Filed 12/3/15; pub. order 12/17/15 (see end of opn.)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(San Joaquin)
----
NATIONWIDE MUTUAL INSURANCE C071776
COMPANY,
(Super. Ct. No.
Plaintiff and Respondent, 39201100255986CUICSTK)
v.
AWEIA SHIMON et al.,
Defendants and Appellants.
This insurance coverage case arose when a 17-year-old driver, Simone Lionudakis
(Simone), got into a motor vehicle accident, injuring Aweia Shimon and Flora Shimon.
Simone was driving a GMC pickup truck owned by and registered to her father Phillip
Lionudakis, but he had excluded Simone from his insurance policy to save money, even
though Simone was the only one who ever drove the GMC. Phillip’s ex-wife (Simone’s
mother) Kristen Doornenbal had insurance through plaintiff Nationwide Mutual
Insurance Company (Nationwide) for her own and her current husband’s vehicles, but not
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the GMC. The Doornenbals’s Nationwide policy provided coverage for a household
family member’s use of a “non-owned” vehicle, but not if the non-owned auto was
“furnished or available” for her “regular use.” Non-owned-auto insurance coverage is
meant to allow an insured to be covered for occasional use of a non-owned automobile,
while the exclusion for regular use is meant to prevent an insured from regularly using a
non-owned vehicle without paying insurance premiums for that vehicle.
The trial court entered declaratory judgment in favor of plaintiff Nationwide
against the Shimons as defendants, finding the GMC was furnished or available for
Simone’s regular use and therefore coverage was excluded. The Shimons appeal, arguing
the vehicle was not available for Simone’s use at the time and place of the accident,
because her parents did not want her driving that far from home and had told her not to
drive at all for a week or two as punishment for bad grades.
We affirm the judgment.
FACTS AND PROCEEDINGS
The accident happened on February 9, 2008, around 4:45 p.m., between Modesto
and Sonora. Simone was a few months shy of her 18th birthday and had been driving the
GMC for over a year and a half, since she got her driver’s license. Her father, divorced
from her mother since 2002, bought the GMC shortly before Simone’s 16th birthday in
May 2006, after asking her what kind of vehicle she wanted. The GMC was owned by
and registered to Simone’s father, who had several other vehicles and did not drive the
GMC. He excluded Simone’s use of the GMC from his own auto insurance policy, in
order to save money.
Simone’s mother and father lived about 10 minutes apart in Escalon, and Simone
split her time between them. Simone’s mother and new husband each had their own
vehicles.
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After Simone got her driver’s license in July 2006, her father gave her her own set
of keys for the GMC, and she drove it every day. It became her “way of transportation.”
She anticipated it would be hers some day.
Simone’s parents set parameters -- “to stay within Escalon, Riverbank, Modesto,
to ask permission if she was going to be going outside of that area. She had to be home
at a certain time. She had to maintain certain grade levels. And of course, attitude had to
play into that as well.” The mother said Simone “really didn’t leave Escalon too much to
go to like to Riverbank, maybe to the movies or something. Modesto. But she let us
know when she did that.”
In February 2007, one year before the accident, Simone signed rules written by her
mother about general behavior. Below their signatures the mother wrote “Truck Rules” -
- (1) no passengers, (2) “no driving outside of Escalon and Riverbank (Modesto when
ok’d by mom or dad),” (3) be home right after school or after-school activities; (4) on
Sundays be home at a reasonable time, as determined by parents, and (5) call and let them
know her plans when with friends and ask permission.
Over time the restrictions loosened. Simone could have passengers. She drove
the GMC around town, to and from school, between her parents’ homes, to her friends’
homes, and after-school activities, on a daily basis, without needing to ask permission.
She drove to Oakland to visit her brother in the hospital. Her mother testified “if it was
going to be outside of her normal range of travels, you know, Modesto, or if she was not
going to be home on time or whatever, she had to call. [¶] But after a period of time, she
could drive the vehicle without having to check in with me all the time, unless it was
something where she said I’m going to be home at this time, and she was not going to be
able to do that.” Simone testified her father “pretty much” said “call him, you know, if
I’m going to be out late or let him know where I was at. It wasn’t any major concern to
him.”
