Case Name: Jack W. FOSTER, Betha Foster, Rodney Scott Baldwin and Deborah Lynn Baldwin, Plaintiffs, Respondents, Cross-Appellants, v. Dave JOHNSTONE, individually and as an agent for the Prudential Insurance Company, Prudential Property and Casualty Insurance Company, a corporation, The Prudential Insurance Company of America, a corporation and Does III, IV and V, Defendants, Appellants, Cross-Respondents
Court: Idaho Supreme Court
Jurisdiction: Idaho
Decision Date: 1984-06-07
Citations: 107 Idaho 61
Docket Number: No. 14774
Parties: Jack W. FOSTER, Betha Foster, Rodney Scott Baldwin and Deborah Lynn Baldwin, Plaintiffs, Respondents, Cross-Appellants, v. Dave JOHNSTONE, individually and as an agent for the Prudential Insurance Company, Prudential Property and Casualty Insurance Company, a corporation, The Prudential Insurance Company of America, a corporation and Does III, IV and V, Defendants, Appellants, Cross-Respondents.
Judges: DONALDSON, C.J., and BAKES, J., concur.
Reporter: Idaho Reports
Volume: 107
Pages: 61–73

Head Matter:
685 P.2d 802
Jack W. FOSTER, Betha Foster, Rodney Scott Baldwin and Deborah Lynn Baldwin, Plaintiffs, Respondents, Cross-Appellants, v. Dave JOHNSTONE, individually and as an agent for the Prudential Insurance Company, Prudential Property and Casualty Insurance Company, a corporation, The Prudential Insurance Company of America, a corporation and Does III, IV and V, Defendants, Appellants, Cross-Respondents.
No. 14774.
Supreme Court of Idaho.
June 7, 1984.
Rehearing Denied Aug. 30, 1984.
Willis E. Sullivan, III, and David W. Cantrill, Cantrill, Skinner & Sullivan, Boise, for defendants, appellants, cross-respondents.
Ellison M. Matthews, Matthews & Wilson, Chartered, Boise, for plaintiffs, respondents, cross-appellants.

Opinion:
HUNTLEY, Justice.
Dave Johnstone (Johnstone), sales agent for the Prudential Insurance Company (Prudential), and Prudential Insurance appeal from jury verdicts in favor of Rodney and Deborah Baldwin, insureds under an automobile insurance policy with Prudential. The action arose out of a denial of policy coverage by Prudential for liability incurred by Deborah Baldwin when she collided with another vehicle while driving her father's truck.
About the 10th of February, 1976, the Baldwins purchased an automobile insurance policy from Prudential. Agent John-stone went to the Baldwins' home, where the policy and its coverage were discussed. It is alleged by the Baldwins that John-stone, upon being specifically questioned whether the policy would cover "any non-owned vehicle" the Baldwins might be driving, assured the Baldwins that it would. Johnstone testified he did not remember being asked if the coverage extended to any non-owned vehicle, but he did outline the basic coverage provisions for non-owned automobiles, namely that the policy "would cover them for any non-used [sic] automobile that they might borrow in case of breakdown or if they had to use somebody else's vehicle for a non-business type use."
About a year-and-a-half after they purchased the policy, Baldwins formed a partnership with Deborah Baldwin's parents, Mr. and Mrs. Foster, to go into the manure-spreading business. Each couple contributed a truck. The Baldwins' truck was not insured under their policy with Prudential. Baldwins owned another truck, also insured under a separate policy, which Rodney Baldwin used in his primary occupation of hauling gravel.
On October 27, 1978, Deborah Baldwin was working with her father in the partnership operation. They were spreading manure with the truck owned by her father. After the day's work was finished, Mr. Foster asked Deborah to take the truck back to his house so that he could have it serviced over the weekend. On the way, Deborah went through a stop sign and collided with another car. The driver of the other car was severely injured, and brought suit against the Fosters and Baldwins. As primary insurer of the Foster vehicle, Farmers Insurance participated in a settlement agreement to the limits of its policy. Baldwins sought recovery from Prudential for $45,000.00 they were required to pay under the terms of the agreement, but Prudential denied coverage.
