Court Opinion

ID: 9844259
Source: CourtListenerOpinion
Date Created: 2023-09-24 02:59:51.048519+00
Date Added: 2024-06-11T09:15:31.200605
License: Public Domain

SULLIVAN, J.
I dissent. We must face two questions in this case: First, whether Milton Johnston’s policy afforded coverage to the 1964 Chevrolet; and second, if it did, whether the policy also afforded coverage to Billy Johnston. Unless both questions are answered in the affirmative, the insurer did not assume the risk arising from Billy’s use of the automobile at the time of the accident. The majority answer the first question in the affirmative but do not deal with the second at all. I am at a loss to understand how they can affirm the judgment without deciding whether Billy was an insured under the policy. I respectfully dissent because the policy itself makes clear that both questions must be answered in the negative and that the judgment must be reversed.
Taking up the first question, I look to the policy itself. The pertinent provisions are as follows: “[State Farm] . . . agrees with the named insured. . . . (1) To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of (A) bodily injury sustained by other persons, and (B) property damage, caused *278by accident arising out of the ownership, maintenance or use ... of the owned automobile . . .” (Italics added.)
Under a section entitled “Definitions—Insuring Agreements I and II,” the following terms are defined:
“Owned Automobile—means the motor vehicle or trailer described in the declarations, and includes a temporary substitute automobile, [and] a newly acquired automobile . . .
“Temporary Substitute Automobile—means an automobile not owned by the named insured or his spouse while- temporarily used with the permission of the owner as a substitute for the described automobile when withdrawn from normal use because of its breakdown, repair, servicing, loss or destruction.
“Newly Acquired Automobile—means an automobile, ownership of which is acquired by the named insured or his spouse, if a resident of the same household, if (1) it replaces an automobile owned by either and covered by this policy . . . and (2) the named insured within 30 days following such delivery date applies to the company for insurance on such newly acquired automobile . . .” (Italics added.)
It is manifest from the above language that the policy affords coverage to the “owned automobile,” that is, the automobile described in the declarations or its substitute, which may be “temporary” or “newly acquired.” The original vehicle (the 1957 Chevrolet), not its replacement (the 1964 Chevrolet), was the vehicle described in the policy issued to Milton Johnston, the father of Billy. At that time, of course, Billy was unmarried and living at home with his parents. The 1964 Chevrolet which Billy purchased in January 1968, after he married and established a home of his own was not owned by the named insured, Milton Johnston, or his spouse. It is beyond argument, then, that it could not be a “newly acquired automobile” of Mr. and Mrs. Milton Johnston so as to fall within the coverage of their policy. It follows then that to be afforded coverage under Milton Johnston’s policy, the 1964 Chevrolet would have to meet the above definition of a “temporary substitute automobile.”'
The question then boils down to this: Can the “temporary substitute automobile” clause in Milton’s policy be reasonably construed to include a vehicle owned and used by Billy, a person no longer a resident of Milton’s household? I am of the view that a full examination of the policy compels a negative answer. As we have said, “In the construction of insurance policies *279. . . the whole of the contract is to be taken together, each clause helping to interpret the other.” (Jurd v. Pacific Indemnity Co. (1967) 57 Cal.2d 699, 704 [21 Cal.Rptr. 793, 371 P.2d 569].)
In the first place, the policy expressly states that a temporary substitute automobile cannot be a vehicle owned by either the named insured or his spouse. Secondly, a careful reading of the clause demonstrates that the temporary substitute cannot be a vehicle owned by the person who is using the automobile. The clause itself clearly requires that the automobile be “temporarily used with the permission of the owner.” The majority misconstrue this provision to require the permission of Milton Johnston, who held no ownership interest in the 1964 Chevrolet. In fact, what the clause unmistakably does is to require the permission of the owner of the substitute automobile, a point recognized by defendants, who argue that Billy could give himself permission to use a vehicle owned by him. Defendants’ strained construction of the clause cannot withstand analysis. Since use is one of the incidents of ownership of a vehicle, it is an absurd proposition to suggest that the clause be construed to require that the owner give permission to himself to use his own vehicle.
Moreover, the term “substitute” within the phrase “temporary substitute automobile” clearly indicates that the clause did not afford coverage to the 1964 Chevrolet. A replacement vehicle cannot be a “substitute,” it has been held, unless it “was in the possession or under the control of the insured to the same extent and effect as the disabled car would have been except for its disablement.” (Tanner v. Pennsylvania Threshermen & F. M. C. Ins. Co. (6th Cir. 1955) 226 F.2d 498, 500; see also 12 Couch on Insurance (2d ed. 1964) § 45:233, pp. 271-272.) Here the 1964 Chevrolet was not in the possession of or under the control of the named insured, Milton Johnston; and, unlike the described vehicle it was not owned by Milton. The 1964 Chevrolet was not, therefore, a “substitute” for the described vehicle.
