No. 95-207
IN THE SUPREMECOURT OF THE STATE OF MONTANA
1995
STATE FARM FIRE AND CASUALTY COMPANY,
Plaintiff and Appellant,
v.
DARRELL POWELL, and JACK SMITH, as
guardian ad litem for NATASHA SMITH,
and as Personal Representative of the <<.,/ ..~sm;&
Estate of CHRISTINA SMITH, deceased, ~~~~~~~~~~~~~~~~~
_ /,._ _, .,Lrrib"r
__ .Y
Defendants and Respondents.
APPEAL FROM: District Court of the Eighth Judicial District,
In and for the County of Cascade,
The Honorable Thomas M. McKittrick, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Lyman H. Bennett, III, Morrow, Sedivy & Bennett,
Bozeman, Montana
For Respondent:
Anne Biby, Bottomly Law Offices,
Kalispell, Montana (for Smith)
Submitted on Briefs: August 31, 1995
Decided: November 21, 1995
Filed:
Justice'Terry N. Trieweiler delivered the opinion of the Court.
The plaintiff, State Farm Fire and Casualty Company, filed a
complaint in the District Court for the Eighth Judicial District in
Cascade County in which it sought a declaratory judgment to the
effect that the insurance policy it issued to Darrell Powell did
not provide liability coverage for his collision with Christina
Smith on August 8, 1994. State Farm moved for summary judgment.
Jack Smith, who represented Christina Smith's estate and her
daughter, also moved for summary judgment. State Farm's motion was
denied and Smith's motion was granted. State Farm appeals the
District Court's disposition of the summary judgment motions. We
affirm the judgment of the District Court.
The issue on appeal is whether the District Court correctly
concluded that the vehicle operated by Darrell Powell at the time
of his collision with Christina Smith was an "insured vehicle"
according to the terms of State Farm's policy issued to Powell.
FACTUAL BACKGROUND
In December 1993, Darrell Powell entered into an oral
agreement to buy a 1971 Ford truck from his brother and
sister-in-law, Walter and Amanda Powell. Walter and Darrell agreed
that Darrell would make payments for the Ford when able and that he
would become the owner of the truck after he had paid the full
$1200 purchase price. Until the full purchase price was paid on
July 10, 1994, Walter continued to insure the Ford with his own
carrier: On one occasion, Darrell paid the premium amount to
Walter, who then sent the premium to his carrier.
During the seven month period that Darrell made payments to
Walter, Walter and Amanda kept the truck at their home and used it
as their own. From time to time, Darrell would notify Walter and
Amanda that he wanted to use the truck, and he would do so if it
was available at the time he needed it. Walter and Amanda,
however, continued to use the truck in exactly the same manner they
had used it prior to their oral purchase agreement with Darrell.
In.January 1994, while Darrell was making payments to Walter,
the truck's registration expired. Walter and Darrell agreed that
Darrell should register the truck in his name so that he would not
have to re-register the vehicle later that year. In order to
register the truck, Darrell's name had to appear on the title.
Walter transferred the title, and Darrell registered the Ford truck
in his name on January 28, 1994. A new title was issued in
Darrell's name on March 11, 1994.
On July 10, 1994, Darrell made the final payment for the Ford
truck. .On that date, Walter and Amanda cancelled their insurance
policy which covered the truck and executed a bill of sale which
stated:
We, the undersigned, hereby sell to Darrell L. Powell, a
1971 3/4 Ton 2 Wheel Drive Ford Pickup - green and white
in color. Debt is paid in full on this date.
DATED this 10th day of July, 1994.
3
Although Darrell continued to leave the truck at Walter's
house after July 10, Darrell then used the truck at will, whereas
Walter asked Darrell's permission to borrow it. According to their
affidavits, Walter and Amanda intended that ownership of the truck
pass to Darrell on the date he finished paying for it. After
July 10; 1994, Walter and Amanda no longer considered themselves
the owners of the Ford truck.
On August 8, 1994, while attempting to walk across U.S.
Highway 2 near Havre, Christina Smith was struck by the Ford truck
which was being operated by Darrell. Christina died seven hours
later as a result of injuries caused by the collision.
Jack Smith, as personal representative of Christina's estate
and guardian ad litem of her five-year-old daughter, filed an
action against Darrell Powell in the District Court of the Twelfth
Judicial District in Hill County. That action is still pending.
Powell's insurance provider, State Farm, then filed this
declaratory judgment action to avoid coverage for Powell's
potential liability. State Farm insured Powell's 1986 Mazda pickup
truck at the time of the collision, but maintained that the Ford
truck he was operating was not an insured vehicle.
On April 4, 1995, the District Court granted Smith's
cross-motion for summary judgment, based on its determination that
the Ford truck was insured as a "newly acquired vehicle" according
to the terms of Powell's insurance policy. On April 20, the court
entered a declaratory judgment in favor of Smith.
4
STANDARDOF REVIEW
This Court reviews a summary judgment order entered pursuant
to Rule 56, M.R.Civ.P., based on the same criteria applied by the
district court. Brinkman and Lenon v. P c? D Land Enterprises ( 19 94 ) , 2 6 3 Mont .
