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Salviejo v. State Farm Fire and Casualty Co.6/17/1998
Opinion OF THE COURT BY ACOBA, J.
We uphold the validity of a homeowner's insurance policy provision that excludes personal liability coverage for bodily injury sustained by a named insured or a resident of the named insured's household, if the resident is a relative or "any other person under the age of 21 who is in care of" either a named insured or a relative. Although similar exclusions in automobile insurance policies have been invalidated, the cases which so hold have relied upon public policies expressed in statutes regulating automobile insurance. In this case, we have not been referred to any similar public policy basis for invalidating this type of exclusion in a homeowner's policy. Thus, we are constrained to hold that this exclusion does not violate public policy and is therefore valid and enforceable.
Accordingly, we affirm the December 5, 1996 order granting summary judgment to Defendant-Appellee State Farm Fire and Casualty Company (State Farm) and the June 5, 1997 final judgment entered in favor of State Farm and against Plaintiffs-Appellants Indalescia T. Salviejo (Indalescia), Armando M. Salviejo (Armando), and Felipe B. Salviejo (Felipe) (collectively referred to herein as Plaintiffs).
I.
A.
Plaintiffs have alleged that on or about February 10, 1994, Felipe took his granddaughter, Angeline Salviejo (Angeline), to the McDonald's restaurant in Waipahu, Hawai'i, where Angeline purportedly injured her right hand in an "unguarded air compressor" while she was playing in McDonald's "Play Place." At the time of Angeline's accident, Plaintiffs were covered by a homeowner's insurance policy (the policy) issued by State Farm. In Section II, the policy provided coverage for "personal liability" and for "medical payments to others":
COVERAGE L - PERSONAL LIABILITY
If a claim is made or a suit is brought against an insured for damages because of bodily injury or property damage to which this coverage applies, caused by an occurrence, we will:
1. pay up to our limit of liability for the damages for which the insured is legally liable; and
2. provide a defense at our expense by counsel of our choice. . . .
COVERAGE M - MEDICAL PAYMENTS TO OTHERS
We will pay the necessary medical expenses incurred or medically ascertained within three years from the date of an accident causing bodily injury . . . .
(Boldfaced emphases in original.)
Section II contained several exclusions, including the following "household exclusion," which is the only exclusion at issue on this appeal:
1. Coverage L and Coverage M do not apply to:
h. bodily injury to you or any insured within the meaning of part a. or b. of the definition of insured.
This exclusion also applies to any claim made or suit brought against any insured to share damages with or repay someone else who may be obligated to pay damages because of the bodily injury [.]
(Boldfaced emphases in original.) The definition of "insured" referred to in the household exclusion is as follows:
4. "insured" means you and, if residents of your household,
a. your relatives; and
b. any other person under the age of 21 who is in care of a person described above.
(Boldfaced emphasis in original.) The definition section also stated that the references to "you" and "your" in the policy were to the "named insured" as shown on the Declarations page of the policy. The named insureds were Felipe, his wife Susana, Indalescia, and Armando; all of the named insureds were listed
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