MISSION INSURANCE COMPANY v. BROWN (1965)

This is an appeal from a judgment in a declaratory relief action wherein plaintiff insurance company sought a declaration of its rights under an automobile insurance policy.

The parties have in effect entered into an agreed statement of the facts by adopting the trial judge's findings of fact with but one exception, namely, finding number 5, which appellant claims is essentially a conclusion of law. The findings are herein set forth in their entirety:

‘FINDINGS OF FACT

‘1. Subsequent to the issuance of the said policy number MIC-149444 and the endorsement entitled ‘Family Protection Coverage Endorsement’, attached thereto, (Plaintiff's Exhibit 1) while both the policy and the endorsement were in full force and effect, except as hereinafter found, the defendants, while occupants of the insured vehicle, were involved in an automobile collision occurring April 13, 1963, within the Republic of Mexico at a point not more than 75 miles from the boundary line of the United States of America, during the course of an occasional trip into Mexico that did not exceed 10 days.

‘2. That said defendants received personal injuries in the course of the collision with an uninsured automobile at the time and place hereinabove described.

‘3. That plaintiff is a corporation organized and existing under and by virtue of the laws of the State of California, with its principal place of business located in the County of Los Angeles, and was and now is duly authorized and admitted insurer in said state.

‘4. The said policy of insurance, exclusive of the Family Protection Coverage Endorsement, provided insurance for losses occurring in the Republic of Mexico in accordance with the terms and provisions of that portion of that said policy entitled ‘Mexican Coverage—Limited’. The provisions of the said policy entitled ‘Mexican Coverage—Limited’ extends the coverage provided by the policy, exclusive of the endorsement entitled ‘Family Protection Coverage Endorsement’, to uses of the insured automobile for occasional trips into that part of the Republic of Mexico lying not more than 75 miles from the border line of the United States of America for a period not to exceed 10 days for any one time.

‘5. The said policy was issued with an endorsement containing, except for attempted purported territorial limitation, the uninsured motorist coverage provision required and prescribed by Section 11580.2 of the Insurance Code.

‘6. The said policy as issued contained no written waiver or deletion of the uninsured motorist coverage, and no written waiver of said uninsured motorist coverage was executed by defendants.’

A judgment was entered in favor of the defendants and from which this appeal was taken. It is the appellant's contention that the trial court erred in concluding that the territorial limitation found in the ‘Family Protection Coverage Endorsement’ does not prevail over the provision found in the general portions of the policy.

The contract of insurance is a three-sheet document, with the printing of the declarations insuring agreements, exclusions and conditions set forth on both the front and back of each sheet. Under the general policy provisions (last paragraph on page 4, sheet 2) is found the following:

‘MEXICO COVERAGE—LIMITED: It is agreed that the coverage provided by this policy is extended to apply while the automobile insured is being used for occational trips into that part of the Republic of Mexico lying not more than 75 miles from the boundary line of the United States of America for a period not exceeding 10 days at any one time.’

The third sheet contains the ‘Family Protection Coverage Endorsement’ and immediately follows the general provisions of the ‘Automobile Policy.’ On page one, of sheet three, under the endorsement provisions it is set forth, among other things, as follows:

‘III. POLICY PERIOD, TERRITORY

‘This endorsement applies only to accidents which occur on and after the effective date hereof, during the policy period and within the United States of America, its territories or possessions, or Canada.’

The sole issue in this appeal is whether the territorial limitation contained in the endorsement will take precedence over the general policy provisions with reference to territorial coverage.

With reference to the principles governing the construction of insurance policies, the court in McConnell v. Underwriters at Lloyds, 56 Cal.2d 637, 640, 16 Cal.Rptr. 362, 364, 365 P.2d 418, 420 said:

‘As delineated in Continental Cas. Co. v. Phoenix Constr. Co. (1956), 46 Cal.2d 423, 437–438 [4b, 11, 12], 296 P.2d 801, 57 A.L.R.2d 914; the following principles govern construction of insurance policies: ‘[A]ny ambiguity or uncertainty in an insurance policy is to be resolved against the insurer. [Citations.] If semantically permissible, the contract will be given such construction as will fairly achieve its object of securing indemnity to the insured for the losses to which the insurance relates. [Citation.] If the insurer uses language which is uncertain any reasonable doubt will be resolved against it; if the doubt relates to the extent or fact of coverage, whether as to peril insured against [citations], the amount of liability [citations] or the person or persons protected [citations], the language will be understood in its most inclusive sense, for the benefit of the insured.’ (See also Freedman v. Queen Ins. Co. (1961), 56 Cal.2d 454, 456–457 [1–3], 15 Cal.Rptr. 69, 364 P.2d 245; Prickett v. Royal Ins. Co., Ltd. (1961), 56 Cal.2d 234, 237–238, 14 Cal.Rptr. 675, 363 P.2d 907 [4–6], [86 A.L.R.2d 711].) However, if there is a conflict in meaning between an endorsement and the body of the policy, the endorsement controls.'

In the case at bar it is apparent that there is a difference between the provisions contained in the body of the policy and the endorsement. Notwithstanding the fact that the conflict is one relating to coverage, the endorsement must control over the provisions in the body of the policy. The endorsement expressly limits the coverage in the endorsement to accidents within the United States or Canada. The accident occurred in Mexico and the trial court erred in finding coverage and liability upon the part of the appellants.

Realism dictates that an insurer can well grant the coverage which is provided against damages for bodily injuries caused by uninsured automobiles in the United States and Canada where practically everybody has some type of automobile insurance. In Mexico the story is different.

The terms of the policy are plain and explicit, and it would be error to indulge in a forced construction that would cast a liability upon the appellant insurance company, which it has not agreed to assume, and, in fact, has explicitly excluded from the coverage of the policy. (Jensen v. Traders & General Ins. Co., 52 Cal.2d 786, 791, 345 P.2d 1.)

The judgment is reversed.

FOURT, Justice.

WOOD, P. J., and LILLIE, J., concur.