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California Casualty Ins. Co. v. Northland Ins. Co.8/30/1996
RICHLI, J.
Memorie Yessian (Yessian) obtained a judgment against Mr. and Mrs. Joe Harmer for personal injuries sustained in a boating accident involving the Harmers' Yamaha Waverunner. Yessian sought to enforce her judgment, and to assert claims assigned to her by the Harmers, against two of the Harmers' insurers, California Casualty Insurance Company (CCIC) and Allstate Insurance Co. (Allstate). The lower court granted summary judgment for the insurers, concluding neither CCIC's nor Allstate's policy covered Yessian's injuries. Yessian appeals.
We agree with the lower court that neither policy covered Yessian's claims. CCIC's policy expressly excluded liability arising from the use of a watercraft with inboard motor power. It was undisputed the Waverunner was a watercraft with an inboard engine. We reject Yessian's argument that because the Waverunner was propelled by a jet pump rather than a propeller, it was not an "inboard motor power watercraft" despite the location of its engine.
Allstate's policy covered the Harmers' 18-foot Donzi waterski boat, not the Waverunner. Although it also covered dinghies or tenders "used to service" the Donzi, the Waverunner was not being used for that purpose when the accident occurred. We reject Yessian's argument that because the Harmers had used the Waverunner in conjunction with the Donzi on other occasions, the Waverunner was covered as a dinghy or tender regardless of how it was being used when the accident occurred.
I. FACTUAL AND PROCEDURAL BACKGROUND
Yessian was seriously injured in a collision between a Kawasaki Jet Ski, which she was operating, and the Waverunner, which Mr. Harmer was operating and on which Mrs. Harmer was riding. The collision occurred on April 12, 1990, on the Colorado River near Bullhead City, Arizona.
The Harmers were insured by CCIC, Allstate and Northland Insurance Company (Northland). CCIC's policy was a homeowners policy which provided liability coverage up to $100,000 but excluded liability arising from the use of a watercraft with inboard or inboard-outdrive motor power. Allstate's policy provided liability coverage for the Donzi, and for watercraft used to service the Donzi, up to $300,000. Northland's policy, which the Harmers purchased specifically to cover the Waverunner, provided liability coverage for the Waverunner up to $15,000.
CCIC began investigating the accident shortly after it occurred. On January 31, 1991, CCIC advised the Harmers it was denying coverage, based on the watercraft exclusion.
A. The Underlying Personal Injury Action
On April 1, 1991, Yessian sued the Harmers for personal injuries. On April 12, 1991, Yessian's husband, Jerry Yessian, filed a separate action against the Harmers for negligent infliction of emotional distress and loss of consortium. The actions were consolidated. Northland defended the Harmers in both actions.
On July 18, 1991, the Harmers tendered the defense and indemnity of the Yessians' actions to Allstate. On October 4, 1991, Allstate advised the Harmers there was no coverage for the actions, because the Waverunner was not a covered watercraft under the Allstate policy.
Effective October 18, 1991, the Harmers agreed to stipulate to a judgment in favor of Yessian for $792,000, and in favor of Mr. Yessian for $88,000. The Yessians agreed to enforce the judgment, except for $10,000, only against proceeds from the CCIC and Allstate policies. The Harmers assigned to the Yessians any claims they had against CCIC or Allstate for not defending or indemnifying the Harmers.
On November 15, 1991, CCIC advised the Harmers that if Northland fai
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