Opinion Says California Law Which Allows UM Exclusion for Injuries Suffered by a ‘Spouse’ of Insured While in Unlisted Family-Owned Vehicle Not Offended by Broadening Definition of ‘Spouse’ to Include Unwed Companion
By a MetNews Staff Writer
An insurance policy that defines “spouse” as including a person who is not married to the insured but is engaged in a sexual relationship with that person is not violative of California’s uninsured motorist provisions, the Ninth U.S. Circuit Court of Appeals held on Friday.
The memorandum opinion affirms a dismissal by District Court Judge Fernando M. Olguin of the Central District of California of claims for declaratory relief, breach of contract, and bad faith by Laura Rzepecki against Defendant Nationwide Insurance Company. Rzepecki lives with, but is not married to, Robert Frazier, who is Nationwide’s insured.
She was injured in an accident on Aug. 20, 2016, while a passenger in Frazier’s vehicle. The driver who was at fault was uninsured.
There was an exclusion in the policy for uninsured motorist coverage where there is an injury to the insured “or any ‘family member’ ” while occupying a vehicle “which is not insured for this coverage under this policy.” The vehicle Frazier was driving was not listed.
This is known as an exclusion for “unlisted family-owned vehicles.”
While the California Insurance Code, which permits such an exclusion, does not define “spouse,” the policy did, saying that “spouse means “(1) a husband or wife; or (2) if unmarried, a domestic partner.”
When Nationwide denied coverage, Rzepecki brought suit in Ventura Superior Court. Nationwide, an Ohio company, removed the action to federal court based on diversity of citizenship.
A three-judge panel—comprised of Circuit Judges Mary H. Murguia, John B. Owens, and Milan D. Smith Jr.—affirmed the dismissal in a memorandum opinion, saying:
“Nationwide’s exclusion does not violate the mandate of coverage under California’s Uninsured Motorist Act (‘UM Act’), nor does its definition of ‘spouse’ violate California law.”
Nationwide’s policy, the opinion says, in broadening the definition of ‘spouse’ also broadens coverage of the policy, with that definition also carrying over, however, to the exclusion in issue.
“Nationwide’s exclusion is also not new to. nor does it contradict, the UM Act,” the opinion says. “It merely defines who qualifies as a ‘spouse,’ which is not defined in the UM Act, for purposes of the policy and the exclusion.”
It adds that “Nationwide’s exclusion is also conspicuous, plain, and clear,” rejecting Rzepecki’s contrary contention.
Opinion also rejects her argument that the definition of “domestic partner” in the policy is ambiguous. It says the words of the policy are commonly understood.
The case is Rzepecki v. Nationwide Insurance Company of America, 20-55498.
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