Stanford Law School - Robert Crown Law Library

Filed 5/17/04

IN THE SUPREME COURT OF CALIFORNIA

JOSHUA LEE HAYNES,
Plaintiff and Appellant,
S104851
v.
) Ct.App.
4/3
G028171
FARMERS INSURANCE EXCHANGE,
Orange
County
Defendant and Respondent.
Super. Ct. No. 00CC05475

The question presented is whether a provision in defendant’s “E-Z Reader
Car Policy” of automobile insurance purporting to limit to the legal minimum any
coverage for permissive users of an insured vehicle is sufficiently conspicuous,
plain and clear to be enforceable. The Court of Appeal concluded it is not. We
affirm.
Background
William M. Gallahair purchased an “E-Z Reader Car Policy” (the policy)
from defendant Farmers Insurance Exchange (Farmers). The policy is 39 pages
long.1 A declarations page, the policy’s first, states that “COVERAGES” are
$250,000 per person and $500,000 per occurrence for bodily injury, and $100,000
for property damage. The declarations page also provides defendant’s company
name, the insured’s (i.e., Gallahair’s) name and address, the policy number, the

1
The main body of the policy is 19 pages. The remainder of the policy
consists of endorsements.
1

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insurance agent’s name and contact information, a description of the insured
vehicle, and other miscellaneous information.
Two-thirds of the way down the declarations page on the left-hand side
appears a box labeled “ENDORSEMENT NUMBERS.” Within this box are 11
alphanumeric entries, each five characters long—a letter followed by four digits.
The eighth alphanumeric entry listed in the endorsement numbers box is “S9064.”
Nothing in the box, or anywhere on the declarations page, defines or explains
“ENDORSEMENTS” or indicates the title, location, subject matter, or substance of
“S9064” or any of the other entries in the box.
Inserted between the policy’s second and fourth pages is a letter to “Dear
Customer,” which states: “The accompanying Declarations Page shows your
current coverages resulting from recent changes made to your policy. Please
review your policy changes and file them in a safe place with your original policy
document.” No specific changes are identified.
The policy’s fourth page (numbered “1”) is entitled “Index of Policy
Provisions.” Under part I, “Liability,” the index contains, inter alia, entries for
“Coverage,” “Exclusions,” “Limits of Liability,” and “Other Insurance,”
referencing page numbers for each. No reference to permissive users, or any
limitation on permissive user coverage, appears in the index.2
On the policy’s seventh page (numbered “4”), in the “LIABILITY” section,
“insured person” is defined as including “Any person using your insured car.”3

2
At the bottom of this page appears a notice: “ANY ADDITIONAL PROVISIONS
AFFECTING YOUR POLICY ARE ATTACHED AS ‘ENDORSEMENTS’ . . . READ YOUR
POLICY CAREFULLY.”
3
Further down that same page appears a notation that “Insured person does
not mean: . . . Any person who uses a vehicle without having sufficient reason to
believe that the use is with the permission of the owner.”
2

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On the policy’s ninth page (numbered “6”), under “Limits of Liability,” the bodily
injury and property damage liability limits for “each person” and “each
occurrence” shown in the declarations on the first page are explained. Neither on
the declarations page nor in the “Limits of Liability” section appears any
indication such limits are different for persons “using your insured car.”
Also in the “LIABILITY” section, on the policy’s 10th page (numbered
“7”) under the subheading “Other Insurance,” the policy advises that, for “an
insured person, other than you or a family member,” coverage is provided “up to
the limits of the Financial Responsibility Law only.”
Endorsement S9064 is on the policy’s 24th page. Entitled “PART I –
LIABILITY – PERMISSIVE USER LIMITATION,” the endorsement is
contained within a box occupying the upper half of the page, the lower half of
which is blank, and comprises 19 lines of text. Various purported amendments to
“Your E-Z Reader Car Policy, Your E-Z Reader Motorcycle Policy and Your
Motor Home Plus Policy” are stated in these 19 lines. Of pertinence here,
endorsement S9064 in its eighth paragraph (lines 11 and 12) states: “In Your E-Z
Reader Car Policy, the second paragraph under PART I – LIABILITY, ‘Other
Insurance’ is deleted” and in its penultimate paragraph (lines 15-17) states: “We
will provide insurance for an Insured person, other than you, a family member or a
listed driver, but only up to the minimum required limits of your state’s Financial
Responsibility Law of $15,000 per person and $30,000 per occurrence for bodily
injury, and $5,000 for property damage.”
Plaintiff Joshua Lee Haynes alleges that while the policy was in force,
Gallahair permitted Christopher Charles Morrow to borrow and drive his insured
automobile. Plaintiff was injured while riding as Morrow’s passenger. Plaintiff
sued Morrow and Gallahair in tort to recover damages for his injuries. Farmers
defended. In answers to interrogatories, Farmers asserted that coverage under the
3

