Court Opinion

ID: 9688026
Source: CourtListenerOpinion
Date Created: 2023-08-24 16:57:46.885404+00
Date Added: 2024-06-11T18:18:34.339831
License: Public Domain

BECKER, Justice
(dissenting).
I respectfully dissent.
The majority finds the intent of the parties is manifest.1 Thus the contract is held to be unambiguous. Of course when one takes that position there is no room for argument. But I must say the contract is certainly ambiguous to me. In fact the more one reads the contested paragraph together with the whole policy the more ambiguous the provision becomes.
I.Since the majority finds a manifest intent, no reference is necessary to principles governing ambiguous policies. If those principles were applied the case would have to be reversed.
In Central Bearings Co. v. Wolverine Ins. Co., 179 N.W.2d 443, 445 (Iowa), we reviewed rules applicable to this case:
“If the words are fairly susceptible to two interpretations the one which will sustain the insured’s claim will be accepted. Thus the policy will be strictly construed against the insurer. State Auto & Cas. Underwriters by Auto. Underwriters v. Hartford Acc. & Ind. Co. (Iowa, 1969), 166 N.W.2d 761. This rule is amplified by the statement that the court should ascertain what an insured as a reasonable person would understand the policy to mean, not what the insurer actually intended. Goodsell v. State Auto & Cas. Underwriters, 261 Iowa 135, 153 N.W.2d 458.”
The majority’s emphasis on the fact that the general provisions of the policy apply to the whole policy is unnecessary. This may be conceded. The real issue is what this particular general provision means. The majority says it means that all accidents which occur outside the territorial limits are excluded. This would be true if certain words were not present in the pertinent paragraph:
“ ‘This policy applies only to accidents, occurrences, and loss during the policy period while the autemehMe ⅛ within the United States of America, its territories or possessions, ee Canada, ea ⅛ being transported hetwecn -parts thereeí or ⅛ in Mexico within seventy-five miles of the United States boundary.’ ”
The paragraph with deletions reads as the majority would now interpret it. To achieve this result we must read several words out of the paragraph. As thus altered the provision says exactly what the insurer now says it was meant to say. But the paragraph, as used, says something entirely different. Application of the legal principles cited above requires reversal.
II. The same principles require reversal with the words left in. Then a modification of the word “automobile” becomes essential. Insured (to be covered) must read the word as “insured automobile”. By the same token insurer (to deny coverage) must read the word as “injury-causing automobile”. In either event there is an ambiguity which must be resolved in insured’s favor.
III. In an effort to meet these semantic difficulties the majority touches on the nature of the insurance coverage involved in this case. It holds that uninsured motorist *732coverage (and several other coverages) actually insure every car on the road; i. e., people buy insurance on cars they do not own. These additional coverages are said to apply to the injury-causing cars, not to the injured individual. I submit nothing could be further from the truth. The additional coverages apply to the insured individuals, not to the uninsured cars. No one buys insurance on cars they do not own and which in fact may not yet be in existence. Rather they buy some types of insurance coverage which apply to them (or members of their families) regardless of the ownership of the injury-causing car. This point is easily illustrated by a quotation of bold-faced type on the face of the policy:
“This new Farm Bureau Mutual Banner Policy protects MORE members of your family against MORE perils in MORE situations than ever before.”
And by an excerpt from insurer’s brief:
“Under this coverage the decedent as a named insured was covered without regard to type, description or ownership of the automobile she would have the occasion to drive or occupy. She was covered as a driver, passenger, or pedestrian through 'being struck by an uninsured automobile. * * (Emphasis added).
This point is illustrated by another quote from insurer’s brief; “decedent as a named insured was afforded protection when occupying or through being struck by virtually any automobile.” (Emphasis added). Again, it was decedent who was insured; not “virtually any automobile”. People do not buy insurance on “virtually any automobile”. They buy insurance on their own automobile and additional insurance for and on themselves for loss due to operation of other automobiles.
This point is important because without this misconception of the nature of the coverage afforded the majority cannot read the words “injury-causing” into the contract. Such failure would be fatal.
IV. We next consider the majority explanation for the words involving “or is being transported between ports thereof.” These words apply when an injury occurs and the “automobile is being transported.” What automobile ? A borrowed automobile ? An uninsured automobile ? A friend’s automobile? Presumably the majority answers all in the affirmative. Is it conceivable this is what the American buying public pays its premiums for? I submit it is not.
The majority follows this with the rhetorical question “What practical difference does the location of the Mercury make if it is not involved?” This is a key question. If the coverages are to the person the involvement of the Mercury is immaterial. The coverage to the individual is afforded for any motor accident loss so long as the oivned car is within the limited territory. Stated otherwise, location of the Mercury is material as limiting the coverage. What is immaterial is its role in the accident.
Does it really make sense to say to the premium-paying public that they are paying for coverage on a nonowned, uninsured motor vehicle which might hit them while being transported between ports of the United States? Isn’t it much more logical to say that insured is covered if injured by a nonowned, uninsured motor vehicle even if her owned, insured automobile is being transported between ports of the United States ? If this latter question is more sensibly answered in the affirmative the case must be reversed.
V. Reproduction of the map and automobile deserves some short comment. One can interpret the picture to indicate coverage ivhenever the car is within the indicated territory. On the other hand the picture can be taken to show intent to afford coverage only if an accident occurs within the depicted territory. In the latter case one should ask, “Why show a car, rather than an accident?” Is this nit-picking? The same policy covers accidents pictorially when it suits the draftsman’s purpose.

