Yamasaki v. Mercury Casualty Insurance

Opinion

SONENSHINE, J.

Marilyn Yamasaki appeals a summary judgment entered in favor of Mercury Casualty Insurance Company in an action for declaratory relief. The issue is whether a designated driver exclusion (Ins. Code, § 11580.1, subd. (d)(1))

1

is applicable when the driver operated the vehicle without the insured’s permission.

[832]

I

Ruben Pena was involved in an automobile accident while driving Yamasaki’s vehicle. Substantial injury was sustained by other persons and the car was declared a total loss.

Yamasaki made a timely claim to Mercury, her insurance company, for her property loss and for defense and indemnification against third party claims. Mercury denied coverage, claiming Yamasaki had designated Pena as a person specifically excluded from coverage.

Yamasaki filed the underlying complaint against Mercury seeking declaratory relief for breach of contract, breach of the implied covenant of good faith and fair dealing, and negligent infliction of emotional distress. Mercury’s motion for summary judgment was granted. Yamasaki appeals.

II

Yamasaki’s policy included a “Designated Person(s) Coverage Exclusion” specifically excluding Pena from coverage. The exclusion states, “It is agreed that coverage and the insurer’s obligation to defend, under this policy, shall not apply nor accrue to the benefit of any insured or any third party claimant while any motor vehicle is being used or operated by a natural person or persons designated above. . . . This limitation shall apply to any use or operation of a motor vehicle including the negligent or alleged negligent entrustment of a motor vehicle to any designated person.” In other words, Mercury is excused from, its duty to provide coverage or defend its insured if the car involved in the accident was driven by a person specifically excluded from coverage by the insured.

Yamasaki does not challenge the exclusion clause itself, acknowledging it is specifically authorized by section 11580.1, subdivision (d)(1).