Court Opinion

ID: 9549290
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:15:43.269423+00
Date Added: 2024-06-11T15:20:04.821969
License: Public Domain

SUTIN, Judge (specially concurring). I specially concur. Foundation Reserve says: [T]he only issue before this Court is an issue of law, namely, whether the 1972 Ford pick-up, not described under the policy, but owned by Ashbaugh, was a “non-owned” vehicle because of the policy having been issued to Ashbaugh in the name of “Tilman H. Ashbaugh, d/b/a Corky’s Wrecker Service.” * * * The 1972 Ford was not a pick-up. It was a half-ton truck with a flat bed. The answer to the issue is: The 1972 Ford half-ton pick-up was a “non-owned” vehicle because Foundation Reserve foisted upon “Corky’s Wrecker Service” a “Basic Automobile Policy” instead of a “Basic Commercial policy.” “Corky’s Wrecker Service” was a commercial enterprise. The insurance policy insured two trucks described as 1973 and 1963 Dodge Wreckers with Holmes Wrecker Equipment installed on them to perform the services necessary in the wrecker business. Nonetheless, Foundation Reserve issued a policy that falls within what is commonly entitled “Family Automobile Policy.” Such a policy does not include a flat bed truck. Weed v. Ohio Farmers Ins. Co., 53 Ill.App.3d 826, 11 Ill.Dec. 564, 368 N.E.2d 1310 (1977). Under paragraph B. Definitions (Coverage J) (a) “Insured” means: (1) the named insured as stated in the policy and, while residents of the same household, the spouse of any such named insured and relatives of either; ****** (b) “Insured Motor Vehicle” means a motor vehicle; ****** (2) while temporarily used as a substitute for an insured motor vehicle as described in subparagraph (1) above, when withdrawn from normal use because of its breakdown, repair, servicing, loss or destruction; ****** but the term “Insured Motor Vehicle” shall not include: ****** (iii) under subparagraph (2) * * * above, a motor vehicle owned by the named insured or by any resident of the same household as such insured; * * * [All emphasis added.] Again, hidden far down the long provisions of the policy in small letters with innumerable paragraphs of language difficult to read and understand, we find: IV OTHER DEFINITIONS. (a) Automobile. Except with respect to division 2 of the coverage C and except where stated to the contrary, the word “automobile ” means: (1) Described Automobile — the motor vehicle or trailer described in this policy. ****** (3)Temporary Substitute Automobile — under coverage A, B, and division 1 of coverage C, an automobile not owned by the named insured or his spouse or any resident of the same household while temporarily used as a substitute for the described automobile when withdrawn from normal use because of its breakdown, repair, servicing, loss or destruction. [All emphasis added.] Foundation Reserve knew that the only or primary purpose of the policy was to insure “Corky’s Wrecker Service,” a commercial enterprise. Yet Item 6 of the Daily Report form, where all “Named Insured’s Declarations” are set forth reads: The automobile(s) will be used for pleasure and family business only and will not be used commercially, except as follows: WRECKER SERVICE. SEE LIMITATION OF USE ENDORSEMENT FORM 21 (11-75) ATTACHED. [Emphasis added.] This endorsement limited use of the wreckers within a 50 mile radius from Santa Fe, New Mexico. Ashbaugh owned automobiles which were insured under policies issued by different insurance companies. The 1972 half-ton truck with a flat bed was “owned” by Ashbaugh, and at the time of the accident was used in Ashbaugh’s commercial enterprises as “Corky’s Wrecker Service.” It was not used for pleasure or family business. The question for decision is: Are the “Coverage Definitions” and “Other Definitions,” supra, applicable to a wrecker owned by Ashbaugh and used by “Corky’s Wrecker Service”? The answer is “No.” The insurance policy recognized two distinct entities for different insured vehicles: (1) Automobiles owned and used for pleasure and family business by Ashbaugh and his family, and (2) Trucks used in the “Wrecker Service.” It was never contemplated or understood that the automobile provisions would be applied to the commercial enterprise. At the time the insurance was obtained, Foundation Reserve’s agent told Ashbaugh that “the coverage would be afforded on another vehicle if one of the wreckers wasn’t available for emergency use.” This fact was Ashbaugh’s understanding because the agent knew that the policy had to cover the necessary insurance required by the State Corporation Commission. The agent did not explain whether the substitute vehicle should be owned or