Court Opinion

ID: 9791552
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:13:38.68372+00
Date Added: 2024-06-11T07:37:36.867906
License: Public Domain

BAKES, Justice.
On August 21, 1969, appellant Associates Discount Corporation purchased from respondent Yosemite Insurance Company, a vendor’s single interest insurance policy. The policy was purchased to protect the security interest of Associates in a 1969 Chevrolet Camaro which had been purchased by Ted Jockumsen, Jr., and which was financed by Associates. Associates paid an annual premium of $145.00 for the policy. After the retail purchaser Jockumsen made three payments on the car he defaulted on his contract with Associates, and as a result, on November 12, 1969, Associates repossessed the car and placed it on the sales lot of Intermountain Chevrolet in Pocatello, Idaho, for the purpose of obtaining a purchaser for it. On about February 1, 1970, the car was stolen from the Intermountain Chevrolet lot and was taken to Power County where it was completely dismantled, stripped and carried away except for the frame. Appellant furnished respondent with notice of the loss as required by the terms of the policy and made demand upon respondent for payment covering the loss. There is no question but that the policy was in effect at the time of the loss. However, respondent denied cov*250erage claiming that the policy only covered damage or loss to the automobile while it was in the' possession of the retail purchaser and prior to repossession by the insured, Associates. The trial court found in favor of the insurer, Yosemite, and appellant Associates has appealed that finding.
The question involved in this appeal is what did the insured, Associates, buy with the $145.00 premium? Appellant Associates maintains that it bought coverage for its security interest in the automobile from the time that the retail purchaser took possession until its security interest terminated in a foreclosure sale. Yosemite, on the other hand, maintains that the insurance only covered the security interest of Associates while the vehicle was in the possession of the retail purchaser.
Ordinarily one would expect to find the answer to this question in the insurance policy itself. However, an examination of the policy provides no ready answer to the question, but rather gives one the distinct impression that the policy was drafted by a committee. Counsel for the parties has not cited any cases directly in point involving this type of vendor’s single interest insurance policy, and our independent research has not disclosed any. The issue involved here appears to be unique.
The relevant provisions of the policy are as follows:
“INSURING AGREEMENTS
“1. Definition of Coverages
A. Fire, Lightning or Transportation _* * *
B. Theft — To cover the interest of the insured, only, in the automobile insured hereunder, against direct and accidental loss of or damage to the automobile caused by theft of the entire automobile.
C. Collision or Upset — To cover the interest of the insured, only, in the automobile insured hereunder against direct or accidental loss of or damage to the automobile, caused by a single collision of the automobile with another object or by upset of the automobile or by collision with a vehicle to which it is attached while the automobile is in the lawful possession of a retail purchaser under a bailment lease, conditional sales contract, mortgage or other encumbrance. (Emphasis added).
“2. Premium
The premium charged hereunder for each automobile is subject to a $15.00 minimum charge to be retained in full by the Company. The premium in excess of the minimum charge shall be refunded in accordance with the pro-rata table applicable to Single Interest Coverage except that (a) cancellation may be allowed within thirty (30) days of the effective date of Coverage at a minimum earned premium charge of Ten ($10) dollars and (b) in event loss is paid under this policy, the premium for the year in which the loss occurs and all prior years is fully earned.
“3. Conditions Precedent to Liability
The conditions precedent to the attaching of the Company’s liability for any loss or damage under this policy are:
(a) That the retail purchaser has defaulted in payments; and
(b) That the insured has repossessed the automobile.
“4. Insured’s Duty When Loss Occurs
When the insured shall be advised of damage to the automobile insured hereunder which may result in an impairment of his interest therein, the insured shall, as soon as practicable, give notice of such occurrence to the Company or its authorized agent. The insured shall protect the automobile whether or not the loss is covered by this policy and any further loss due to the failure of the insured to protect shall not be recoverable under this policy.
“5. Date of Loss
The Company’s liability shall attach as of the date when the Company receives notice from the Named Insured that all *251the conditions precedent to a claim hereunder have been complied with, and such date shall, for the purpose of this policy, be the date of loss.
“6. Company’s Liability — Settlement Options
* * * * * *
“7. Policy Period, Territory, Purposes of Use
This policy applies only to direct and accidental losses to the automobile which are sustained during the policy period, while the automobile is within the United States of America, its territories or possessions, Canada, or is being transported between ports thereof, and is owned, maintained and used for the purposes stated as applicable thereto in the declarations.” (Clerk’s Transcript).
Appellant points out that under definition 1(C), Collision or Upset, the damage must occur while the automobile is in the lawful possession of a retail purchaser, but that under 1(B), the theft provision, that limitation is omitted. Therefore appellant argues that theft loss, even though after repossession and not while the vehicle is in the lawful possession of the retail purchaser, is nevertheless covered'under the policy. Looking at those two definitions, this argument is plausible.
Respondent on the other hand contends that looking at the other provisions in the policy, and reading them “in pari materia” shows that the policy fixes the date of loss as of the date of repossession, and if at that time no loss has occurred, there is no further liability of the respondent insurer under the policy. This argument appears to fly directly into the face of the language of paragraph 3, Conditions Precedent to Liability. Paragraph 3(b) specifically requires that the vehicle be repossessed as a condition precedent to the attaching of the company’s liability for any loss or damage under the policy. Respondent argues that it is the time of repossession which fixes the date of loss, and if the vehicle is damaged at the time it is repossessed, then it is that damage for which the insurance was issued. However, paragraph 5 of the policy does not support this argument. Further, if respondent’s interpretation is accepted, there could be no theft coverage under any circumstances where the vehicle was stolen from a retail purchaser and was not recovered, since under those circumstances it would be impossible to repossess a vehicle as required under the express language of subparagraph 3(b). In order to avoid this anomalous result, respondent Yosemite requests that we interpret, which is another way of saying rewrite, section 3(b) of the policy to read “that the insured has repossessed [or attempted to repossess] the automobile,” thereby providing coverage in the event of the theft of the car while the retail purchaser is still in possession. We respectfully decline the invitation to rewrite the policy for respondent. The policy must be interpreted as written. Our long standing rule of construction is that an ambiguous contract is to be “construed most strongly against the person preparing it or employing the words concerning which doubt arises.” Big Butte Ranch, Inc., v. Grasmick, 91 Idaho 6, 415 P.2d 48 (1966); Morgan v. Firestone Tire and Rubber Co., 68 Idaho 506, 201 P.2d 976 (1948). This rule is applicable to insurance contracts. Stephens v. New Hampshire Ins. Co., 92 Idaho 537, 447 P.2d 14 (1968).
Under section 1(B) the theft coverage is not limited to theft occurring while the automobile is in the lawful possession of a retail purchaser, such as the collision coverage is expressly limited in paragraph 1(C). Since the condition precedent to liability, i. e., default by the retail purchaser and repossession have occurred, and since the insured has notified the company of the loss, we are of the opinion that the loss in question was covered under the policy.
The cause is remanded to the trial court to enter judgment in favor of appellant under the policy and for reasonable attorneys fees as prayed in plaintiff-appellant’s complaint. I.C. § 41-1839.
Costs to appellant.
*252DONALDSON, C. J., and SHEPARD and McQUADE, JJ., concur.