Safeco Insurance Co. of America v. Green

Smith, J., delivered the opinion of the Court. Appellant Safeco Insurance Company of America (Safeco) seeks to reverse a declaratory judgment holding that its policy was in force at the time of an accident as to an automobile owned by a wife, coverage for which her husband directed be deleted from the policy on the day prior to the accident. We shall affirm that judgment. The basic facts are undisputed.

Prior to March 6, 1967, Donald G. Orem (Orem) had procured an automobile liability policy from Safeco. The policy was issued in his name only. It did not mention his then wife, one of the appellees, by name. Her occupation as “Housewife” was listed, however.

The policy was procured through the agency of J. Charles Smith, Jr. (Smith), and covered a 1954 Plymouth. On March 6, 1967, Orem had added to the policy a Cadillac titled in the name of his wife for which he said he paid. No mention was made in the policy as to ownership of that car. On Saturday, April 15, 1967, Orem became angry with his wife.

He telephoned Smith and directed that the Cad ⁴¹³ iliac be removed from the policy. Smith was asked what reason was given by Orem for eliminating the coverage. From there the pertinent portion of the record is as follows: “A. Mr. Orem was concerned about his liability coverage because his wife was using the vehicle in a manner that he did not approve of, so he requested me, asked me if it was possible to eliminate this vehicle from the policy. I said yes, we’ll not cancel the policy, we’ll just eliminate that vehicle from the policy.

He says he still wanted coverage on his other car. So, we left one car — we didn’t cancel the policy, we just — “(The Court) Just eliminated the Cadillac from coverage? “(The Witness) Yes, sir. “Q. (Mr. Gallagher) And that was done, then, on what date ? A. It was done on the same day. “(The Court) And that was April 15th, 1967? “(The Witness) Yes, sir. “(The Court) A verbal agreement? “(The Witness) Yes.

It was a matter of a couple days before we could process it.” Smith testified he had no knowledge as to ownership of the Cadillac. When Orem called his wife to advise that he had eliminated coverage for the Cadillac, he was at a bar, drinking. His wife was at her mother’s. She did not believe him.

The accident giving rise to this litigation occurred the following day, Sunday, when Mrs. Orem was operating the Cadillac. She notified Smith of the accident on Monday. On Tuesday Smith executed an endorsement to the policy deleting the Cadillac “per phone call from insured on 4-15-67”. Safeco defended upon the strength of that endorsement.

The trial judge noted that the term “named insured” was defined in the “Liability Section” of the policy as ⁴¹⁴ meaning “the individual named in the declarations and also includes his spouse, if a resident of the same household” : that at the time of the accident the husband and wife did reside in the same household; that Section 15 of the policy said it might “be canceled by the insured named in the declarations by surrender thereof to Safeco or any of its authorized agents or by mailing to Safeco written notice stating when thereafter the cancellation [should] be effective”; and that no notice of cancellation had been given the wife. He concluded that the terms “insured named” and “named insured” “to the average layman reading a policy * * * would carry the same connotation, and would * * * reasonably be interpreted to mean the same”, and held as a matter of law “that the overall effect of the language in the policy means that ‘named insured’ and ‘insured named’ are indeed one and the same, and are interchangeable * * Notwithstanding the deletion of the Cadillac from the policy, Mrs. Orem continued to be protected so long as she operated the vehicle which remained in the policy, the 1954 Plymouth. Moreover, as a “named insured”, as the term was defined in the “Liability Section” of the policy, she continued to be protected in the operation of a non-owned automobile. “Non-owned” is defined in the policy as “an automobile or trailer not owned by or furnished for the regular use of either the named insured or any relative, other than a temporary substitute automobile * * The Cadillac was not a non-owned vehicle. Under the policy terms what we here have is not a cancellation of all insurance under the policy as to Mrs. Orem, but elimination or deletion of a particular vehicle primarily operated by her.

The trial judge found persuasive the rule relative to life insurance policies found in 43 Am.Jur.2d, Insurance, § 434 (1969), to the effect that “the interest of one named as a beneficiary in a life insurance policy cannot be terminated by the insured without the consent of the beneficiary except in pursuance of such a right in the insurance contract itself”. A like parallel might be found here. ⁴¹⁵ There