Court Opinion

ID: 9550760
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:41:52.751583+00
Date Added: 2024-06-11T15:22:19.392659
License: Public Domain

Mowbray, C. J.,
dissenting:
Respectfully, I dissent.
The majority concludes that the exclusionary terms in the insurance contract are “clear on their face” and then proceeds to give the terms their “plain meaning.” The majority, however, mistakenly assumes that their conclusion ends the inquiry. Because of the nature of the contract and the contracting parties, I believe that even the most precise language is insufficient to eliminate coverage.
The relevant rules of construction are straightforward. First, any contract is construed against the party who prepared the contract. E.g., Caldwell v. Consolidated Realty, 99 Nev. 635, 668 P.2d 284 (1983). Farmers prepared and printed this contract; thus, every term must be construed in favor of respondent, the insured. Second, because this is an insurance contract, the court is under an even more stringent duty to interpret in favor of the insured. See Harvey’s Wagon Wheel v. MacSween, 96 Nev. 215, 606 P.2d 1095 (1980). Finally, the contract term in dispute is an exclusion from coverage, and exclusions are subjected to the closest possible scrutiny. See Sullivan v. Dairyland Insurance Co., 98 Nev. 364, 649 P.2d 1357 (1982).
Moreover, in my view, this is not merely an insurance contract but an adhesion contract for insurance. An adhesion contract is a standardized form contract written entirely by a party with superior bargaining power. The weaker party confronts a “take it or leave it” proposition, under which the only alternative to complete adherence is outright rejection. Steven v. Fidelity and Casualty Co. of New York, 377 P.2d 284 (Cal. 1962). Here, the insurance policy was prepared entirely by Farmers, a major insurance company whose bargaining power is clearly superior to individual members of the general public. Respondent was not at liberty to sit down with Farmers and bargain individual terms. Farmers dictated the contract terms to her and, if she wanted Farmers automobile insurance, she had to sign the contract as is.1
Because I believe this is an adhesion contract, I submit that this court is obligated to interpret it consistent with the reasonable expectations of the insured. Gray v. Zurich Insurance Co., 419 *335P.2d 168 (Cal. 1966). Here, respondent reasonably expected that her policy with Farmers would cover her personal injuries. Accordingly, I would affirm the order of the district court.

 One commentator has observed that most agreements found to be adhesion contracts by California courts have been insurance policies. In addition, this same observer notes that in most other states the adhesion contract doctrine has been confined to insurance policies. Richard P. Sybert, Adhesion Theory in California: A Suggested Redefinition and Its Application to Banking, 11 Loy. L.A. L.Rev. 297 (1978).