The majority seek to avert the impact of the “temporary substitute automobile” clause by finding ambiguity in part of its language. Focusing on the phrase “temporarily used with the permission of the owner,” they maintain that the word “temporarily” is ambiguous. Resolving its meaning in favor of the insured, they declare that Billy could use a “temporary” vehicle for the remainder of the policy period. They rely heavily on Nelson v. St. Paul Mercury Insurance Company (1967) 83 S.D. 32 [153 N.W.2d 397], and Harte v. Peerless Insurance Company (1962) 123 Vt. 120 [183 A.2d 223], in reaching this result. Their reliance is indeed misplaced. Nelson merely decided that the described automobile did not need to be *280restored to its normal use because any “breakdown, loss or destruction” of the automobile might be permanent. Accordingly, the term “temporarily” does not apply to the described vehicle but is, the Nelson court concluded (p. 400), a “restriction on the use of the substitute vehicle.” (Italics added.) In Harte it was held that the character of the use, whether temporary or permanent, must be decided with reference to the intention of the user. There the court stated (183 A.2d p. 226), “. . . the object of the substitution clause is to afford a temporary insurance expedient to protect the insured’s operation of a borrowed vehicle . . . [and that since the] insurance contract itself fixes no limit . . . during which the temporary extended coverage is to be effective . . . the intention of the insured [is controlling].” (See also 12 Couch on Insurance, supra, §§ 45:230, 45:231, pp. 269-270.) Here, the trial court made no finding of fact concerning the intent of Billy Johnston with respect to the nature of his use of the 1964 Chevrolet. However, in declaring that Billy may “temporarily” use the 1964 Chevrolet for the remainder of the policy period, the majority have applied no restriction at all, other than the term of the policy in which coverage is afforded. Consequently, they strip the term “temporarily” of its real significance.
Whatever might have been the intent of Billy with regard to the use of the 1964 Chevrolet, I conclude for two related reasons that the temporary substitute clause did not afford coverage: First, the clause itself implies that a temporary substitute automobile may not be owned by the user; and second, the replacement vehicle (1964 Chevrolet) was not a “substitute” for the described vehicle since Milton, the named insured, failed to control or possess the 1964 Chevrolet as he did the original automobile.
I now turn to the second question presented by this appeal. Assuming arguendo that the 1964 Chevrolet was a “temporary substitute automobile,” we must still determine whether coverage was afforded to Billy Johnston as an insured under the policy. As previously mentioned, the majority fail to consider this question.
The provisions defining an insured, contained in what is commonly referred to as an omnibus clause, state as follows: “Insured . . . includes (1) the named insured, and (2) if the named insured is a person or persons, also includes his or their spouse(s), if a resident of the same household, and (3) if residents of the same household, the relatives of the first person named in the declarations, or of his spouse, and (4) any other person while using the owned automobile, provided the operation and the actual use of such automobile are with the permission of the named insured or such spouse and are within the scope of such permission, and (5) ... *281any person or organization legally responsible for the use of such owned automobile by an insured as defined under the four subsections above.”
Of the five subsections only subsection (4), defining a permissive user, is potentially applicable. Since Billy was neither the named insured nor a resident of his parents’ household, subsections (1) through (3) cannot apply. Moreover, subsection (5), which extends coverage only to another who is liable for the use of an automobile by the insured, is inapplicable since a precondition of its applicability is that the user be an insured as defined by any of the four previous subsections. The permissive user provision remains as a possible basis for coverage.
However, since neither Milton Johnston, the named insured, nor his spouse, could give permission to use an automobile in which they had no ownership interest, subsection (4) is also inapplicable. Without the “power to grant or withhold” the use of an automobile, no basis exists to extend permission for its use. (Didlake v. Standard Ins. Co. (10th Cir. 1952) 195 F.2d 247, 251 [33 A.L.R.2d 941]; see also 12 Couch on Insurance, supra, § 45:342, pp. 347-348.)
Milton Johnston had no ownership interest in the 1964 Chevrolet nor did he exercise any parental control over Billy. Although the trial court found that the father “approved” of the purchase of the automobile, his assent, without the authority to control the use of the automobile, is nothing more than a gratuitous act and of no legal significance in relation to the permissive use provision in the omnibus clause of the policy. In sum, at the time of the accident Billy Johnston was the owner of the 1964 Chevrolet and was operating such vehicle as owner. Neither Mr. nor Mrs. Johnston owned the vehicle and therefore neither of them was in a position to grant permission to anyone to use it. Furthermore, Billy required no permission from them or anyone else to use the Chevrolet since he himself was the owner. As a result Billy was not a person using the automobile with the permission of the named insured and therefore did not fall within the definition of “insured” under the terms of the policy.
Quite apart from whether it was proper for Billy to be included as an additional insured with regard to the use of the original automobile when it was understood that he was to be the primary user of that automobile, I am unable to reach the result that he can be considered the permissive user of a temporary substitute automobile owned by him. Simply stated, it defies any notion of logic to suggest that Billy was “temporarily” using a vehicle in which he had acquired an ownership interest as a “substitute” *282for an automobile that could no longer be used by him or the named insureds. Nor can it be said that the named insureds, Milton Johnston or his spouse, without any control over the use of the automobile, could extend permission for its use by Billy. Therefore, State Farm, the insurer, did not assume the risk of Billy’s use of the automobile at the time of the collision.
To recapitulate, the policy issued by State Farm to Milton Johnston covered neither the Chevrolet which Billy purchased nor Billy himself as an insured. Billy had married, had ceased to be a resident of his father’s household, had established his own home and had bought his own car. It not only defies logic but also offends fairness to say that he remained covered by his father’s policy. I think that the simple answer to the present problem is that Billy should have purchased his own insurance for his own car.
I would reverse the judgment.
Wright, C. J., concurred.
Appellant’s petition for a rehearing was denied May 3, 1973. Wright, C. J., and Sullivan, J., were of the opinion that the petition should be granted.