We affirm. 

On September 20, 1986, Colonial renewed an automobile 

liability insurance policy that Colonial had previously 

issued to John Lloyd Johnson. Colonial's policy with Johnson 

insured Johnson's 1982 Chevrolet Camaro. 

On October 3, 1986, Johnson sold the Camaro to his 

cousin, Roger Lee Blankenship, for $7000. Blankenship paid 

Johnson $5000 of the purchase price and orally agreed to pay 

the remaining $2000 within one year. The parties did not 

execute an agreement with respect to the $2000 and Johnson 

did not secure the debt with a lien. Following Johnson's 

transfer of the certificate of title, Blankenship executed an 

application for a new title. A review of Blankenship's 

application for a new title shows that the Camaro was subject 

to a lien in favor of Southwest Montana Federal Credit Union. 

Subsequent to the above-described transaction, Johnson 

delivered the Camaro to Blankenship who immediately took 

possession. On October 4, 1986, Blankenship drove the Camaro 

to Helena. 

At approximately 1:00 a.m. on October 5, 1986, 

Blankenship was driving the Camaro when he collided with a 

motorcycle driven by appellant David Sandford. As a result, 

Sandford was seriously injured. Blankenship fled the accident scene. In January or February 1987, Blankenship admitted to law enforcement authorities that he was involved in 

the October 5, 1987, accident. 

On or about October 13, 1986, Blankenship purchased 

insurance, from another insurer, for the Camaro. 
Approximately three months later, Blankenship gave John Lloyd 

Johnson another vehicle in lieu of the $2000 debt owed to 

Johnson. Blankenship testified, by deposition, that Johnson 

agreed to leave his insurance on the Camaro until Blankenship 

could get coverage. Blankenship also stated that Johnson 

gave Blankenship Johnson's certificate of insurance. 

Blankenship did not request Colonial to transfer Johnson's insurance policy to Blankenship. Colonial did not 

learn of the accident until Blankenship admitted his involvement in January or February 1987. 

On May 19, 1987, Colonial brought this action seeking a 

declaratory judgment and requesting a stay of proceedings in 

a companion case. Following a hearing on October 15, 1987, 

the District Court, on November 3, 1987, granted summary 

judgment in favor of Colonial. 

On appeal, defendant Sandford raises one issue for our 

review: 

Did the District Court err when it held that Colonial's 

automobile liability insurance policy issued to John Lloyd 

Johnson affords Roger Lee Blankenship neither coverage nor a 

defense to the claims asserted against him by David P. 

Sandford? 

Appellant Sandford contends the District Court erred 

when it found that Colonial's policy with Johnson did not 

provide liability coverage to Blankenship. Colonial's policy 

provides that an "insured person" means the owner, the owner's spouse or a permissive user. Appellant Sandford does 

not contend that Blankenship is a permissive user. Therefore, we must determine whether the District Court properly 

found that the sale was not conditional and that Johnson and 

Blankenship were - not joint owners. 

Previously we considered the issue of who was the owner 

of an automobile for insurance purposes. In Safeco Insurance 
Company v. Lapp (Mont. 1985), 695 P.2d 1310, 1312, 42 St.Rep. 

289, 290, we stated: "Ownership for insurance purposes can 

be determined by the intent of the parties and language of 

the insurance contract." In Lapp the certificate of title 

had not been transferred to the buyer at the time of the 

accident. However, we held that, based on the intent of the 

parties, the purchaser was the owner of the vehicle. Lapp, 

695 P.2d at 1312, 42 St.Rep. at 290. Clearly, Blankenship is 

the automobile's owner under Lapp. 

Section 61-1-310, MCA, defines an automobile "owner." 

It provides: 

"Owner" means a person who holds the 

legal title to a Gehicle. - If - a vehicle 

-- is the subject -- of an agreement -- for the 

conditional sale thereof with -- the riaht 

- of purchase upon performance of the - - 

conditions stated -- in the agreement and 

-- with an immediate right of possession -. . . - vested -- in the conditional vendee. or in 

the event a vehicle is subject to a 

lease, contract, or other legal arrangement vesting right of possession or 

control, for security or otherwise, or 

in the event a mortgagor of a vehicle is 

entitled to ~ossession. 

L -- then the owner 

-- is the person in whom is --- vested right of 

possession or control. -- ~ - - [~m~hasis added. 1 

In Truck Insurance Exchange v. Nelson (Mont. 19871, 743 

P.2d 572, 44 St.Rep. 1482, we clarified "intent of the parties" to mean the parties to an insurance contract. "The 

purchase of property and the insurance of property are distinct transactions . . . The purchase contract is essentially 

irrelevant to the acquisition of insurance. We will not 

allow the purchase agreement to dictate the interpretation of 

the insurance agreement." Nelson, 743 P.2d at 574, 44 

St.Rep. at 1485. See also, S 61-1-310, MCA. 
Appellant Sandford contends that at the time of the 

accident Blankenship owed Johnson $2000 on the purchase 

price. Therefore, appellant argues, the sale was conditional 

and the parties were joint owners. Appellant cites the 

endorsements section of Colonial's insurance policy which 

provides : 

. . . Except with respect to bailment 

lease, conditional sale, purchase agreement, mortgage or other encumbrance, the 

named insured is --- the sole owner -- of the 

vehicle unless otherwise stated herein: 

Absence of an entry means no exception. 

[Emphasis added.] 

After careful review of the record, we hold the District Court correctly found the sale was not conditional. 

Johnson was the named insured in the policy. Neither 

Blankenship nor Johnson requested Colonial to transfer Johnson's policy to Blankenship. The sale to Blankenship was not 

entered as an exception. Further, appellant presented no 

evidence that Johnson retained any interest in the Camaro. 

The $2000 owed by Blankenship to Johnson was simply an unsecured debt and not part of a conditional sale. Additionally, 

Blankenship acquired title to the car and exercised total 

control of the automobile. 

If, arguendo, we agreed with appellant that the automobile sale was conditional, $ 61-1-310, MCA, determines the 

issue in an identical manner. Section 61-1-310, MCA, provides in pertinent part: "If a vehicle is the subject of an 

agreement for the conditional sale . . . the owner is the 

person in whom is vested the right of possession or control." 

Therefore, Blankenship, as the person in possession of the 

Camaro, is the "owner" under $ 61-1-310, MCA. Johnson's 

insurance policy with Colonial does not afford Blankenship, 

as owner of the Camaro, with coverage. 
Clearly the contract, the record and 5 61-1-310, MCA, 

support the District Court's finding the sale was not conditional and that Colonial's policy with Johnson affords 

Blankenship neither coverage nor a defense to claims asserted 

against him by appellant Sandford. 

Accordingly, the judgment of the District Court is 

af firmed. 

247 J 

Chief Justice 

We concur: