No. 88-001
IN THE SUPREME COURT OF THE STATE OF MONTANA
1988
COLONIAL INSURANCE COMPANY
OF CALIFORNIA,
Plaintiff and Respondent,
-vs-
ROGER LEE BLANKENSHIP,
Defendant,
-and-
DAVID P. SANDFORD,
Defendant and Appellant.
APPEAL FROM: District Court of the First Judicial District,
In and for the County of Lewis and Clark,
The Honorable Thomas C. Honzel, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
James T. Harrison, Jr.; Harrison Loendorf and Poston, P.C.
Helena, Montana (David P. Sandford)
Glen L. Drake, Keller, Reynolds, Drake, Sternhagen and
Johnson, Helena, Montana (Roger Lee p lank ens hip)
For Respondent:
Stephen M. Frankino; Hughes, Kellner, Sullivan and
Alke, Helena, Montana
Submitted on Briefs: March 24, 1988
Decided: May 3, 1988
Clerk
Mr. Chief Justice J. A. Turnage delivered the Opinion of the
Court.
Plaintiff David P. Sandford appeals an order of the
First Judicial District Court, Lewis and Clark County, grant-
ing summary judgment in favor of respondent Colonial National
Insurance Company (Colonial). We affirm.
On September 20, 1986, Colonial renewed an automobile
liability insurance policy that Colonial had previously
issued to John Lloyd Johnson. Colonial's policy with Johnson
insured Johnson's 1982 Chevrolet Camaro.
On October 3, 1986, Johnson sold the Camaro to his
cousin, Roger Lee Blankenship, for $7000. Blankenship paid
Johnson $5000 of the purchase price and orally agreed to pay
the remaining $2000 within one year. The parties did not
execute an agreement with respect to the $2000 and Johnson
did not secure the debt with a lien. Following Johnson's
transfer of the certificate of title, Blankenship executed an
application for a new title. A review of Blankenship's
application for a new title shows that the Camaro was subject
to a lien in favor of Southwest Montana Federal Credit Union.
Subsequent to the above-described transaction, Johnson
delivered the Camaro to Blankenship who immediately took
possession. On October 4, 1986, Blankenship drove the Camaro
to Helena.
At approximately 1:00 a.m. on October 5, 1986,
Blankenship was driving the Camaro when he collided with a
motorcycle driven by appellant David Sandford. As a result,
Sandford was seriously injured. Blankenship fled the acci-
dent scene. In January or February 1987, Blankenship admit-
ted to law enforcement authorities that he was involved in
the October 5, 1987, accident.
On or about October 13, 1986, Blankenship purchased
insurance, from another insurer, for the Camaro.
Approximately three months later, Blankenship gave John Lloyd
Johnson another vehicle in lieu of the $2000 debt owed to
Johnson. Blankenship testified, by deposition, that Johnson
agreed to leave his insurance on the Camaro until Blankenship
could get coverage. Blankenship also stated that Johnson
gave Blankenship Johnson's certificate of insurance.
Blankenship did not request Colonial to transfer John-
son's insurance policy to Blankenship. Colonial did not
learn of the accident until Blankenship admitted his involve-
ment in January or February 1987.
On May 19, 1987, Colonial brought this action seeking a
declaratory judgment and requesting a stay of proceedings in
a companion case. Following a hearing on October 15, 1987,
the District Court, on November 3, 1987, granted summary
judgment in favor of Colonial.
On appeal, defendant Sandford raises one issue for our
review:
Did the District Court err when it held that Colonial's
automobile liability insurance policy issued to John Lloyd
Johnson affords Roger Lee Blankenship neither coverage nor a
defense to the claims asserted against him by David P.
Sandford?
