Case Name: COMMUNITY SERVICE INSURANCE COMPANY v. PRICE
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1974-05-21
Citations: 391 Mich. 482
Docket Number: No. 8; Docket No. 54,255
Parties: COMMUNITY SERVICE INSURANCE COMPANY v PRICE
Judges: Levin and M. S. Coleman, JJ., concurred with T. G. Kavanagh, J.
Reporter: Michigan Reports
Volume: 391
Pages: 482–494

Head Matter:
COMMUNITY SERVICE INSURANCE COMPANY v PRICE
Decision of the Court
1. Appeal and Error — Equally Divided Court.
Decision of the Michigan Court of Appeals determining that the applicable limits of liability coverage of an automobile insurance policy issued to defendants was $10,000 is affirmed by an equally divided Court.
Opinion for Affirmance
T. G. Kavanagh, Levin, and M. S. Coleman, JJ.
2. Insurance — Automobiles—Liability Insurance — Nonowned Automobile — Owned Automobile — Insurer’s Liability.
Michigan Supreme Court looks first to the definition of "owned automobile" to determine if an automobile insurance contract provides coverage, where it may be said an ambiguity exists with regard to the definition of "nonowned” automobile but there is no ambiguity with regard to the definition of "owned automobile”, and finding that it does provide coverage while driving an "owned automobile” there is no occasion to determine what coverage the contract provides in relation to a "nonowned automobile”.
3. Insurance — Automobiles—Liability Insurance — Owned Automobile — Insurer’s Liability.
Under the terms of an automobile insurance policy which covered two automobiles separately owned by a husband and wife named as insureds any automobile described in the policy for which a premium was paid was an "owned” automobile as to any and all of the named insureds listed on the policy; therefore, the husband, while driving his wife’s automobile described in the policy, was driving an "owned” automobile with respect to the policy of insurance, and because he was driving an "owned" automobile, the insurer’s limit of liability is that which is stated in the policy as to "owned" automobiles, that is, $10,000.
References for Points in Headnotes
5 Am Jur 2d, Appeal and Error §§ 901, 902.
7 Am Jur 2d, Automobile Insurance § 98.
7 Am Jur 2d, Automobile Insurance §§ 41-138.
7 Am Jur 2d, Automobile Insurance § 103.
Opinion for Reversal
T. M. Kavanagh, C. J., and Swainson and Williams, JJ.
4. Insurance — Automobiles—Liability Coverage.
A qualifying phrase attached to a condition of an automobile insurance policy which limits of coverage were inter alia $10,-000 for injuries or death to one person, and $20,000 with respect to two or more persons injured as a result of an accident providing that "[wjhen two or more automobiles are insured hereunder, the terms of this policy should apply separately to each”, would require that when more than one automobile is listed in the policy, the $10,000 coverage limitation would be applied separately to each vehicle.
5. Insurance — Automobiles—Named Insured — Construction of Policy.
The term "named insured” used throughout an automobile insurance policy in the singular sense, cannot be read by the Michigan Supreme Court and will not be read by the Court to be inclusive of only one person in one policy provision and yet to read inclusive of more than one person in a different policy provision.
6. Insurance — Automobiles—Construction of Policy — Appeal and Error.
The Michigan Supreme Court will accept the definition of a phrase, which is used in an automobile insurance policy in both the singular and the plural, which is the most reasonable from the four comers of the policy and is urged by the drafters of the policy.
7. Insurance — Automobiles—Liability Coverage — Construction of Policy.
An automobile insurance company which wished to limit its liability should have stated so in no uncertain language in its policy instead of by means of complicated, illogical, and confusing definitional sections; and, as it is the insurance company which wrote the policy, the company must bear the loss if the language chosen does not achieve the effect intended.
Appeal from Court of Appeals, Division 2, Quinn, P. J., and Fitzgerald and Van Valkenburg, JJ., reversing and remanding Genesee, John W. Baker, J.
