Opinion ID: 1191941
Heading Depth: 1
Heading Rank: 4

Heading: Whether the Carters' Loss Is Covered by the Policy

Text: {5} The terms and conditions of the Policy are clear. Coverage S of the Policy states in pertinent part: We will pay for any direct and accidental loss of, or damage to, your insured vehicle and its equipment not caused by collision or rollover. Loss or damage from missiles, falling objects, theft, collision with animals, or accidental glass breakage are comprehensive losses. (Boldface type in original.) We have no difficulty determining from this language that the Carters' loss of their vehicles by repossession was a covered loss. First, use of the word any suggests that every loss of a vehicle is covered except those that are specifically excluded, such as collision or rollover losses. Second, we note that outside of this provision Western took the trouble of attaching additional exclusions to the automobile section of the Policy; for example, Under Coverages, [sic] R, S, and T, loss caused by recall of an insured vehicle. Loss by an innocent purchaser through repossession is not so excluded. Third, the fact that Western labeled the Coverage S provision of the Policy Comprehensive indicates that the enumerated covered losses (from damage by missiles, etc.) are simply illustrative and not exhaustive. (Boldface type in original.) {6} Based on the foregoing analysis, we hold that the Policy covered the loss of a vehicle in the circumstances presented here. A majority of courts have reached the same conclusion. See, e.g., Butler v. Farmers Ins. Co., 126 Ariz. 371, 616 P.2d 46, 48-49 (1980) (in banc); Reznick v. Home Ins. Co., 45 Ill.App.3d 1058, 4 Ill.Dec. 525, 360 N.E.2d 461, 464-65 (1977); Kast v. Citizens Mut. Ins. Co., 125 Mich.App. 309, 336 N.W.2d 18, 19-20 (1983). Cf. Smith v. State Farm Mut. Auto. Ins. Co., 231 So.2d 193, 194 (Fla.1970) (holding that insurance contract covered loss but limiting, according to the express terms of the policy, insurer's liability to reimbursement for temporary loss of use of the vehicle instead of the full purchase price of the vehicle). But see Cueto v. Allstate Ins. Co., 226 N.J.Super. 487, 544 A.2d 906, 909 (1987) (granting summary judgment for insurance company where policy only covered losses to and not of a vehicle); Sauer v. Vigilant Ins. Co., 102 Misc.2d 243, 423 N.Y.S.2d 138, 139 (N.Y.City Civ.Ct.1979) (deciding, without reprinting the disputed policy terms, that [s]uch a repossession [by the true owner]... is not covered by the insurance policy written by defendant). When presented with policy language almost identical to the language in Coverage S of the Policy in this case, the Michigan Court of Appeals found in favor of the insured, reasoning, The inclusive language implied that coverage would be granted in every case of damage to, or loss of, the vehicle except collision. Kast, 336 N.W.2d at 20. We are persuaded that the same reasoning and result apply in this case. {7} Western argues that the Carters' loss by repossession is not within Coverage S of the Policy because it was not direct and accidental. Western contends that the Carters only indirectly lost their vehicles and that their true, direct loss was the loss of their purchase money to the car thieves. We disagree with this characterization of the Carters' loss. The Carters' vehicles were physically taken from their possession and the Carters will not be able to use those vehicles again, which is sufficient in our view to constitute a direct and complete loss. {8} Western also contends that the Carters' loss was not accidental because repossession of these vehicles was a deliberate and calculated process by the true owners as well as the law enforcement agencies involved. This construction of the word accidental focuses on the intentions of the repossessing parties and agents, consequently overlooking what we believe is the rationale behind the requirement that a loss be accidental. As described by one authority in a related context, [A]mong the evils sought to be discouraged by the insurable interest requirement [in insurance contracts] is the intentional destruction of the covered property [by the insured] in order to profit from the insurance proceeds. Jay M. Zitter, Annotation, Automobile Fire, Theft, and Collision Insurance: Insurable Interest in Stolen Motor Vehicle, 38 A.L.R.4th 538, 544 (1985) (emphasis added). We interpret the use of the term accidental in the instant Policy to be aimed at preventing similar intentional destruction of covered property for evil ends. Thus, we hold that in this case it is the insured's actions and not those of third parties that are relevant in determining the meaning of accidental. Of course, preventing evildoers from profiting from their evil actions at the expense of insurance companies is as much a policy goal in the circumstances of a knowing purchase of a stolen vehicle as it is in the case of intentional destruction of property. For this reason, we further hold that Western is not liable under the Policy for payment of the Carters' claim of loss if the Carters were not innocent purchasers of the two repossessed vehicles. {9} As we discuss below, however, we express no opinion at this time as to whether the Carters did or did not innocently purchase their vehicles. Similarly, we do not determine whether the Carters had an insurable interest in their vehicles, since such a determination turns on whether they were innocent purchasers. See NMSA 1978, § 59A-18-6(B) (1984) (defining insurable interest as any ... lawful ... economic interest in the safety and preservation of the subject of the insurance) (emphasis added). Our purpose herein is solely to determine the scope of coverage set out in the Policy issued by Western to the Carters. In that regard, we do not find it necessary to formulate a comprehensive definition of the term accidental for use in cases such as this one. Rather, in the words of the Arizona Supreme Court concerning a policy provision similar to Coverage S of the Policy in this case, Suffice it to say ... that either unanticipated or unintentional occurrences are sufficient, and since repossession by an unknown owner is neither foreseeable nor deliberate, the loss to appellant must fall within the coverage of the contract. Butler, 616 P.2d at 48. {10} Citing Cueto, 544 A.2d at 908-09, and Sauer, 423 N.Y.S.2d at 139, Western insists that if the Carters had wanted protection against repossession in the event the vehicles they purchased turned out to be stolen, they should have secured title insurance. As we have noted, the insurance contract in Sauer was not reproduced in the published opinion, so we have no means of comparing it to the Policy at issue here. In Cueto, a New Jersey trial court ruled that [t]he confiscation of a vehicle by the police while enforcing the property rights of the true owner is not a risk within the expectation of a purchaser of automobile insurance. Cueto, 544 A.2d at 908. We are ill-equipped to make a similar determination regarding the expectations of purchasers of all the various automobile insurance policies issued in New Mexico. Examining the particular policy in this case, however, we cannot say that the Carters were mistaken in thinking that Coverage S embraced their claim against Western. Instead, we agree with the Appellate Court of Illinois' conclusion regarding language approximating the instant Policy: [A]nyone purchasing the comprehensive coverage offered by this policy would be justified in a belief that any loss[,] except a loss by collision or any other specific exception made in the policy, would be covered by the comprehensive provision. Reznick, 4 Ill.Dec. 525, 360 N.E.2d at 464.