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policy for plaintiff’s accident is defined not by the “COVERAGES” of
$250,000/$500,000/$100,000 listed on the declarations page, but by the language
in endorsement S9064 limiting permissive user coverage to $15,000/$30,000/
$5,000. Subsequently, plaintiff filed this separate action for declaratory relief,
seeking a declaration of the rights and liabilities between himself and Farmers,
specifically a declaration that the endorsement’s limitation of permissive user
coverage is unenforceable.
The trial court granted Farmers’ motion for summary judgment. The Court
of Appeal reversed. For the following reasons, we affirm.
Discussion
This case comes to us on cross-motions for summary judgment. As the
material facts are not disputed, interpretation of the policy presents solely a
question of law. (State Farm Mut. Auto. Ins. Co. v. Partridge (1973) 10 Cal.3d
94, 100.)
“ ‘While insurance contracts have special features, they are still contracts to
which the ordinary rules of contractual interpretation apply.’ ” (Palmer v. Truck
Ins. Exchange (1999) 21 Cal.4th 1109, 1115.) Accordingly, in interpreting an
insurance policy, we seek to discern the mutual intention of the parties and, where
possible, to infer this intent from the terms of the policy. (Civ. Code, §§ 1636,
1639; Palmer v. Truck Ins. Exchange, supra, at p. 1115.) When interpreting a
policy provision, we give its words their ordinary and popular sense except where
they are used by the parties in a technical or other special sense. (AIU Ins. Co. v.
Superior Court (1990) 51 Cal.3d 807, 822.)
In the insurance context, “we begin with the fundamental principle that an
insurer cannot escape its basic duty to insure by means of an exclusionary clause
that is unclear. As we have declared time and again ‘any exception to the
performance of the basic underlying obligation must be so stated as clearly to
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apprise the insured of its effect.’ ” (State Farm Mut. Auto. Ins. Co. v. Jacober
(1973) 10 Cal.3d 193, 201.) Coverage may be limited by a valid endorsement and,
if a conflict exists between the main body of the policy and an endorsement, the
endorsement prevails. (Aerojet-General Corp. v. Transport Indemnity Co. (1997)
17 Cal.4th 38, 50, fn. 4.) But to be enforceable, any provision that takes away or
limits coverage reasonably expected by an insured must be “conspicuous, plain
and clear.” (Steven v. Fidelity & Casualty Co. (1962) 58 Cal.2d 862, 878
(Steven).) Thus, any such limitation must be placed and printed so that it will
attract the reader’s attention. Such a provision also must be stated precisely and
understandably, in words that are part of the working vocabulary of the average
layperson. (National Auto. & Casualty Ins. Co. v. Stewart (1990) 223 Cal.App.3d
452, 458; Ponder v. Blue Cross of Southern California (1983) 145 Cal.App.3d
709, 719, 723.) The burden of making coverage exceptions and limitations
conspicuous, plain and clear rests with the insurer. (State Farm Mut. Auto. Ins.
Co. v. Jacober, supra, at pp. 201-202; Harris v. Glen Falls Ins. Co. (1972) 6
Cal.3d 699, 701.)
Applying these well-established principles, Farmers clearly may not rely to
limit coverage on the permissive user language in the main body of the policy.
That language, which appears on the policy’s 10th page (numbered “7”) as the
second of four paragraphs under the heading “Other Insurance,” is not
conspicuous, plain and clear. There is nothing in the heading to alert a reader that
it limits permissive user coverage, nor anything in the section to attract a reader’s
attention to the limiting language. As Farmers acknowledges, an identical
limitation on permissive user coverage in an E-Z Reader Car Policy was
invalidated as “inconspicuous and vague” by the Court of Appeal in Jauregui v.
Mid-Century Ins. Co. (1991) 1 Cal.App.4th 1544, 1547 (Jauregui).
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In light of Jauregui, Farmers disclaims any reliance on the permissive user
limitation in the main body of the policy, resting its case entirely on the limitation
in endorsement S9064. Farmers proposes two justifications for enforcing the
limitation that appears in endorsement S9064: first, it is conspicuous, plain and
clear; second, even if not conspicuous, plain and clear, the limitation may be
enforced without defeating the reasonable expectations of Farmers’ insureds.
Farmers fails to demonstrate either proposition.
Endorsement S9064, lines 15-17
In addition to the Court of Appeal below, of the Courts of Appeal that have
considered limitations on automobile liability coverage for permissive users that
were similarly printed and positioned to the one in endorsement S9064, a majority
has held them to be unenforceable. (Compare Thompson v. Mercury Casualty Co.
(2000) 84 Cal.App.4th 90 (Thompson) [decided by the Fourth Dist. Ct.App.
(unenforceable)] and Jauregui, supra, 1 Cal.App.4th 1544 [decided by the Third
Dist. Ct.App. (unenforceable)], with Hartford Casualty Ins. Co. v. Mid-Century
Ins. Co. (1994) 26 Cal.App.4th 1783 [decided by the Sixth Dist. Ct.App.
(enforceable)] and Mid-Century Ins. Co. v. Haynes (1990) 218 Cal.App.3d 737
[same].)
Thompson, supra, 84 Cal.App.4th 90, and Jauregui, supra, 1 Cal.App.4th
1544, both examined provisions, as in this case, purporting to limit coverage for
permissive users to the limits of the Financial Responsibility Law. As previously
noted, in Jauregui, the limitation was placed in the main body of the policy under
the heading “Other Insurance” (see Jauregui, supra, at p. 1547); in Thompson, the
limitation appeared, as here, on a page at the back of the policy (see Thompson,
supra, at p. 97). In both cases, the courts held the provisions unenforceable
because they were inconspicuous. (See Thompson, supra, at pp. 97-98; Jauregui,
supra, at pp. 1549-1550.)
6

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In Jauregui, the court noted that “[t]he definition of the insured, appearing
at the outset of the liability section, gives every indication that a permissive driver
stands in the same position as the insured and receives the same coverage. The
average policyholder would reach the same conclusion by continuing to read the
policy. The coverage limitation for permissive drivers is not contained within one
of the subheadings that might alert the reader to a partial exclusion. Rather, it
appears within a subsection whose ordinary language would not encompass the
limitation and is surrounded by language that has nothing to do with exclusions or
limitations on coverage.” (Jauregui, supra, 1 Cal.App.4th at pp. 1549-1550.)
In Thompson, the court concluded that the permissive user limitation was
“inconspicuously located on the last page of the policy. Permissive users are
included in the definition of ‘Persons Insured’ on the first page of the policy.
[Moreover,] . . . the liability limitations for permissive users . . . is nowhere to be
found in the ‘Liability’ section of the policy. [¶] Strangely enough, the policy
contains two numbered sections and one unnumbered section entitled
‘Conditions.’ The unnumbered section contains 30 random and unrelated
subsections. Therein lies the permissive user coverage provision, Condition
23. . . . [T]he language in Condition 23 is not bolded, italicized, enlarged,
underlined, in different font, capitalized, boxed, set apart, or in any other way
distinguished from the rest of the fine print.” (Thompson, supra, 84 Cal.App.4th
at p. 97.)
For reasons similar to the foregoing, we agree with the Court of Appeal
below that a layperson would not find the instant permissive user limitation to be
conspicuous, plain and clear.
Conspicuousness
More specifically, the permissive user limitation is not conspicuous.
Endorsement S9064, in which the limitation appears, is listed on the policy’s
7

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declarations page only by its alphanumeric designation (“S9064”), along with 10
other endorsements. As the Court of Appeal observed, no reason appears why the
actual dollar coverages for permissive users could not have been placed with the
policy coverages on the declarations page, where one would expect an insured to
look to determine the policy limits. The deficiencies in Farmers’ approach do not,
however, depend on the lack of such placement per se.
First, nothing on the declarations page alerts a reader to the fact that
endorsement S9064 contains a paragraph limiting coverage for permissive users to
amounts less than the policy coverages prominently displayed in specific dollar
amounts on that same page. Indeed, the declarations page does not reveal the
subject matter or substance of any of the endorsements, nor does it state that the
endorsements constitute part of the policy and amend the policy. To receive the
latter notification, a reader must proceed to the bottom of the policy’s fourth page
(numbered “1”).4 The only apparent references to the policy’s endorsements that
appear on the declarations page, except for the alphanumeric list, are two phrases
placed among others in a box positioned immediately to the right of the
“ENDORSEMENT NUMBERS” box. Labeled “MESSAGES / RATING INFORMATION,”
the box, which is only half full, contains the cryptic notation: “COVERAGE FOR
E1167 IS K5” and “COVERAGE FOR E9007 IS C-2.”5 The “MESSAGES / RATING
INFORMATION” box contains no message informing a reader that endorsement

4
See footnote 2, ante.
5
The alphanumeric designation E1167 appears in the endorsement numbers
box, but no endorsement so numbered is attached. Endorsement E1187 is attached
to the policy but not listed among the endorsements. The alphanumeric
designation E9007 also appears in the endorsement numbers box, and an
endorsement so numbered is attached. It contains, among other provisions, a
section entitled “Option C-2.”
8

