Opinion
NOT TO BE PUBLISHED
Super. Ct. No. 06AS01230
RAYE, Acting P. J.Plaintiff Todd A. Crawford suffered injuries in a motor vehicle accident after colliding with a truck driven by Rhonda Long. Long drove a truck owned by a grading and paving company, Duran & Venables (D&V). Defendant St. Paul Fire and Marine Insurance Company (St. Paul) issued a commercial automobile liability policy to D&V, which covered the truck driven by Long. Crawford obtained a default judgment against Long and sought reimbursement from St. Paul, arguing Long was a permissive user of the truck under the D&V policy. Following a court trial, the court found Long did not have implied permission to drive D&V’s truck and denied Crawford’s claim. Crawford appeals, arguing the court erred in refusing to apply a liberal rule of construction to the D&V policy and misconstrued the law interpreting permissive users. We shall affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
The Accident and Aftermath
In November of 2003 Crawford and Long were involved in an automobile accident. At the time of the accident, Long drove a truck owned by D&V. The truck was covered by a policy issued by St. Paul.
D&V, a grading and paving contract firm, hired Matthew Guyer as a salesman. D&V assigned a Ford F-150 truck for his use on the job, which covered sales territory from Modesto to Sacramento. D&V knew Guyer used the truck as his primary vehicle and allowed him to use it for personal as well as professional purposes.
On several occasions, Guyer visited Long, a prostitute, for sexual services. During three of these visits, Guyer allowed Long to drive the truck.
The first time Guyer let Long drive the vehicle, he told her, “I’m going to let you do this, but I ain’t really supposed to but just don’t get in no wrecks.” On the second occasion, Guyer told Long “he wasn’t supposed to let me drive it because he was drinking then.”
The day of the accident, Guyer gave Long permission to borrow the truck to check on her daughter and purchase drugs for him. Again, Guyer told Long he was not supposed to allow her to drive the truck because it was a company truck, and he told her not to get into a wreck. Guyer warned Long that if she got into a wreck or got caught driving the truck, he would say she had stolen it.
In deposition, Long reiterated Guyer’s warning: “Q: Did he tell you why no one was supposed to be driving the truck? [¶] A: Because it wasn’t his truck. It was a company truck.”
While driving the truck, Long struck Crawford’s truck in a head-on collision, injuring Crawford. The officer investigating the accident accompanied Long back to Guyer’s motel room. According to the officer, Guyer “was worried that Rhonda had possession of the car and crashed it, and she wasn’t supposed to be driving it.” Guyer feared he would lose his job because Long had wrecked the company truck. The president of D&V testified that Guyer claimed the vehicle was stolen but refused to press charges.
Crawford filed suit against Long and D&V. D&V settled with Crawford. The release and settlement agreement excluded Long. Crawford obtained a default judgment against Long for $703,000.
St. Paul Policy
The policy issued by St. Paul to D&V sets forth the subjects of coverage. Under the heading “Who Is Protected Under This Agreement” and the subheading “Corporation or other organization,” the policy states: “If you are named in the Introduction as a corporation or other organization, you are a protected person for the use of a covered auto. Also, your executive officers and directors are protected persons. But only for the use of a covered auto. Also, your stockholders are protected persons, but only for their liability as your stockholders.” The policy also covers, as stated under the subheading “Any permitted user,” “Any person or organization to whom you’ve given permission to use a covered auto you own, rent, lease, hire or borrow is a protected person.”
D&V Fleet and Company Vehicles Policy
D&V’s written policy governs the use of company vehicles. The “Personal Use” section states: “Company vehicles are to be used for company business. Vehicles are not to be loaned or rented to anyone not employed by the company.” This policy was in effect at the time of the accident.
Each new D&V employee was specifically advised that under company policy, vehicles “are not to be loaned or rented to anyone not employed by the company.” Guyer was informed of the policy against loaning vehicles to nonemployees, and signed and dated the policy. Guyer was terminated after the accident for violating the policy.
Crawford contends D&V “was aware non-employees sometimes drove company vehicles, and [D&V’s owner] contemplated non-employees would drive company vehicles under certain circumstances.” However, the scenario contemplated by D&V involved a “mechanic test driving a vehicle,” not a truck loaned to an unconnected third party.
Trial Court’s Decision
A court trial followed. The court heard testimony from Crawford; Carlos Duran and Marchand Venables, owners of D&V; and the California Highway Patrol officer who responded to the accident. In addition, Long testified about Guyer’s loaning her the truck. Finally, D&V safety officer Gary Rudy testified he specifically informed Guyer of the company policy not to loan company vehicles to nonemployees. The trial court issued a statement of decision. The court agreed the basic facts were largely undisputed.
The court noted the case involved a third-party victim and the insurer, requiring liberal interpretation of the insurance policy in favor of coverage. However, the court also stated: “[W]hether the requisite permission was present at the time and place of the accident is a question of fact. [Citation.] As the trier of fact the Court weighs the evidence based on the preponderance of the evidence standard. The standard of liberal interpretation does not apply to the Court’s consideration of the credibility of the witnesses or the weight of the evidence.”
