Court Opinion

ID: 9528224
Source: CourtListenerOpinion
Date Created: 2023-08-07 03:38:33.798167+00
Date Added: 2024-06-11T13:26:36.020698
License: Public Domain

BAKES, Chief Justice,
dissenting:
The most telling statement in the majority opinion is as follows: “Here we are discussing questions of fact.” The majority does make findings of fact, most notably that Foremost and Guanche had entered into an oral contract of insurance for first party coverage.
The majority’s finding in that regard is belied by the trial court’s statement in Finding of Fact 15. “The record will not support any finding that Guanche ever advised [Foremost] of the type or kind of insurance he desired.... ” Nowhere did the trial court conclude that there came into being an oral contract of insurance. Nevertheless, the majority finds an oral contract of first party coverage in the face of an explicit finding by the trial court that Guanche never told Foremost’s agent what he wanted in the way of coverage. The secret, unexpressed and uncommunicated intentions of a contracting party do not become part of the contract. See Amann v. Fredrick, 257 N.W.2d 436 (N.D.1977); Wesco Realty, Inc. v. Drewry, 9 Wash.App. 734, 515 P.2d 513 (1973); 1 Williston on Contracts § 22 (3d ed. 1962). Cf. Benner v. Farm Bureau Mutual Ins. Co. of Idaho, Inc., 96 Idaho 311, 312, 528 P.2d 193, 194 (1974) (oral contract of insurance found where insured expressly requested the particular coverage to agent who proclaimed that he would “take care of everything”).
The majority fails to discuss some of the more salient facts of this case. State and county licensing authorities had required Knievel and Snake River Canyon Enterprises to obtain liability insurance covering the event in question. First party coverage was not required. Representatives of Foremost, Knievel and Snake River Canyon Enterprises then negotiated the same insurance policy at issue in both this appeal and in Foremost Insurance Co. v. Putzier, 100 Idaho 883, 606 P.2d 987 (1980). Foremost was informed that some of Knievel’s concessionaires might be added as additional insureds on the policy.
Representatives of Knievel and Snake River Canyon Enterprises in turn informed Guanche that he, too, would need insurance. There is no indication that Guanche would have purchased any insurance but for the fact that Snake River Canyon Enterprises required it. Guanche testified that he was too busy to “take care of insurance,” and that he thought representatives of Knievel and Snake River Canyon Enterprises would “take care” of him. They did. He was made an additional insured on Snake River Canyon Enterprises’ liability policy.
Guanche’s testimony does demonstrate that he thought he was “fully” covered. When asked who had informed him that he had “full” coverage, he answered that it was the representatives of Knievel and Snake River Canyon Enterprises, and not any agent of Foremost. Guanche did testify that Foremost’s agent informed him that *146he was “covered,” although Guanche never asked the agent what for.1
The entire transaction is summarized neatly in Guanche’s amended counterclaim.
“Guanche contracted with Snake River Canyon Enterprises, Inc., to provide food and beverage concessions ... and as a part of said contract, was required to maintain certain liability insurance in force. Guanche contacted Foremost Insurance Company and asked to have the required insurance coverage provided. Foremost agreed to provide the coverage and merely added Guanche’s name as an additional named insured to the policy of insurance described in the Complaint.” (Emphasis added.)
Finally, it is clear, although the majority refuses to recognize it, that the court below based its decision squarely upon the now discredited doctrine of reasonable expectations.2 In Finding of Fact 16, the trial court stated that Guanche “intended” to insure his property; that he “believed” he had first party coverage; and that such belief was “reasonable ... under the facts in this case.” On the basis of these “facts” and the “theories expounded in Corgatelli v. Globe Insurance,” the trial court concluded that there did indeed exist a contract for first party coverage between Foremost and Guanche. In so concluding the trial court held as a matter of law that “Guanche’s intentions and expectations [are] paramount in interpreting the terms of any insurance contract existing between Guanche and [Foremost].”
The above legal conclusion was erroneous, the doctrine of reasonable expectations having been “expressly rejected ... in favor of traditional contract rules of construction.” Foremost Ins. Co. v. Putzier, 100 Idaho at 888, 606 P.2d at 992. That being the case, we ought to reverse and remand the case for a new trial in order to give the lower court an opportunity to correct its legal error. But in no event should this Court decide the case on a legal theory not even asserted by Guanche, and then make an appellate finding of fact that there was an oral contract of first party insurance. There is no evidence to sustain such an appellate finding, and it is directly contrary to the trial court’s express finding that Guanche never “advised [Foremost] of the type or kind of insurance he desired .... ” I would reverse.
McFADDEN, J., concurs.

. What are, I wonder, the outer limits of Guanche’s oral contract for insurance “coverage”? If a Mrs. Guanche was blessed with a child during Knievel’s jump, could Guanche recover maternity benefits? How about life insurance for any children, or Guanche’s horse? I think the limits of Guanche’s coverage should be established, not by his secret and unexpressed desires, but by the context in which the insurance was obtained. Thus, the trial court should consider the probability that Guanche intended to procure, and Foremost intended to sell, only that coverage which satisfied the county’s requirements, which did not include first party coverage.

. The majority quotes some language from the Corgatelli dissent in support of its assertion that an ambiguous insurance contract should be construed in accordance with the understandings of a reasonable person in the position of the insured. The majority failed to quote the preceding sentence in the Corgatelli dissent. “If the meaning of the contract is in doubt, it must be construed in the sense in which the insurer believed, at the time of making, the insured understood the terms.” Corgatelli v. Globe Life & Accident Co., 96 Idaho 616, 622, 533 P.2d 737, 743 (1975) (Donaldson, J„ dissenting). If that standard were applied to the instant case, there could be no doubt as to the end result. In Guanche’s case, Foremost was merely adding an additional insured to a negotiated special policy of liability coverage. Any reasonable insurance agent would be mildly astonished to discover that Guanche’s unexpressed desires would ripen into first party coverage.