Norma K. CRANE, Plaintiff and Appellant, v. STATE FARM FIRE AND CASUALTY COMPANY, a corporation, Defendant and Respondent.
Plaintiff appeals from a judgment for declaratory relief following a nonjury trial declaring her claim for $500 medical expenses to be excluded from coverage under a homeowners insurance policy issued by defendant to James A. and Janet Chamberlain.
The Supreme Court has recently described the coverage intended to be provided by the type of policy at issue here: ‘Generally speaking, the personal liability provisions of a homeowner's policy bind the insurer to pay damages for which the insured shall become liable as a result of accidents in and around his home.’ (Herzog v. National American Ins. Co. (1970) 2 Cal.3d 192, 197, 84 Cal.Rptr. 705, 707, 465 P.2d 841, 843.) The entire policy is not before us. It provided, as applicable to this cause:
‘Section II of this Policy Does Not Apply:
‘(a) to any business pursuits of an Insured, other than activities therein which are ordinarily incident to non-business pursuits; or to the rendering of any professional service or the omission thereof, except with respect to voluntary civilian defense activities; or to any act or omission in connection with premises, other than as defined, which are owned, rented or controlled by an Insured.’
This policy insuring Mr. James A. and Mrs. Janet Chamberlain was in force and effect on June 24, 1966. Two to three months prior to that date, Mrs. Janet Chamberlain had orally agreed with appellant Norma K. Crane, a neighborhood friend, to care for Mrs. Crane's two children, including Andrea, aged 2 1/2 years, as appellant was employed.
Under this arrangement, appellant left her children at the Chamberlain residence at approximately 7:40 a. m. each morning and picked them up each evening between 5:10 and 5:40 p. m. This occurred on five days a week during which appellant worked. In return, appellant paid Mrs. Chamberlain $20 the first week, increased thereafter to $25 a week, plus ‘a sack of groceries,’ valued at about $5. Neither woman ever mentioned how long the arrangement was to last.
On June 24, 1966, two to three months after the beginning of this arrangement, infant Andrea accordingly was in the care of Mrs. Chamberlain at the Chamberlain residence. It was admitted Andrea sustained injuries at that time at the Chamberlain home and that there were resulting medical costs whose reasonable value exceeded $500. No further facts as to the cause of the injuries or the manner in which they were sustained appear in the record.
Appellant sought a declaration that this injury was covered by the insurance policy.
The trial court found that Mrs. Chamberlain's activity in caring for Andrea ‘constituted a business pursuit of said insured, within the meaning of the above-quoted exclusion of said Homeowners policy, and was not an activity ordinarily incident to non-business pursuits of said assured.’ The court then concluded that appellant's claim was excluded from coverage under respondent's policy.
Appellant argues first, that the ‘babysitting’ by Mrs. Chamberlain was not a business pursuit. From their agreement we are satisfied that the trial court correctly determined that it was. Upon oral argument, appellant conceded this point.
‘Babysitting’ is an occupation in which the babysitter has the responsibility of keeping her infant charges entertained and protected from harm and even mischief. (Tropical Coach Lines, Inc. v. King (1962 Fla.Sup.Ct.) 147 So.2d 318, 319.)
The term ‘babysitting’ perhaps is inaptly used to describe the contract for day care of children involved here. In ordinary parlance, the ‘babysitter’ is one employed as a matter of convenience by parents to stay with a child or children, so that they may for a few hours seek their pleasure, or tend to affairs external to the home. This differs from day-in, day-out child care for an indefinite period, as here.
‘Business' in its broad sense embraces anything about which a person may be busy, and in its usual sense, signifies an undertaking or calling for gain, profit, advantage of livelihood. While ‘business pursuit’ in some contexts is synonymous with ‘business,’ it more accurately denotes a continued, extended or prolonged course of business or occupation. Child care for compensation as evidenced in this case was much more than a casual accommodation, and was properly found to be a ‘business pursuit’ under the terms of the policy exclusion. (Mansfield v. Hyde (1952) 112 Cal.App.2d 133, 137–138, 245 P.2d 577; Long v. City of Anaheim (1967) 255 Cal.App.2d 191, 197, 63 Cal.Rptr. 56; cf. Dorrell v. Norida Land & Timber Co. (1933) 53 Idaho 793, 27 P.2d 960, 963, reviewing definitions; Fadden v. Cambridge Mutual Fire Insurance Co. (Sup.Ct.1966) 51 Misc.2d 858, 274 N.Y.S.2d 235, 241; Home Insurance Company v. Aurigemma (Sup.Ct.1965) 45 Misc.2d 875, 257 N.Y.S.2d 980, 985. These New York trial court cases involve the same exclusionary clause here considered.)
It has been held in a variety of contexts that a single day's act, or single transaction does not qualify as a business. We need not explore the ramifications of these definitions, in view of the continuity of the services here contracted for and performed, according to the evidence. The present case does not involve casual babysitting, a temporary arrangement for an hour, a day or an evening, for the convenience of parents. It seems clear that while an individual instance might involve a business arrangement, such would lack the continuity of a ‘business pursuit.’
We next consider a number of cases involving an exclusionary clause, the same or similar to the one reviewed here.
In Home Insurance Comapny v. Aurigemma, supra, 45 Misc.2d 875, 257 N.Y.S.2d 980, a guest was electrocuted upon a charged swimming pool ladder. The pool electrical work had been performed for the insured by an electrician friend as a favor, not as a business pursuit. Hence it was held that friendly help was not a business pursuit and the policy exclusion (the same as involved here) was inoperative.
In another case, it appears the insured baled and sold hay for business purposes. While transporting hay on a highway after dark to feed cattle maintained for personal and family needs, a collision occurred and plaintiff sued. The policy exclusion was held inoperative. The use of the hay-wagon was not a business pursuit or if so, it was an activity ordinarily incident to nonbusiness pursuits. (Edwards v. Trahan (La.App.1964) 168 So.2d 365.)
But torts arising in the course of business bring the exclusion into play.
D. and M. were fellow employees, sheetmetal workers, when M. in course of employment activated a power brake on a sheet metal machine and injured D. M. was insured on homeowners policy including personal liability and property damage. It was held that this was a business pursuit, and the exclusion was held applicable, the exception being inapplicable. (Dieckman v. Moran (Sup.Ct.Mo.1967) 414 S.W.2d 320, 322.) The court in that case concluded the exception to the business exclusion was poorly worded, but not ambiguous; and that the rule determining ambiguities against the insurance company does not authorize the distortion or perversion of the language used in an insurance contract, nor does it furnish any warrant for creating an ambiguity where none exists; citing Continental Cas. Co. v. Phoenix Constr. Co. (1956) 46 Cal.2d 423, 432, 296 P.2d 801, the point being that the company is entitled to the limitations plainly expressed.
The applications made of the exception to the business pursuit exclusion are definitive.
The owner of Sequoyah Marina was in the business of renting boats. A mechanic attempted to start a boat used by the owner solely for nonbusiness purposes, and was injured. The court stated: ‘We conclude that the activities of Lowrance in repairing the boat were ordinarily incident to the non-business use of the boat by Freeman, the owner, and were not within the exclusion.’ (Security National Insurance Co. v. Sequoyah Marina (C.A. 10th 1957) 246 F.2d 830, 833.)
An insured, engaged in raising cattle, while rounding up cattle on adjacent premises, threw a stick which hit the plaintiff. It was held the exclusionary clause applied. (Burroughs v. Employers Liability Assurance Corp. (La.App.1967) 198 So.2d 202.)
Where an insured plaintiff was sent by his fellow employee, the assured, to open and close chute openings for cotton bins and a corn bin, and the assured pushed a starter button which activated an auger in a chute, whereby plaintiff lost an arm, the exclusion was applied. The momentary forgetfulness in pushing the starter button was not an ‘activity ordinarily incident to a nonbusiness pursuit.’ (Pitre v. Pennsylvania Millers Mutual Insurance Co. (La.App.1970) 236 So.2d 920.) A similar conclusion was reached, where the injury was caused by operation of a fork lift by a fellow employee. (Berry v. Aetna Casualty & Surety Co. (La.App.1969) 221 So.2d 272, 273.)
These facts appear in Hardware Mutual Casualty Co. v. Mayer (1960) 11 Wis.2d 58, 104 N.W.2d 148, rehearing denied 105 N.W.2d 322:
Mayer, the insured, was engaged in farming and on adjacent acreage maintained a home on lands excluded from farming operations, and leased another parcel to Steward. Defendant Sachse was a man of all work, performing services relative to all parties and lands, and for the Flex Belt Company owned by Mayer. Sachse was injured while working on a woodlot acreage reserved for the owners and guests, and the trial court found that at the time of the injury he was neither a commercial employee nor farm employee. The trial court held Sachse was not excluded from coverage on the policy.
The exception did not apply to any business pursuits of an insured except where he was the sole owner and ‘(b) activities in such pursuits which are ordinarily incident to non-business pursuits.’
