Opinion ID: 703882
Heading Depth: 2
Heading Rank: 2

Heading: The Automobile Policy

Text: 10 Determining whether the Automobile Policy covers the accident in question involves interpretation of several related provisions. The Automobile Policy's broad coverage provision provides that Northern will pay damages for 'bodily injury' or 'property damage' for which any 'insured' becomes legally responsible because of an auto accident and settle or defend against suits seeking such damages. Without more, this language, fairly read, seems to cover Mary Brabender with respect to the accident in question since Paul is seeking to hold her legally responsible under a respondeat superior theory for injuries he received in a car accident. 11 This does not settle the matter, however. Exclusion B of the Automobile Policy states that coverage is not provided for the ownership, maintenance or use of ... [a]ny vehicle, other than 'your covered auto,' which is ... owned by any family member. Because the accident in this case arose out of the use of Mary Ellen Brabender's car--a car which was owned by a family member and not the Automobile Policy's covered auto--this exclusion seems to deny coverage in this case. There is an exception to Exclusion B, though, which provides that this exclusion (B.3.) does not apply to your maintenance or use of any vehicle which is ... owned by a 'family member'  (emphasis added). Brabender's argument is that the term your ... use in this exception is not limited to physical operation of the car by the insured; it includes physical operation by the insured's employee, in this case Ahlbrand, at the direction of and for the purposes of the insured. 12 In rejecting this argument, the district court noted that the terms you and your are defined in the Automobile Policy to refer only to the named insured and the named insured's spouse, and does not include agents of the named insured. Thus, the district court concluded, an agent's use of a family member's automobile does not fall within the exemption to Exclusion B. This reasoning reflects a misunderstanding of plaintiff's argument. Brabender's position is not that your includes the insured's agent, but rather that she was in fact using the car when the accident occurred. 13 This position is not without some support in New York caselaw. When interpreting N.Y. Vehicle & Traffic Law Sec. 59, which imposes liability on a car's owner for negligent operation of the car by any person legally using or operating it with permission, the New York Court of Appeals has held that a person can use a car even though not actually driving it. Arcara v. Moresse, 258 N.Y. 211, 213-14, 179 N.E. 389, 389 (1932) (Nephew of the car's owner was still using the car even though he had turned the wheel over to his friend.); see also Grant v. Knepper, 245 N.Y. 158, 165, 156 N.E. 650, 652 (1927) (Truck driver did not abandon the car or its use when he surrendered to another the guidance of the wheel.). 14 In the insurance contract context, several courts have held that a person may operate a vehicle even if another is behind the wheel. See G. Couch, Cyclopedia of Insurance Law Second 45:45 (Rev.Ed.1981) (describing as the majority view that actual physical driving or manual control of the automobile is not necessary to constitute 'operation' of the vehicle by the insured). For example, in Neel v. Indemnity Ins. Co. of North America, 122 N.J.L. 560, 6 A.2d 722 (1939), the New Jersey Supreme Court held that a customer was operating a car for the purposes of an automobile dealer's insurance policy when the customer's son test-drove the car alone at the father's request. Id., 6 A.2d at 724. To the extent that use of a car, denoting employment for some purpose of the user, Indemnity Ins. Co. of N. Am. v. Metropolitan Casualty Ins. Co., 33 N.J. 507, 166 A.2d 355, 358 (1960), is broader than operation, these cases provide authority for Brabender's contention that she was using the car when Ahlbrand took her son to visit her at her request. 15 On the other hand, in none of the cases cited above was the term use (or operate) given quite as broad a meaning as Brabender advocates in this case. In Neel, the customer specifically requested that his son drive the particular car at issue for the purpose of evaluating its fitness for purchase. Neel, 6 A.2d at 723. In Arcara, the court found that since the owner's nephew had exclusive permission to use the car, had driven it for the duration of the trip, and was in the passenger's seat at the time of the accident, he was still the master of the ship. Arcara, 258 N.Y. at 213-14, 179 N.E. at 389 (quotations omitted). Here, in contrast, the plaintiff neither told Ahlbrand which car to drive nor was she present herself. A number of lower state court cases suggest that, in these circumstances, Brabender was not using the car. See, e.g., Electric Ins. Co. v. Boutelle, 122 A.D.2d 332, 332, 504 N.Y.S.2d 577, 578-79 (1986) (In the common meaning of the phrase 'using [the] covered vehicle', some purposeful exercise of control is required by the person claiming to be covered under the policy.). 16 Neither the contract itself nor any other evidence submitted by the parties permits us to resolve the meaning and scope of the term your ... use. See generally Newin Corp. v. Hartford Accident & Indem. Co., 62 N.Y.2d 916, 919, 479 N.Y.S.2d 3, 5, 467 N.E.2d 887, 889 (1984) (While the rights and obligations of parties under insurance contracts should be determined by the specific language of the policies, if the language of the policy is susceptible of two reasonable meanings, the parties may submit extrinsic evidence of their intent at the time of contracting. (citations omitted)). Both constructions advocated by the parties are equally reasonable. It is plausible that Northern intended to cover the actions of employees acting at the insured's behest under its automobile policies and may have factored the attendant risks into its premium calculations. However, it is equally plausible, especially in light of the fact that both Ahlbrand and Mary Ellen carried separate insurance, that the Automobile Policy was intended to cover Mary Ellen's car only if the plaintiff herself drove it. After considering the evidence submitted in support of both positions, we are unable to resolve the ambiguity. 17 In an insurance contract, where there is ambiguity as to the existence of coverage, doubt must be resolved in favor of the insured and against the insurer. Lavanant v. General Accident Ins. Co. of Am., 79 N.Y.2d 623, 629, 584 N.Y.S.2d 744, 747, 595 N.E.2d 819, 822 (1992). This rule is particularly applicable where, as here, the ambiguity is contained within an exclusion clause, see Breed v. Insurance Co. of N. Am., 46 N.Y.2d 351, 353, 413 N.Y.S.2d 352, 354, 385 N.E.2d 1280, 1282 (1978), and the insured had little or no input into the terms of the agreement, cf. United States Fire Ins. Co. v. General Reinsurance Corp., 949 F.2d 569, 574 (2d Cir.1991) (noting that the touchstone for applying this rule of construction is the insured's lack of sophistication). See Sea Ins. Co. v. Westchester Fire Ins. Co., 51 F.3d 22, 26 & n. 4 (2d Cir.1995). Northern certainly could have defined the term use or specified whether coverage extends to agents and employees of the insured. Because it did not, and because we cannot conclude as a matter of law that [the insurer's] interpretation is the only fair construction of the policy language at issue, Kula v. State Farm Fire & Casualty Co., 212 A.D.2d 16, 628 N.Y.S.2d 988, 990 (1995), we construe the term your use in Brabender's favor and hold that the accident in question was covered by the Automobile Policy. See Thomas J. Lipton, Inc. v. Liberty Mut. Ins. Co., 34 N.Y.2d 356, 361, 357 N.Y.S.2d 705, 708, 314 N.E.2d 37, 39 (1974). 18 We note that this result can be more efficiently accommodated in the market place for insurance than the contrary one. Sophisticated insurers are in a better position to learn of this decision and renegotiate the terms of coverage than are policy holders who, if we were to deny coverage, would likely be unaware that they are not covered under circumstances similar to those in this case until such circumstances befall them. 19 Accordingly, we reverse the judgment of the district court as to this point and direct that plaintiff's summary judgment motion be granted in relevant part.