Court Opinion

ID: 9532447
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:21:26.165796+00
Date Added: 2024-06-11T13:28:45.902578
License: Public Domain

Zenoff, J.,
dissenting:
Robert Vigoren was struck in the face and blinded by a shotgun blast on October 16, 1966. He and two other youths, William Ferrand and Steven Ferrand, were returning from a hunting expedition in Clark County, Nevada, when the loaded shotgun which had been placed on the front seat of the car by William Ferrand discharged from the movement of the car.
At the time of the occurrence, legal title to the car was in Richard Doherty, who had purchased the car in August of 1965. Though Doherty had sold the car to A. E. Ferrand in June of 1966 under a conditional sales contract, no change of legal registration was made with the Department of Motor Vehicles, Doherty retained possession of the title, and he remained personally hable to the Bank of Nevada for the chattel mortgage payments. After the accident, Ferrand ceased paying for the car, Doherty repossessed it and soon resold it, this time filing the required change of title.
At the time of the accident, Doherty maintained an insurance policy on the car with Transnational Insurance Company. The policy was issued to Doherty on May 2, 1966 but was allowed to lapse from May 19 to June 14, 1966. Doherty explained his reinstating the policy shortly after the sale of the car because “. . . I became apprehensive that he might not carry insurance on it.” The policy included liability, comprehensive and collision coverage. Doherty asserted that he informed the Transnational agent of the conditional sale to Ferrand at the time he reinstated the policy, though the agent disagreed.
Because Ferrand at no time had insurance coverage on the car, Transnational became apprehensive that it might have to *814compensate Vigoren under the omnibus clause of its policy with Doherty. On February 16, 1968 Transnational filed its complaint for declaratory relief against A. E. Ferrand, William Ferrand, Steven Ferrand and Robert Vigoren, requesting the district court to declare the policy issued to Doherty unavailable for the injuries to Robert Vigoren. Transnational further asked the court to declare that it had no obligation to defend any litigation arising out of the accident.
Hartford Accident and Indemnity Company’s interest arises out of its uninsured motorist coverage in a policy issued to Robert Vigoren’s father. Under this coverage, Hartford might be obligated to compensate for Robert’s injuries should Transnational not be so obligated.
By respective motions for summary judgment Transnational sought a declaration that its policy did not apply while Robert Vigoren and Hartford sought a declaration that it did. Transnational’s motion for summary judgment was granted and that of Robert Vigoren and Hartford was denied.
It is from this order, which in effect held the Transnational policy to provide no coverage whatsoever for this accident, and which removed Transnational from any obligation to defend any litigation arising from the accident, that Robert Vigoren and Hartford appeal.
1. Chapter 485, Nevada’s Motor Vehicle Safety Responsibility Act, provides that a motor vehicle liability policy refers to an owner’s policy of liability insurance and that such owner’s policy shall insure the person named therein and any other person, as insured, using any such motor vehicle with the express or implied permission of such named insurer, against loss from the liability imposed by law for damages arising out of the ownership or use of such motor vehicle. NRS 485.3091, §§ 1 and 2(b). Those provisions are popularly known as the “omnibus” clause in liability insurance contracts.
We are not now concerned in this case with the doctrine of insurable interest as it would apply as a prerequisite to a valid automobile liability insurance policy. No insurable interest need be shown to support an omnibus clause in an automobile insurance policy. Ohio Farmers Insurance Co. v. Lantz, 246 F.2d 182 (7th Cir. 1957); Western Casualty and Surety Co. v. Herman, 209 F.Supp. 94 (E.D.Mo. 1962), aff’d 318 F.2d 50 (8th Cir. 1963); cf. United Services Automobile Ass’n v. Howe, 208 F.Supp. 683 (D. Minn. 1962); see also Annot., Liability Insurance: Insurable Interest, 1 A.L.R.3rd 1193 (1965). The omnibus clause is a creation resulting from modern desires to protect innocent victims of automobile accidents. *815Unlike other forms of insurance, such as life and property insurance, its validity is not based on a potential risk of loss. That is, there need be no “insurable interest” in the traditional sense of that phrase. The only requirement is that the insuring party be the owner of the vehicle. As has been pointed out, the wagering contract rationale for requiring insurable interest is inapplicable in this area. United Services Automobile Ass’n v. Howe, supra, at 685. Moreover, the insurance company is protected against irresponsible acts of the insuring party by the requirement of ownership, just as it is protected in other areas of insurance by the requirement of insurable interest. The fact that Doherty had no “insurable interest” does not in itself defeat the validity of the policy. The question is solely one of ownership.