The basis for Prudential's denial of coverage, and the focus of this action, is the policy's limitations on its non-owned vehicle coverage. Policy coverage for non-owned automobiles is restricted to automobiles "not owned by or furnished for the regular use of either the named insured or any relative, other than a temporary substitute automobile." Coverage is further restricted by an exclusion in the policy for any "non-owned automobile . maintained or used by any person while such person is employed or otherwise engaged in . (2) any . business or occupation of the insured____" Prudential has maintained that there is no coverage because first, Fosters' truck was furnished for Deborah Baldwin's regular use (and consequently does not qualify as a "non-owned automobile"), and second, the truck was used in the Baldwin-Foster manure-hauling business.
After trial, the jury returned verdicts in favor of the Baldwins on the basis of coverage under the policy, and estoppel. We will first discuss the errors alleged with respect to the verdict based on coverage of the insurance policy.
I. Policy Coverage
Prudential contends that it was error for the trial court to find the insurance contract ambiguous as a matter of law. Whether language contained in an insurance policy is ambiguous is a question of law to be determined by the trial judge. Clark v. St. Paul Property & Liab. Ins. Cos., 102 Idaho 756, 639 P.2d 454 (1981). However, Prudential contends that the language in question in the instant case is not ambiguous. We agree. The particular language in question is that which defines non-owned automobile as an automobile "not owned by or furnished for the regular use of . the named insured," and also that language which excludes from coverage any non-owned automobile which is "maintained or used" by anyone engaged in "any . business or occupation of the insured____"
Coverage for non-owned automobiles under policy provisions similar to the one at issue has been a much litigated aspect of insurance law, particularly with respect to the term "regular use." See 83 A.L.R.2d 926 (1962); 86 A.L.R.2d 937 (1962); 8 A.L. R.4th 387 (1981). Respondents have cited several cases in support of their contention that the "regular use" language is ambiguous. To the extent that the cited cases stand for that proposition, and most do not, they represent a minority view. The overwhelming weight of authority supports the view that "regular use" and other similar language limiting the extent of coverage provided through non-owned vehicle clauses is not ambiguous. See Dairyland Ins. Co. v. Ward, 83 Wash.2d 353, 517 P.2d 966, 971-72 (1974) (Hamilton, J., dissenting; some 35 cases cited in support of the view, and only two cited as holding the language ambiguous); DiOrio v. New Jersey Mfrs. Ins. Co., 79 N.J. 257, 398 A.2d 1274 (1979). See also Highlands Ins. Co. v. Universal Underwriters Ins. Co., 29 Cal.App.3d 171, 154 Cal.Rptr. 683 (1979); Horridge v. Cooney, 405 So.2d 1276 (La.App.1981); Ins. Co. of North America v. Coffman, 52 Md.App. 732, 451 A.2d 952 (1982); Grinnell Mut. Reinsurance Co. v. Scott, 628 S.W.2d 355 (Mo.App.1981); Spaulding v. Concord Gen. Mut. Ins. Co., 122 N.H. 515, 446 A.2d 1172 (1982); Tollison v. Reaves, 277 S.C. 443, 289 S.E.2d 163 (1982); Benjamin v. Plains Ins. Co., 650 F.2d 98 (5th Cir.1981) (applying Texas law).
Respondents contend that "regular use" is ambiguous under our holding in Moss v. Mid-America Fire and Marine Ins. Co., 103 Idaho 298, 647 P.2d 754 (1982). The Moss case, however, involved an entirely different policy than the one here at issue. Mr. Moss had purchased commercial hauling coverage in connection with his farming operation. The policy included a "radius endorsement" which rendered the liability coverage ineffective if Mr. Moss made "regular or frequent" business trips outside a 300-mile radius of his home. The policy we are asked to construe today, however, is a common family automobile policy, and the particular language at issue is the standard version of "drive other cars" insurance coverage. That language has remained virtually unchanged for three decades. See Miller v. Farmers Mut. Automobile Ins. Co., 179 Kan. 50, 292 P.2d 711 (1956). See also DiOrio v. New Jersey Mfrs. Ins. Co., supra, 398 A.2d at 1277. There is a substantial body of law construing non-owned vehicle provisions similar or identical to the language at issue in the present case. Almost without exception courts have recognized the validity of these policy provisions. In the words of one court:
It is well established that the purpose of this provision creating an exception to coverage of non-owned vehicles in automobile insurance policies is to make certain that the insured properly pays premiums on all of the vehicles which are regularly used and therefore are covered by the policy. The non-owned exception, as well as other exceptions involving replacement cars, rental cars, etc., are designed as a convenience to the insured to enable coverage in the case of occasional and sporadic use of such vehicles. To cover a non-owned vehicle regularly used by an insured would cause the insurance company to have to insure vehicles for which the insured did not pay insured [sic] premiums. Benjamin v. Plains Ins., supra, 650 F.2d at 100.
