Mid-Century Insurance v. Hauck

[295]

Opinion

THE COURT.

This appeal is from a judgment in favor of respondent insurance carrier and involves the interpretation and construction of a policy of insurance. The facts are not in dispute. The controversy arises out of a water skiing accident when respondent’s insured, Larry Hauck, was operating his motor boat and towing his wife, Rebecca Hauck. Mrs. Hauck collided with an irrigation pipe protruding above the water surface and died from the resulting injuries.

Respondent insured Mr. Hauck under its Trident Boat and Yacht Policy. Under coverage C of the policy, respondent agrees “to pay all sums which the insured shall become legally obligated to pay for bodily injury, including death at any time resulting therefrom, sustained by any person . . . .” Under the exclusions section, exclusion 7 states: “[This policy does not cover: . . .] 7. under coverages B, C and D3, bodily injury . . . sustained by (a) any member of the same household as the insured except a residence employee or (b) the named insured.” It is undisputed that decedent was a member of the same household as the insured, and, as Larry Hauck’s wife, Rebecca Hauck was by definition a “named insured” under the terms of the policy. The issue before us is whether the exclusion, since it speaks only of bodily injury, also includes death. The trial court concluded that exclusion 7 was not ambiguous and the subject policy excluded coverage for the death of Rebecca Hauck, and it entered a declaratory judgment stating that respondent Mid-Century Insurance Company had no obligations or duties of any kind or description to defendants under the terms of its policy on account of the accident.

“[W]e begin with the fundamental principle that an insurer cannot escape its basic duty to insure by means of an exclusionary clause that is unclear.”

(State Farm Mut. Auto. Ins. Co.

v.

Jacober

(1973) 10 Cal.3d 193, 201 [110 Cal.Rptr. 1, 514 P.2d 953].) The policy before us contains no definition of “bodily injury,” although the Special Conditions section does set forth other definitions applicable to the instant policy. We note that exclusion 6 provides “under coverage B, damages for personal injuries or loss of life.” Exclusion 7, here in question, provides, “under coverages B, C and D3, bodily injury or property damage.” Exclusion 11 provides “under coverages C and D, bodily injury, sickness, disease or death.” It is apparent that within the exclusionary clauses and their overlapping coverage, the terms “bodily injury,” “personal injuries,” “loss of life,” and “death” are not used interchangeably or with any degree of consistency. “[T]he burden rests upon the insurer to