But in the policy, Mayer's entire tract was described as the farm; and Sachse's wages for the day in question were charged against the farm and deducted on his income tax as a business expense. The Supreme Court held that this was an excluded business operation, and excluded from coverage, although the trial court found the woodlot was not operated as part of the farm. If the court was asked to consider Sachse's business activities on the woodlot (not operated as the farm) to be ‘ordinarily incident’ to nonbusiness pursuits, it did not state such a conclusion.
Thus, the exclusionary clause here considered has been before other courts, which have not differed from the definition of business pursuit set forth above. In respect to the qualification of the exclusionary clause, ‘other than activities therein which are ordinarily incident to nonbusiness pursuits,’ it is held that the phrase ‘activities therein which are ordinarily incident’ relates to something which is primary, i. e. the previously excluded business pursuit. (Security National Insurance Co. v. Sequoyah Marina, supra, 246 F.2d 830, 833; Dieckman v. Moran, supra, 414 S.W.2d 320, 322.) ‘* * * [T]here will be no liability coverage with respect to an insured's ‘business pursuits,’ but that, as an exception to this broad rule, coverage will be extended to liability which arises, even though connected in some causal manner with the insured's ‘business pursuits,’ out of an act or omission that is ordinarily not associated with or related to the insured's business pursuits.' (Gulf Insurance Company v. Tilley (N.D.Ind.1967) 280 F.Supp. 60, 64, aff'd per curiam (C.A.7th 1968) 393 F.2d 119.)
As was said in Pitre v. Pennsylvania Millers Mutual Insurance Co., supra, 236 So.2d 920, 922, ‘We find no support for the contention that this provision is vague when applied to the facts of this case. * * * We acknowledge that it may become very difficult to determine in some cases whether a particular activity is ‘ordinarily incident to nonbusiness pursuits.”
In Michigan Mutual Liability Company v. Ferguson (1968) 15 Mich.App. 298, 166 N.W.2d 525, it appears: One Ferguson, the assured, attempted to remove snow from his place of business with a shovel, the handle of which had been wired together. When it broke again, he flung it from his hands. As luck would have it, the wire struck and shorted a high tension line, damaging an adjacent building and parked autos. Holding the exclusionary clause inapplicable, the court held that the immediate activity involved, throwing the handle from the roof to discard it, was not proved incident to a business pursuit; and even though occurring on business property, it is suggested this was an activity ordinarily incident to nonbusiness pursuits. The court regarded this comparable to Morrill v. Gallagher (1963), infra, 370 Mich. 578, 122 N.W.2d 687, and thought there was no sufficient causal connection to relate the act to the business of Ferguson.
There are other cases involving this exclusion clause, which because of their special facts are inappropriate to this controversy.1
Under the view taken in Illinois and Michigan that ‘horseplay’ serves no business objective and is not in the course of business, construction of the exclusionary clause follows such point of view.
Gallagher as a prank threw a firecracker in a room where his fellow-employee plaintiff was working. It was held that Gallagher was not the employer, and the attempted prank was not in the course of business nor for the purpose of expediting it, and the exclusion did not apply. (Morrill v. Gallagher, supra, 370 Mich. 578, 122 N.W.2d 687.)
In State Farm Fire & Cas. Co. v. National Union F. Ins. Co. (1967) 87 Ill.App.2d 15, 230 N.E.2d 513, 516, the insured engaged in ‘impulsive horseplay’ in hitting a steel door with a mallet which bounced back and injured the plaintiff. The court held that the incident occurred during a business pursuit and held ‘it is at least as logical to conclude that the defendant's impulsive action, which caused the injury, was the type ordinarily incident to a non-business pursuit, as it would be to reach an opposite determination,’ and upheld the trial court's ruling that coverage attached.
In regard to horseplay cases, one must recognize a diversity among the states as to whether or not it is ordinarily an incident of business employment. (99 C.J.S. Workmen's includes it. (Pacific Emp. Ins. Co. v. Ind. Acc. Comm. (1945) 26 Cal.2d 286, 158 P.2d 9, overruling a long line of cases to the contrary, in respect to workmen's compensation.)2
Appellant's principal reliance is upon Gulf Insurance Company v. Tilley, supra, 280 F.Supp. 60, 64.
