Great American Insurance v. Curl

Kerns, J. This is an appeal on questions of law from a judgment of the Court of Common Pleas of Montgomery County. On September 24, 1959, the defendant-appellee, Stella Mae Curl, who resided with her son-in-law and daughter, Phillip and Latitia Sparaco, ran her automobile into their garage eaus [517] ing damages in tbe amount of $1,044.00. Tbe Sparacos’ property was insured by the plaintiff-appellant, Great American Insurance Company, under a “homeowners insurance policy.” Under the provisions of the policy, the plaintiff-appellant paid the claim in the amount of $1,044.00 and took a subrogation receipt in its favor to all rights, claims and interests which the Sparacos may have had against the person liable for the damages involved. Thereafter, the plaintiff-appellant, as subrogee of Phillip and Latitia Sparaco, instituted an action claiming damages due to the negligence of the defendant-appellee. On April 26, 1960, an answer was filed, one of the defenses of which was that the defendant-appellee was an insured under the policy of insurance which covered the loss. On June 28, 1960, the plaintiff-appellant filed a motion for a summary judgment in the action seeking a determination of whether the defendant-appellee was an insured under the homeOAvners insurance policy and, if so, whether this was a defense to the action by the subrogee under the policy. The judgment of the trial court was in faAmr of the defendant. The general conditions of the insurance contract between plaintiff-appellant and the Sparacos define the term “insured” as follows: “Insured: The unqualified word ‘Insured’ includes (1) the Named Insured, and (2) if residents of his household, his spouse, the relatives of either, and any other person under the age of 21 in the case of an Insured, * * (Emphasis ours.) The defendant-appellee is clearly an insured within the scope of this definition. But the plaintiff-appellant contends that the defendantappellee could not be an insured because she has no insurable interest in the Sparacos’ property. The rule is well established that an insurable interest in property insured is necessary to support the validity of a contract of insurance on such property. 30 Ohio Jurisprudence (2d), 305, Section 305. However, we cannot agree Andth the plaintiff-appellant that this rule has any application to the facts of this case. Here the defendant-appellee made no attempt to insure property in which she had no insurable interest. She made no contract. And she stood to gain nothing [518] by the loss or destruction of the property which was insured by her daughter and son-in-law. None of the evils which the rule relied upon by the-plaintiff-appellant was designed to guard against are present in this case. The Sparacos had the insurable interest and undoubtedly paid premiums geared to the protection afforded by the policy. If that protection is extended by a provision including relatives residing in the same household within the definition of the term “insured,” we are aware of no rule of law which will invalidate the provision. Suppose, for example, that the defendant-appellee in this case was a dependent son of the Sparacos. He too would be liable for his torts, and possibly have no insurable interest in his parents’ property. Could hé be sued by way of subrogation and thus possibly place the parents in the position of having to return by a circuitous route the same money originally paid by the company on the claim? In our opinion, the policy insures against any such possibilities. Surely the named insureds, Phillip F. and Latitia M. Sparaco, did not pay the insurer a premium for the purpose of having it collect their damages from their mother who lived with them. Furthermore, the doctrine of subrogation is based upon principles of equity and justice, and in effectuating a fair resolution of the rights of the parties, the plaintiff-appellant may not use subrogation as a means of attacking the validity of a provision of the insurance contract which it drafted, and which specifically includes protection for relatives living in the same household. Any such provision must be construed liberally in favor of the insured. 30 Ohio Jurisprudence (2d), 225, Sections 215, et seq. The plaintiff-appellant also argues in support of its assignment of error that the special exclusions applicable to the liability provisions of the policy relieve it from any liability to reimburse the insured for damages to insured property caused by property in the physical control of the insured. This provision, however, by its own terms, applies exclusively to the liability portion of the policy (Section II), and therefore has no application to that portion of the policy (Section I) insuring against certain specified perils, including vehicles. If said [519] exclusions did apply, the named insured as well as the defendant-appellee would stand in the same position and would be excluded from coverage under the policy for damages from vehicles under their control. This being so, the plaintiff-appellant, to be consistent, would have to admit therefore that it paid the named insured in the first instance as a volunteer, in which case it would have no standing as a subrogee. With further reference to the contention of the plaintiff-appellant, it should be noted that the insurance contract under consideration is the so-called “broad form” homeowners policy which does not exclude loss by any vehicle owned or operated by an occupant of the premises under Section I of its policy, as was the case here, as distinguished from the “standard” homeowners policy which normally does exclude the insurer specifically from liability for any such loss. Accordingly, we find no merit in the assigned error. The judgment will be affirmed. Crawford, P. J., concurs.