Accordingly, the court considered the evidence both supportive of a finding of permission and negating a finding of permission on the part of D&V. The court concluded: “Plaintiff relies almost entirely on a theory of failure to monitor to support a finding that D&V should have known Guyer would lend his vehicle to Long. The weight of the evidence simply does not demonstrate a failure to monitor that would lead conclusively to a finding of implied permissive use. [¶] In any event, failure to monitor is only one factor in the equation. Based on the record as a whole, in light of all of the factors properly considered, the preponderance of the evidence shows that D&V had a reasonable expectation that Guyer would follow its express written policy against third party use. There is no evidence of conduct that would lead to the conclusion that third party use should have been in the contemplation of the owners. There is no coverage for this accident under the policy.”
The court entered judgment for St. Paul. Crawford filed a timely notice of appeal.
DISCUSSION
I
At the outset, the parties disagree over the standard of review. Crawford urges de novo review, arguing the issues involve selection of a rule of law and consideration of that rule in a factual context. St. Paul contends the proper standard of review is the substantial evidence standard, arguing the trial court’s decision expressly involved a weighing of facts to support its judgment, and an assessment of the credibility of witnesses and testimony.
Solomon-like, we find both parties partly correct. We are not bound by the interpretation of an insurance policy adopted by the trial court, but must make our own independent interpretation of the contract. (Adams v. State Farm Mut. Auto. Ins. Co. (1977) 65 Cal.App.3d 821, 826.)
However, to the extent the trial court’s decision is based on the credibility of witnesses, we defer to the court’s findings. The trial court is in the best position to assess the credibility of witnesses and we will not substitute our own assessment. (Green v. American Cas. Co. (1971) 17 Cal.App.3d 270, 273-274.)
II
Crawford argues the St. Paul policy is ambiguous and therefore must be construed against the insurer and in favor of coverage. The ambiguity, Crawford contends, consists of the word “permission.” According to Crawford, the policy does not state whether permission is express, implied, or both, creating an ambiguity. We disagree.
We interpret insurance policies under the basic principles of interpretation applicable to all contracts. (E.M.M.I.Inc. v. Zurich American Ins. Co. (2004) 32 Cal.4th 465, 470.) Policy language must be construed in the context of the policy as a whole and the circumstances of the case, and cannot be found ambiguous in the abstract. (Bay Cities Paving & Grading, Inc. v. Lawyers’ Mutual Ins. Co. (1993) 5 Cal.4th 854, 867.) The parties and the court considered both express and implied permission, reflecting a reasonable understanding that the policy contemplated both in the term “permission.”
As for express permission, the court found the evidence revealed no express permission by D&V to Long to drive the truck. D&V’s policy prohibited employees from loaning company vehicles to nonemployees. As regards implied permission, the court considered Guyer’s understanding of his authority to lend the truck, Long’s understanding of whether she had permission, the application of D&V’s policy, and D&V’s oversight of the employee’s use of company vehicles. The court found no implied permission. Since the trial court and the parties construed permission as both express and implied, we find no ambiguity in the policy regarding permission.
III
Crawford also contends the trial court erroneously refused to apply a liberal rule of construction to the factual determination of permission. In support, Crawford relies on Jurd v. Pacific Indemnity Co. (1962) 57 Cal.2d 699 (Jurd). However, Jurd does not support Crawford’s assertion.
In Jurd, the Supreme Court set forth the general proposition that omnibus coverage clauses in insurance policies should be construed liberally so as to effectuate the manifest public policy of broadening the insurance coverage. (Jurd, supra, 57 Cal.2d at pp. 703-704.) However, in addition to this liberal interpretation of the policy, the court determined: “Whether the requisite permission was present at the time and place of the accident is a question of fact.” (Jurd, at p. 704.)
“Generally, an automobile liability policy must contain a provision affording insurance, to the same extent that insurance is afforded to the named insured, to any person using an owned or leased motor vehicle covered by the policy, provided the use is with the permission, express or implied, of the named insured and is within the scope of that permission. This is referred to as ‘omnibus’ coverage, and the clause setting forth the coverage in a policy is called the omnibus clause.” (39A Cal.Jur.3d (2006) Insurance Contracts & Coverage, § 479, pp. 368-369 [fn. omitted].)
Crawford argues Jurd acknowledged two different, and competing, principles of interpretation between two types of cases, those involving the imputed liability provisions of Vehicle Code section 17150 and those involving Insurance Code section 11580.1. In the former, according to Crawford, where the negligence of a driver who operates a vehicle with the owner’s permission is imputed to the owner, the issue of permission is strictly construed in favor of the owner of the car and against the injured person seeking to recover from the owner. In the latter, the issue of permission is liberally construed against the insurer and in favor of the injured person seeking recovery.
However, the language of Jurd does not support this interpretation. The Supreme Court stated: “In this vein it was accordingly said that ‘the scope of “permission” under such a policy may in certain situations be broader than the scope of “permission” under [Vehicle Code] former section 402 [now Vehicle Code section 17150], because a different rule of construction is applicable to the owner’s liability statute than the construction of an automobile liability policy, and “permission” within the two contexts need not be construed in a similar manner.’ [Citation.]” (Jurd, supra, 57 Cal.2d at p. 704.) The court did not state that permission in the insurance context is always to be liberally construed; it merely noted the different scope of permission between the two different types of cases.