Moreover, while the Court held in Moss that the phrase "regular or frequent" was ambiguous, the Court's determination was primarily concerned with the proper interpretation of such language in light of the facts in that case. The Court was persuaded of a need to submit to the jury the question of whether Mr. Moss's trips outside the 300-mile radius were "regular or frequent." The Moss Court quoted from State Farm Mut. Auto Ins. Co. v. Gudmunson, 495 F.Supp. 794, 797 N. 4 (D.Mont.1980):
"I think that the variants in the meaning of common words should be considered by the finder of fact — normally a jury. Words used in an insurance policy should be given the meaning which the community would generally give them. A jury chosen from the community is probably better equipped to apply community meanings than is a judge. Any effort to apply meanings as a matter of law simply results in the creation of endless distinctions or in a uniformity that is achieved by squeezing sets of facts into molds carefully tailored for other, but slightly different, sets of facts." 103 Idaho at 301-302, 647 P.2d at 757-58.
The Moss Court cited a number of cases wherein courts have held that the terms "regular" or "frequent" are not ambiguous but nevertheless present questions of fact to be decided by the trier of fact. 103 Idaho at 301-302, 647 P.2d at 757-58. This Court's holding in Moss, however, may have seemed to imply that under Idaho law the question of proper application of such provisions may only be submitted to the finder of fact upon a showing of ambiguity. Indeed, that may seem to be the meaning of the Court's statement in Clark v. St. Paul Property & Liab. Ins. Cos., 102 Idaho 756, 757, 639 P.2d 454, 455 (1981), that "only if a contract is found to be ambiguous does its interpretation and meaning become a question of fact____" To read such language as precluding fact-finding or jury involvement absent a finding of ambiguity would be to overlook the distinction between questions of interpretation of policy language and questions of application of policy language to specific situations. The latter must always necessarily be questions of fact. As the Supreme Court of Illinois stated:
We have considered defendant's argument that the term "frequent or regular use" is ambiguous and that any ambiguity must be construed in favor of the insured. This rule, however, applies only when the language of the policy is ambiguous, and while the determination of whether the non-owned automobile was available for the frequent or regular use of the insured presents a question of fact, that created no ambiguity requiring construction of the language of the policy. State Farm Mut. Automobile Ins. Co. v. Differding, 69 Ill.2d 103, 12 Ill. Dec. 739, 370 N.E.2d 543, 545 (1977).
Thus, while it is true that questions of contract interpretation and meaning may only become questions of fact where there has been found to be ambiguity in the contract, Clark v. St. Paul Property, supra, questions of application of policy provisions to the particular circumstances of each case are questions of fact, and must be decided on a case-by-case basis, whether or not the provisions themselves are found to be ambiguous.
We cannot accept Respondents' argument that the words "furnished for the regular use of . the named insured" are ambiguous because they admit of more than one meaning. Application of such a rigid standard to the provisions of insurance policies would render most language ambiguous. The language of standardized contracts must necessarily be somewhat general, in anticipation of varying circumstances and facts. The court in Commercial Standard Ins. Co. v. Haley, 282 F.Supp. 16, 20 (S.D.Iowa 1968), stated:
The Court does not feel that there is any room for judicial emasculation of the terms 'regular' or 'frequent.' The ordinary man would have no difficulty in interpreting words of such common usage. 'Regular,' as used in the context of the policy in question, connotes a uniform or recurring course of action or conduct. The term 'frequent' usually portrays the concept of " 'Often to be met with, happening at short intervals, often repeated or recurring, 'as frequent visits.' " Weaver v. National Fidelity Ins. Co., 377 S.W.2d 73, 75 (Ky. [1963]). Any ambiguities which could be said to be generated by the use of those terms in the policy derive from the fact that their inherent nature necessitates a factual consideration in each case to determine whether the use was 'regular' or 'frequent.' Ambiguities in that sense have apparently led some authorities to approach the factual application of the terms to the manner and extent of use of a commercial vehicle in a liberal spirit. See, e.g., Weaver, supra; Indiana Rolling Mill Bailing Corp. v. National Automobile and Cas. Ins. Co., 141 F.Supp. 831 (D.Ind. [1956]), aff'd. 240 F.2d 74 (7 Cir. [1957]); Bruins v. Anderson, 73 S.D. 620, 47 N.W.2d 493 [1951]. But no court has found that the terms themselves need clarification.
