Opinion ID: 2115005
Heading Depth: 1
Heading Rank: 1

Heading: Family Automobile Policy Amendment

Text: It is agreed: 1. That the definition of `owned automobile' is amended to read: `Owned automobile' means: (a) a private passenger or utility automobile described in the policy, (b) a trailer owned by the named insured, provided with respect to Part III it is described in the policy, (c) a private passenger or utility automobile or, with respect to Part III, a trailer, ownership of any of which is acquired by the named insured during the policy period, provided acquisition of such automobile or trailer is reported to the company within 30 days of the date of delivery of the automobile or trailer to the insured, and (1) the company insures all private passenger or utility automobiles or trailers owned by the named insured on the date of such delivery, or (2) it replaces a described automobile or trailer; and includes a temporary substitute automobile. The trial court found, upon the issue of ownership, that Richard, not plaintiff, was the owner of the Hudson. Further, that plaintiff     had taken no steps, nor given any notice to have said automobile covered by the insurance policy issued to him and described herein; nor did plaintiff give notice of a replacement or substitution of the Hudson automobile for the Oldsmobile automobile covered by the said policy   . In a memorandum attached to the decision the court concluded:    the fact question to be determined was whether or not the Hudson automobile, prior to the accident, had become a replacement of the insured Oldsmobile. The Court has concluded that the testimony does not support a favorable finding for plaintiff on this issue. 1-2. There is sufficient evidence to support the court's findings and decision that the Hudson at the time of the accident was in fact owned by Richard, not plaintiff, and that it did not in fact replace the Oldsmobile and, therefore, was not a replacement automobile within the contemplation of the policy provisions. We cannot agree, however, that it was not covered by the policy. We have concluded that the language of the policy defining owned automobile included the Hudson as a newly acquired additional automobile. The essentials of provision (c), which might be termed an automatic coverage for newly acquired automobiles, are: `Owned automobile' means    a private passenger    automobile    ownership    of which is acquired    during the policy period, provided acquisition of such automobile    is reported to the company within 30 days of the date of delivery of the automobile    to the insured, and    the company insures all    automobiles    owned by the named insured on the date of such delivery   . This language clearly contemplates coverage, for some period, of an automobile or automobiles in addition to the one described in the policy. The record supports a conclusion that the defendant was the insurer of all the automobiles of which plaintiff was the registered owner. The pivotal question is: What meaning should be given to the words ownership and owned selected by the defendant in these policy provisions and under the facts of this case? In construing the terms of the policy, it must be kept in mind that the public has an interest in having automobiles covered by liability insurance. [1] Further, it is well settled that any ambiguous terms of an insurance policy are to be construed in favor of the insured and against the insurer who is charged with having chosen the language of the policy. [2] In their context the terms ownership and owned are ambiguous. It is not clear whether they mean registered owner, or one having legal title to the vehicle, or simply one who may be exposed to liability as a registered owner pursuant to statutes governing motor vehicle registration and the Safety Responsibility Act. [3] Thus the policy should be construed to effect coverage if this can be done without violence to its plain language and underlying purpose. 3-4. The apparent purpose sought to be achieved by defendant in the sale of this policy was to insure plaintiff against all risks arising out of the operation of the automobile described in the policy and, in addition, any automobile he acquired to replace it, or acquires as an added automobile where defendant is the insurer of all his family automobiles. The policy is obviously designed to meet the liability insurance needs of today's two-or-more-car families who customarily trade in and replace family automobiles quite frequently. Surely it can also be said that this type of automatic insurance coverage was designed to enable insurance companies, such as defendant, to sell all of the automobile liability insurance needed by a two-car family. Premiums for the policy covering an automobile used principally by the younger members of a family are calculated accordingly. Thus the terms, as used in the provisions in question, were intended to have a broader meaning than legal title. Most likely the words as used were intended to include any interest in an automobile which might expose one to liability by reason of the use of such automobile by the insured or members of his household. It was so understood by defendant's agent who sold the policies to plaintiff according to his own testimony. Moreover, it is clear that in the suit for damages plaintiff could have been held liable for any negligent operation of the Hudson by his son under the vicarious liability provisions of the Safety Responsibility Act. [4] Liability in that suit was defeated on the issue of negligence. However, ownership in the son was a defense plaintiff could have asserted in that suit, and a finding by the jury that plaintiff was the owner for the purposes of the Safety Responsibility Act would not have been unlikely, even though the trial court reached a contrary finding under the evidence before us. Although we believe the court was correct in finding that Richard owned the Hudson, this finding cannot be taken to mean that he was the sole owner. The evidence would not support such a finding. It is undisputed the plaintiff paid the entire purchase price for the Hudson and was the registered owner. At the time policy was issued, as well as at the time of the accident, Richard was a member of his household. The evidence compels a conclusion that the interest of plaintiff in the Oldsmobile differed in no material way from his interest in the Hudson. Similarly, Richard's interest and use of both vehicles was substantially identical. It is, therefore, apparent that plaintiff had a sufficient interest in both the Oldsmobile and the Hudson to require liability insurance protection. In the light of the foregoing, we are constrained to hold that the terms ownership and owned by the named insured under the provisions of this family automobile policy include any insurable interest in the automobile described in the policy. An insurable interest exists when the named insured may be held liable for damages incident to the operation and use of such automobile. It follows that the phrase owned automobile as used in the policy included not only the Oldsmobile described in the policy but also the Hudson in which the named insured acquired an insurable interest at a time when defendant insured all automobiles for which he had legal title or any insurable interest. While the Hudson is thus to be regarded as owned by plaintiff within the meaning of the policy, we cannot agree with plaintiff that the evidence was sufficient to support a finding that it replaced the Oldsmobile and was covered by the replacement provision. The court found, and the evidence is undisputed, that the Oldsmobile was still in his possession at the time of the accident. The language of the policy appears to contemplate a replacement in fact. If such construction is correct, an intention to replace is not enough. Thus the Hudson under this record cannot be regarded as a replacement of the automobile described in the policy. Defendant asserts, and the lower court held, that notice of the acquisition of the Hudson 4 days after the accident to defendant's agent was not compliance with the notice provisions of the policy quoted above. We do not agree. The policy requires no form of notice and an oral notice is therefore sufficient. Plaintiff had 30 days within which to report such acquisition. He did so to defendant's agent well within that time even though it was subsequent to the accident. Coverage of the Hudson is, by its terms, properly characterized as automatic coverage and several cases now hold that no notice whatsoever need be given where a coverage question arises during the period in which notice is required to be given. [5] Upon argument plaintiff requested an allowance of attorney's fees for prosecuting this action and this appeal. The complaint asked for no such relief. The issue regarding such expenses was therefore not litigated and plaintiff's request must be denied. The judgment of the trial court is reversed with directions to enter judgment for the plaintiff in the sum of $1,033.35.