Opinion
No. 78-634
Opinion announced March 22, 1979, withdrawn and rehearing granted April 12, 1979. Decided May 3, 1979. Rehearing denied May 24, 1979. Certiorari granted July 23, 1979.
From a judgment declaring that automobile liability insurer was not obligated to defend alleged tortfeasor in an action arising from a motor vehicle accident, the alleged tortfeasor appealed.
Reversed
1. APPEAL AND ERROR — Trial Court — Findings of Fact — Stipulation of Parties — Binding — Issue — Legal Significance of Facts — Not Binding — Appellate Court. Although an appellate court is bound on review to accept the findings of fact of the trial court where, by stipulation of the parties, those findings are supported by the evidence, nevertheless, where the dispute concerns the legal significance of such facts, the appellate court is not bound by the conclusions of law drawn by the trial court.
2. INSURANCE — Company — Had Knowledge — Vehicle Transferred — Uninsurable Son — Reissued Policy — Father's Name — Son Considered — Named Insured — Entitled — All Coverages. Where insurance company, through its local agent, had knowledge that vehicle described in liability policy had been transferred to insured's emancipated, uninsurable son, but nevertheless, reissued the policy in father's name, the son, having the insurable interest, will be considered as if he were the "named insured" and is entitled to the full panoply of coverages, including the "newly acquired automobile" coverage.
Appeal from the District Court of Adams County, Honorable Jean J. Jacobucci, Judge.
Weltzer Worstell, Louis A. Weltzer, David L. Worstell, for third-party plaintiff-appellant.
DeMoulin, Anderson, Campbell Laugesen, Richard W. Laugesen, for third-party defendant-appellee.
This is an appeal pursuant to C.R.C.P. 54(b) from a judgment declaring that Farmers Insurance Group is not obligated to defend Tony Liljestrand in an action against him arising from a motor vehicle accident. We reverse.
On August 13, 1976, defendant Tony Liljestrand, while driving a vehicle he had purchased from Anthony Zanghi, was involved in an accident in which the named plaintiffs allegedly suffered damages. Plaintiffs filed suit against Tony, his father, Phillip, his girlfriend, Rebecca Zanghi and Rebecca's father, Anthony Zanghi. Tony and his father filed a third-party complaint against Farmers Insurance Group and one of its included companies, Mid-Century Insurance Co. alleging insurance coverage relative to the accident. Defendants Zanghis also filed a third-party complaint making the same claims against Government Employees Insurance Company, their insurer.
Ultimately, defendants Zanghis, their insurance carrier, Government Employees Insurance Company, and Phillip Liljestrand were dismissed from the action. A separate trial was ordered relative to Tony's claims against Farmers Insurance Group and Mid-Century (hereafter Farmers). At the conclusion of that trial the court concluded that Tony was not covered by Farmers policy and entered a judgment so declaring. An order under C.R.C.P. 54(b) was thereafter entered permitting this appeal of the propriety of that ruling.
We have before us only an abbreviated record, which does not include a transcript of testimony. Tony and Farmers stipulated at a pre-argument conference held in this court as follows:
"(1) Evidence supported the 'findings of fact' made by the trial court; (2) The accident occurred within 30 days of acquisition of the Galaxie; (3) Tony was not licensed to drive at the time the insurance policy issued to his father or any other time prior to the accident, his license having been suspended."
The record on appeal contains various findings of fact made by the trial court which are sufficient for us to reconstruct the events leading to this controversy.
The trial court found that in June of 1976 Phillip Liljestrand, Tony's father, called one Jerry Sprinkle, an agent of Farmers, and requested renewal of an existing insurance policy on a 1964 Chevrolet pickup truck. The reason for the request was that Phillip had transferred the title to the Chevrolet to Tony. The trial court found that Tony at that time and thereafter was not living at this father's home. He was and had been emancipated and was self-supporting. The court further found that Sprinkle had actual knowledge of Tony's ownership and yet deliberately caused the policy to be issued in Phillip's name.
In July Tony sold the Chevrolet and on August 4, 1976, purchased a 1968 Ford Galaxie which he was driving at the time of the accident. The Farmers policy provided coverage for "a newly acquired automobile" (defined as one which replaces the described automobile) provided the named insured notified Farmers within 30 days following the date of acquisition of the new automobile. The parties have stipulated that the accident occurred within 30 days of the acquisition of the 1968 Ford. Tony reported the accident to Farmers and at the same time gave notice of the new acquisition.
Based on these facts and its interpretation of the policy, the trial court concluded as a matter of law: (1) That Sprinkle's knowledge was imputed to Farmers, (2) that any coverage which would have been afforded to Tony would have had to come under either the "relative" or "permissive use" coverage provisions of the policy, and (3) that, since Tony was not residing with his father, Tony was not entitled to coverage under the policy as a relative. The court further concluded, as a matter of law, that Tony would have been covered under the permissive use clause of the policy had he been driving the 1964 Chevrolet pickup. The court finally concluded that the 1968 Ford did not qualify as a newly acquired vehicle under the terms of the policy since Tony was not a "named insured" of the policy while he was driving the 1968 Ford. We disagree with all but the first of these conclusions.
[1] We are bound on review to accept the findings of fact of the trial court since they are, as the parties have stipulated, supported by the evidence. Carter v. Pigg, 146 Colo. 306, 361 P.2d 437 (1961). However, the dispute here concerns the legal significance of the facts found by the trial court. And, since these are questions of law, we are not bound by the conclusions of law drawn by the trial court. Weed v. Monfort Feed Lots, Inc., 156 Colo. 577, 402 P.2d 177 (1965).
Ordinarily liability coverage terminates upon change of ownership of the described vehicle. Transfer of the automobile to a third person does not carry with it the contract of insurance without the consent of the insurer. Worchester v. State Farm Mutual Automobile Insurance Co., 172 Colo. 352, 473 P.2d 711 (1970). However, here, Farmers' agent Sprinkle "deliberately" caused the policy to be renewed or re-issued in Tony's father's name after having been advised by Tony's father that the reason for the re-issuance was that Tony now owned the pickup. It is difficult to conceive that he would have done so except for his knowledge that, as Farmers so candidly admits here, "no insurer would have insured Tony because he had no right to be driving any vehicle."
[2] It is elementary that knowledge of the agent is knowledge of the company, and any information material to the transaction possessed by the agent at the time of the transaction, or acquired by him before its completion, is deemed to be knowledge of the principal. Merchants' Mutual Fire Insurance Co. v. Harris, 51 Colo. 95, 116 P.2d 143 (1923). Accordingly, when Farmers, with knowledge that Tony was the owner of the Chevrolet, issued the policy and accepted payment of the premium therefor, it in fact accepted Tony as the primary insured, the owner of the vehicle, the person with the insurable interest. It cannot, having done so, now deny coverage on the basis that Tony was uninsurable. Rocky Mountain Fire Casualty Co. v. Rose, 62 Wash. 2d 896, 385 P.2d 46 (1963).
Furthermore, the trial court erred in concluding that any coverage which would have been afforded to Tony would have had to come under either the relative or permissive use clauses of the policy because both depend upon his father being the owner which Farmers knew was not the case.
Since Farmers accepted Tony as the primary insured on the Chevrolet truck, he must be considered as if he were the "named insured." Thus, the full panoply of coverage provided by the policy inured to him, including newly acquired vehicle coverage. See General Insurance Co. v. Western Fire Casualty Co., 241 F.2d 289 (5th Cir. 1957); Doyle v. Allstate Insurance Co., 4 Wis.2d 411, 90 N.W.2d 562 (1958); Rocky Mountain Fire Casualty Co. v. Rose, supra.
There is no question but that the Galaxie fell within the policy definition of being a vehicle which "replaces the described automobile" and that Tony "notifie[d] the company within 30 days following the date of such acquisition." Farmers is therefore liable according to the terms of its policy.
Judgment reversed and cause remanded with directions to enter judgment in accordance with the views expressed herein.
JUDGE PIERCE and JUDGE KELLY concur.