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Simone was the only one who drove the GMC for the year and a half before the
accident, with inconsequential exceptions. Once, as a prank, her friend took the keys and
hid the truck around the block. And once, Simone was in Oakland with her father, who
decided to stay, and she needed to get back to school, so her friend drove the GMC to
Simone in Oakland. Simone’s mother apparently said in deposition that she may have
driven the GMC once or twice, but at trial she did not recall saying that or driving the
GMC, and Simone testified her mother did not drive the GMC.
At her mother’s house, Simone usually left her keys on top of a cabinet where
other household members left their keys. Simone’s mother or father would take away her
keys if she misbehaved, but that did not happen very often.
On the day of the accident in February 2008, Simone was not supposed to be
driving the GMC because her mother had taken the keys away due to Simone’s poor
grades. Simone nevertheless obtained her father’s set of keys from his home before
going to her mother’s home and, in her mother’s absence, took the GMC from the
mother’s residence, drove to pick up a friend, and drove to a pool hall in Modesto. An
inebriated female stranger at the pool hall asked for a ride to her home in Sonora, about
50 miles away, and Simone agreed in exchange for $100 “gas money.”
On the way to Sonora, Simone got into the accident with the Shimons.
The Shimons filed a personal injury lawsuit against several parties, including
Simone, her father, and her mother. The lawsuit settled, with an agreement that the court
would determine whether there was insurance coverage for Simone under her mother’s
auto insurance policy with Nationwide. Nationwide accordingly filed this declaratory
relief action.
Nationwide presented the insurance policy. The named insureds are Herman
Doornenbal Jr., dba Herman Doornenbal Farms, and Kristen Doornenbal, both identified
as individuals. The policy defines “family member” as “a person related to you by blood,
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marriage or adoption who is a resident of your household.” It is undisputed that Simone
qualifies as a family member.
The insurance policy provides under “Personal Auto Coverage,” 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 your or any ‘family member’s’
regular use.” (Italics added.)
The trial court issued a statement of decision concluding there was no coverage
under the Nationwide policy because the GMC was furnished or available for Simone’s
regular use. The court found: Simone enjoyed regular use of the GMC. Her father
bought it shortly before she got her license after discussing with her the type of vehicle
she wanted. Simone herself testified that, once licensed, she routinely drove the GMC to
school and between her parents’ homes without having to ask permission. She also
testified she could use the vehicle for longer trips outside Escalon once granted
permission from her parents and she even drove the GMC to Oakland to visit her younger
brother in the hospital. There was no evidence that Simone’s ability to drive the GMC
was conditioned on her father or mother or anyone else’s use of the GMC preempting
Simone. When her father bought the GMC, he owned numerous other vehicles for his
business and personal use. Her mother and mother’s current husband owned their own
vehicles. The court said that, while the evidence may be in conflict as to whether
Simone’s mother may have driven the GMC on two prior occasions, “the evidence is
compelling that the GMC was purchased specifically for Simone’s exclusive use and for
no other reason or purpose; that it was routinely available to her; had been driven as her
vehicle for over a year before the accident, and was not being used by anyone else since
the time of its acquisition.” The court found: “Despite the fact that her parents did place
limitations on where she could venture in the vehicle without first securing permission,
and had taken away her overall driving privilege due to problems with her grades or
conduct, evidence is clear that Simone’s use of the GMC was far beyond occasional and
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that it was regularly available to her for over a year before the subject accident. Clearly,
Simone’s use of the GMC was dominant and controlling as the evidence confirms that it
would not have even been acquired but for her need of a vehicle. When she was on
restriction, evidence confirms that it sat parked and unused by anyone else for two weeks.
Simone’s use of the GMC was not only a priority, it was clearly exclusive.”
The trial court found inapplicable the Nationwide policy coverage for a vehicle
hired or borrowed by the Doornenbals being driven with their permission.
The trial court found the GMC was furnished and available for Simone’s regular
use, indeed her exclusive use, hence triggering the exclusion from coverage for a non-
owned automobile. The trial court entered judgment in favor of Nationwide.
