State Farm Mutual Automobile Insurance v. Vaughn

Opinion

GATES, J.

Defendant Keith Vaughn appeals from the judgment entered in this declaratory relief action in favor of plaintiff State Farm Mutual Automobile Insurance Company. He challenges the trial court’s determination “[t]hat the 1982 Legislative Amendment to California Insurance Code Section 11580.1 (c)(5) merely clarified existing law permitting indirect inter family indemnity exclusions from policies of automobile liability insurance coverage rather than changed the pre-1982 law on this subject; [and] [t]hat, accordingly, no retroactive] effect is being given to the 1982 amendment. . . . ”

On May 6, 1978, defendant Raymond Schnitger and appellant Vaughn were involved in a traffic accident. Thereafter, Schnitger’s wife, who had been a passenger in the insured vehicle at the time of the accident, filed a complaint for personal injuries against appellant. Appellant, in turn, filed a cross-complaint against Schnitger seeking equitable indemnification and/or contribution. Respondent State Farm thereupon instituted the instant action for declaratory relief to determine its duties and obligations under the automobile liability policy it had issued to Schnitger, which excluded coverage for “bodily injury to: (1) any named insured, (2) any other insured under the policy, or (3) any member of the family of any named insured or other insured residing in the same household with such named insured or other insured; ...” (Exclusions, § I, par. (h); italics omitted.)

Appellant contends the intrafamily exclusion contained in Schnitger’s policy “is valid to exclude coverage only where one insured under the policy attempts to recover directly from another insured under the policy. It does not extend to preclude coverage of a claim arising out of a third party indemnity cross-complaint, notwithstanding that the benefits in such case might flow indirectly and circuitously to an insured under the policy.” In support of this position, appellant argues that the 1982 amendment to paragraph (5) of subdivision (c) of section 11580.1 of the Insurance Code may not properly be applied in the instant case, since it “does not act merely

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to clarify the existing law, but rather acts to provide an insurer with the statutory authority to extend the scope and effect of intra-family exclusions, so as to further narrow its obligation . . . .” We disagree.