There, the exclusionary clause was held inoperative in an instance where for a short time baby care was furnished for consideration, and the baby sustained burns when she overturned a coffee percolator. The trial court assumed that the child care was a business pursuit, but characterized insured's coffee brewing for herself and a guest as an activity not connected with baby care, thus ordinarily incident to nonbusiness pursuits. The analysis is unconvincing. The baby was not burned by reason of the insured's activity; but by a condition on the premises, and the baby's own activity. The business of child care by an insured itself contemplates the exercise of due care by an insured to safeguard the child of tender years from household conditions and activities; and any inactivity of an insured in this regard from which injury results cannot logically be called an activity ordinarily incidental to a nonbusiness pursuit.3
In the several cases which have involved the same, or similar exclusion clauses, the carving out of the exemption of ‘activities therein which are ordinarily incident to non-business pursuits' has depended upon evidence of the causative facts relative to the injury. The only evidence here is that of an injury. There is no evidence to indicate whether this resulted from a condition of the property, or some operation carried on therein. The former, an injury by reason of the defective or dangerous condition of the property, is not an ‘activity’ at all. Child care being the business, what activity therein ‘ordinarily incident to non-business pursuits' caused the injury? There was no evidence of any activity within the business, before the trial court. It was alleged in plaintiff's complaint that the injuries consisted of burns.
The only evidence tendered in the court below upon the limitation of the exclusion was that ‘All of the time that you were watching the Crane children, you would have been watching your own children too, wouldn't you? A. Certainly.’ This is offered to show that the business activity of child care is an activity ordinarily incident to nonbusiness pursuits. Undertaking the business relationship of child care for compensation is certainly not ‘ordinarily incident’ to the conduct of a household.
The clause, however, preserves coverage for some business activities ordinarily incident to nonbusiness pursuits. This is not a purposeless obfuscatory exception to the basic exclusion.
There are many business activities in the generic sense, in any house or home, ordinarily incident thereto; such as those which involve business visitors present for purpose of solicitation, sales or purchases relative to the household affairs. The housewife's occasional and incidental ‘pin money’ operations, the sale or exchange of eggs, flowers, fruits or vegetables to neighbors, might fall within such category; if they are considered to be business pursuits at all.4
The language of the exclusion also make it applicable to ‘the rendering of any professional service.’ The giving of music lessons at home has been held to be such a service, though carried on in a home. (People ex rel. Fullam v. Kelly, 255 N.Y. 396, 175 N.E. 108, 109.)
The insurance policy here is a ‘contract of adhesion’ but is perfectly valid and enforceable according to its terms. (Schmidt v. Pacific Mut. Life Ins. Co. (1969) 268 Cal.App.2d 735, 74 Cal.Rptr. 367.) The exclusionary clause here involved is conspicuous, plain and clear as required by Steven v. Fidelity & Casualty Co. (1962) 58 Cal.2d 862, 868, 27 Cal.Rptr. 172, 377 P.2d 284; and being clear under the facts developed here, the rules applicable to uncertainties are not applicable, so as to give coverage to an excluded business pursuit.
The judgment is affirmed.
I respectfully dissent from the majority opinion. The law is well established that doubts in construing policy provisions susceptible to alternative readings are to be resolved against the insurer and in favor of coverage and that ‘in particular, provisions relating to exclusions or exceptions from the performance of the basic, underlying obligation are construed strictly against the insurer and liberally in favor of the insured’ (Paramount Properties Co. v. Transamerica Title Ins. Co., 1 Cal.3d 562, 569, 83 Cal.Rptr. 394, 398, 463 P.2d 746, 750). In construing an insurance policy, it must be borne in mind that where two constructions are reasonable, that which is more favorable to the insured should be adopted. The policy should be read as a layman would read it and not as an attorney or an insurance expert might read it (Hobson v. Mutual Benefit H. & A. Assn., 99 Cal.App.2d 330, 221 P.2d 761).
The coverage here is under a homeowner's insurance policy and the question is whether appellant, as a laywoman, could reasonably interpret the exclusionary clause in question to include coverage for her liability for injuries to the child she was babysitting in her home. If so, the fact that there may be another interpretation of the clause, equally reasonable, excluding coverage, cannot justify a denial of appellant's claim.
I agree with my colleagues that appellant, in keeping the two young children in her home during the daylight hours for approximately $100 per month, was engaging in a business pursuit. But obviously, her principal occupation was not a business. It was the operation of the home and the care of her own two children. The activities inherent in keeping the two additional minor children would normally be in conjunction with and to a degree duplicatory of her ordinary household activities in the preparation of meals and the maintenance of suitable premises for her own children. It would thus be perfectly reasonable for appellant to conclude that while keeping Andrea constituted a business pursuit within the terms of the policy, it nevertheless fell within the exception to the business exclusion as it consisted of an activity ordinarily incident to her nonbusiness pursuits performed in her role as a homemaker and mother.
