Court Opinion

ID: 9480308
Source: CourtListenerOpinion
Date Created: 2023-08-05 07:44:29.722443+00
Date Added: 2024-06-11T17:47:36.523055
License: Public Domain

McMILLIAN, Circuit Judge,
dissenting.
I respectfully dissent. Because I agree with the magistrate that the contract language is unambiguous when read as a whole, I would affirm.
While the majority correctly states the applicable law of contract interpretation, it is worth repeating here. When deciding whether a particular clause in a contract is ambiguous we must consider the entire contract. Continental Casualty Co. v. Didier, 301 Ark. 159, 783 S.W.2d 29, 32 (1990) (Didier). This is so because it is impossible to give effect to the intent of the parties by focussing only on a single word or phrase and ignoring what is contained within the four corners of the document. See id.; see also Pate v. United States Fidelity & Guar. Co., 685 S.W.2d 530, 532 (Ark.App.1985) {Pate). Although an ambiguous insurance policy is to be interpreted in favor of the insured, every effort must be made to give effect to the intent of the parties. Didier, 783 S.W.2d at 32. An ambiguity exists only if the provision is susceptible to two equally reasonable interpretations. Pate, 685 S.W.2d at 532. While the provision standing alone may be susceptible to different interpretations, an examination of the entire policy may reveal that only one interpretation is reasonable. Id. When that happens the reasonable construction must be followed, and the doctrine calling for the resolution of ambiguities in favor of the insured is inapplicable. See Didier, 783 S.W.2d at 32; Pate, 685 *1361S.W.2d at 532 (interpreting exclusion clauses against the insured).
The magistrate held that the language in the policy referring to the insured vehicle as a “recreational vehicle” used for “recreational purposes” removes any ambiguity in the clause excluding coverage while the vehicle is used as a “permanent residence.” The magistrate concluded that the contract as a whole indicates that the parties intended to exclude coverage while the vehicle is used as a principal abode, as it was in this case. The majority, on the other hand, holds that the exclusion clause is latently ambiguous and that the references in the policy to “recreational purposes” and “recreational vehicle” shed no light on the ambiguous language. I disagree with the majority. Admittedly, it is difficult to discern from the term “permanent residence” whether the exclusion encompasses use of the insured vehicle as a residence for a fixed, five-month period.1 However, I believe that the answer can be found elsewhere in the contract. In my view, the majority, in rejecting the significance of language found elsewhere in the contract, too readily turns to the canon of construction resolving ambiguities against the drafter in favor of the insured.
The insurance contract at issue is entitled “Recreational Vehicle Insurance Policy” and covers damages resulting from a “recreational vehicle accident.” It specifically excludes coverage “while ‘[the insured’s] covered recreational vehicle’ is used as a permanent residence.” The policy establishes five classes of covered recreational vehicles. The Nortons’ vehicle was categorized as a Class IV Recreational Vehicle which the policy defines as “a trailer that is under 35 feet in length and is designed to be towed by a private passenger car, station wagon, van or pickup, provided such vehicle is equipped with living facilities and is used for recreational purposes.” 2 After examining the exclusion provision in the context of the entire policy, including the definition of a Class IV vehicle, I am convinced that the exclusion encompasses use of the vehicle as a residence for a fixed, five-month period.
The majority expresses concern that reliance on the language referring to “recreational purposes” and “recreational vehicle,” which is mostly found in the definitions section of the policy, attributes exclusionary force to purely definitional provisions. The majority also believes that these references have no bearing on the scope of coverage afforded the vehicle and that to attach any significance to them is a forced construction of the insurance policy. I disagree. Merely because the “recreational” language is found in the definitions section of the contract does not preclude it from shedding light on the ambiguity surrounding the term “permanent residence.” Furthermore, the “recreational” language is by no means limited to the definitions section of the contract. Indeed, the very exclusion clause at issue refers to the insured’s “covered recreational vehicle” which, in the Nortons’ case, means a trailer that is used for recreational purposes.
For these reasons, I would affirm the order of the magistrate granting summary judgment in favor of St. Paul.

. The ambiguity is not in the use of the term "residence” since there can be no doubt that the Nortons’ daughter was using the vehicle as her residence when the damage occurred. Rather, the ambiguity arises when the term "permanent residence" is applied to the fact that she only planned to reside in the vehicle for five months.

. The majority believes that this definition does not provide that a Class IV vehicle must be used exclusively for recreational purposes. I do not entirely agree with the majority’s assessment. I think the only fair interpretation of this definition is that a vehicle is not a Class IV recreational vehicle when it is used for non-recreational, or residential, purposes.