Since we find no merit in Crawford’s argument that permission must be liberally construed, we do not address his contention that a liberal construction mandates coverage.
IV
Finally, Crawford faults the trial court’s interpretation of more recent cases construing permission in the insurance coverage context. Specifically, Crawford disputes the trial court’s reliance on Sandoval v. Mercury Ins. Group (1991) 229 Cal.App.3d 1 (Sandoval), arguing Sandoval is the “polar opposite of the case at bar.”
In Sandoval, the plaintiff owned a landscape maintenance business and had several employees. The plaintiff told his employee not to drive the business’s truck. The employee took the truck keys and drove to lunch. En route, the truck collided with a motorcycle, injuring the rider. (Sandoval, supra, 229 Cal.App.3d at p. 3.) After the plaintiff’s insurer denied coverage, the plaintiff filed suit against the insurer. (Id. at p. 4.) The insurer moved for summary judgment, which the trial court granted, finding the employee was not driving the truck with the plaintiff’s permission. (Id. at pp. 4-5.)
The appellate court affirmed. The court stated: “While repeatedly recognizing the need to provide a source of compensation for the innocent victims of automobile accidents, the cases have never suggested that need should be fulfilled by finding coverage without regard to the conduct and expectations of the owner. The statute underscores the importance of the owner’s expectations by limiting coverage to cases where use is ‘within the scope of [the owner’s] permission.’” (Sandoval, supra, 229 Cal.App.3d at p. 9.) The court noted that were it to ignore the contemplation of the owner, either actual or constructive, insurance coverage would rest on ownership alone, not on the owner’s consent. Finding coverage even where an insured had no reason to contemplate use by a third party would increase the risk covered by insurance and diminish its availability. (Id. at pp. 9-10.)
The Sandoval court concluded the plaintiff did not and should not have contemplated his employee’s use of the truck. In so finding, the court considered the plaintiff’s testimony that he repeatedly told the employee not to drive the truck and that he had not seen the employee driving any vehicles around the time of the accident. (Sandoval, supra, 229 Cal.App.3d at pp. 10-12.)
Crawford argues that here, unlike in Sandoval, employee Guyer’s “knowledge and actions are far less significant for purposes of proving what D&V objectively should have contemplated. Yet, the trial court seemed to give undue consideration to Guyer’s words and actions, and not enough consideration to D&V’s words and actions.” We disagree.
Guyer’s knowledge and actions were directly linked to whether or not D&V contemplated, or should have contemplated, a third party’s use of the truck. Guyer knew of D&V’s policy against vehicles being driven by nonemployees. Nonetheless, Guyer allowed Long to drive the truck, warning her not to get in an accident because she was not supposed to be driving. Long also knew she did not have permission to drive the truck.
We find the present situation similar to that encountered by the Supreme Court in Norris v. Pacific Indemnity Co. (1952) 39 Cal.2d 420 (Norris). In Norris, the son of the car’s owner was allowed to use the car. However, he was forbidden from allowing anyone but a family member or the chauffeur to drive it. (Id. at p. 422.)
The son loaned the car to a friend, telling the friend he was not allowed to loan it. The friend got into an accident and brought an action for declaratory relief against the owner’s insurer to determine whether he was covered as an additional insured under the policy. The court found for the insurer. (Norris, supra, 39 Cal.2d at p. 422.)
The Supreme Court affirmed, noting the language of the insurance policy was clear that only those with permission of the insured owner were covered by the policy. The facts established that the driver did not have the owner’s permission, either express or implied, to use the vehicle. To the contrary, the owner expressly forbade his son to allow nonfamily members to use the car. (Norris, supra, 39 Cal.2d at p. 426.)
Crawford argues the court in the present case “gave short-shrift” to Taylor v. Roseville Toyota, Inc. (2006) 138 Cal.App.4th 994 (Taylor). To the contrary, the trial court extensively discussed Taylor in its statement of decision. In Taylor, a car detailer, who had been working for a car dealership, got keys from the dealership’s key attendant. He used a car for a personal errand and caused an accident. The dealership had a system for controlling access to its vehicles by controlling its keys through an attendant. Because the driver believed the attendant could grant permission for personal use, the Taylor court concluded there was implied permission from the owner. (Id. at pp. 996-998, 1005-1006.) The court found the owner’s failure to monitor a factor to be considered in determining permission. (Id. at p. 1004.)
No such implied permission exists in the present case. To the contrary, D&V expressly denied nonemployees permission to drive its vehicles. No employee possessed the apparent or implied authority to override this prohibition. Taylor is not instructive given the facts in the present case.
Given the facts, including D&V’s express policy, Guyer’s knowledge of that policy, and Long’s awareness that she did not have permission to drive the truck, the trial court did not err in finding Long was not covered by the St. Paul policy.
DISPOSITION
The judgment is affirmed. St. Paul shall recover costs on appeal.
We concur: HULL, J., CANTIL-SAKAUYE, J.