See Moss, supra, 103 Idaho at 305-306, 647 P.2d at 781-82 (McFadden, J., dissenting).
As to the exclusion for non-owned automobiles maintained or used in any business of the insured, the same analysis applies. The words "maintained or used" and "business or occupation" have common meanings readily understood by the average person. To hold that they are ambiguous merely because they are susceptible of various applications depending upon the particular facts of each situation would be error. The insurer would have difficulty being more specific, unless it attempted to anticipate specific factual situations and tailor its exclusionary language to each anticipated situation, an obviously impossible task. We hold that the language of the "business or occupation" exclusion to non-owned automobile coverage, like the non-owned vehicle definition just discussed, is unambiguous as a matter of law, and the interpretation of those provisions as applied to the circumstances of the instant case presents questions of fact. Accordingly, it was error for the district court to admit testimony of the parties regarding their actual intentions at the time the insurance contract was entered into as evidence of the meaning of the terms "furnished for regular use" or "maintained or used" in any "business or occupation" of the insured.
It should be noted that whether the truck driven by Deborah Baldwin was an automobile provided for her "regular use" within the meaning of the policy, and if not, whether its use is subject to the "business or occupation" exclusion, although they are primarily questions of fact to be decided in light of the circumstances of this particular case, involve to some degree questions of law. The dividing line between legal and factual questions is not always a clear one, and often courts have seen fit to characterize certain questions as "mixed questions of law and fact." See, e.g., Long v. Ins. Co. of North America, 670 F.2d 930 (10th Cir.1982); Central Nat. Life Ins. Co. v. Fidelity and Deposit Co. of Maryland, 626 F.2d 537 (7th Cir.1980); Humphrey v. Boschung, 287 Ala. 600, 253 So.2d 769 (1971); Schwartz v. Helms Bakery Ltd., 67 Cal.2d 232, 60 Cal.Rptr. 510, 430 P.2d 68, 71 n. 3 (1967); Deutsch v. Shein, 597 S.W.2d 141 (Ky.1980); Millonig v. Bakken, 112 Wis.2d 445, 334 N.W.2d 80 (1983). Where reasonable minds could differ as to the determination of a mixed question of law and fact, the ultimate answer must come from the jury. But the court should instruct the jury in the legal standards which should guide their determination. See State ex. rel. Moretz v. City of Johnson City, 581 S.W.2d 628 (Tenn.1979) (citing 75 Am.Jur.2d Trial § 323, and Rucker v. Spalding, 80 U.S. (13 Wall.) 453, 20 L.Ed. 515 (1872)). See also Weiner, The Civil Jury Trial and the Law-Fact Distinction, 54 Calif.L.Rev. 1867 (1966).
In Farm Bureau Mut. Auto. Ins. Co. v. Marr, 128 F.Supp. 67, 70 (D.N.J. 1955), the court held that a provision similar to the "regular use" clause in the present case presented a question to be determined upon examination of the facts in the particular case before the court. The court discussed a number of guidelines set out by other courts as useful in determining whether an automobile had been furnished for the regular use of the insured, and the court provided several of its own "signposts" for such a determination:
1. Was the use of the car in question made available most of the time to the insured?
2. Did the insured make more than mere occasional use of the car?
3. Did the insured need to obtain permission to use the car or had that been granted by blanket authority?
4. Was there a purpose for the use of the car in the permission granted or by the blanket authority and was it being used for such purpose?
5. Was it being used in the area where such car would be expected to be used?
Where, as here, the factual determination of whether particular policy provisions apply to the circumstances of the individual insured involves application of commonly-used, standardized insurance policy language, the district court should instruct the jury as to any legal standards established in applying such provisions.