I find no disagreement with most of the authorities upon which the majority opinion relies. Generally, they concern business activities which are clearly not incident to nonbusiness pursuits of the assured. Nor do I contend that the clause in question is not susceptible to the reasonable interpretation upon which the majority opinion is predicated. But I agree with the initial appraisal of the clause expressed by the trial judge in this case: ‘Now, that is the most ambiguous thing I have heard of in a long time when you analyze it because it says it excludes business pursuits, but from the exclusion there is excluded activities which are ordinarily incident to nonbusiness pursuits, and those activities obviously have to be business activities, or is that the broad term—is it because I am not seeing the whole policy? MR. BERRY [Counsel for respondent]: No, Your Honor. I don't think the rest of the policy would cast any more light on it.’
A similar opinion has been expressed by an Illinois appellate court in State Farm Fire & Cas. Co. v. National Union F. Ins. Co. (1967) 87 Ill.App.2d 15, 230 N.E.2d 513. Construing the same provision in the same policy issued by the same company involved herein, the court stated that its language tended ‘to obscure rather than elucidate the meaning of the clause’ and referred to its meaning as ‘unclear, ambiguous.’ (Pp. 515–516.)
If the trial judge herein and an appellate court were confused as to the meaning of the provision, how much more so the average layman. I believe the clause is susceptible to more than one reasonable interpretation and, therefore, that we are mandated by the cases to resolve the ambiguity in favor of the insured.
I would reverse the judgment.
1. A jockey brought an action against insured for an injury, a race horse bite. The insurance company defended, assuming that the racing stable was a hobby or pastime. It later discovered insured treated his farm and racing as a business for income tax purposes. Having had information about the activity, its means of knowledge was held to estop the company, under Missouri law. (Salerno v. Western Casualty & Surety Company (C.A.8th 1964) 336 F.2d 14.)In a case where father and son were coinsured parties, the son volunteered to help B. who was hired by the father to clear the father's land. In so doing, B. was struck and injured by a power saw operated by the inexperienced son. While the policy exclusion operated as against the father, it was held that the son was not engaged in a business pursuit of his own, and the policy was operative to insure him. (Fadden v. Cambridge Mutual Fire Insurance Co., supra. 51 Misc.2d 858, 274 N.Y.S.2d 235.)
2. One may well doubt that horseplay, such as goosing with an airhose, is an ‘activity ordinarily incident to nonbusiness pursuits.’ (Consult: Tarpper v. West-on-Mott Co. (1918) 200 Mich. 275, 166 N.W. 857; International Harvester Co. v. Industrial Commission (1933) 354 Ill. 151, 187 N.E. 916; Barden v. Archer Daniels Midland Co. (1933) 187 Minn. 600, 246 N.W. 254; Payne v. Industrial Commission (1920) 295 Ill. 388, 129 N.E. 122; Federal Rubber Mfg. Co. v. Havolic (1916) 162 Wis. 341, 156 N.W. 143; In re Loper (1917) 64 Ind.App. 571, 116 N.E. 324; Stark v. State Industrial Acc. Commission (1922) 103 Or. 80, 204 P. 151.)
3. Paulson v. Jarmulowicz (1964) 268 Minn. 280, 128 N.W.2d 763, infant scalded by contents of coffee percolator. The duty of care re infants: Crane v. Smith (1943) 23 Cal.2d 288, 144 P.2d 356, child put finger in coffee grinder and lost it, while she was invitee; Kataoka v. May Dept. Stores Co. (1943) 60 Cal.App.2d 177, 182, 140 P.2d 467 (child's hand caught in escalator) stating the rule (p. 184, 140 P.2d p. 471) “Proprietors of premises who invite children on them must use care to keep them reasonably safe, not omitting precautions against injury from childish impulses. * * *”
4. While it involved only an administrative law question, Child v. Warne (1961) 194 Cal.App.2d 623, 632–633, 15 Cal.Rptr. 437, is instructive. The Director of Agriculture prefatory to issuance of a marketing order was required to secure assent of certain percentages of producers responsible for the crop, by volume and by number, and the director interpreted this to relate only to those who were engaged in the ‘business' of producing avocados or of causing them to be produced for market. In this case, it is held (p. 633, 15 Cal.Rptr. 437) that where the contribution to livelihood is slight and the activity is a mere incident to the primary use of the property, his minimal business activity does not render him engaged in business. Thus, backyard avocado growers producing on an annual average of 438 lbs., the production on an average of four trees or less, which would return an average of $21.90 each annually, were held not to be in the business or production contemplated for regulation. The produce in such minimal amount was a mere incident to use of the owner's premises.
DAVID,* Associate Justice. FN* Retired judge of the superior court sitting under assignment by the Chairman of the Judicial Council.
SHOEMAKER, P. J., concurs.