*733

This should not be taken as a criticism of the form of the policy used or the use of small drawings. The entire policy format is a commendable and successful attempt to clarify the contract for the lay purchaser. However, both the paragraph in question and the accompanying picture are in fact ambiguous.
It is submitted that a reasonable insurance policy purchaser, if he thought about it at all, could easily interpret the meaning of the map and the pictured car to mean that location of the car controls effectiveness of the territorial limitations. Thus the place of accident could be anywhere.
VI. Justice Holmes has said, “Upon this point a page of history is worth a volume of logic.” New York Trust Co. v. Eisner, 256 U.S. 345, 349, 41 S.Ct. 506, 507, 65 L.Ed. 963, 983, 16 A.L.R. 660 (1921). *734So it is here. One need not be an insurance historian to recognize that in the early days of automobile insurance policies were keyed to the owner’s automobile. As the industry developed the competing companies offered medical coverage, uninsured motorist’s coverage, and other such provisions relating to the person rather than the vehicle itself. Absent these newer provisions a territorial limitation keyed to the vehicle itself makes sense. When the additional coverages are added the phraseology of the territorial limitation must be changed if the company desires similar limitation. This was not done.
VII. There is only one case directly in point. It was decided by a New York trial court in American Casualty Co. v. Foster, 31 Misc.2d 818, 219 N.Y.S.2d 815 (1961). The geographic limitation clause was exactly as it appears in the instant policy except it did not include the Mexico provision. The accident occurred while the insured was driving a noninsured car in Italy; the vehicle referred to in the policy was in the United States at the time of the accident. In a very brief opinion, that court said:
“The automobile in which the insured was riding at the time of the accident was not the ‘insured automobile’ which it is claimed was in the United States at the time of the accident, but the ‘uninsured automobile’, and it is the latter vehicle which is referred to in the policy under ‘Coverage G-Family Protection (Damages for Bodily Injury)’, which is the clause under which the insured claims he is covered.
“Although it is true that the insurer here could have written its policy so as to obviate any possible doubt that the coverage was to apply to accidents occurring only in the United States or Canada, it is abundantly clear that that is the only logical import of the policy. Any other interpretation would be strained and illogical. * *
I cannot agree. It is neither strained nor illogical for policy purchasers to conclude they are afforded medical, uninsured motorist and similar coverages personal to them in situations which do not involve their owned automobile. This is what the policy says. Nor is it. strained or illogical to assume this coverage relating to their persons would follow them to Mexico (or Europe) so long as their car is in the territorial area prescribed. This is also what the policy says.
I would reverse.
MOORE, C. J., and REYNOLDSON, J., join in this dissent.

. The fallacy of the attempt to apply the fiction of manifestation of mutual assent or meeting of the minds to an insurance policy is nowhere better illustrated than here. Actually this isn’t a contract in the classic sense. It would be much better to treat the policy as the sale of a service or commodity. The majority rationale would look far better under this more realistic approach.