DISCUSSION
I
Standard of Review
An insurer seeking a declaratory judgment must prove the claim cannot fall within
the policy coverage. (Montrose Chemical Corp. v. Superior Court (1993) 6 Cal.4th 287,
300.) Policy exclusions are strictly construed, while exceptions to exclusions are broadly
construed in favor of the insured. (E.M.M.I. Inc. v. Zurich American Ins. Co. (2004)
32 Cal.4th 465, 471.)
We independently determine the meaning of insurance policy terms but review for
substantial evidence the trial court’s factual findings and inferences as to the underlying
circumstances relevant to applicability of the insurance policy. (Waller v. Truck Ins.
Exchange, Inc. (1995) 11 Cal.4th 1, 18; Alpine Ins. Co. v. Planchon (1999)
72 Cal.App.4th 1316, 1324; Interinsurance Exchange of the Automobile Club of Southern
California v. Smith (1983) 148 Cal.App.3d 1128, 1137-1138 (Interinsurance Exchange).)
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II
The Exclusion of Coverage for Regular Use Applies
The exclusion of coverage for regular use of vehicles not included in the policy,
sometimes called “drive other cars” or “additional insured automobile” provisions, is
intended “to prevent abuse, by precluding the insured and his family from regularly
driving two or more cars for the price of one policy.” (Highlands Ins. Co. v. Universal
Underwriters Ins. Co. (1979) 92 Cal.App.3d 171, 176 (Highlands).) The provision is
“intended to provide coverage for occasional use of other nonowned cars without
requiring payment of additional premiums. For obvious reasons, coverage was not
intended to include the regular use of other cars because insurance companies would
necessarily bear an increased risk without receiving a related increase in premiums.
Specifically, 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.” (Interinsurance
Exchange, supra, 148 Cal.App.3d at pp. 1137-1138; italics added.)
This purpose of preventing abuse is a crucial factor in determining whether the
exclusion from coverage applies in a particular case. (Interinsurance Exchange, supra,
148 Cal.App.3d at pp. 1137-1138; Highlands, supra, 92 Cal.App.3d at p. 176.)
The situation in this appeal falls squarely within this purpose of preventing abuse.
The GMC was basically Simone’s vehicle, but no one insured the truck for her use. Even
though it was registered to her father and he had a key, Simone had her own key and was
the only one who drove it for a year and a half, with the possible de minimus exception
that her mother may have driven it once or twice. That Simone’s friend drove it once as
Simone’s agent was still Simone’s use. That Simone’s friend once drove it around the
block as a prank is inconsequential. When Simone was not driving the GMC, it sat
parked. The vehicle was for her exclusive use.
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Exclusive use for a limited period of several weeks has been discussed with
differing results. Highlands, supra, 92 Cal.App.3d 171, held there was no coverage
under the non-owned auto provision of the driver’s insurance policy, where the owner
gave the car to the driver six weeks before the accident, with no limitation on its use, for
purposes of a potential sale to the driver. The driver delayed buying the car while he
waited for arrival of special tires he ordered. (Id. at p. 174.) Highlands held there was no
coverage because there were no limits on the driver’s use, and the situation exactly fit the
purpose of the exclusion to prevent abuse by allowing habitual use of non-owned cars
without paying insurance premiums. (Id. at pp. 176-177.) Highlands, supra,
92 Cal.App.3d at p. 176, distinguished Truck Insurance Exchange v. Wilshire Insurance
Co. (1970) 8 Cal.App.3d 553, 561, which held the trial court could reasonably infer the
test-driver’s use of the car for several weeks before deciding whether to buy it was for a
limited period of time, restricted to a reasonable geographical area, and for a limited
purpose. Here, Simone’s exclusive use was for an unlimited period of time and unlimited
purpose.
