Payne v. Safeco Insurance Companies of America

MR. JUSTICE WEBER delivered the Opinion of the Court. Richard and Shirley Payne held a homeowners insurance policy with Safeco Insurance Companies of America (Safeco). They appeal the summary judgment of the District Court for Park County that their Safeco policy did not cover fire damage to several antique vehicles. We affirm. The issue is whether the District Court correctly determined that *199 the Paynes’ insurance policy clearly and unambiguously excludes the antique cars from coverage. The Paynes own several antique vehicles, only one of which is licensed for road use. In March 1984, the garage containing the antique vehicles burned, damaging the vehicles. The Paynes insurance policy provided: “This coverage excludes:... 2. motorized vehicles, except such vehicles pertaining to the service of the premises and not licensed for road use.” Safeco denied coverage for damage to the vehicles based on this provision. The Paynes filed a complaint against Safeco alleging failure to pay under the policy, bad faith, and breach of contract. Safeco filed a motion for summary judgment based on the above provision. The trial judge granted Safeco’s motion for summary judgment, stating that the language of the policy was plain, clear, and unambiguous, that no further discovery would change the terms of the insurance contract, and that Safeco’s denial of the Paynes’ claim could not be considered as bad faith. The Paynes contend that a reasonable person could read the exclusionary provision as excluding coverage for motorized vehicles except for two types, 1) vehicles which were used to service the premises, or 2) vehicles which were unlicensed for road use. They argue that since the policy provision is ambiguous, it must be construed against the insurer. They cite Truck Ins. Exchange v. Woldstad (Mont. 1984), [212 Mont. 418,] 687 P.2d 1022, 41 St.Rep. 1750. In that case, the Court stated, “[i]t is the rule of construction in Montana that language of limitation or exclusion must be clear and unequivocal; otherwise, the policy will be strictly construed in favor of the insured.” Truck Ins., 687 P.2d at 1024-25. The above rule is set forth in our statutes. Section 28-3-303, MCA, provides the general rule: “Writing generally to determine intention. When a contract is reduced to writing, the intention of the parties is to be ascertained from the writing alone if possible, subject, however, to the other provisions of this chapter.” Section 28-3-206, MCA, sets forth the exception for ambiguity: “Uncertainty to be resolved against party causing it. In cases of uncertainty . . . the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist *200 We conclude that the insurance policy clause at issue here is within the general rule. The grammatical structure of the clause is such that both “pertaining to the use of the premises” and “not licensed for road use” modify the same word, “vehicles.” If the clause was meant to include two exceptions to the coverage exclusion, it would properly be written either with a disjunctive ‘or’ between the exceptions, or as: “vehicles pertaining to the service of the premises and vehicles not licensed for road use . . . .” As it is written, the policy clearly and unambiguously covers only those vehicles which meet both of the requirements set forth in the provision. There have been no allegations that the antique vehicles in any way pertained to the service of the premises. We therefore affirm the District Court’s conclusion that, as a matter of law, the Safeco insurance policy did not provide coverage for damage to the Paynes’ antique vehicles. Affirmed. MR. JUSTICES GULBRANDSON, MORRISON, SHEEHY and HUNT concur.