Court Opinion

ID: 9748373
Source: CourtListenerOpinion
Date Created: 2023-08-27 16:00:48.044237+00
Date Added: 2024-06-11T07:25:34.896408
License: Public Domain

MARLER, J.
I dissent.
The majority refuses to enforce the clause of the insurance contract limiting the coverage of permissive users of the insured automobile on the grounds the clause is inconspicuous and unclear, and defeats the reasonable expectations of the insured.
The majority applies the requirements of conspicuity and clarity without explaining why it applies to the clause in question. Insurance contracts are subject to rules of construction and interpretation which are different from ordinary contracts. Usually being characterized as adhesion contracts, all ambiguities are interpreted in favor of the insured. (Ponder v. Blue Cross of Southern California (1983) 145 Cal.App.3d 709, 718 [193 Cal.Rptr. 632].) There are no ambiguities here. The clause in question is quite precise in its meaning.
*1554However, there are special rules for the enforcement of clauses which are exclusions from coverage.1 Such clauses to be given effect must be “conspicuous, plain, and clear” (Ponder v. Blue Cross of Southern California, supra, 145 Cal.App.3d at p. 719). These requirements, however, do not apply unless the exclusion disappoints the reasonable expectations of the insured. Some authority indicates it is not entirely clear that such is the rule. (National Auto. & Casualty Ins. Co. v. Stewart (1990) 223 Cal.App.3d 452, 461 [272 Cal.Rptr. 625]; Ponder v. Blue Cross of Southern California, supra, at pp. 720-721.) However, it makes no sense to require a clause to be conspicuous, plain and clear in instances where the exclusion does not defeat the reasonable expectations of the insured. The majority views the issue of reasonable expectations of the insured as coterminous with the issue of whether the limitation is conspicuous, plain and clear, i.e., if the limitation is not conspicuous, plain and clear it defeats the reasonable expectations of the insured. However, this puts the cart before the horse. The requirement of a limitation being conspicuous, plain and clear does not arise unless enforcement of the limiting clause defeats the reasonable expectations of the insured. (See Ponder v. Blue Cross of Southern California, supra, 145 Cal.App.3d at p. 719.)
If a reasonable insured would not care if the exclusion or limiting clause applies, then such insured is not being deprived of his reasonable expectations of coverage. Such is the case here. Coverage for permissive users is included in automobile insurance policies because such coverage is required by Insurance Code section 11580.1, not because it is sought by a purchaser of insurance. That section further allows an insurance company to limit such coverage to the amount required by the financial responsibility law. It does not appear that an insured would reasonably expect high limits of coverage for an unknown parade of future permissive users regardless of their driving records or other factors involving increased risk. Persons buying insurance do so primarily to protect themselves and their families, not to gratuitously provide protection for others to whom they owe no duty. Neither are they motivated to provide insurance that provides benefit only to the permissive user and the victim of his negligence and no benefit to the insured.
An insurance company is entitled to limit the coverage in its policy as long as the limitation conforms to the law and is not contrary to public policy. (National Auto. & Casualty Ins. Co. v. Stewart, supra, 223 Cal.App.3d at p. 461; Public Employees Ins. Co. v. Mitchell (1985) 173 Cal.App.3d 814, *1555817 [219 Cal.Rptr. 129].) The policy coverage and its limitation were expressly permitted by statute.
I would affirm.2
Respondent’s petition for review by the Supreme Court was denied April 3, 1992. Panelli, J., Baxter, J., and George, J., were of the opinion that the petition should be granted.

Though it is not clear whether clauses limiting coverage are subject to the same rules as clauses excluding coverage, I need not reach that issue here, but for purposes of argument assume so.

I do not discuss the other theories of plaintiff, i.e., that the permissive driver was a member of the insured’s household and that the defendant is estopped to deny coverage. I find neither contention to be meritorious.