Appellants cite the distinguishable case of Interinsurance Exchange, supra,
148 Cal.App.3d 1128. There, a teenage girl who lived with her mother was involved in
an accident while driving her father’s pickup truck. (Id. at pp. 1130-1131.) The mother’s
insurer sought a declaration that coverage was excluded. The trial court concluded the
truck was available for the teen’s regular use, and therefore there was no coverage under
the non-owned-auto clause. (Ibid.) The appellate court reversed, holding that under the
undisputed facts and the established rules of construction, the father’s pickup truck was
not available for his daughter’s regular use, because it was used primarily by the father in
his business (though he also had other vehicles) and was not available to the girl
whenever she “ ‘wanted, needed, or desired’ ” it, and the girl did not possess a set of
keys, and she could use it only with her parents’ consent, limited in time, geographical
8
area and function, and the truck was not actually or potentially used interchangeably with
any other family car owned or used by the mother. (Id. at pp. 1137-1138.)
Interinsurance Exchange noted the term “regular use” is not vague, undefined, or
ambiguous. (Id. 148 Cal.App.3d at p. 1133.) It was defined in an insurance context to
mean “the principal use, as distinguished from a casual or incidental use.” (Kindred v.
Pacific Auto Ins. Co. (1938) 10 Cal.2d 463, 465 (Kindred).) The Kindred insurance
policy stated, “ ‘In consideration of [a] reduced premium . . . it is agreed that the regular
and frequent use of the commercial automobile described in the policy is and will be
confined during the policy period to the territory within a 50 mile radius of the place of
principal garaging of such automobile; and that no regular or frequent trips are or will be
made during the policy period to any location beyond a 50 mile radius . . . ; that the
assured does not and will not during the policy period advertise or solicit the hauling of
goods, materials or commodities to a location beyond [the] 50 mile radius . . . .’ ” (Id. at
pp. 464-465.) The insured regularly and frequently (i.e., principally) used the truck
beyond the 50 mile radius. Accordingly, there was no coverage for the accident that
occurred beyond the 50 mile radius. (Id. at pp. 465-466.)
Certainly, Simone’s use of the GMC at the time of the accident was not a casual or
incidental use. Her use was not only the principal use of the GMC; it was the exclusive
use of the GMC.
Appellants nevertheless argue the truck was not furnished or available for
Simone’s regular use because her parents placed some parental restrictions on her such
that she should not have been driving the truck at that particular time and place.
Appellants rely on case law holding that the question whether a vehicle is furnished or
available for regular use may depend on the time, place, and purpose for which it is to be
used. (E.g., Pacific Auto Ins. Co. v. Lewis (1943) 56 Cal.App.2d 597, 599-601 (Pacific
Auto).) However, in none of those cases was the driver the exclusive user of the car, as
Simone was in this case.
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Thus, in Pacific Auto, a car salesman, who had his own car, was allowed to use his
employer’s demonstrator cars for business purposes, as were other employees. The
salesman sometimes used one of the cars for personal purposes but always within the San
Diego vicinity. (Id. 56 Cal.App.2d at p. 599.) The employer did not encourage personal
use but permitted it for employee morale. (Ibid.) On one occasion, the employee asked
for, and received, special permission to drive one of the cars to Pomona on a personal
matter. He got into an accident on the way to Pomona. (Id. at pp. 599-600.) The
appellate court held the car was not available for the employee’s regular use so as to
exclude coverage under the employer’s insurance policy. “It is unnecessary to hold that
the words ‘regular use’ as used in these policies referred to an exclusive use. But ‘regular
use’ reasonably suggests a principal use, as distinguished from a casual or incidental use.
[Citation.] Assuming that the use of such a car may be regular without being exclusive,
there are other elements which may be considered in determining the meaning intended
by the rather broad and not very explicit language used in these policies to set forth the
exception to the coverage otherwise provided. Whether an automobile is furnished by
another to an insured for his regular use may reasonably depend upon the time, place
and purpose for which it is to be used. One furnished for all purposes and at all times and
places would clearly be for his regular use. One furnished at all times but strictly for
business purposes alone could hardly be said to have been furnished for his regular use at
a time and place when it was being used for personal purposes. It may be assumed that
when a car is furnished all of the time for business purposes, with permission to use the
same for incidental personal purposes, all within a certain area, the car might be said to
be furnished for regular use within that area. But when a car thus furnished for such a
use is driven to a distant point on one occasion, with the special permission of the one
furnishing the car, that particular use would hardly seem to be a ‘regular use’ of the car.
