No. 88-001
IN THE SUPREMECOURTOF THE STATE OF MONTANA 1988

COLONIAL INSURANCE COMPANY OF CALIFORNIA, Plaintiffand 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 ThomasC. Honzel, Judgepresiding.
COUNSEL OF RECORD:
ForAppellant:
James T. Harrison,Jr.; Harrison Loendorf and Poston,P.C. Helena, Montana (DavidP. Sandford) Glen L. Drake,Keller,Reynolds, Drake, Sternhagen and Johnson, Helena,Montana (RogerLee 

### p lank ens hip)
For Respondent: StephenM. Frankino; Hughes, Kellner, Sullivanand Alke, Helena,Montana

Submitted on Briefs: March 

### 24, 1988 Decided: May 3, 1988

ClerkMr. Chief Justice J. A. Turnage delivered the Opinion of the Court.Plaintiff David P. Sandford appeals an order of the First JudicialDistrict Court,Lewis and Clark County,granting summary judgment in favor of respondent Colonial National InsuranceCompany (Colonial). We affirm. On September 20, 1986, Colonial renewed an automobile liability insurance policy that Colonial had previously issued to John Lloyd Johnson. Colonial'spolicy with Johnson insured Johnson's 1982 ChevroletCamaro. 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 Camarowas subject to a lien in favor of Southwest Montana Federal CreditUnion. 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 threemonths later, Blankenshipgave John Lloyd Johnson another vehicle in lieu of the $2000 

### debt owed to Johnson. Blankenship testified,by deposition, that Johnson agreed to leavehis insuranceon the Camaro until Blankenship could get coverage. Blankenship also stated that Johnson gave Blankenship Johnson's certificateof 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. OnMay 19, 1987,Colonial brought this action seekinga 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 theDistrictCourt errwhen itheld 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'spolicy 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 salewas not conditional and that Johnson and Blankenship were 

### - not joint owners. Previouslywe considered the issue ofwho was the owner of an automobile for insurancepurposes. In Safeco InsuranceCompany 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." Itprovides: "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 conditionalvendee. 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 amortgagor of a vehicle is entitled to ~ossession.then the owner L 

### -- is the person in whom isvested right of -- 

### --- possession or control.

--

~ - 

### - [~m~hasis added.

### 1
InTruck InsuranceExchange 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

# .. . Thepurchase contract is essentially irrelevant to the acquisition of insurance. We will not allow thepurchase 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 salewas 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.

[Emphasisadded.] 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'spolicy 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 Johnsonwas simply an unsecured debt and notpart of a conditional sale. Additionally, Blankenship acquired title to the car and exercised total control of the automobile. If,arguendo,we agreedwith 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 isvested the right ofpossession 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 Blankenshipneither coverage nor a defense to claims asserted against him 

### by appellant Sandford. Accordingly, the judgment of the District Court is af firmed.

J 

# 247
Chief Justice

We concur: