Court Opinion

ID: 9844252
Source: CourtListenerOpinion
Date Created: 2023-09-24 02:59:47.372944+00
Date Added: 2024-06-11T09:15:31.161780
License: Public Domain

SULLIVAN, J., Concurring and Dissenting.
I agree with the conclusion of the majority that the judgment below should be affirmed insofar as it is in favor of defendants Glens Falls Insurance Company and Venberg and *266Robson, but I strongly dissent from the majority’s further conclusion that the judgment should be reversed insofar as it is in favor of defendant Fidelity and Casualty Company of New York. It is my view that the majority, by wrenching the terms of the Fidelity policy beyond all recognition and conveniently ignoring relevant trial court findings, have employed procrustean reasoning to make the record fit a theory of recovery. I would affirm the judgment in its entirety.
The policy here in question, denominated a “Farmer’s Comprehensive Personal Liability Policy,” is essentially a homeowner’s policy tailored to the special needs and requirements of persons who live in rural areas and engage in those activities of a generally agricultural nature which are normally carried on in such areas. Among the several respects in which this tailoring occurs is in the matter of exclusions from coverage. Thus, while the policy contains the “business pursuits” exclusion found in most if not all homeowner’s policies (i.e., excluding coverage of “business pursuits of an insured, except . . . activities therein which are ordinarily incident to nonbusiness pursuits”), the definition of “business” customarily present in such nonfarm policies is modified in the farm policy to reflect the peculiar nexus between home and business which obtains in the case of the typical farm: “ ‘Business’ includes trade, profession, or occupation, other than farming and roadside stands maintained principally for the sale of the insured’s produce.” (Italics added.) The effect of this definition is to render the “business pursuits” exclusion inapplicable (and the insuring agreements applicable) in cases falling within the purview of the italicized language. ^
The question in this case is whether the special “business pursuits” exclusion in the farmer’s policy issued by Fidelity to the insured Mc-Gregor is applicable to prevent recovery on that policy by plaintiffs. The trial court, looking to the nature of the activities of the insured out of which the accident arose, found and concluded in essence (1) that the activities in question constituted “business” within the normal meaning of that term, i.e., trade, profession, or occupation; (2) that such activities did not constitute “farming” within the meaning of the specially tailored provision defining “business” for purposes of the “business pursuits" exclusion in the farmer’s policy; (3) that the activities therefore constituted “business pursuits" within the meaning of the exclusion; and (4) that the activities were not such that, in spite of their “business” character, they would be withdrawn from the operation of the exclusion as “activities therein which are ordinarily incident to nonbusiness pursuits.”1 On the *267basis of this determination the trial court held that the “business pursuits” exclusion in the policy was operative to preclude recovery.
The opinion of the majority, as I read it, accepts the first of the trial court’s conclusions summarized above and rejects the remaining three. The process of reasoning by which this result is reached is curious enough to warrant reiteration. First the opinion designates the activity of the insured as “the pasturing of horses for a fee” and on. the basis of this designation concedes that this activity “would normally be regarded as a business pursuit.” Then, turning to the “farming” provision (which if applicable would render the exclusion inapplicable) the majority jettison their initial designation and substitute the more generic “grazing.” The new denomination, being clearly preferable for the purposes of the majority because it omits the element of compensation, is then found to be included within “the broad term ‘farming.’ ” Finally, to resolve any possible doubt, recourse is had to the useful principle that all ambiguities are to be resolved against the insurer. Thus it is concluded that the “business pursuits” exclusion does not apply because the activities out of which the accident arose were “farming” within the special exception. Moreover, the majority assure us, those same activities prevented operation of the exclusion on the additional ground that they were activities “ordinarily incident to non-business pursuits.” But alas, a new designation for those activities is now needed—suddenly we are concerned not with “the pasturing of horses for a fee,” not with “grazing,” but with “keeping fences and gates repaired and closed.” This latter activity, of course, is “ordinarily incident to normal farming activities,” and thus the exclusion is inapplicable on another ground.
*268Comment upon the quality of this reasoning would be superfluous. I am content to suggest that such tortuous ratiocination can only be grounded upon a herculean effort to ignore the clear and amply supported factual findings of the trial court (set forth in fn. 1, ante) to the effect that the activities of the insured from which the accident arose had nothing to do with farming in any sense of the word but were part and parcel of his business of operating a riding academy and boarding stable.2
But, the majority ask, if the Fidelity policy is not applicable to the insured’s activities in this case, what is its intended purpose? The insured did not engage in “any other farming activities” and, we are told, “to exclude the entire grazing operation would cut the heart out of the special coverage afforded by this farm-oriented comprehensive policy.” Again, the answer is to be found in carefully stated and fully supported findings of the trial court which I set forth in extenso in the margin.3 Those findings, based upon considerable evidence concerning the representations and negotiations which led up to the issuance of the Fidelity policy, were to the effect that that policy was issued for the purpose of covering the insured during the frequent occasions when he took his own horses away from the premises to horse shows and like spectacles and was not issued to cover the insured’s business activities at the ranch. Moreover, the findings indicate that the insured represented to the Fidelity agent that his activities on the ranch were already covered by another policy.4
*269It is my view that the trial court properly applied the “business pursuits” exclusion in the Fidelity policy to the facts of this case. Here, as in Herzog v. National American Ins. Co., supra, 2 Cal.3d 192, and Huggins v. Yoshiwara (1970) 2 Cal.3d 200 [84 Cal.Rptr. 709, 465 P.2d 845], a plaintiff who has exhausted the limits of insurance issued to cover the kind of accident which in fact occurred seeks to gain further recovery against insurance which was issued with entirely different risks in mind. In those cases we did not allow our sympathies for the plaintiff, who clearly would not be afforded adequate compensation by the applicable policies, to bring about a construction of the policy at issue which was contrary to the intent and reasonable expectations of both the insurer and the insured. We should in this case be equally faithful to our sometimes onerous task.
I would affirm the judgment in its entirety.
Wright, C. J., concurred.
The petition of respondent Fidelity for a rehearing was denied May 3, 1973, and the opinion was modified to read as printed above. Wright, C. J., and Sullivan, J., were of the opinion that the petition should be granted.