It cannot be said, as a matter of law, that such a use on a particular occasion, which is a
departure from the customary use for which the car is furnished, is a regular use within
10
the meaning of these clauses of the policies. A question of fact is presented which calls
for an interpretation of the language of the policies relating to the facts involved. . . .”
(Pacific Auto, supra, 56 Cal.App.2d at pp. 600-601, italics added.)
Another case held the vehicle was not furnished for the driver’s regular use, where
the driver borrowed the truck from his brother and used it for 10 days before the accident,
pursuant to an agreement that the driver would use the truck “solely for the purpose of
driving to and from his work and not for other purposes.” (Comunale v. Traders &
General Ins. Co. (1953) 116 Cal.App.2d 198, 202.) The only occasion on which he had
used the truck for other than this purpose was on the night of the accident. (Ibid.)
Another case held a father’s Packard was not furnished for his adult son’s “regular
use,” where the son had his own car and used his father’s snazzy Packard only on special
occasions and only by requesting special permission on each occasion, though permission
was granted unless his parents had other plans. (Juzefski v. Western Cas. & Surety Co.
(1959) 173 Cal.App.2d 118, 122.) The son’s use was a “casual and occasional use for
which special permission had to be secured each time the car was driven [by the son].”
(Id. at p. 122.) Accordingly, the exclusion of coverage for “regular use” of a non-owned
automobile was inapplicable, and the accident was covered under the son’s insurance
policy for non-owned vehicles. (Id. at p. 122.)
Here, in contrast, Simone 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.
That Simone 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.
11
“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.” (Allstate Ins. Co. v. Thompson (1988) 206 Cal.App.3d
933, 941 (Allstate).) Allstate held a Camaro was furnished or available for a minor’s
regular use. (Id. at p. 941.) Though he did not yet have a driver’s license, the minor
acquired the car about four to six weeks before the accident. The car was registered to
someone else, but the minor’s brother had acquired it, and the minor gave his brother
partial payment to buy the car. (Id. at p. 936.) The minor kept the car and worked on it
at his family’s residence. His parents admonished him not to drive without a license, but
he nevertheless drove the Camaro at least once before the accident and was driving it at
the time of the accident. (Id. at p. 936.) The appellate court held there was no insurance
coverage under the parents’ insurance policy because, unlike the case law relied upon the
appellants, “in the case at bench no restrictions were placed on [the minor’s] use of the
subject Camaro by the owner of that automobile.” (Id. at p. 941, orig. italics.)
Allstate is not on point because there the minor’s parents who imposed the
restriction were not the owners of the Camaro. Here, the parental discipline was by both
a nonowner of the GMC (mother) and the owner (father). However, the insurance policy
at issue in this appeal is the mother’s policy only, and the mother was not the GMC’s
owner.
We conclude the Doornenbals’s insurance policy excludes coverage for this
accident.
12
DISPOSITION
The judgment is affirmed. Respondent will recover its costs on appeal. (Cal.
Rules of Court, rule 8.278(a).)
HULL , J.
We concur:
RAYE , P. J.
BLEASE , J.
13
Filed 12/17/15
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(San Joaquin)
----
NATIONWIDE MUTUAL INSURANCE C071776
COMPANY,
(Super. Ct. No.
Plaintiff and Respondent, 39201100255986CUICSTK)
v. ORDER CERTIFYING
OPINION FOR
AWEIA SHIMON et al., PUBLICATION
Defendants and Appellants.
APPEAL from a judgment of the Superior Court of San Joaquin County,
Michael D. Coughlan, J. Affirmed.
Strauss Neibauer, Douglas L. Neibauer; and Brian P. Murray for Defendants and
Appellants.
Mackenroth & Laird, Ralph E. Laird for Plaintiff and Respondent.
1
THE COURT:
The opinion in the above-entitled matter filed December 3, 2015, was not certified
for publication in the Official Reports. For good cause it now appears that the opinion
should be published in the Official Reports and it is so ordered.
BY THE COURT:
RAYE , P. J.
BLEASE , J.
HULL , J.
2