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Iowa Mutual Insurance Co. v. Davis3/18/1988
Submitted January 7, 1988.
Iowa Mutual instituted a declaratory judgment action in United States District Court, Great Falls Division, to determine whether it is under any obligation to indemnify or defend Jeffrey Davis (Davis) in a personal injury suit brought by Curtis Beck (Beck). Beck brought suit against Davis in the District Court of the Eighth Judicial District, Cascade County. The United States District Court certified the following question of law for review by this Court pursuant to Rule 44, M.R.App.P.:
"Do the provisions of Title 61, Chapter 6, Part 3, Montana Code Annotated, `Mandatory Liability Protection,' prohibit exclusion of a named driver or drivers from coverage under a motor vehicle liability policy?"
We answer the certified question in the affirmative.
The following facts are garnered from the parties' briefs. Beck was a passenger in an automobile driven by Davis and was injured when the vehicle left the road and crashed. The automobile was owned at the time by Jeffrey Davis' parents, Donald and Betty Davis. The younger Davis was operating the automobile with his parents' permission.
Iowa Mutual insured the Davis' 1964 Oldsmobile involved in the accident. On several occasions during the 1970s, Donald and Betty Davis requested that Jeffrey Davis be specifically excluded from insurance coverage during times that Jeffrey resided away from home. Mr. and Mrs. Davis excluded Jeffrey and their other children on these occasions ostensibly to reduce their insurance premiums. On February 1, 1980, the last of these exclusions, Iowa Mutual endorsement form 1607(a), was executed by Mr. Davis. Iowa Mutual's endorsement form 1607(a) provided the following:
"It is agreed that all insurance and coverage under this policy shall be null and void with respect to any claims arising out of the operation, use, or occupancy of the automobile described in this policy, or out of the operation, use or occupancy of any other automobile to which the terms of this policy otherwise extends, by the following named person(s):
"Jeffrey L. Davis (D.O.B. 12-03-59) & Alan Davis (D.O.B. 8-25-57) Sons of Insured.
"Provided, however, this endorsement shall not be effective if the automobile is operated by the named insured or the described automobile is operated by any person other than Jeffrey or Alan and such operation of the described automobile is by and under the express permission of the named insured."
The Davis' never requested that Jeffrey again be added to their auto insurance policy.
Subsequent insurance policies issued to cover the 1964 Oldsmobile included a "declaration" section which incorporated the 1980 form 1607(a) endorsement by reference. The 1980 endorsement was in effect in this manner at the time of the accident in which Beck was injured. Iowa Mutual contends that Jeffrey Davis is excluded from his parents' insurance coverage and that it is under no obligation to indemnify or defend Jeffrey Davis in the Montana District Court action.
The parties cross-motioned for summary judgment in the U.S. District Court. On February 2, 1987, the U.S. District Court, the Honorable Judge Paul G. Hatfield presiding, issued a memorandum and order in favor of defendants Davis and Beck. Iowa Mutual then moved to vacate the U.S. District Court order and requested that the question be certified to this Court. The U.S. District Court vacated its February 2, 1987, order and certified the aforementioned question of law to this Court. This Court ordered simultaneous briefs from plaintiff Iowa Mutual and defendants Davis and Beck. State Farm Mutual A
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