The relevant findings were the following: “XXI At all relevant times, Richard MacGregor and Barbara MacGregor conducted a multi-faceted business operation at *267the Fletcher Hills Ranch, including boarding of horses for profit, riding instruction for profit, training of horses for profit, rental of a riding ring for profit, and the sale of snacks and refreshments for profit at certain riding events.
“XXII The multi-faceted business operation, as described in the foregoing finding, and the particular activities therein enumerated, did not constitute farming within the meaning of the policy issued by the Fidelity & Casualty Company of New York.
“XXIII The accident in question, the death of James Donald Reece, and the claims made against Richard MacGregor in action No. 277640 arose out of, and were directly related to, the non-fanning business activities of Richard and Barbara MacGregor as described above.
“XXIV The accident in question, the death of James Reece, and the claims made against Richard MacGregor in action No. 277640 did not arise out of, nor were they related to, any farming operations of Richard MacGregor and Barbara MacGregor nor any non-business pursuits of Richard and Barbara MacGregor.
“XXV The accident in question, the death of James Donald Reece, and the claims made against Richard MacGregor in action No. 277640 did not arise out of, nor were they related to, any activities of Richard or Barbara MacGregor which are ordinarily incident to non-business pursuits within the meaning of the policy issued by Fidelity & Casualty Company of New York.”

We need look no further than the face of the policy itself to determine that the insured’s activities were not “farming” as that term is used therein. In the section of the policy titled “Definitions” it is stated that the property of the insured shall not be considered “business property” because of, among other things, the “rental or holding for rental of not more than three car spaces or stalls in garages or stables." (Italics added.) The implication is clear regarding the operation of a boarding stable of the size here involved wherein, according to the evidence, up to 30 horses were boarded.

“III Richard MacGregor contacted Venberg and Robson on or about February 10, 1962, regarding the placement of certain personal liability insurance coverage.
“IV At all relevant times, defendant Venberg and Robson, through Eric Brelin, was generally cognizant of the nature, extent and scope of activities conducted at the Fletcher Hills Ranch, but reasonably understood that Richard MacGregor was the manager of the ranch and not the tenant of the entire ranch.
“V The defendant Venberg and Robson, through Eric Brelin, was asked to, and did, procure on behalf of Richard MacGregor a policy of insurance to afford personal liability coverage to Richard MacGregor arising out of the ownership and maintenance of MacGregor’s own horses while away from the premises.
“VI Venberg and Robson was not asked to obtain insurance to cover any business pursuits of Richard MacGregor on the Fletcher Hills Ranch, but was told that the business pursuits conducted at said ranch were covered by another policy of insurance procured through the owners of the ranch.”

The other policy was apparently that written by the Great American Insurance Company, with limits of $10,000/$20,000, which paid $10,000 to plaintiff prior to *269the institution of the instant lawsuit. As the majority opinion indicates, the insured also carried an excess policy, which brought the combined limits up to $100,000/ $300,000, during the first six months of his lease, but he later allowed that policy to lapse, leaving the Great American policy as the only “business policy” in effect at the time of the accident. It is interesting to note that the combined premiums on the two “business policies” in effect when the insured entered into the Fletcher lease was in the neighborhood of $600 per year; that the premium on the Great American policy alone was approximately $340 per year; and that the premium on the Fidelity policy was $36 per year. Thus the combined “business policies,” with a per-person limit of $100,000, had premiums totaling roughly 17 times that of the Fidelity policy, which had the same per-person limit; and the sole “business policy” remaining in force at the time of the accident, the Great American policy, with a per-person limit of $10,000, had a premium almost 10 times that of the Fidelity policy, although its per-person limit was one-tenth the size. Clearly the trial court, in making its findings, took account of the reasonable expectations of the parties to the insurance contract in the context of other available insurance. (Cf. Herzog v. National American Ins. Co. (1970) 2 Cal.3d 192, 197 [84 Cal.Rptr. 705, 465 P.2d 841].)