Section 485.090 defines “owner” as meaning “a person who holds the legal title of a motor vehicle, or in the event a motor vehicle is the subject of an agreement for the conditional sale . . . with an immediate right of possession vested in the conditional vendee . . . then such conditional vendee shall be deemed the owner for the purposes of this chapter.”
Except as to the seller’s failure to transfer the title certificate and the fact of his renewal of a liability policy that he purchased when he still had ownership and possession of the car the bona fides of the sale are not questioned. Fraud in the transaction might well be a serious consideration in this problem but it is not presented. The seller thought he was obtaining more protection by retaining the title and renewing his old insurance but his ignorance does not alter the fact that so long as the payments under the conditional sales contract were current he had no incidents of ownership. He did not have the right to take the automobile from the buyer nor to deprive him of its use. He could not direct the use of the car nor direct by whom it could be operated. He had no control whatsoever of the automobile other than to retake its possession and terminate the buyer’s rights as an owner if the buyer failed to pay.
2. The real problem for our determination is whether this conditional sale was sufficiently perfected as to validly transfer ownership of the car from the seller to the buyer. In some states failure to complete the registration requirements such as we have in NRS 482.400 and 482.426 voids the transaction, thus leaving the ownership in the seller. Nevada’s registration statute does not invalidate the transaction on failure to complete registration requirements. The infraction is a misdemeanor but the sale is not affected.
*816Under the statutes of California, Kansas, Missouri and Montana, ownership does not transfer until all registration requirements are met. Somerville v. Providence Washington Indemnity Co., 32 Cal.Rptr. 378 (Cal.App. 1963); Maryland Cas. Co. v. American Family Ins. Group, 429 P.2d 931 (Kans. 1967); Greer v. Zurich Insurance Company, 441 S.W.2d 15 (Mo. 1969); Ostermiller v. Parker, 451 P.2d 515 (Mont. 1968) (cert. den. sub nom. Glens Falls Insurance Co. v. Nationwide Mutual Ins. Co., 394 U.S. 975 (1969)). The cited cases naturally relate to their statutes, which are clearly different from NRS 482.399: “No transfer of the title or any interest in or to a vehicle registered under this code shall pass [until the certificate of title and registration card have been properly filed].” (E.g., Cal. Vehicle Code, § 5600; “the sale of any vehicle registered under the laws of this state, without the assignment of such certificate of title, shall be fraudulent and void.” Kans. Stats., Annot., § 8-135 (c)(6). See also Vernon’s Mo. Stats., Annot, § 301-210(4) (1963), and Revised Codes of Montana, Annot., § 53-109(d) (1961).)
Under the statutes of Colorado, Indiana and Washington, ownership transfers even though not all registration requirements are met. United Fire and Casualty Co. v. Perez, 419 P.2d 663 (Colo. 1966); Royal Indemnity Insurance Co. v. Shue, 182 N.E.2d 796 (Ind. 1962); Beatty v. Western Pacific Insurance Co., 445 P.2d 325 (Wash. 1968). The statutes of these states are more similar to those of Nevada. They do not specify that a purported sale is void or invalid for noncompliance with registration requirements. See Colo. Rev. Stats., Annot., §§ 13-6-8, 13-6-9 (1963); Burns Ind. Stats., Annot., § 47-2502 (1965); Rev. Code of Wash., Annot., § 46-12.101 (1970). But cf. Code of Va., Annot., § 46.1-87, as construed in Nationwide Insurance Co. v. Storm, 106 S.E.2d 588 (Va. 1959).
But in Nevada the omnibus statute and under NRS 41.460(a), the family purpose law, are like all others in the respect that a conditional vendee is the owner. In this case, for the purposes of the omnibus clause the sale of the car by Doherty was completed and his buyer was the owner in possession.
3. Hartford asserts, without citation of authorities, that if Transnational’s agent knew Doherty was not the owner of the automobile when the insurance was obtained, Transnational is estopped from denying liability on the ground Doherty was not the owner and thereby did not have insurable interest.
*817Disregarding the reference to insurable interest, nevertheless, the arguments of waiver or estoppel are not appropriate. On estoppel (reliance): Zunino v. Paramore, 83 Nev. 506, 509, 435 P.2d 196 (1967). Ferrand, the buyer, makes no claim that he did not buy the liability insurance because he relied upon Doherty’s policy. If he did, estoppel might be a question. Instead, the factual dispute of whether the agent knew or did not know of the sale is not one that Hartford can rely upon. It would only be Doherty’s concern if his company tried to avoid responsibility as to him if he was the owner, but he was not the owner at the time of the injury.
On the subject of waiver, to charge the insurance agent with the responsibility of being knowledgeable in the law, that is, with knowing all the legal consequences of each policy he sells, is unreasonable. The answer here is best provided by the declaration of where the ownership of the automobile lies.
I dissent.