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AIG Hawaii Insurance Co. v. Smith2/28/1995
is added); see also American States Ins. Co. v. Adair Indus., Ill. App. 3d , 576 N.E.2d 1272 (1991) (same); Hartford Ins. Co. of Illinois v. Jackson, 206 Ill. App. 3d 465, 151 Ill. Dec. 451, 564 N.E.2d 906 (1990) (same), appeal denied, 139 Ill. 2d 595, 159 Ill. Dec. 107, 575 N.E.2d 914 (1991).
We agree with the court in Kubik and likewise conclude that the selective use of the terms "any person" and "family member" in clause four of AIG's policy creates mutually exclusive classes; consequently, Castillo may not claim entitlement to coverage under clause four by asserting that he is both "any person" and a "family member."
However, in articulating their theory of liability as to Castillo, the Smith appellants argue that, although
[Castillo] was not driving an automobile at the time the accident occurred[,] . . . the liability case against him does not revolve around his use of the accident vehicle. Instead, it is based on the fact that he illegally delivered alcohol to the driver, Frederick Lawrence, Jr. ("Frederick"), a minor. Frederick became intoxicated as a result of drinking that alcohol and, while driving a motor vehicle under the influence, he struck and killed Mr. Smith.
(Emphasis in original.) In other words, the Smith appellants' theory is that Castillo's liability flows through Lawrence's liability and stems from Castillo's initial delivery of the alcohol to Lawrence, who in turn caused injury to Smith. In this sense, the Smith appellants are attempting to hold Castillo legally responsible for Lawrence's conduct.
The infirmity in the Smith appellants' argument that Castillo is a "covered person" under clause four is that, under their construction as applied to the facts of the case, Castillo is both "any person" and a "family member." Because we have concluded that those terms, as used in the policy, form mutually exclusive classes, the Smiths appellants' construction is untenable; moveover, even if correct, the theory of legal responsibility inherent in the construction would implicate the "resident relative" exclusion, which, as previously noted, would serve to exclude coverage for Castillo in any event.
However, we have often noted that "because insurance policies are contracts of adhesion and are premised on standard forms prepared by the insurer's attorneys, we have long subscribed to the principle that they must be construed liberally in favor of the insured and any ambiguities must be resolved against the insurer." Dawes v. First Ins. Co. of Hawaii, Ltd., 77 Hawaii 117, 121, 883 P.2d 38, 42, reconsideration denied, 77 Hawaii , P.2d (1994). Keeping in mind the Smith appellants' theory of liability, we believe the language of clause four is ambiguous as applied to the present factual situation. Resolving such ambiguity in favor of the insured, we further believe that Castillo qualifies as a "covered person" under clause four because Lawrence qualifies as "any person" as that term is used in clause four. In tracking the language of clause four, (1) Bitanga's vehicle, which Lawrence was driving at the time of the accident, qualifies as "any auto"; (2) Bitanga's vehicle is not a vehicle of either of the named insureds (Mario or Apolonio Castillo); (3) Lawrence qualifies as "any person"; and (4) the "acts or omissions" for which a "family member" could be held "legally responsible" would be, under the Smith appellants' theory, Castillo's transportation of the alcohol to the party where it was consumed by Lawrence, who later drove and killed Smith. So construed, clause four would read:
"Covered person" as used in this Part means:
4. For any auto [i.e., Bitanga's vehicle] or trailer,
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