Damage by a Community Property Vehicle in AZ | Hildebrand Law, PC

Wed 11th Jan, 2017 Arizona Community Property Laws

Property a spouse brings to marriage remains his or her separate property. However, the spouses can agree to convert the property to community property. It can also be converted to community property by gift. In Sellers v. Allstate Ins. Co., 555 P.2d 1113 (1976) the Arizona Supreme Court discussed these issues in the context of an insurance issue.

Facts and Procedure

Two months after Mr. Collison and Mrs. Collison married, they were in an automobile accident with Mr. Sellers and Mrs. Sellers and their minor children. Mr. Collison was driving a 1957 Cadillac which he owned before marriage. He was on his way to the Lowboy Lounge in Phoenix, Arizona to have a beer and cash a check. He then planned to pick up his wife at her place of work and drive her home.

Mrs. Collison owned a 1964 Chrysler automobile, insured by Allstate Insurance Company. She usually drove herself to work and back in it. On the day of the accident, it was in a garage undergoing repairs. The Sellers sued for damages. They won a judgment. They claimed that Mrs. Collison’s Allstate insurance policy covered Mr. Collison and his Cadillac at the time the accident happened. They had a writ of garnishment served on Allstate. Allstate denied any liability.

The court granted Allstate a summary judgment. The Sellers appealed.

U.S. News and World Report Votes Hildebrand Law, PC Best Law Firms for 2020 2021 2022 2023

The Allstate Policy

The Sellers argue that Mr. Collison’s car was covered as a “replacement automobile” under the Allstate policy. The policy defines the relevant terms:

“named insured’ means the individual named on the Supplement Page, and his spouse if a resident of the same household; * * * `owned automobile’ means the vehicle described on the Supplement Page, and, as defined herein, any replacement automobile, any additional automobile, any temporary substitute automobile, * * * owned by the named insured; `replacement automobile’ means any other private passenger or utility automobile of which the named insured acquires ownership, provided it replaces the owned automobile; `additional automobile’ means an additional private passenger or utility automobile of which the named insured acquires ownership, provided notice of its delivery be given to Allstate within the policy term then current, or if delivery is within 30 days before the end of such term, then within 30 days after delivery; `temporary substitute automobile’ means any automobile, including a trailer, while temporarily used as a substitute for the owned automobile or trailer when withdrawn from normal use because of its breakdown, repair, servicing, loss or destruction; * * *”

From this, it is clear that the policy covered Mr. Collison while he was driving her Chrysler or any replacement automobile.

Substitute Vehicle Clause

The Sellers first argue that the Cadillac was a car temporarily substituted for Mrs. Collison’s Chrysler. The policy extends coverage temporarily to an insured using an alternate vehicle because the regular car was being repaired.

An alternate automobile is one temporarily used in place of the insured car. In the present case, Mrs. Collison usually drove to and from work in the Chrysler car. The accident occurred on Tuesday. If Mr. Collison drove Mrs. Collison home in his Cadillac after work, it would have been a substitute for her Chrysler. It would have furnished her transportation. But Mr. Collison had driven to the Lowboy Lounge. He was using the Cadillac for his convenience.

Since Mr. Collison usually drove the Cadillac, he was not using it as a substitute for Mrs. Collison’s Chrysler on this part of his trip.

Hildebrand Law, PC Voted Best Divorce Law Firm in Arizona in Arizona Foothills Magazine

Additional Automobile Clause

The Sellers next argues that the policy covers the Cadillac as an “additional automobile.” They claim that Mrs. Collison acquired an ownership interest in the Cadillac vehicle under Arizona’s community property laws.

In Arizona, the status of the property as community or separate is established at the time of marriage. Assets which are the separate property of one spouse before the marriage retain that character after the marriage. However, this can be altered by agreement between the spouses, or by a gift of one to the other.

Mr. Collison testified that he considered the Cadillac to belong to both himself and Evelyn after the marriage. Mrs. Collison testified that the couple invested some $400 of community property in repairs to the Chrysler.

The Court ruled that there was a factual question as to whether Mr. Collison’s Cadillac stayed separate goods or became community property. A motion for summary judgment does not resolve factual issues. Since a genuine issue was raised, the Court found that it was an error for the lower court to grant summary judgment to Allstate.

Disposition

The Court of Appeals reversed the judgment below.

If you have questions about damage by community property vehicle in an Arizona divorce case, you should seriously consider contacting the attorneys at Hildebrand Law, PC. Our Arizona community property and family law attorneys have decades of combined experience successfully representing clients in community property disputes and family law cases.

Our family law firm has earned numerous awards such as US News and World Reports Best Arizona Family Law Firm, US News and World Report Best Divorce Attorneys, “Best of the Valley” by Arizona Foothills readers, and “Best Arizona Divorce Law Firms” by North Scottsdale Magazine.

Call us today at (480)305-8300 or reach out to us through our appointment scheduling form to schedule your personalized consultation and turn your Arizona community property or family law case around today.

Categories

Damage by a Community Property Vehicle in AZ | Hildebrand Law, PC

Table of Contents

Facts and Procedure

The Allstate Policy

Substitute Vehicle Clause

Additional Automobile Clause

Disposition

Contact Form

More Articles About Arizona Community Property Laws