Court Opinion

ID: 9599296
Source: CourtListenerOpinion
Date Created: 2023-08-22 01:17:35.3208+00
Date Added: 2024-06-11T09:43:26.212625
License: Public Domain

CLARK, J.
I dissent. The exclusionary clause in question is clear and unambiguous and controls the interpretation of the policy. There being no ambiguity in the terms of the exclusionary clause, its provisions must be effectuated. (Canadian Indem. Co. v. West. Nat. Ins. Co. (1955) 134 Cal.App.2d 512, 516-517 [286 P.2d 532].)
The exclusionary clause provides: “This policy does not cover any loss caused by or resulting from (1) injury or sickness for which compensation is payable under any Workmen’s Compensation or Occupational Disease Law. . . .’’ The only reasonable interpretation of this language is that coverage of the policy is excluded whenever compensation is available for the injury or sickness, whether or not available compensation would cover all expenses.* 1 No other interpretation is permissible since “payable,” mean*467ing that which “may, can, or must be paid” (Webster’s New Collegiate Dict. (7th ed. 1970) p. 619), obviously modifies injury or sickness, not loss. The majority does not contend the exclusionary clause is ambiguous.
The clear provisions of the exclusionary clause control despite any ambiguity in the insuring clause. “ ‘Each clause is to be considered with reference to every other clause upon which it has any bearing, and all the clauses and provisions are to construed together as the unified medium whereby the intent of the parties to the instrument is to be reached.’ ” (Burr v. Western States Life Ins. Co. (1931) 211 Cal. 568, 575 [296 P. 273].)
The exclusion removes from coverage events which would otherwise fall within the scope of the insured event (2 Richards on Insurance (1952) § 208, pp. 713-714.) Since the exclusionary clause ordinarily limits the coverage provided by the insuring clause, it must be read with a view toward ascertaining the extent to which such coverage is restricted. Accordingly, if there were a conflict between the insuring clause and the exclusionary clause, the insured must reasonably expect the unambiguous exclusion would control.
Obviously, if the exclusionary clause controls in cases of direct conflict, it must control in cases where there is no direct conflict. When the only possible conflict arises because of ambiguity in the insuring clause,* 2 the unambiguous exclusionary clause must be given full effect. Under the rule requiring the provisions of the policy to be construed together, the exclusionary clause must, at least, be viewéd as a more explicit statement or a clarification of the insuring clause.
Whether the insuring clause conflicts or is merely ambiguous, there is no doubt as to the meaning of the policy, making the rule of liberal construction in favor of the insured inapplicable. Also, there is no unfairness since the insured must reasonably expect that the unambiguous *468exclusionary clause will be given its ordinary effect of restricting the coverage of the insuring clause.3
In the instant case it is clear that the exclusionary clause prevents coverage for the injury since the employer-employee relationship existed as a matter of law, making workmen’s compensation benefits available. The test for existence of the employment relationship is not the form of consideration the employee receives, which need not be pecuniary (Anaheim General Hospital v. Workmen’s Comp. App. Bd. (1970) 3 Cal.App.3d 468, 473 [83 Cal.Rptr. 495]), but rather, the relationship is determined by the degree of control exercised by the employer over the employee. (Department of Natural Resources v. Ind. Acc. Com., 216 Cal. 434, 438 [14 P.2d 746].) Here control is evidenced in the duties plaintiff was to perform in order to receive consideration in the form of reduced rent. Therefore, since the requisite relationship existed, making benefits available, the exclusionary clause eliminates coverage for the injury, irrespective of the amount of such benefits or their collection.
As pointed out above, the exclusionary clause eliminates coverage whether or not compensation is in fact paid and whether or not it covers all expenses. The lack of coverage was established at the time of injury and did not depend on future events. There being no coverage, breach of the implied covenant of good faith and fair dealing (Comunale v. Traders & General Ins. Co. (1958) 50 Cal.2d 654 [328 P.2d 198, 68 A.L.R.2d 883]) may not be predicated on withholding of payments to which the insured was not entitled and could not become entitled.
It must be concluded that plaintiff was not entitled to any damages.
The order granting new trial should be affirmed and the judgment reversed.
On June 7, 1974, the opinion was modified to read as printed above.

Other jurisdictions which have had opportunity to rule on this issue have found the exclusionary clause to deny coverage for any injury for which any amount of workmen’s compensation benefits is payable. (See Keffer v. Prudential Insurance Company of America (1970) 153 W.Va. 813 [172 S.E.2d 714]; Phillips v. Prudential Ins. Co. (1970) 285 Ala. 472 [233 So.2d 480]; Wenthe v. Hospital Service Incorporated, of Iowa (1960) 251 Iowa 765 [100 N.W.2d 903]; Sinai Hospital of Detroit v. *467Welborn (1959) 357 Mich. 625 [99 N.W.2d 553]; Bonney v. Citizens’ Mut. Auto. Ins. Co. (1952) 333 Mich. 435 [53 N.W.2d 321].) Those cases which have ruled the exclusionary clause does not exclude liability for medical expenses in excess of workmen’s compensation benefits contained clauses whose language was specific as to such liability and are clearly distinguishable from our present case. (See Burkett v. Continental Cas. Co. (1969) 271 Cal.App.2d 360 [76 Cal.Rptr. 476]; Hunt v. Hospital Service Plan of N. J. (1960) 33 N.J. 98 [162 A.2d 561, 81 A.L.R.2d 919].)

The insuring clause, providing for payment for loss “except losses covered by . . . Workmen’s Compensation,” is ambiguous in that it is unclear as to whether all coverage—or only part of it—is precluded by the availability of compensation benefits.

Aside from claiming the policy is ambiguous, the majority also relies on a statement in the application: “All Benefits Payable in Full Regardless of Any Other Insurance You May Have.” The statement has no application to this case. The workingman does not have compensation insurance; his employer carries it.