II. Estoppel
Prudential contends the district court erred when it submitted the question of estoppel to the jury without proper instructions. The doctrine of estoppel as applied to insurance contracts was described in Lewis v. Continental Life and Accident Co., 93 Idaho 348, 351, 461 P.2d 243, 246 (1969):
[Wjhere a policy holder is induced to enter into [a] contract in reasonable reliance on promises of or agreements with the soliciting representative of that insurance company thereby leaving the insured person or property otherwise unprotected, and the company profits from that change of position, that the insurance company is estopped to deny the liability for which it actually contracted by raising provisions from its own printed policy form. (Emphasis added.)
We have drawn attention to the words "reasonable reliance" in the above discussion of the elements of estoppel because it is in this area where we find the district court's instructions to the jury flawed. While it is true that the instructions did contain language similar to that quoted above, the elements of estoppel as applied in insurance contract cases were not separately set out, and no instruction was given on the meaning of the legal terminology "reasonable reliance." Taken together, the instructions could easily suggest to the jury that it was necessary only to find a representation of coverage and a reliance on that representation in order for the insurance company to be estopped from denying coverage according to the terms of its policy. Because the court's instructions to the jury misrepresented the law, and failed to set out with clarity the requisite elements for the jury to find estoppel, the jury verdict based on the legal doctrine of estoppel must be reversed and the case remanded for a new trial.
On remand the jury should be instructed that the Baldwins' reliance on agent Johnstone's oral representations must have been "reasonable." While some jurisdictions have held that an insurer can only be estopped from denying coverage where the insured has not received a copy of the policy before the loss occurs, see, e.g., Gen. Ins. Co. of America v. Truly Nolen of America, Inc., 136 Ariz. 142, 664 P.2d 686 (Ariz.App.1983), that is not the law in Idaho. However, where facts exist which tend to indicate the insureds should have been aware that the policy excluded coverage contrary to the representations of the agent, the trier of fact should consider those facts as bearing on the issue of reasonableness. In the present case it appears the jury had no opportunity to consider the length of time which had elapsed since the policy was received and before the accident occurred (over two years) and to what extent the Baldwins had opportunities to verify the coverage under the policy. It is certainly not the law in Idaho that an insured has no obligation to read his policy, and may with confidence rely on subjective impressions he may have obtained in talking with an agent prior to entering into an insurance contract. Moreover, there are some types of policy coverage or exclusions which have become so common in certain areas of insurance law as to be nearly identical in wording and function in virtually all comparable insurance policies. In determining the reasonableness of an insured's reliance on an agent's oral representations, consideration should be given to the type of policy involved, and the likelihood of the coverage existing in light of industry norms and common experience.
One of the factors mentioned in Lewis, supra, leading to a determination of estoppel is an oral promise or agreement upon which the potential insured relies and is thereby left unprotected (absent estoppel). Supposing the Baldwins were made aware of the policy's limitations on coverage for non-owned vehicles and consequently decided to look elsewhere for automobile liability insurance which would cover them in "all non-owned vehicles," it is unlikely they could find a company which would insure them as to all non-owned vehicles they might operate, without any limitation as to use whatsoever. A company that would issue such a policy could not stay in business long. A person could insure several cars for the price of one simply by allowing a relative or employer, etc. to hold title. If the technicality of "ownership" were the only obstacle to a person's being able to include other vehicles on his single-premium policy, companies would end up insuring large numbers of automobiles for no additional payment. It is therefore arguable whether the Baldwins were left "unprotected" by agent John-stone's representations and inducements to purchase the Prudential policy when it is doubtful they could have obtained the type of coverage they hoped to receive anywhere in the industry. Nevertheless, it is possible that Johnstone represented Prudential's coverage of non-owned vehicles as something better than the industry norm, or that it would cover uses outside of mere incidental or irregular use, and that the Baldwins anticipated something less than limitless coverage of all non-owned vehicles, irrespective of nature or extent of use (which "reliance" would seem to be unreasonable, as a matter of law). In any case, Johnstone's representations and the Baldwins' reliance, and the reasonableness of that reliance, present questions of fact for the factfinder, and must be resolved on remand.
The judgment in favor of respondents Baldwins' and Fosters is reversed and remanded for a new trial consistent with the foregoing opinion. We do not reach the issue of punitive damages. Costs to appellants; no attorney fees.
DONALDSON, C.J., and BAKES, J., concur.