In Nationwide Mutual Ins. v. Shimon (No. C071776, filed 12/3/15, ord. pub. 12/17/15) (hereinafter “Shimon”), a California appeals court affirmed judgment in favor of an auto insurer on a finding that coverage did not apply to an accident involving a pickup truck that was not owned by the named insured, but which was used regularly, and exclusively, by her teenage daughter.
In Shimon, a teenager split time living between her divorced parents. The girl’s father purchased a pickup truck solely for her use. However, the daughter was excluded from coverage under the father’s policy. The mother’s Nationwide policy did not list the truck, but covered family members’ use of certain non-owned vehicles.
Although the truck was registered to the father, he never drove it. The daughter had her own keys, and admitted using the truck for daily transportation. In fact, her mother had a set of written “truck rules” that were supposed to bar the daughter from having any passengers, along with limiting the times and places she could drive the truck, as well as imposing other conditions. But the evidence showed that the mother had allowed the rules to slip over time. On the day of the accident, the daughter’s use of the truck was purportedly suspended by her mother due to the girl’s poor grades in school. The truck was parked at the mother’s house, and the mother had the keys. However, the girl took her father’s spare keys and drove to a pool hall with her friend. She then agreed to drive a stranger home, 50 miles away, in exchange for $100 “gas money,” when the accident occurred.
The Nationwide policy issued to the girl’s mother provided that “Any ‘auto’ you don’t own is a covered ‘auto’ while being used by you or by any ‘family member’ except: … Any ‘auto’ furnished or available for you or any ‘family member’s’ regular use.” It was undisputed that the daughter qualified as a family member, defined as: “a person related to you by blood, marriage or adoption who is a resident of your household.”
The underlying personal injury lawsuit was settled with an agreement to submit the coverage question to the court in a declaratory relief action. The trial court in the declaratory judgment action issued a statement of decision concluding there was no coverage under the Nationwide policy because the truck was furnished or available for the daughter’s regular use, and entered judgment for Nationwide.
The appeals court agreed. Calling the “regular use” exception to nonowned auto coverage an “exclusion,” the appeals court engaged in an exhaustive review of “drive other cars” and “additional insured auto” case law. The court noted that such limitations were intended “to prevent abuse, by precluding the insured and his family from regularly driving two or more cars for the price of one policy.” (Citing Highlands Ins. Co. v. Universal Underwriters Ins. Co. (1979) 92 Cal.App.3d 171, 176.) Specifically, the Shimon court said that “the exclusion serves to prevent a situation in which the members of one family or household may have two or more automobiles actually or potentially used interchangeably but with only one particular automobile insured.” (Citing Interinsurance Exchange of the Automobile Club of Southern California v. Smith (1983) 148 Cal.App.3d 1128, 1137-1138.) The Shimon court said that “[t]he situation in this appeal falls squarely within this purpose of preventing abuse. The [truck] was basically [the daughter’s] vehicle, but no one insured the truck for her use.”
The court recognized that whether use is for a limited period of time has yielded differing results. (Comparing Highlands, supra, (no coverage where owner gave car to the driver six weeks before the accident with no limitation on use, for purposes of a potential sale) with Truck Insurance Exchange v. Wilshire Insurance Co. (1970) 8 Cal.App.3d 553, 561 (coverage applied because test-driver’s use for several weeks before deciding to buy was for a limited time, restricted to a geographical area and for a limited purpose).) But the Shimon court found that the daughter’s exclusive use was unlimited in either time or purpose.
The court rejected an argument that there was no regular use because the mother’s written “truck rules” purportedly barred the daughter from driving the truck at the particular time and place of the accident. The Shimon court distinguished Pacific Auto Ins. Co. v. Lewis (1943) 56 Cal.App.2d 597; Comunale v. Traders & General Ins. Co. (1953) 116 Cal.App.2d 198; and Juzefski v. Western Cas. & Surety Co. (1959) 173 Cal.App.2d 118, on the ground that none of those cases involved a situation where the vehicle was for the sole use of the involved driver, to the exclusion of all others. “Here, in contrast, [the daughter] was the exclusive user of the car owned by her father, who deliberately excluded it from his insurance policy to save money. This is exactly the abuse the ‘regular use’ exclusion is designed to prevent.”
The Shimon court concluded that the daughter’s violation of the mother’s “truck rules” was not dispositive: “That [the daughter] drove that day in defiance of her parents’ discipline for poor grades, and drove further than she was supposed to go without permission, does not render the ‘regular use’ exclusion inapplicable. Where the driver is the exclusive user of the vehicle, we see no reason, and appellants offer none, why ‘regular use’ should vary with each trip the driver takes. . . . A parental admonition by a nonowner of an automobile to a minor not to drive that automobile which is actually possessed and controlled by that minor does not render it unavailable for his regular use. It simply makes the minor’s use of the automobile subject to parental discipline.”
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