238, 241, 867 P.2d 1112, 1114. Rule 56(c), M.R.Civ.P., provides
that summary judgment is proper only when "there is no genuine
issue as to any material fact and . . the moving party is
entitled to a judgment as a matter of law."
Because our review of summary judgment is plenary, we decline
to review two of State Farm's claims on appeal: first, that the
trial court failed to consider State Farm's reply brief before
issuing its order; and second, that the court did not state with
sufficient particularity its reasons for granting Smith's summary
judgment motion. Since we review the entire record, including
State Farm's reply brief, denovo, we hold that the District Court's
failure to consider that brief was, at best, a harmless error.
Furthermore, there was nothing in State Farm's three-page reply
brief which even addressed the issue on which the District Court's
judgment was based. Therefore, State Farm's substantial rights
could not have been affected by the District Court's failure to
consider it.
We also hold that the District Court's order granting summary
judgment, though not exhaustive, was sufficient to apprise the
parties'of the court's rationale for concluding that Powell's Ford
5
truck was an insured vehicle according to the terms of State Farm's
policy.
DISCUSSION
Did the District Court correctly conclude that the vehicle
operated by Darrell Powell at the time of his collision with
Christina Smith was an "insured vehicle" according to the terms of
State Farm's policy issued to Powell?
State Farm contends that it did not insure Darrell's operation
of his Ford truck on August 8, 1994, because on that date the truck
was not an "insured vehicle" as required by Powell's insurance
policy. According to State Farm, Powell's truck was not an
"insured vehicle" because it was neither (a) "your car," (b) a
"newly acquired car," (c) a "temporary substitute car," or (d) a
"non-owned car," as required by the terms of the policy.
State Farm reasons that "your car" can only be the car
described on the declarations page, in this case the 1986 Mazda
truck. However, since Powell had purchased the 1971 Ford truck and
the title had been transferred, neither was it a "non-owned car,"
and it was not a "temporary substitute car," which is also defined
as a non-owned vehicle. State Farm further maintains that the Ford
was not a "newly acquired car" because Powell did not notify the
company of his acquisition of the vehicle within thirty days after
the date on which he acquired an ownership interest. State Farm
relies on our decision in Colonial Insurance Co. v. Blankenship (1988) , 231
Mont. 469, 753 P.Zd 880, to establish the proposition that Powell
6
became the owner of the Ford when he acquired title to the vehicle
in January 1994, rather than when Walter and Amanda executed the
bill of sale on July 10, 1994.
Although we agree that Colonial Insurance would be the starting
point for determining Powell's ownership of the vehicle, we hold
that "delivery," and not "ownership," is the definitive date from
which to determine coverage based on State Farm's policy. The
plain language of State Farm's policy provides that:
NewlyAcquiredCar - means a car newly owned by you if it . . .
is an added CCIY and . . [is] owned by you on the date of
its delivery to you; but only if you . . . tell us about
it within 30 davs after its deliverv to YOU . . .
(Underlining added.) The policy clearly states that the thirty-day
grace period is to run from the date of delivery, not from the time
an ownership interest is acquired.
The sincerity of State Farm's argument in this case must be
questioned in light of the inconsistent position it has taken in
the past when it was to its advantage to do so. In the past, State
Farm has taken the position that the date of delivery is the
crucial date from which to determine coverage for a newly acquired
vehicle. In LYllier v. Turnaclzfl (N.M. 1988), 758 P.2d 796, Turnacliff
took possession of a car on October 21, before the title was
transferred or payment was made. After Turnacliff was involved in
an accident on November 28, State Farm argued that the dispositive
date for coverage under its "newly acquired car" provision--
identical to the provision in Powell's policy--was the date of
7
delivery. The L’Allier court agreed that according to the policy
language "the newly acquired car provision began to run when the
newly acquired car was 'owned' and 'delivered' to Turnacliff."
L’ANier , 758 P.2d at 797. The court stated:
The dispositive issue on appeal is whether, as a matter
of law, the thirty-day notice period under the newly
acquired car provision in Turnacliff's automobile
insurance policy began to run when Turnacliff took
delivery of the car. We hold that delivery is a critical
element of ownership of a car, and when the circumstances
indicate that the parties intended for ownership of the
car to pass, delivery of the car is sufficient to trigger
the running of the newly acquired car provision in an
automobile insurance policy.
L ‘Allier , 758 P.2d at 797.
Because "delivery" is not defined in State Farm's insurance
policy, we choose to give the term its ordinary meaning. We hold
that in the context of the newly acquired vehicle clause, the word
"delivery" signifies a handing over of physical possession and
control of an automobile.
In this case, we conclude, based on uncontroverted facts, that
delivery occurred on July 10, 1994, when Walter and Amanda intended
to transfer ownership of the truck to Darrell, and when Darrell's
physical possession and control of the truck was finally possible.
Therefore, we conclude that the Ford truck operated by Darrell
Powell on August 8, 1994, when he collided with Christina Smith,
was a "newly acquired vehicle," and therefore, an "insured vehicle"
according to the terms of State Farm's policy.
8
For these reasons, we affirm the District Court's order which
denied State Farm's motion for summary judgment and granted summary
judgment to the defendants.
9