Car Dealer's Insurance Policy Doesn't Cover "Customers"

Garage Keeper's Liability Insurance Doesn't Cover Customers
Messina v. Midway Chevrolet Co., 545 Ariz. Adv. Rptr. 12 (Ct. App. Div. I, December 18, 2008) (Justice Downie)


Bookhamer purchased a new car from the defendant but his check bounced and the financing was not approved so technically he never "paid" or "bought" anything. While in possession of the vehicle he drove across the center line in the car killing himself and seriously injuring the plaintiff. Plaintiff sues claiming Bookhamer was insured under the defendant's garage liability policy.

The policy in question excludes coverage for customers of the defendant unless the customers lack the minimal financial responsibility insurance limits in coverage elsewhere. Here Bookhamer had such a policy so the only question was whether or not he was a "customer" considering he never paid or bought anything. The term was not defined in the policy.

The Arizona court of appeals therefore gave "customer" it's plain and ordinary meaning finding Webster's definition of "one who purchases a commodity or service or 'patronizes or uses the services, '" particularly persuasive.

Here there was no question that Bookhamer had "patronized" the defendant and was therefore a "customer" of Midway Chevrolet and excluded under their garage keeper's policy.

Finally, the court sustained the trial court's ruling in the face of plaintiff's expert's declaration that Bookhamer was not a customer. The court found that insurance policy terms are to be given "their ordinary meaning and effect, and we view them from the standpoint of someone untrained in law or the insurance business." The trial court didn't need an expert to tell it Bookhamer was a customer.

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