Court Opinion

ID: 9724618
Source: CourtListenerOpinion
Date Created: 2023-08-26 11:04:42.832294+00
Date Added: 2024-06-11T18:25:03.075837
License: Public Domain

Murphy, Justice
(dissenting).
I must respectfully dissent from the majority opinion. It denies to plaintiff the insurance protection for which she paid. We have said, “Liability insurance contracts should, if possible, be construed so as not to be a delusion to those who have bought them.” Motor Vehicle Cas. Co. v. Smith, 247 Minn. 151, 157, 76 N. W. (2d) 486, 490.
In construing the policy in question we are required to keep in mind the purpose and necessity of the policy and to attempt to carry out the intention of the parties by a fair, reasonable, and sensible interpretation rather than by a strict or technical interpretation which would distort the purpose of the contract and lead to an absurd re-*451suit. In considering the purpose of the policy, we must keep in mind that Mrs. Gabrelcik was engaged in a public transportation business which involved one automobile. In order to qualify for a license to operate the automobile as a taxicab, she was required to take out public liability insurance. The higher premium on this policy was based on the risks inherent in that business. By a rider attached to the policy, coverage was limited to the operation of the automobile within a 15-mile radius of the assured’s address. The description contained in another rider entitled “Public Livery or Taxicab” described the automobile as “All Vehicles Covered Under Policy.”
The purpose of the policy was not only to indemnify the insured but to protect the public. The agreement comprehended that should the taxicab become disabled a substitute vehicle would be used which would also be insured as a taxicab, and whether the substitute vehicle came from a stock of cars owned by the insured’s husband or from some other source was not important. The important consideration was that the substitute car be used as a taxicab.
The difficulty encountered in this case derives from the form of policy used by the insurer. The insurer wrongly chose to use a policy written to cover “pleasure and business” purposes to insure a commercial risk. The printed form, designed for the family-car situation, contained the exclusion from substitute-automobile coverage of an automobile owned by the insured or his spouse, if a resident in the same household. The reason for this exclusion is well understood. It is to forestall schemes whereby all of a family’s automobiles may be insured for the price of one. The risk which the insurance company seeks to avoid by this clause is the claim, in the event of accident involving an uninsured automobile was being used as a substitute for the insured automobile. See, Rodenkirk v. State Farm Mutual Auto. Ins. Co. 325 Ill. App. 421, 60 N. E. (2d) 269. Because of the doubtful relevance of this particular clause, as applied to an automobile used for a taxicab, it should be subordinated to the overriding purpose of the insuring agreement.
When the temporary-substitute-automobile clause is viewed in light of the overriding purpose of the insurance policy, as expressed in the *452rider which extends coverage to a taxicab operation licensed by law, it should be construed to exclude from the benefits of the policy an automobile owned by the insured or spouse in the same household when used for a purpose other than a taxicab. The dominant purpose of the contract was to insure the taxicab or a substitute for it against risks involved hi the operation of a taxicab. Since only one automobile was licensed as a taxicab and only one automobile could be used for that purpose, the danger or risk of having multiple automobiles covered by one policy was not present.
In an able memorandum the trial court expressed what seems to me to be a sensible appraisal of what the parties intended. The trial court said:
“Here we have a one-car taxi business. The insurance company must be held to the knowledge that the car insured would be out of service at times due to breakdowns, repairs, etc., thereby making necessary the substitution of another car in the continuous conduct of plaintiff’s business. If plaintiff had borrowed the 1953 Ford from anyone other than Frank’s Used Cars, or even as is, if Frank’s Used Cars was a partnership or corporation, it is reasonable to assume that there would have been no denial of coverage by the defendant insurance company. We are not here dealing with the usual situation of a car individually owned by a spouse being used by an insured in lieu of the insured car and then claiming coverage, thus allowing for fraud and connivance between the married couple and in effect covering two vehicles by one policy.”