Submitted May 10, 1973.
(No. 8
May Term 1973,
Docket No. 54,255.)
Decided May 21, 1974.
41 Mich App 604 affirmed by an equally divided Court.
Complaint by Community Service Insurance Company against Eldon L. Price, Velma E. Price, and David L. Beckwith, guardian of the estate of Carolyn Beckwith, for a declaratory judgment determining that the applicable limits of liability coverage of an automobile insurance policy issued to defendants Price was $10,000. Judgment for defendants. Plaintiff appealed to the Court of Appeals. Reversed and remanded. Defendants appeal.
Affirmed by an equally divided Court.
Gault, Davison & Bowers, for plaintiff.
Milliken & Magee, for defendants Price.
Leitson, Dean, Dean, Segar & Hart, P. G, for defendant Beckwith.

Opinion:
T. G. Kavanagh, J.
(for affirmance). On March 4, 1969 defendant Eldon L. Price while driving a Volkswagen registered in the name of his wife, Velma E. Price, was involved in an accident with an automobile driven by defendant David L. Beck-with. Carolyn Beckwith was a passenger in the car driven by her husband and as a result of the accident Carolyn Beckwith sustained serious injuries.
On the date of the accident, there was in full force and effect a policy of automobile insurance issued by plaintiff, Community Service Insurance Company. This was a single policy that covered both Eldon L. Price and Velma E. Price as named insureds and afforded coverage to both a Chevrolet registered in the name of Eldon Price and the Volkswagen registered in the name of Velma Price. The limits of coverage were inter alia $10,-000 for injuries or death to one person, and $20,-000 with respect to two or more persons injured as a result of an accident.
Plaintiff insurance company brought an action in Genesee Circuit Court (John W. Baker, J.) for a declaratory judgment to determine the applicable limits of coverage available to defendants.
The trial court held that the Volkswagen driven by Eldon Price, but registered to Velma Price was, within the policy, a "nonowned" automobile with respect to Eldon Price. Furthermore, because of certain ambiguities within the policy, the trial court ordered the plaintiff insurance company to provide $10,000 as primary liability applicable to the Volkswagen as a described automobile owned and insured by Velma Price and an additional $10,000 as secondary liability applicable to Eldon Price as a named insured driving a "nonowned" automobile.
The Court of Appeals (Fitzgerald, J.) reversed and held that the maximum coverage was $10,000 in accordance with its construction of various provisions within the policy.
We affirm the Court of Appeals, for while it may be said that an ambiguity exists with regard to the definition of "nonowned" automobile, there is no ambiguity with regard to the definition of "owned automobile".
In such circumstance we look first to the definition of "owned automobile" to determine if the contract provides coverage. Finding that it does provide coverage while driving an "owned automobile" there is no occasion to determine what coverage the contract provides in relation to a "non-owned automobile".
Both the Volkswagen and the Chevrolet were described in the amended declarations which formed a part of the policy. A premium charge for each automobile indicated that bodily injury in the amount of $10,000 for one person was afforded to each automobile. The definition of "owned automobile" under PART I — LIABILITY of the policy was:
"a private passenger, farm or utility automobile described in this policy for which a specific premium charge indicates that coverage is afforded, ."
Under the terms of the policy any automobile described in the policy for which a premium was paid was an "owned" automobile as to any and all of the named insureds listed on the policy. Therefore, Eldon Price, while driving the Volkswagen on March 4, 1969, was driving an "owned" automobile with respect to the policy of insurance. Because Eldon Price was driving an "owned" automobile, the insurer's limit of liability is that which is stated in the policy as to "owned" automobiles, that is, $10,000.
The decision of the trial court which found a limit of liability totalling $20,000, therefore, was in error. The Court of Appeals decision with respect to its finding that the Volkswagen under the terms of the policy was "owned" by Eldon Price is affirmed.
Costs to plaintiff.
Levin and M. S. Coleman, JJ., concurred with T. G. Kavanagh, J.