non-owned by “Corky’s Wrecker Service.” Judge Baca’s comments pierced the position taken by Foundation Reserve, comments that fairly and realistically explain the basis of his decision. He said: * * * I think, complicating the situation here, is that Foundation Reserve has attached a set of provisos to the contract that may be better attached to a policy of insurance covering an automobile that was to be used for family purposes rather than for business purposes * * * I think here what has arisen is a business contract. * * * Is there an ambiguity in the words here? Well, perhaps there’s not an ambiguity in the words here, but there is certainly an ambiguity in its interpretation. * * * [Emphasis added.] Foundation Reserve cannot plead ignorance of the law or lack of knowledge of rules applicable to insurance contracts. It knows the difference between a family automobile policy and a commercial policy. It has presented many legal problems heretofore in the appellate courts of New Mexico and the Tenth Circuit of the United States. See, Foundation Reserve Insurance Company v. Faust, 71 N.M. 271, 377 P.2d 681 (1962); Armijo v. Foundation Reserve Insurance Company, 75 N.M. 592, 408 P.2d 750 (1965); Anaya v. Foundation Reserve Insurance Company, 76 N.M. 334, 414 P.2d 848 (1966) (an unfair restriction); Foundation Reserve Insurance Co. v. McCarthy, 77 N.M. 118, 419 P.2d 963 (1966) (unfair position taken on “being struck by automobile”); Foundation Reserve Ins. Co. v. Johnston Testers, Inc., 77 N.M. 207, 421 P.2d 123 (1966); Modisette v. Foundation Reserve Insurance Co., 77 N.M. 661, 427 P.2d 21 (1967) directly contra, Tsosie v. Foundation Reserve Insurance Company, 77 N.M. 671, 427 P.2d 29 (1967) (both seeking to deny coverage); State Farm Mut. Auto. Ins. Co. v. Foundation R. Ins. Co., 78 N.M. 359, 431 P.2d 737 (1967); Foundation Reserve Insurance Co. v. Kennedy, 79 N.M. 382, 444 P.2d 293 (1968); Foundation Reserve Ins. Co. v. Martin, 79 N.M. 737, 449 P.2d 339 (Ct.App.1968); Universal C. I. T. Corp. v. Foundation Reserve Ins. Co., 79 N.M. 785, 450 P.2d 194 (1969); Fierro v. Foundation Reserve Insurance Company, 81 N.M. 225, 465 P.2d 282 (1970); Homestead Invest. Inc. v. Foundation Reserve Ins. Co., 83 N.M. 242, 490 P.2d 959 (1971); C & H Constr. & Pav., Inc. v. Foundation Reserve Ins. Co., 85 N.M. 374, 512 P.2d 947 (1973); Foundation Reserve Insurance Company v. Kelly, 388 F.2d 528 (10th Cir. 1968). My views on this subject matter were expressed in Read v. Western Farm Bur. Mut. Ins. Co., 90 N.M. 369, 563 P.2d 1162 (Ct.App.1977); Sandoval v. Valdez, 91 N.M. 705, 580 P.2d 131 (Ct.App.1978), Sutin, J., concurring; Thompson v. Occidental Life Ins. Co. of Cal., 90 N.M. 620, 567 P.2d 62 (Ct.App.1977), Sutin, J., concurring and dissenting. Foundation Reserve’s insurance policy has, apart from many other provisions, 24 exclusions, 28 conditions, 5 coverage exclusions and 12 conditions of coverage. No insured, except one trained in insurance law or experienced in the insurance business can read and understand the complex, complicated and intricate provisions of this insurance policy written in words of fine print that ambles along the way. An insured must rely upon the representations of a sales agent. The insurer prepares the policy. Its sales agent is schooled in the art of salesmanship. A word, a phrase, or a provision in a contract of insurance is not what the insurer intended the language to mean, but what a reasonable person in the position of the insured would have understood them to mean. Public policy demands that when an insurance policy is issued to a person or business, the contents thereof must be stated as at least one insurance company wrote: We have written this policy in clear everyday English. We have also provided step-by-step instructions to make it easy for you to find out if a loss is covered. If you have any questions call your agent or broker. They will be glad to help you. [And then follows a clear explanation in everyday English.] If necessary, public policy demands that an insurance agent explain in writing the complex, complicated and intricate provisions of an insurance policy applicable to a family or a business. The public needs this protection. An insurance company must give protection. The tortuosity of the insurance policy of yesterday should not be acceptable in courts of law today. Our duty is to liberally construe this insurance policy in favor of the insured and strictly against the insurer where the coverage and the language used is ambiguous. It has a double meaning by inserting family insurance into commercial insurance. Its meaning is doubtful. I agree that judgment should be affirmed.