It is true that courts may not ignore the plain language of a policy or write a new agreement. The policy may be construed, however, to carry out the intention of the parties where there is an apparent ambiguity growing out of the use of words in the substitute-automobile clause when considered in relation to the puipose of the whole policy. See, Anderson v. Connecticut Fire Ins. Co. 231 Minn 469, 43 N. W. (2d) 807; Lowry v. Kneeland, 263 Minn. 537, 117 N. W. (2d) 207; Farley v. American Auto Ins. Co. 137 W. Va. 455, 72 S. E. (2d) 520, 34 A. L. R. (2d) 933; St. Paul-Mercury Ind. Co. v. Heflin (W.D. Ark.) 137 F. Supp. 520. Here, we have a pro*453vision applicable to a family-automobile situation which is inappropriate to the purpose of the policy insuring a commercial automobile used for public transportation.
The views expressed by this court in Struble v. Occidental Life Ins. Co. 265 Minn. 26, 35, 120 N. W. (2d) 609, 615, are applicable here. There we said:
“It is unnecessary to review the many authorities which discuss criteria for the construction and interpretation of insurance contracts. It is sufficient to say that such contracts must be liberally construed in favor of the insured so as not to defeat without a plain necessity his claim for the indemnity which, in the making of the insurance contract, it was his objeet to secure. The rule which has influenced our court, and by which we must be guided here, is that in the interpretation of limiting conditions in insurance policies, when reasonably possible, words must be so construed as to make effective the general insurance purpose of the contract. In the Weum case we said (237 Minn. 105, 54 N. W. [2d] 29), ‘In resolving doubts as to the meaning to be given the terms of an insurance contract, this court will note the purposes for seeking insurance and will avoid an interpretation which would forfeit rights which the insured may have believed he was securing, * * Moreover, words may well be construed contrary to their literal meaning in order to carry out the general object of the insuring agreement. Bolduc v. New York Fire Ins. Co. 244 Minn. 192, 69 N. W. (2d) 660; Motor Vehicle Cas. Co. v. Smith, 247 Minn. 151, 76 N. W. (2d) 486; Gershcow v. Homeland Ins. Co. 217 Minn. 568, 15 N. W. (2d) 88; Garbush v. Order of United Commercial Travelers, 178 Minn. 535, 228 N. W. 148; Anderson v. Connecticut Fire Ins. Co. 231 Minn. 469, 43 N. W. (2d) 807.”
In Cement, Sand & Gravel Co. v. Agricultural Ins. Co. 225 Minn. 211, 216, 30 N. W. (2d) 341, 345, we said:
“* * * The intent of the contracting parties is to be ascertained, not by a process of dissection in which words or phrases are isolated from their context, but rather from a process of synthesis in which the words and phrases are given a meaning in accordance with the obvious purpose of the insurance contract as a whole.
*454“ * * the day is past for adhering to technical or literal meanings of particular words in a deed or other contract against the plain intention of the parties as gathered from the entire instrument.’ Long v. Fewer, 53 Minn. 156, 159, 54 N. W. 1071.”
Moreover, it seems to me that the result reached by the majority is morally wrong in view of the fact that at the time the liability arose the substitute automobile was actually in use as a taxicab within the risks provided by the policy. Further, it must be kept in mind that the public has an interest in having automobiles covered by liability insurance. Quaderer v. Integrity Mutual Ins. Co. 263 Minn. 383, 116 N. W. (2d) 605. This principle applies with much greater force in the case before us because the insurance policy in question was required by law as a condition to the operation of a public conveyance. Lloyds America v. Ferguson (5 Qr.) 116 F. (2d) 920.
For the foregoing reasons I respectfully dissent.
Since the foregoing dissent was submitted, the majority opinion has been revised and two concurring opinions have been written. The majority opinion now apparently expresses the view that in a subsequent action by the injured party after judgment, public policy “might well dictate a different result.” It is also suggested that the record is deficient and that an action to reform the policy should have been instituted; but that in any event, the party who sustained the damage “may have rights against the insurer which will not be affected by this decision.”
The record establishes that this is a proceeding brought to determine the rights of the insured pursuant to Minn. St. 555.01 and 555.02. The trial court had no difficulty with the sufficiency of the record or the procedure used. In his memorandum, he said:
“The policy in question was issued to plaintiff by defendant insurer for commercial use in the taxi business, a licensed and regulated business, with appropriate increased premium charge. The city of Fridley was furnished a copy of the policy as a prerequisite to the issuance of the cab company license to plaintiff.”
The policy accordingly should not only be construed to provide ul-*455tímate protection to the public, but primary protection to the policyholder as well.