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S9064 discusses permissive users or limits coverage. Not unless or until a reader
has turned to and examined the policy’s 24th page—after perusing pages
containing language relating, inter alia, to “MEXICO COVERAGE,” “BUSINESS
USE,” and “CUSTOMIZING EQUIPMENT,” along with a page “LEFT
INTENTIONALLY BLANK”—does the reader learn that the policy contains an
endorsement entitled “PART I – LIABILITY – PERMISSIVE USER
LIMITATION.”
Second, within endorsement S9064, the language of the permissive user
limitation “is not bolded, italicized, enlarged, underlined, in different font,
capitalized, boxed, set apart, or in any other way distinguished from the rest of the
fine print.” (Thompson, supra, 84 Cal.App.4th at p. 97.) Although the title of
endorsement S9064 refers in capital letters to “PERMISSIVE USER,” that term is
nowhere defined in the policy, so its significance might, contrary to the dissent’s
assertion (dis. opn., post, at p. 8), escape the average lay reader notwithstanding
the capitalization.6 The title also indicates endorsement S9064 contains a
“LIMITATION,” but does not state that the limitation concerns liability coverage
amounts. The text of the permissive user limitation contains a few scattered terms
that have been bolded, apparently because they are terms defined elsewhere within
the policy, but as the other 10 paragraphs in endorsement S9064 do so as well,
nothing about this scattered bolding of terms attracts attention to the permissive
user limitation. (See ibid.) Consequently, the permissive user limitation is not
“positioned in a place and printed in a form which would attract a reader’s

6
With respect, we disagree with our dissenting colleague’s focus on
“ambiguity” (dis. opn., post, at pp. 3, 8), where the issue is whether the permissive
user limitation is conspicuous, plain and clear.
9

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attention.” (Ponder v. Blue Cross of Southern California, supra, 145 Cal.App.3d
at p. 719.)
Unquestionably, California insurers may rely on endorsements to modify
printed terms of a form policy. Moreover, our jurisprudence indicates that where
the terms of an effective endorsement conflict with terms in the main body of such
a policy, the endorsement controls. (Continental Cas. Co. v. Phoenix Constr. Co.
(1956) 46 Cal.2d 423, 431.) But neither the prevalence of endorsements in the
industry nor our recognition that they may validly modify an insurance policy
diminishes an insurer’s burden in notifying insureds of reductions in otherwise
reasonably expected coverage. (See Tomaselli v. Transamerica Ins. Co. (1994) 25
Cal.App.4th 1269, 1281-1282.) “While the insurer has every right to sell
insurance policies by methods of mechanization, and present-day economic
conditions may well justify such distribution, the insurer cannot then rely upon
esoteric provisions to limit coverage. If it deals with the public upon a mass basis,
the notice of noncoverage of the policy, in a situation in which the public may
reasonably expect coverage, must be conspicuous, plain and clear.” (Steven,
supra, 58 Cal.2d at p. 878.)
Farmers can accurately claim to have partly addressed Jauregui’s concerns
about the permissive user limitation’s placement in the E-Z Reader Car Policy.
(See Jauregui, supra, 1 Cal.App.4th at p. 1550.) Endorsement S9064 provides
that its new permissive user limitation “is added to the ‘Limits of Liability’ ”
section of the policy, thus responding to the court’s observation that the limiting
language in the body of the policy did not appear in either of the two
subheadings—“Exclusions” or “Limits on Liability”—where an insured would be
likely to look (id. at p. 1549). But in so providing, Farmers has addressed only
one of the deficiencies Jauregui identified in the course of concluding that “the
average lay reader, attempting to locate coverage provided for permissive drivers,
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would have a difficult time locating the limiting language” (id. at p. 1550). Other
deficiencies noted by the Jauregui court remain unaddressed. For example, the
definition of the insured, appearing at the outset of the liability section, still “gives
every indication that a permissive driver stands in the same position as the insured
and receives the same coverage.” (Id. at p. 1549.) A permissive user limitation
still is found in the subsection on “Other Insurance,” even though it “has nothing
to do with insurance from any other source.” (Ibid.) And the permissive user
limitation itself in endorsement S9064 remains “surrounded by language that has
nothing to do with exclusions or limitations on coverage.” (Id. at p. 1550.) Like
the Jauregui majority, we are “not satisfied that a policy purportedly designed for
comprehensibility and clarity succeeds in limiting coverage as long as the
language appears somewhere within the appropriate section.” (Ibid.)
Of course, the policy at issue in this case does not actually have the
physical form described in endorsement S9064, i.e., it is not a policy from which
the older permissive user limitation has been physically excised and into which
endorsement S9064’s new limitation has been physically inserted. Rather, it is a
policy containing older limiting language that has been declared invalid, to which
has been appended an endorsement of questionable conspicuousness that contains
new language and instructions about where the new language is to be read as
appearing. But merely stating, as does endorsement S9064, that a particular
provision “is deleted” from the existing policy and a new provision “is added” in
another place or places—even with a proviso that the statement “is part of your
policy”—does not produce a result as conspicuous as would providing a new
document in which the changes actually have been physically incorporated.
Our jurisprudence respecting conspicuousness, consistently with the
inherent logic of that concept, refers to how a coverage-limiting provision actually
has been positioned and printed within the policy at issue. (Ponder v. Blue Cross
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of Southern California, supra, 145 Cal.App.3d at p. 719.) In evaluating its
conspicuousness, accordingly, we must consider the permissive user limitation’s
actual placement in the actual physical policy that was presented to Farmers’
insureds. “The policy should be read as a layman would read it and not as it might
be analyzed by an attorney or an insurance expert.” (Crane v. State Farm Fire &
Cas. Co. (1971) 5 Cal.3d 112, 115.)
Endorsement S9064, as mentioned, appears on the 24th page of the policy.
It first amends the definition of “Insured person” as used in the liability part of the
policy to add and define a “listed driver.” Six lines later, it declares deleted an
item in “Your Motor Home Plus Policy.” Thereafter, it declares deleted “in your
E-Z Reader Car Policy, the second paragraph under PART I – LIABILITY, ‘Other
Insurance.’ ” The permissive user limitation then appears: three lines of ordinary
type, in the least conspicuous position on the page, purporting to limit permissive
user coverage “to the minimum required limits” of the Financial Responsibility
Law, as described.7 We agree with the Court of Appeal that burying the
permissive user limitation among such provisions renders it inconspicuous and
potentially confusing to the average lay reader. From such a reader’s point of
view, the instant policy is not a significant improvement over the policies in
Jauregui and Thompson, where the coverage limitations were invalidated.
We do not quarrel with Farmers that “perfection in presentation is
unattainable.” But no authority supports the notion that a provision presented in
an endorsement, no matter how printed or where placed, is conspicuous per se. To

7
In specifying the dollar amounts of the minimum required limits of the law,
Farmers addressed the Jauregui court’s concern that the terminology “Financial
Responsibility Law” had not been defined. (See Jauregui, supra, 1 Cal.App.4th at
p. 1551.)
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the contrary, it is well established that “mere receipt of [an endorsement] . . . does
not serve to charge the insured with constructive knowledge of [an] exclusion” it
contains. (Underwriters Ins. Co. v. Purdie (1983) 145 Cal.App.3d 57, 65.) Nor
does the fact the permissive user limitation appears in an endorsement necessarily
diminish—with respect to the issue of conspicuousness—the significance of the
fact that “it appears only after [many] long and complicated page[s] of fine print
. . . .” (Gray v. Zurich Insurance Co. (1966) 65 Cal.2d 263, 273.)
Farmers cites Merrill & Seeley, Inc. v. Admiral Ins. Co. (1990) 225
Cal.App.3d 624, 631, for its statement that an exclusion of retroactive coverage
was conspicuous because the cover page directed the insured to the provisions at
issue in the policy. But unlike the declarations page in this case, the cover page in
Merrill contained language actually referring the reader to the critical provision
“ ‘as per form attached’ ” (ibid.). Whereas this referring language and a key date
on the cover page in Merrill “adequately alert[ed] the reader that there [were]
important limits on coverage” (ibid.), the same cannot be said of Farmers’ cryptic
alphanumeric designation, “S9064.” Moreover, contrary to the dissent’s
suggestion (dis. opn., post, at p. 4), neither Farmers’ cursory and unexplained
reference to “recent changes” in a form letter inserted in the policy nor the index’s
global reminder that the policy contains “certain exclusions” calls attention either
to endorsement S9064 or to the permissive user limitation.
Farmers and our dissenting colleague (dis. opn., post, at p. 2) cite Fields v.
Blue Shield of California (1985) 163 Cal.App.3d 570, 578, for its statement that
“an insured has a duty to read his policy.” But the general rule that “a party is
bound by contract provisions and cannot complain of unfamiliarity” with them
(ibid.) does not dispose of this case. As Fields itself recognizes, the duty to read
“is insufficient to bind a party to unusual or unfair language unless it is brought to
the attention of the party and explained.” (Ibid.)
13

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For nearly a hundred years we have recognized that “ ‘the rule [presuming
parties are familiar with contract terms] should not be strictly applied to insurance
policies. It is a matter almost of common knowledge that a very small percentage
of policy-holders are actually cognizant of the provisions of their policies . . . .
The insured usually confides implicitly in the agent securing the insurance, and it
is only just and equitable that the company should be required to call specifically
to the attention of the policy-holder such provisions as the one before us.’ ”
(Raulet v. Northwestern etc. Ins. Co. (1910) 157 Cal. 213, 230 [discussing a lien
provision].) Thus, an insurer’s direction to the subscriber to read the entire policy,
“is not a substitute for notice to the subscriber of a loss of benefit.” (Fields v. Blue
Shield of California, supra, 163 Cal.App.3d at p. 583.)
The cases Farmers cites therefore do not insulate the permissive user
limitation from the general requirement that, as a coverage reduction, it must be
conspicuous. As has been explained in detail, Farmers “does not meet its stringent
obligation to alert a policyholder to limitations on anticipated coverage by hiding
the disfavored language in an inconspicuous portion of the policy.” (Jauregui,
supra, 1 Cal.App.4th at p. 1550.) Like the cross-references found insufficient in
Thompson, Farmers’ unadorned alphanumeric reference to endorsement S9064 on
the declarations page is “ineffective in alerting the reader to the important
limitations contained on [a] back page of the policy.” (Thompson, supra, 84
Cal.App.4th at p. 98.) “The exclusionary clause . . . upon which the insurance
company relies, is an unexpected one.” (Steven, supra, 58 Cal.2d at p. 884.)
Plainness and clarity
“Conspicuous placement of exclusionary language is only one of two rigid
drafting rules required of insurers to exclude or limit coverage. The language
itself must be plain and clear. [Citation.] ‘This means more than the traditional
requirement that contract terms be “unambiguous.” Precision is not enough.
14

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Understandability is also required.’ ” (Jauregui, supra, 1 Cal.App.4th at
p. 1550.)8
Judged in light of these requirements, the permissive user limitation is not
plain and clear. Although the term “permissive user” appears in the title of the
endorsement containing the limitation, the term is nowhere defined, neither in the
policy nor the endorsement, for the average lay reader. While an attorney or an
insurance professional likely could deduce from close examination of the entire
document that permissive user refers to “an insured person, other than you, a
family member or a listed driver” (the phrase that appears in the permissive user
limitation itself) and, by cross-referencing to the definition of insured person in the
liability section, that such an “insured person” is “Any person using your insured
car” but not “Any person who uses a vehicle without having sufficient reason to
believe that the use is with the owner’s permission,” the average lay reader
encountering the term in the title of endorsement S9064 would not necessarily
understand its significance. Endorsement S9064, moreover, contains confusing
language surrounding and introducing the actual text of the permissive user
limitation, along with confusing cross-references to other insurance policies
Farmers’ insured did not possess. Thus, contrary to the claim on the cover page of
Farmers’ E-Z Reader Car Policy, the policy is not “written in non-technical easy-
to-read style.”
Additionally, endorsement S9064 purports to effect insertion of the
permissive user limitation at two different points in the policy, including a
reinsertion at the point where the Court of Appeal in Jauregui indicated the
average lay reader “would have a difficult time locating” it. (Jauregui, supra,

8
See foonote 6, ante.
15

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1 Cal.App.4th at p. 1550.) The endorsement states that the permissive user
limitation is added to both “the ‘Limits of Liability’ and ‘Other Insurance’
sections.” (See generally Thompson, supra, 84 Cal.App.4th at p. 97.) Directing
the insured to insert the permissive user limitation into the “Other Insurance”
section may erroneously cause the insured to believe the limitation applies only if
the policyholder has other insurance. (See Jauregui, supra, 1 Cal.App.4th at pp.
1549-1550.) Combined with Farmers’ failure to define “permissive user,” the
repeated cross-references in endorsement S9064 to policies other than the car
policy, and the confusing language surrounding and introducing the permissive
user limitation, these dual-insertion directions seriously impair the clarity with
which the limitation imparts its intended message that some portion or aspect of
the insurance provided by the policy is extended “only up to the minimum
required limits of your state’s Financial Responsibility Law.”
Especially as “an exclusion is subjected to the closest possible scrutiny”
(Ponder v. Blue Cross of Southern California, supra, 145 Cal.App.3d at p. 718)
and judged from the perspective of an average layperson (Thompson, supra, 84
Cal.App.4th at p. 97), we conclude that Farmers has not met its burden to phrase
exceptions and exclusions in “ ‘clear and unmistakable language’ ” (State Farm
Mut. Auto. Ins. Co. v. Jacober, supra, 10 Cal.3d at p. 202). For all of the
foregoing reasons, we agree with the Court of Appeal that the permissive user
limitation is not conspicuous, plain and clear.9

9
We do not in so holding suggest that Farmers necessarily must correct all of
the identified deficiencies in order to render a permissive user limitation
enforceable in future cases. Nor have we the expertise to dictate the precise
wording or placement of such a limitation an insurer must adopt in order to satisfy
the established legal standard. Indeed, “we do not rewrite any provision of any
contract, including the standard policy underlying any individual policy, for any

(footnote continued on next page)
16

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Insured’s reasonable expectations
With some exceptions, Insurance Code section 11580.1, subdivision (b)(4)
requires every automobile liability insurer to provide permissive user coverage to
the same extent as that afforded to the named insured. One exception, applicable
here, is that Insurance Code section 11580.1, subdivision (a) provides that the
requirements of subdivision (b)(4) do not apply to any policy that exceeds the
minimum financial responsibility requirements ($15,000/$30,000/$5,000) of
Vehicle Code section 16056, subdivision (a). Because the policy here
($250,000/$500,000/$100,000) provided the named insured with liability
insurance greater than the Vehicle Code’s minimum requirements, Farmers had no
initial duty to indemnify a permissive user for damages exceeding those
requirements. But Farmers included “[a]ny person using your insured car” within
its definition of “Insured person,” thus raising a reasonable expectation that
permissive user coverage would be coextensive with that for other insureds.
Consequently, any limitation on permissive user coverage, to be enforceable, was
required to be conspicuous, plain and clear. (Steven, supra, 58 Cal.2d at p. 878.)
Farmers, however, contends the permissive user limitation need not be
conspicuous, plain and clear because it does not defeat the reasonable expectations
of the contracting party. Relying on the dissenting opinion in Jauregui, supra, 1
Cal.App.4th at page 1553, Farmers argues that a limitation on coverage for a
permissive user has no significance for the policyholder.

(footnote continued from previous page)
purpose.” (Certain Underwriters at Lloyd’s of London v. Superior Court (2001)
24 Cal.4th 945, 967-968; see also Bay Cities Paving & Grading, Inc. v. Lawyers’
Mutual Ins. Co. (1993) 5 Cal.4th 854, 871.) There may be a number of ways for
Farmers to correct the problem.
17

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The dissent on which Farmers relies asserted, without authority, that
insurance purchasers are not “motivated to provide insurance that provides benefit
only to the permissive user and the victim of his negligence and no benefit to the
insured.” (Jauregui, supra, 1 Cal.App.4th at p. 1554 (dis. opn. of Marler, J.).)
The assertion is not self-evidently true. The mere fact an insured may be legally
protected from liability when a permissive user kills or injures another does not
mean the insured is indifferent to compensating those victims.
In some circumstances, an automobile owner’s liability for injuries caused
by a permissive user is statutorily limited,10 but contrary to the dissent in
Jauregui, it does not follow that “a reasonable insured would not care if the
exclusion or limiting clause [reducing permissive user coverage] applies”
(Jauregui, supra, 1 Cal.App.4th at p. 1554 (dis. opn. of Marler, J.)). Even
assuming, as seems doubtful, that the average lay insurance shopper is acquainted
with the various statutes that circumscribe automobile owners’ liability and, in
addition, has no interest either in victim compensation or in being able to assure
permissive users of coverage in case of an accident, such an insured reasonably
might prefer to have the maximum possible liability limits available to a
permissive user. Otherwise, the insured will face a greater risk of being
independently named as a defendant (as, for example, in a negligent entrustment

10
See, e.g., Vehicle Code section 17151, limiting civil liability of automobile
owners to $15,000 per person and $30,000 per occurrence for bodily injury and
$5,000 per occurrence for property damage.
18

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action11 by a victim deciding to allege such against the insured owing to a
negligent permissive user’s having been underinsured).12
California courts have recognized that an insured bargains for liability
limits not only for himself, but also for permissive users. Indeed, “liability limits
are among the few policy features actually bargained for between the insurer and
insured. . . . [And,] even if an insured does not specifically seek out high limits of
coverage for permissive users,” he generally expects that any increases in liability
limits will apply to everyone covered. (Thompson, supra, 84 Cal.App.4th at
p. 97.)13

11
See Hartford Accident & Indemnity Co. v. Abdullah (1979) 94 Cal.App.3d
81, 90-91; Ohio Farmers Indem. Co. v. Interinsurance Exchange (1968) 266
Cal.App.2d 772, 774-775.
12
At oral argument, counsel for Farmers speculated that, in a particular case
where the named insured and a permissive user were both sued and the damages
sought exceeded the policy limits, a rational insured might, depending on the
circumstances, prefer that permissive user coverage be limited so that a greater
fraction of the total insurance available under the policy would be available for
settlement of the claim against himself. The theoretical possibility that a specific
insured might prefer limited permissive user coverage if faced with such a
scenario, however, does not change the fact that, generally, “a reasonable
layperson expects that when one increases one’s insurance liability limits, such
changes apply universally to everyone covered under the policy” (Thompson,
supra, 84 Cal.App.4th at p. 97).
13
At least some of those who market insurance today would appear to agree.
(See, e.g., Billboards at Interstate 880 (South) near 23d Avenue exit, Alameda, and
at 10th and Folsom Streets, San Francisco (as of Dec. 30, 2003) [automobile
liability insurer advertises that, under its policies, “We Cover Your Friends Like
We Cover You”]; “Get More,” Internet Web site
<http://www.21st.com/company/getMore/coverage/coverage.jsp> (as of May 17,
2004) [advertising five insurers that will “[e]xtend[] your policy coverage and
limits—at no additional charge—to any licensed driver given permission to drive
your car”].)
19

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More importantly, even if Farmers were correct that reasonable insureds do
not shop for permissive user coverage, it would not follow that the permissive user
limitation here defeats no relevant expectations. “It is not our role to speculate on
the policyholder’s abstract expectations, but rather to consider reasonable
expectations defined by the insurer’s policy language.” (Jauregui, supra, 1
Cal.App.4th at p. 1552, fn. 1.) And the question whether Farmers’ E-Z Reader
Car Policy creates a reasonable expectation that permissive user coverage equals
other coverage already has been answered in the affirmative. (See Jauregui,
supra, at pp. 1551-1553.) Applying “well-accepted rules of construction of
insurance contracts to ascertain what reasonable expectations were created by the
insurer in drafting its E-Z Reader Car Policy” (id. at p. 1552, fn. 1), the majority in
Jauregui concluded that an insured “could reasonably expect, based on the
policy’s definition of insured, that coverage extended to ‘[a]ny person using [his]
insured car.’ Having created a reasonable expectation of coverage for permissive
users coextensive with that of the named insured, defendant was required to cast
coverage restrictions in plain and clear language which was conspicuously
displayed.” (Ibid.) The same is true here.
We conclude that Farmers’ argument that the permissive user limitation
need not be conspicuous, plain or clear because it does not defeat insureds’
reasonable expectations is without merit.
20

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Disposition
For the foregoing reasons, we affirm the judgment of the Court of
Appeal.14
WERDEGAR, J.
WE CONCUR:
GEORGE, C. J.
KENNARD, J.
CHIN, J.
MORENO, J.

14
Hartford Casualty Ins. Co. v. Mid-Century Ins. Co., supra, 26 Cal.App.4th
1783 and Mid-Century Ins. Co. v. Haynes, supra, 218 Cal.App.3d 737 are
disapproved to the extent they are inconsistent with this opinion.
21

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CONCURRING OPINION BY BROWN, J.

I concur but write separately to clarify my understanding of the majority’s
holding. Finding the provision purporting to limit the coverage for permissive
users of an insured vehicle neither conspicuous, plain nor clear, the majority notes
that Farmers Insurance Exchange (Farmers) need not necessarily “correct all of the
identified deficiencies in order to render a permissive user limitation enforceable”
and that “[t]here may be a number of ways for Farmers to correct the problem.”
(Maj. opn., ante, at p. 17, fn. 9.) In doing so, I assume the majority is eschewing
any suggestion that insurers, when making policy changes, must or should issue a
new document which physically incorporates these changes. Indeed, such a
suggestion would create an administrative nightmare for both insurers and
insureds, and likely result in more confusion over the scope of coverage. Thus,
our decision today does not, in any way, preclude insurers from making policy
changes through endorsements attached to the end of existing policies. (See, e.g.,
Continental Cas. Co. v. Phoenix Constr. Co. (1956) 46 Cal.2d 423, 430-432
[enforcing two endorsements that were not physically incorporated into a new
document].)
BROWN, J.
1

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DISSENTING OPINION BY BAXTER, J.

I respectfully dissent.
Like many insurance policies, William Gallahair’s E-Z Reader Car Policy
incorporates several preprinted policy forms and endorsements that are identified
on the declarations page. (Croskey et al., Cal. Practice Guide: Insurance
Litigation (The Rutter Group 2002) ¶ 3:66, pp. 3-12 to 3-13.) Among the several
endorsements the declarations page identifies is endorsement S9064, which
expressly amends the policy to limit the insurer’s liability for permissive users to
the statutorily required minimum of $15,000 per person, $30,000 per occurrence
for bodily injury, and $5,000 for property damage. (See Ins. Code, § 11580.1;
Veh. Code, § 16056, subd. (a).) The question here is whether the permissive user
limitation is valid and enforceable. I believe it is: the limitation appears
conspicuously in the endorsement, and its language is plain and clear.
An endorsement is an amendment to or modification of an existing
insurance policy. (Adams v. Explorer Ins. Co. (2003) 107 Cal.App.4th 438, 451.)
Some endorsements make changes that are relatively minor, while others “ ‘can
add or delete “additional insureds” and additional “insured locations” to those
listed on the declarations page, substantially changing the risks and premiums.’ ”
(Id. at p. 450, quoting Croskey et al., Cal. Practice Guide: Insurance Litigation,
supra, ¶ 3:188, p. 3-50.) Whether located in an endorsement or elsewhere in a
policy, a provision that purports to exclude or substantially limit liability must be
conspicuous, plain, and clear to be effective. (Thompson v. Occidental Life Ins.
1

---

Co. (1973) 9 Cal.3d 904, 921; Ponder v. Blue Cross of Southern California (1983)
145 Cal.App.3d 709, 719 (Ponder).) To be conspicuous, plain, and clear, a
limiting provision “must be positioned in a place and printed in a form which
would attract a reader’s attention,” and its substance “must be stated in words that
convey the proper meaning to persons expected to read the contract.” (Ponder,
supra, 145 Cal.App.3d at p. 719.)
It bears emphasis that a policy provision limiting liability is not invalid
simply because it could have been made easier to find. (See National Auto. &
Casualty Ins. Co. v. Stewart (1990) 223 Cal.App.3d 452, 460.) Thus, a coverage
provision in the text of an insurance policy need not expressly reference the
provisions that modify or limit it (Zubia v. Farmers Ins. Exchange (1993) 14
Cal.App.4th 790, 796), and a limiting provision need not be mentioned on the
declarations page of a policy in order to be valid (Merrill & Seeley, Inc. v. Admiral
Ins. Co. (1990) 225 Cal.App.3d 624, 631; Estate of Murphy (1978) 82 Cal.App.3d
304, 307-309). Instead, the controlling concern is whether the insuring document,
construed as a whole, puts the average insured on reasonable notice of its
provisions and limitations. (See Feurzeig v. Insurance Co. of the West (1997) 59
Cal.App.4th 1276, 1282-1283.)
In determining whether an insurance policy provides reasonable notice of a
lawful limiting provision, we assume the insured reads the entire policy. (See
Fields v. Blue Shield of California (1985) 163 Cal.App.3d 570, 578-579 [insured
has a duty to read the policy and is bound by all of its conspicuous, plain, and
clear provisions].) Significantly, the provisions of an endorsement prevail over
conflicting provisions in the body of the policy, if the relevant language of the
endorsement is conspicuous and free from ambiguity. (Jane D. v. Ordinary
Mutual (1995) 32 Cal.App.4th 643, 651; see Aerojet-General Corp. v. Transport
Indemnity Co. (1997) 17 Cal.4th 38, 50, fn. 4; Continental Cas. Co. v. Phoenix
Constr. Co. (1956) 46 Cal.2d 423, 431; Estate of Murphy, supra, 82 Cal.App.3d at
p. 309.)
2

---

These rules have been applied as follows. Provisions purporting to limit or
exclude liability have been invalidated as inconspicuous when placed on an
overcrowded page, or in a “dense pack” format, or in a section bearing no clear
heading or relationship to the insuring clause and concealed in fine print. (See
Cal-Farm Ins. Co. v. TAC Exterminators, Inc. (1985) 172 Cal.App.3d 564, 577,
and cases cited therein.) Likewise, terms have been found ambiguous where they
could be interpreted to have more than one meaning. (E.g., Safeco Ins. Co. v.
Robert S. (2001) 26 Cal.4th 758, 765-766; Gyler v. Mission Ins. Co. (1973) 10
Cal.3d 216, 219.)
Conversely, an exclusionary clause in the same size print and intensity as
the rest of the policy and appearing under an appropriate heading was found
conspicuous as a matter of law (National Ins. Underwriters v. Carter (1976) 17
Cal.3d 380, 384-385), even though it appeared 21 paragraphs after the insuring
clause and was the last of eight exclusions (id. at p. 390 (conc. & dis. opn. of
Tobriner, J.)). Another exclusion was found conspicuous, even though it appeared
on an attached page, where the declarations page stated coverage was “AS PER
FORM ATTACHED.” (Merrill & Seeley, Inc. v. Admiral Ins. Co., supra, 225
Cal.App.3d at p. 631.) Similarly, a clause excepting liability for third party
negligence was held enforceable where (1) it appeared in a single-page attachment
to a policy that was entitled “Amendatory Endorsement,” was in a type of a
reasonable size, and was located in a subsection having a bolded, all-capitalized
subheading entitled “Specifically Excepted Perils,” and (2) the language of the
exclusionary provision was sufficiently precise and understandable. (Palub v.
Hartford Underwriters Ins. Co. (2001) 92 Cal.App.4th 645, 652.) Moreover,
policy language is never deemed ambiguous in the abstract; rather, a provision
may be found ambiguous only in the context of the policy and the circumstances at
issue. (Bay Cities Paving & Grading, Inc. v. Lawyers’ Mutual Ins. Co. (1993) 5
Cal.4th 854, 867; see California Casualty Ins. Co. v. Northland Ins. Co. (1996) 48
Cal.App.4th 1682, 1694.)
3

---

As set forth below, the terms of Gallahair’s E-Z Reader Car Policy, I
believe, more than meet the foregoing standards for effectuating a valid and
enforceable limitation on the insurer’s liability.
First, the declarations page of the E-Z Reader Car Policy expressly lists
S9064 as an endorsement to the policy.
Following the declarations page but preceding the main body of the policy
is a one-page letter written to the insured from “Your Farmers Agent.” The
second paragraph of that letter states in full: “The accompanying Declarations
Page shows your current coverages resulting from the recent changes made to your
policy. Please review your policy changes and file them in a safe place with your
original policy documents.”
Following that letter but also preceding the main body of the policy is a
page entitled “Index of Policy Provisions.” The index identifies the multiple parts
of the policy, including “PART I — LIABILITY,” and explicitly states: “ANY
ADDITIONAL PROVISIONS AFFECTING YOUR POLICY ARE ATTACHED
AS ‘ENDORSEMENTS.’ This policy is a legal contract between you (the
policyholder) and us (the Company). IT CONTAINS CERTAIN EXCLUSIONS.
READ YOUR POLICY CAREFULLY.” Thus, the index puts the insured on
reasonable notice that any attached endorsements may affect the policy provisions
that follow.
Turning to endorsement S9064 itself, we see it is comprised of a single
page with the fully capitalized title: “PART I — LIABILITY — PERMISSIVE
USER LIMITATION.” There is no dispute that the endorsement’s terms appear
in readily legible print; indeed, the print size and intensity of the endorsement’s
text is the same as the policy’s main text. The endorsement sets forth the
permissive user limitation as follows: “It is agreed that PART I — LIABILITY of
Your E-Z Reader Car Policy, Your E-Z Reader Motorcycle Policy and Your
Motor Home Plus Policy is amended as follows: . . . [¶] To Your E-Z Reader Car
Policy, Your E-Z Reader Motorcycle Policy and Your Motor Home Plus Policy,
4

---

the following is added to the ‘Limits of Liability’ and ‘Other Insurance’ sections:
[¶] We will provide insurance for an Insured person, other than you, a family
member or a listed driver, but only up to the minimum required limits of your
state’s Financial Responsibility Law of $15,000 per person and $30,000 per
occurrence for bodily injury, and $5,000 for property damage.” The balance of the
endorsement consists of an amended definition of “Insured person,” a term which
appears in the permissive user limitation and elsewhere in the “LIABILITY”
section of Gallahair’s policy, and a definition of “Listed Driver,” a new term that
the permissive user limitation utilizes. At the end of the endorsement, set apart in
its own paragraph, is the following admonishment to the insured: “This
endorsement is part of your policy. It supersedes and controls anything to the
contrary. It is otherwise subject to all other terms of the policy.”1
In sum, endorsement S9064 appears on its own page as a separate
attachment to the policy. The declarations page lists the endorsement by number,
and the insurance policy explicitly informs the insured in two prominent places
that the endorsements attached to the policy affect its provisions. The fully
capitalized title of endorsement S9064 makes it crystal clear that the endorsement
purports to limit the insurer’s liability for permissive users. Within the
endorsement, the provision that specifically limits liability for permissive users to
the legally authorized minimum of $15,000 per person, $30,000 per occurrence for
bodily injury, and $5,000 for property damage, appears in its own separate
paragraph in print of the same size and intensity of the policy’s main text, thus
making the provision obvious and distinct, as well as readily legible. The limiting

1
Attached as an appendix to this opinion is a copy of endorsement S9064,
which the parties submitted in their joint appendix on appeal. The parties do not
indicate who made the handwritten markings that appear on the endorsement and
offer no explanation for their presence.
5

---

provision is not phrased in esoteric or technical terms, but in language easily
understood by a person of average intelligence and experience.
Given the physical characteristics of endorsement S9064, as well as its
conspicuous title and plain wording, I find that the endorsement and the
permissive user limitation contained therein satisfy the requirements for a valid
and enforceable limitation of liability. (See Palub v. Hartford Underwriters Ins.
Co., supra, 92 Cal.App.4th at p. 652.)
To support its contrary conclusion, the majority points out that Jauregui v.
Mid-Century Ins. Co. (1991) 1 Cal.App.4th 1544 (Jauregui) and Thompson v.
Mercury Casualty Co. (2000) 84 Cal.App.4th 90 (Thompson) both considered
permissive user limitations and found them invalid. Those decisions, however, did
not involve endorsements and did not criticize the limiting language at issue here.
If anything, they support, rather than undermine, my view that the limitation in
endorsement S9064 is effective.
In Jauregui, the permissive user limitation appeared only in the “Other
Insurance” section of the main body of the policy; it was not in a separate
endorsement as in Gallahair’s policy. Because the provision was placed under a
heading that was unrelated to its subject and was surrounded by language having
nothing to do with exclusions or limitations on coverage, Jauregui found it
inconspicuous as a matter of law. (Jauregui, supra, 1 Cal.App.4th at pp. 1549-
1550.) Here, however, the insurer is not seeking enforcement of the permissive
user limitation based on its location in the “Other Insurance” section of Gallahair’s
E-Z Reader Car Policy. Rather, the insurer relies on the fact that endorsement
S9064 expressly amends the policy to add the limitation to the exact location in
the policy where the Jauregui court thought such a provision could most easily be
found by an insured—in the liability section of the policy entitled “PART I —
LIABILITY,” under the most relevant possible subheading entitled “Limits of
Liability.” (See Jauregui, supra, 1 Cal.App.4th at p. 1549.) Furthermore,
endorsement S9064 specifically addresses the Jauregui court’s additional concern
6

---

over the plainness and clarity of the limiting provision’s language by explicitly
referring to “the minimum required limits of your state’s Financial Responsibility
Law of $15,000 per person and $30,000 per occurrence for bodily injury, and
$5,000 for property damage.” (See Jauregui, supra, 1 Cal.App.4th at pp. 1550-
1552.)
Similarly, the permissive user limitation in Thompson was not in a separate
endorsement. Instead, it appeared inconspicuously on the last page of a multipage
policy in an unnumbered section that was entitled “Conditions” and contained “30
random and unrelated subsections.” (Thompson, supra, 84 Cal.App.4th at p. 97.)
The limitation was specified as “Condition 23” in that section, but its language
was “not bolded, italicized, enlarged, underlined, in different font, capitalized,
boxed, set apart, or in any other way distinguished from the rest of the fine print.”
(Ibid.) In stark contrast to the provision in Thompson, the permissive user
limitation in Gallahair’s policy is located in a clearly titled, legibly printed, single-
page endorsement that unambiguously instructs the insured to add the plainly
worded limitation to the Limits of Liability section of the policy, exactly where
such limitation belongs. (See Jauregui, supra, 1 Cal.App.4th at p. 1549.)
Additionally, the majority concludes that “burying the permissive user
limitation” among several other provisions of the same print size and intensity
“renders it inconspicuous and potentially confusing to the average lay reader.”
(Maj. opn., ante, at p. 12.) But no “burying” is in evidence here. Endorsement
S9064 is a single-page attachment that displays a fully capitalized title calling
ample attention to the fact that it contains a permissive user limitation. The
limitation itself is set forth in its own paragraph. More to the point, the other
provisions listed in the endorsement serve to define certain terms that are used in
the permissive user limitation, i.e., “Insured person” and “Listed Driver.” (See
appendix.) I find it beyond comprehension that the majority criticizes
endorsement S9064 for its inclusion of such definitions.
7

---

Finally, the majority surmises that the average lay reader would not
necessarily understand the significance of the permissive user endorsement
because the title term “permissive user” is not defined anywhere in the policy.
(Maj. opn., ante, at p. 15.) But the fact that a term is not defined in the policy does
not render it ambiguous. (Foster-Gardner, Inc. v. National Union Fire Ins. Co.
(1998) 18 Cal.4th 857, 868.) Nothing about the term, moreover, suggests that the
average insured would have difficulty understanding its likely application in
situations where, as here, the insured grants a friend permission to use his or her
car. Contrary to the majority’s suggestion otherwise, the permissive user
provision is not ambiguous in the context of the policy or the circumstances at
issue. (Bay Cities Paving & Grading, Inc. v. Lawyers’ Mutual Ins. Co., supra, 5
Cal.4th at p. 867; see California Casualty Ins. Co. v. Northland Ins. Co., supra, 48
Cal.App.4th at p. 1694.)2
To summarize, I believe the permissive user limitation contained in
endorsement S9064 is conspicuous, plain, and clear. Unlike the majority, I would
find the limitation valid and enforceable in the circumstances before us.

BAXTER, J.

2
Because endorsement S9064 directs the insured to also add the permissive
user limitation to the “Other Insurance” section of the policy, the majority finds
the endorsement “may erroneously cause the insured to believe the limitation
applies only if the policyholder has other insurance.” (Maj. opn., ante, at p. 16,
italics added.) Not so. If anything, adding the limiting provision both to the
“Limits of Liability” section and to the “Other Insurance” section makes clear to
the average insured that the limitation applies at all times, regardless whether other
insurance is involved.
8

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9

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See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion Haynes v. Farmers Insurance Exchange

__________________________________________________________________________________

Unpublished Opinion

Original Appeal
Original Proceeding
Review Granted XXX 95 Cal.App.4th 588
Rehearing Granted

__________________________________________________________________________________

Opinion No.

S104851
Date Filed: May17, 2004
__________________________________________________________________________________

Court:

Superior
County: Orange
Judge: Kim Garlin Dunning

__________________________________________________________________________________

Attorneys for Appellant:

James C. Caviola, Jr., and Jean Ballantine for Plaintiff and Appellant.

Robinson, Calcagnie & Robinson and Sharon J. Arkin for Consumer Attorneys of California as Amicus
Curiae on behalf of Plaintiff and Appellant.

__________________________________________________________________________________

Attorneys for Respondent:

Horvitz & Levy, Barry R. Levy, Mitchell C. Tilner, Daniel J. Gonzalez; Chapin Shea McNitt & Carter,
Richard D. Carter and Robin James for Defendant and Respondent.

Grant, Genovese & Baratta and Lance D. Orloff for California Capital Insurance Company as Amicus
Curiae on behalf of Defendant and Respondent.

10

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Counsel who argued in Supreme Court (not intended for publication with opinion):

Jean Ballantine
12228 Venice Boulevard, Suite 152
Los Angeles, CA 90066
(310) 398-5462

Sharon J Arkin
Robinson, Calcagnie & Robinson
620 Newport Center Drive, 7th Floor
Newport Beach, CA 92660
(949) 720-1288

Daniel J. Gonzalez
Horvitz & Levy
15760 Ventura Boulevard, 18th Floor
Encino, CA 91436
(818) 995-0800

11

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Opinion Information

Date:	Docket Number:
Mon, 05/17/2004	S104851

Disposition
May 17 2004	Opinion: Affirmed

Dockets
Mar 6 2002	Petition for review filed   by counsel for respondent ( Farmers Insurance Exchange) (40k)
Mar 6 2002	Record requested
Mar 8 2002	Received Court of Appeal record   1-doghouse
Mar 15 2002	Answer to petition for review filed   appellant, Joshua Lee Haynes
May 1 2002	Petition for Review Granted (civil case)   Votes: George, CJ., Kennard, Baxter, Werdegar, Chin, Brown and Moreno, JJ.
May 8 2002	Certification of interested entities or persons filed   appellant Haynes
May 14 2002	Certification of interested entities or persons filed   by counsel for respondent (Farmers Ins. Exchange)
May 20 2002	Request for extension of time filed   by counsel for respondent (Farmers Ins. Exchange) requesting an extension of time to June 30, 2002, to file the Opening Brief on the Merits.
May 22 2002	Extension of time granted   Respondent's time to serve and file the opening brief on the merits is extended to and including July 1, 2002.
Jul 2 2002	Opening brief on the merits filed   by counsel for respondents (Farmers Ins. Exchange) (40K)
Jul 12 2002	Notice of intent to rely on CA brief (as opening brief)   by counsel for appellant (J. Haynes) (ANSWER BRIEF) also received copy of CA Reply brief.
Aug 2 2002	Reply brief filed (case fully briefed)   by resp (timely per CRC 40k)
Sep 4 2002	Received application to file amicus curiae brief; with brief   California Capital Insurance Company (40K)
Sep 6 2002	Permission to file amicus curiae brief granted   Calif. Capital Insurance Company in support of respondent.
Sep 6 2002	Amicus Curiae Brief filed by:   California Capital Insurance Company in support of respondent. An answer thereto may be served and filed by any party within twenty days of the filing of the brief.
Sep 25 2002	Received:   from Consumer Attys or Calif. Application for Leave to file Late Amicus Curiae Brief/with Brief.
Sep 25 2002	Response to amicus curiae brief filed   by counsel for appellant (Haynes) to amicus curiae brief of Capital Ins. Company.
Oct 2 2002	Permission to file amicus curiae brief granted   Consumer Attorneys of California
Oct 2 2002	Amicus Curiae Brief filed by:   Consumer Attorneys of California in support of respondent. An answer thereto may be served and filed by any party within twenty days of the filing of the brief.
Oct 23 2002	Response to amicus curiae brief filed   by counsel for respondent (Farmers Ins. Exchange) to amicus curiae brief of Consumer Attorneys of Calif. (40k)
Feb 10 2004	Case ordered on calendar   3-11-04, 9am, S.F.
Feb 20 2004	Application filed to:   divide oral argument>>appellant Joshua Lee Haynes
Feb 25 2004	Order filed   Permission granted for two counsel to present oral argument on behalf of aplt.
Feb 25 2004	Order filed   permission granted for applt to allocate 15 min. of oral argument time to a/c Consumer Attorneys of California
Mar 1 2004	Filed:   by counsel for aplt. (Haynes) additional authorities not cited.
Mar 11 2004	Cause argued and submitted
May 17 2004	Opinion filed: Judgment affirmed in full   OPINION BY: Werdegar,J. --- joined by: George, C.J., Kennard, Chin, Moreno, CONCURRING OPINON BY: Brown, J. DISSENTING OPINION BY: Baxter, J.
Jun 17 2004	Remittitur issued (civil case)
Jun 25 2004	Received:   receipt for remittitur from CA 4/3

Briefs
Jul 2 2002	Opening brief on the merits filed
Jul 12 2002	Notice of intent to rely on CA brief (as opening brief)
Aug 2 2002	Reply brief filed (case fully briefed)
Sep 6 2002	Amicus Curiae Brief filed by:
Sep 25 2002	Response to amicus curiae brief filed
Oct 2 2002	Amicus Curiae Brief filed by:
Oct 23 2002	Response to amicus curiae brief filed

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