Community Service Insurance v. Price

T. G. Kavanagh, J.

(for affirmance). On March 4, 1969 defendant Eldon L. Price while driving a Volkswagen registered in the name of his wife, Velma E. Price, was involved in an accident with an automobile driven by defendant David L. Beck-with. Carolyn Beckwith was a passenger in the car driven by her husband and as a result of the accident Carolyn Beckwith sustained serious injuries.

On the date of the accident, there was in full force and effect a policy of automobile insurance *485issued by plaintiff, Community Service Insurance Company. This was a single policy that covered both Eldon L. Price and Velma E. Price as named insureds and afforded coverage to both a Chevrolet registered in the name of Eldon Price and the Volkswagen registered in the name of Velma Price. The limits of coverage were inter alia $10,-000 for injuries or death to one person, and $20,-000 with respect to two or more persons injured as a result of an accident.

Plaintiff insurance company brought an action in Genesee Circuit Court (John W. Baker, J.) for a declaratory judgment to determine the applicable limits of coverage available to defendants.

The trial court held that the Volkswagen driven by Eldon Price, but registered to Velma Price was, within the policy, a "nonowned” automobile with respect to Eldon Price. Furthermore, because of certain ambiguities within the policy, the trial court ordered the plaintiff insurance company to provide $10,000 as primary liability applicable to the Volkswagen as a described automobile owned and insured by Velma Price and an additional $10,000 as secondary liability applicable to Eldon Price as a named insured driving a "nonowned” automobile.

The Court of Appeals (Fitzgerald, J.) reversed and held that the maximum coverage was $10,000 in accordance with its construction of various provisions within the policy.

We affirm the Court of Appeals, for while it may be said that an ambiguity exists with regard to the definition of "nonowned” automobile, there is no ambiguity with regard to the definition of "owned automobile”.

In such circumstance we look first to the definition of "owned automobile” to determine if the *486contract provides coverage. Finding that it does provide coverage while driving an "owned automobile” there is no occasion to determine what coverage the contract provides in relation to a "non-owned automobile”.

Both the Volkswagen and the Chevrolet were described in the amended declarations which formed a part of the policy. A premium charge for each automobile indicated that bodily injury in the amount of $10,000 for one person was afforded to each automobile. The definition of "owned automobile” under PART I — LIABILITY of the policy was:

"a private passenger, farm or utility automobile described in this policy for which a specific premium charge indicates that coverage is afforded, * * * .”

Under the terms of the policy any automobile described in the policy for which a premium was paid was an "owned” automobile as to any and all of the named insureds listed on the policy. Therefore, Eldon Price, while driving the Volkswagen on March 4, 1969, was driving an "owned” automobile with respect to the policy of insurance. Because Eldon Price was driving an "owned” automobile, the insurer’s limit of liability is that which is stated in the policy as to "owned” automobiles, that is, $10,000.

The decision of the trial court which found a limit of liability totalling $20,000, therefore, was in error. The Court of Appeals decision with respect to its finding that the Volkswagen under the terms of the policy was "owned” by Eldon Price is affirmed.

Costs to plaintiff.

Levin and M. S. Coleman, JJ., concurred with T. G. Kavanagh, J.