Bodie

MEMORANDUM AND ORDER

I. PROCEDURAL AND FACTUAL BACKGROUND

Plaintiff Motors Insurance Corporation (“Motors”) filed the underlying action seeking a declaration of its rights and obligations to defendants Patrick Michael Bodie and Teresa Bodie under an automobile liability insurance policy for an automobile accident which occurred on September 10, 1988 in Calaveras County California. The parties have filed counter-motions for summary judgment which are now before the court. Jurisdiction is predicated on 28 U.S.C. § 1332 .

The material facts are undisputed. On or about February 15, 1988, Patrick Bodie renewed his Motors automobile insurance policy, No. 135007760, for his 1984 Isuzu pickup truck. The policy provided liability coverage for bodily injury in the amount of $25,000/$50,000 and property damage coverage of $10,000. The policy also provided additional coverage for medical payments, comprehensive, collision and uninsured motorist protection. The total premium of $593.00 was paid in full. Motors issued the renewal policy and delivered it to Patrick Bodie at his then residence in Calaveras County, California.

During the summer of 1988, the Bodies wished to insure a 1976…