Appellant Sandford contends the District Court erred
when it found that Colonial's policy with Johnson did not
provide liability coverage to Blankenship. Colonial's policy
provides that an "insured person" means the owner, the own-
er's spouse or a permissive user. Appellant Sandford does
not contend that Blankenship is a permissive user. There-
fore, we must determine whether the District Court properly
found that the sale was not conditional and that Johnson and
Blankenship were - joint owners.
not
Previously we considered the issue of who was the owner
of an automobile for insurance purposes. In Safeco Insurance
Company v. Lapp (Mont. 1985), 695 P.2d 1310, 1312, 42 St.Rep.
289, 290, we stated: "Ownership for insurance purposes can
be determined by the intent of the parties and language of
the insurance contract." In Lapp the certificate of title
had not been transferred to the buyer at the time of the
accident. However, we held that, based on the intent of the
parties, the purchaser was the owner of the vehicle. Lapp,
695 P.2d at 1312, 42 St.Rep. at 290. Clearly, Blankenship is
the automobile's owner under Lapp.
Section 61-1-310, MCA, defines an automobile "owner."
It provides:
"Owner" means a person who holds the
legal title to a Gehicle. - - vehicle
If a
is - subject - - agreement - -
- the of an for the
conditional sale thereof with- riaht
- the
- purchase upon performance - -
of of the
conditions stated - - agreement and
in the
- -an immediate right - possession
with - .
of
. .
vested - - conditional vendee. or in
in the
the event a vehicle is subject to a
lease, contract, or other legal arrange-
ment vesting right of possession or
control, for security or otherwise, or
in the event a mortgagor of a vehicle is
entitled to ~ossession. - - owner
L
then the
is - person - - - is vested right of
- the in whom
possession
- -- - control.
or [~m~hasis
added. 1
~
In Truck Insurance Exchange v. Nelson (Mont. 19871, 743
P.2d 572, 44 St.Rep. 1482, we clarified "intent of the par-
ties" to mean the parties to an insurance contract. "The
purchase of property and the insurance of property are dis-
tinct transactions ...
The purchase contract is essentially
irrelevant to the acquisition of insurance. We will not
allow the purchase agreement to dictate the interpretation of
the insurance agreement." Nelson, 743 P.2d at 574, 44
St.Rep. at 1485. See also, S 61-1-310, MCA.
Appellant Sandford contends that at the time of the
accident Blankenship owed Johnson $2000 on the purchase
price. Therefore, appellant argues, the sale was conditional
and the parties were joint owners. Appellant cites the
endorsements section of Colonial's insurance policy which
provides :
. .. Except with respect to bailment
lease, conditional sale, purchase agree-
ment, mortgage or other encumbrance, the
named insured - - -
is the sole owner - -
of the
vehicle unless otherwise stated herein:
Absence of an entry means no exception.
[Emphasis added.]
After careful review of the record, we hold the Dis-
trict Court correctly found the sale was not conditional.
Johnson was the named insured in the policy. Neither
Blankenship nor Johnson requested Colonial to transfer John-
son's policy to Blankenship. The sale to Blankenship was not
entered as an exception. Further, appellant presented no
evidence that Johnson retained any interest in the Camaro.
The $2000 owed by Blankenship to Johnson was simply an unse-
cured debt and not part of a conditional sale. Additionally,
Blankenship acquired title to the car and exercised total
control of the automobile.
If, arguendo, we agreed with appellant that the automo-
bile sale was conditional, $ 61-1-310, MCA, determines the
issue in an identical manner. Section 61-1-310, MCA, pro-
vides in pertinent part: "If a vehicle is the subject of an
agreement for the conditional sale ... the owner is the
person in whom is vested the right of possession or control."
Therefore, Blankenship, as the person in possession of the
Camaro, is the "owner" under $ 61-1-310, MCA. Johnson's
insurance policy with Colonial does not afford Blankenship,
as owner of the Camaro, with coverage.
Clearly the contract, the record and 5 61-1-310, MCA,
support the District Court's finding the sale was not condi-
tional and that Colonial's policy with Johnson affords
Blankenship neither coverage nor a defense to claims asserted
against him by appellant Sandford.
Accordingly, the judgment of the District Court is
affirmed.
2 4 7 J
Chief Justice
We concur: