Opinion
No. 77-665
Decided September 28, 1978. Rehearing denied October 26, 1978. Certiorari denied December 26, 1978.
By declaratory judgment trial court ruled that third-party defendant, insurance company that had issued a liability policy to alleged tortfeasor's father, was not obligated under that policy to pay for plaintiff's injuries. Plaintiff appealed.
Affirmed
1. INSURANCE — Liability — Coverage — Dependent — "Temporary Substitute Automobile" — Circumstances — Sale of Automobile — Completed — Ruling — No Coverage — Correct. Where coverage of liability insurance policy issued to insured was dependent on whether car driven by insured's son at the time of accident was a "temporary substitute automobile" as defined by the policy, and where insured's son had paid $200 towards the purchase of the car and had taken possession of it one week before the accident, the evidence supports the trial court's conclusion that the car was owned by the insured's son and thus was not a "temporary substitute automobile," and that finding was not defeated by the fact that the previous owner had retained the right to use the car nor by the fact that the certificate of title had not yet been transferred to the new owner.
2. SALES — Oral Agreement — Sale of Automobile — Covered by UCC — Enforceable — Payment of Down Payment — Taking Possession. Oral sales agreement for the purchase of an automobile was covered by the Uniform Commercial Code and became enforceable by virtue of the payment by the purchaser of $200 down payment coupled with his taking possession of the automobile.
3. AUTOMOBILES — Non-Delivery — Certificate of Title — Not Prevent — Change of Ownership — Between Parties. Non-delivery of the certificate of title does not prevent change of ownership of an automobile as between the parties to the transaction.
4. INSURANCE — Payments to Injured Party — Several Months — No Estoppel — Assertion — Terms of Policy — No Waiver Established. Although insurance company made certain payments to party injured in accident for several months after the accident, there was no evidence that son of the named insured relied on the insurer's action to refrain from insuring car involved in that accident; therefore, the insurer was not estopped from asserting the provisions of its policy, and that partial payment was insufficient to establish a waiver of the policy provisions.
Appeal from the District Court of the City and County of Denver, Honorable George M. McNamara, Judge.
DeMuth Eiberger, Russell P. Rowe, Perry L. Goorman, for plaintiff-appellant.
White Steele, P.C., R. Eric Peterson, James D. Hinga, for third-party defendant-appellee Government Employees Insurance Company.
This is an appeal by plaintiff from a declaratory judgment that third-party defendant, Government Employees Insurance Company (GEICO), is not obligated under its policy insuring Edward Droll to pay for plaintiff's injuries. The injuries arose out of a one-car accident in which Edward Droll's son, Mark, was the driver of a 1970 Siato and plaintiff was the passenger. We affirm
Prior to the accident, Edward Droll paid a premium on the insurance policy for the period of September 17, 1973, to September 17, 1974, to cover his automobiles, including a 1971 Vega. At the time of payment Mark lived with his father. In January 1974, Mark moved out of his father's house and established a separate residence. Edward Droll contacted a GEICO agent who informed him that coverage for the Vega still existed under the policy. At the agent's suggestion, Edward Droll wrote GEICO that Mark, the sole driver of the Vega, no longer resided with him. GEICO never responded to the letter.
In June 1974, the Vega sustained damage when it was struck by another car. Mark presented this collision loss to GEICO which agreed to pay the claim. Before having the car repaired, Mark spoke with a Harold Bennett about purchasing Bennett's 1970 Siato. They agreed that Mark would pay $200 to Bennett and would pay the three remaining payments of $107 owed to Boulder National Bank on a loan covering the Siato. The bank was to give Mark the certificate of title after he made final payment on the car. On September 1, after paying $200 to Bennett, Mark took possession of the Siato, and it remained at Mark's residence, although Bennett had the right to use the car. On September 5, Mark took the Vega to be repaired; it was still in the repair shop on September 7, 1974.
On September 7, Mark was involved in the accident with the Siato giving rise to the issues in this case. GEICO paid certain medical expenses incurred by plaintiff until January 1975. When GEICO refused to pay additional expenses, plaintiff initiated this suit to recover damages. Plaintiff agreed to a settlement with Mark and Dairyland Insurance Company, Bennett's Insurer, and they are no longer involved in this litigation. The court granted GEICO's motion for a declaratory judgment, on the grounds that the policy did not cover the September 7 accident and that GEICO's payments for the Vega repairs and plaintiff's expenses up to January 1975 did not constitute a waiver of the policy limitations, nor did they estop GEICO from asserting the limitations.
Plaintiff first argues that the Siato was covered under the policy as a "temporary substitute automobile" for the Vega while the Vega was being repaired. We disagree.
[1] The policy states:
"'Temporary Substitute Automobile' means any automobile or trailer, not owned by the named insured, while temporarily used with the permission of the owner as a substitute for the owned automobile or trailer when withdrawn from normal use because of its breakdown, repair, servicing, loss or destruction."
The evidence supports the trial court's conclusion that the Siato was owned by Mark at the time of the accident. Therefore the Siato was not a substitute for the insured Vega even though the Vega was being repaired at the time, and it does not fall within the policy definition of "temporary substitute automobile."
In support of the argument that Mark did not own the Siato, plaintiff claims there was no contract between Mark and Bennett because the $200 was merely earnest money, not a down payment. We find no merit in this claim.
[2] There was sufficient evidence to support the court's finding that the $200 was the first payment under a purchase agreement. Not only did Mark and Bennett agree to periodic payments, but Mark took possession after making the initial payment. Plaintiff also contends that the agreement between Bennett and Mark is unenforceable under the Statute of Frauds because it was not in writing. The oral sales agreement, however, was a sales contract covered by the Uniform Commercial Code. Waggoner v. Wilson, 31 Colo. App. 518, 507 P.2d 482 (1972). Under § 4-2-201(3)(c), C.R.S. 1973, that contract became enforceable by virtue of the payment by Mark of $200 coupled with his taking possession of the automobile.
[3] Plaintiff urges that because Mark did not have a certificate of title for the Siato, he was not yet the owner of the car under § 42-6-109, C.R.S. 1973. Non-delivery of the certificate of title does not prevent change of ownership as between the parties to the transaction. United Fire Casualty Co. v. Perez, 161 Colo. 31, 419 P.2d 663 (1966). Therefore, Mark was the owner of the Siato on September 7, 1974, despite the fact that the certificate of title had not yet passed to him and Bennett had reserved a right to use the car. See Waggoner v. Wilson, supra.
Plaintiff further contends that if Mark did own the Siato, then the car falls within the "non-owned automobile" provision of the GEICO policy, insuring either the named insured or any relative. Though Mark is a relative of the insured, coverage is restricted to a relative who is a resident of the same household. Plaintiff admits that Mark was not living in the Droll household at the time of the accident; therefore Mark is not an insured person within the terms of the policy.
Plaintiff's final argument is that GEICO waived the provisions of its policy, or is estopped from asserting them, because of its payment of the claim arising out of the June 1974 accident and payments to plaintiff until January 1975. We do not agree.
[4] There is no evidence that Mark relied on GEICO's actions to refrain from insuring the Siato prior to the accident. Therefore, GEICO is not estopped from asserting the provisions of its policy. See First National Bank v. Ulibarri, 38 Colo. App. 428, 557 P.2d 1221 (1976). Nor is the partial payment sufficient under the facts of this case to establish a waiver of policy provisions. See Colorado Bank Trust Co. v. Western Slope Investments, Inc., 36 Colo. App. 149, 539 P.2d 501 (1975).
Judgment affirmed.
JUDGE RULAND and JUDGE STERNBERG concur.