Opinion
C.A. No. 06C-09-218 RRC.
Submitted: July 18, 2008.
Decided: August 29, 2008.
On Plaintiffs' Motion for Summary Judgment.
GRANTED.David G. Culley, Esquire, Tybout Redfearn Pell, Wilmington, Delaware, Attorney for Plaintiffs.
Gary S. Nitsche, Esquire, Christopher W. Componovo, Esquire, Weik Nitsche Doughtery Componovo, Wilmington, Delaware, Attorney for Defendant Joyce O'Neal.
Dear Counsel:
This unusual case arises from a motor vehicle accident that occurred at around midnight on Sunday, July 10, 2006, which accident resulted in the death of Elizabeth Reader. Elizabeth Reader, under the influence of cocaine and alcohol, was driving a van on Interstate 495. The van was owned by her employer and insured by State Farm Mutual Automobile Insurance Company and State Farm Fire and Casualty Company ("Plaintiffs" or "State Farm") and had been loaned to her to use. For reasons unknown, she pulled over onto the shoulder of the highway, then exited the van (but did not apparently put the van into park) and, as she walked behind the van, was killed by the van when it rolled backwards and hit her. Her passenger, Richard Cutler, ran around the van and attempted to enter the driver's compartment to try to stop the vehicle.
Plaintiffs have moved for summary judgment on their complaint for declaratory judgment, requesting that the Court hold that Plaintiffs are not required to provide insurance coverage under the "omnibus" provision for the accident because 1) the use of the van to pick up Elizabeth Reader's possession had not been impliedly granted by Sandra Pitts, and 2) Elizabeth Reader's impaired state from her ingestion of alcohol and drugs disqualified her from coverage under the policy.
The sole issue before the Court is whether, as a matter of law, Elizabeth Reader's use of the van at the time of the accident in a highly intoxicated state constituted a "major deviation" from the permission given to her by her employer.
The Court holds that Elizabeth Reader's use of the van did constitute a "major deviation" from the scope of permission, and that therefore Plaintiffs are not obligated to provide coverage under the "omnibus provision" contained in the policy insuring the van.
I. FACTUAL AND PROCEDURAL BACKGROUND
The facts set forth in this section relating to the scope of the use of the van are essentially the facts proffered by Defendants.
At the time of the accident Elizabeth Reader was employed by Sandra Pitts as an independent contractor. Sandra Pitts owned two businesses, "Just Inside Caf É" and "Hot Dawg Carts," and she owned and operated a number of vehicles in connection with the businesses, including a 1997 Chevrolet Astro Van ("the van"). The van was insured by State Farm, and Sandra Pitts was the named insured. The insurance policy contained an "omnibus" provision, which provided the following:
Who Is an Insured When we refer to your car . . . insured means:
1. you;
2. your spouse;
3. the relatives of the first person named in the Declarations;
4. any other person while using such a car if its use is within the scope of consent of you or your spouse . . .
In May or June of 2006, Elizabeth Reader lost the use of her personal vehicle, and subsequently Sandra Pitts offered use of the van to Elizabeth Reader for the purpose of driving back and forth to work.
While this use of the vehicle was initially the sole intended purpose of Elizabeth Reader's use of the vehicle, there is evidence that Elizabeth Reader used the van for personal purposes, and that Sandra Pitts, at least to some extent, was aware of this personal use.
Samantha Malinowski stated at her deposition that when she was present during conversations between Elizabeth Reader and Sandra Pitts, Sandra Pitts "never once said that [the van was] only for work purposes." At her deposition, Ashley Reader, another daughter of Elizabeth Reader, "testified that her understanding, gained from her mother, was that her mother could use the van to go to work, go to the grocery store, and to visit her children."
Def. Resp. to Pl. Mot. for Summ. J., at 2.
Id. at 3.
James Reader, Elizabeth Reader's son, said in his deposition that he spoke with Sandra Pitts "about getting directions to a storage unit where the back seats of the van were located so that the seats could be put in the vehicle so that the Reader family could sit on them while going to the beach."
Id. at 2.
Richard Cutler testified in his deposition that Elizabeth Reader "could take the van to the grocery store and that it wasn't just for her use to and from work." He also testified that there were "several occasions where he would go see [Elizabeth Reader] and she would drive it to the store," and that Richard Cutler knew that Samantha Malinowski had driven the vehicle.
Id.
Id. at 4.
In her deposition, Joyce O'Neal testified that Elizabeth Reader told her in June, 2006 that she had to pay Sandra Pitts $600 "for a van."
Id. at 3.
Melissa Wilson, Elizabeth Reader's coworker, stated in her deposition that Sandra Pitts had to know that Elizabeth Reader was using the van for personal purposes because the employees and Sandra Pitts would talk about their weekend activities, and that Sandra Pitts, knowing that Elizabeth. Reader had no other means of transportation, had to be aware that Elizabeth Reader was using the van for her personal weekend activities. Melissa Wilson testified that, as far as Melissa Wilson knew, Elizabeth Reader's privileges were the same as Melissa Wilson's; that it was their van for their use.
Id. at 4.
In the afternoon of July 9, 2006, Elizabeth Reader's father evicted her from his home in Elsmere, where she was then living, following a verbal confrontation. Elizabeth Reader called Mr. Cutler and received permission to stay in his apartment. Elizabeth Reader arrived in the van at Mr. Cutler's apartment at approximately 7:00 p.m., and joined Mr. Cutler in drinking beer. Mr. Reader then smoked crack cocaine in a back room of Mr. Cutler's apartment. At approximately 11:00 p.m., Elizabeth Reader and Mr. Cutler left his apartment in the van to retrieve some personal items from Elizabeth Reader's former residence. Elizabeth Reader was driving the van, and while traveling southbound on Interstate 495, Elizabeth Reader pulled over onto the shoulder of the freeway for an unknown reason. When the van came to a stop Elizabeth Reader immediately exited the vehicle. At that time, Mr. Cutler realized that the van was rolling backwards; he jumped out of the van and ran around the vehicle to try to access the driver's compartment in order to stop it. The van eventually came to a stop, but not before striking and killing Elizabeth Reader. A post-mortem test of Elizabeth Reader's blood demonstrated a blood alcohol level of .218 and the presence of cannaboids (marijuana) and benzodiazepine cross-reactives (cocaine). Mr. Cutler's blood alcohol content was .268.
II. CONTENTIONS OF THE PARTIES
Plaintiffs contend that Elizabeth Reader's use of the vehicle "for purely personal reasons and while heavily intoxicated and after having ingested illegal drugs was a major deviation from the scope of permission as a matter of law." As a result, Plaintiffs argue, Plaintiffs are not obligated to provide coverage under the omnibus provision in the van's insurance policy.
Pl. Mot. for Summ. J., at 5.
In response, Defendant contends that summary judgment is inappropriate because "there is a material dispute of fact as to whether the scope of use of the van by Elizabeth Reader was limited by Sandra Pitts as Plaintiff[s] contend." Additionally, Defendant argues that the word "use" in the policy is of significance, because it has a different meaning than the word "operation." Defendant asserts that "the use of the vehicle concerned is the purpose for which its use is permitted. As long as that use has been permitted, [Defendant argues] it is immaterial how the vehicle is operated."
Def. Resp. to Pl. Mot. for Summ. J., at 5.
Def. Supplemental Mem. of Law, at 3 (quoting Indemnity Ins. Co. of North America v. Metropolitan Cas. Ins. Co. of New York, 166 A.2d 355, 358 (N.J. 1960)).
III. STANDARD OF REVIEW
IV. DISCUSSION
Super. Ct. Civ. R. 56(c).
Mason v. United Servs. Auto. Ass'n, 697 A.2d 388, 392 (Del. 1997) ("a party moving for summary judgment concedes the absence of a factual issue and the truth of the nonmoving party's allegations only for purposes of its own motion, and does not waive its right to assert that there are disputed facts that preclude summary judgment in favor of the other party").
The liability provision of the policy is governed by 21 Del. C. § 2902, which states, in pertinent part:
(b) Such owner's policy of liability insurance shall:
(2) Insure the person named therein and any other person, as insured, using any such motor vehicle or motor vehicles with the express or implied permission of such named insured, against loss from the liability imposed by law for damages arising out of the ownership, maintenance or use of such motor vehicle or motor vehicles . . .
Delaware courts have adopted the "minor deviation" rule, the preferred rule when compared with the more restrictive rule, that no deviation from the scope of permission is allowed (called the "strict" or "conversion rule"), and the less restrictive rule, where once permission is given, only action that constitutes theft or conversion will be outside of the scope of permission (called the "liberal," "initial permission," or "hell or high water" rule.) Under the minor deviation rule, "there is no omnibus coverage where there is a major or substantial departure or deviation or a gross violation of the original permission, purpose, or instructions relating to the use of the automobile." Where a major deviation occurs, ". . . it is frequently said that the permission is no longer effective or is annulled, because it would be presumed that the original insured would not have given permission had the use for the deviation been requested."
Id.
8 Blashfield Automobile Law and Practice § 321.8, at 102-103 (1987).
8 Couch on Ins. § 113:12 (3d ed. 2008). Id.
Id.
There is, in essence, a two-step analysis under the minor deviation rule. First, the Court must determine the extent of the permission granted, paying "particular attention to the relationship of the parties and the scope of the initial permission." "Permission will usually be given a broader scope in a family situation than in an employer-employee situation," and "[o]rdinarily implied permission to an employee to use his employer's vehicle extends only to its use within the scope of the employment, and permission to use the automobile for a given purpose does not imply permission to use it for other purposes." Next, the Court must look to the specific facts of the alleged deviation to determine whether the deviation was "minor" or "major" in relation to the permission given. Relevant factors include the distance and time of the deviation, and whether the deviation "is one which could have been reasonably contemplated or foreseen, or whether the deviation is alien or foreign to the original permitted objective or operation."
7 Am. Jur. 2d Automobile Insurance § 236 (2008).
8 Blashfield Automobile Law and Practice § 321.8, at 100 (1987).
Id. at 100-101.
American International Insurance Company v. Farm Family Cas. Ins. Co., 1999 WL 1442000, at *5.
Turning first to the initial permission granted, and looking at the facts in the light most favorable to the Reader Defendants, it appears that permission was given for work-related purposes, that is, for using the van to travel to and from work. The initial permission was then impliedly expanded as Sandra Pitts became aware to some degree that Elizabeth Reader had used the van for some personal activities, such as a trip to the beach and various errands. The result, is that the scope of permission evolved to include more than strict "work-only" use. For the purposes of this motion for summary judgment, the Court assumes that Elizabeth Reader's use of the van for the purpose of picking up her belongings was a "minor deviation" from the scope of the permission granted by Sandra Pitts.
The Court next turns to the specific facts of the alleged deviation to determine whether it constituted a "major" or "minor" deviation. Elizabeth Reader was driving at around midnight with a blood alcohol level of .218, a level that is more than twice the legal limit in Delaware, and she had smoked crack cocaine right before driving the vehicle. Elizabeth Reader was using the vehicle for purely personal reasons — to get some of her belongings from her father's house. Additionally, there is no allegation that Sandra Pitts was aware that Elizabeth Reader had a history of drinking and driving or that she was a user of crack cocaine. No facts in the record suggest that Sandra Pitts could have foreseen Elizabeth Reader's use of the vehicle while under the influence of alcohol and cocaine before the accident.
Given these facts, the Court holds that Elizabeth Reader's use constituted a "major deviation" from the permission expressly and impliedly given to her by Sandra Pitts. Assuming that Sandra Pitts was aware of some ongoing personal use of the vehicle, it cannot be said that Elizabeth Reader's use of the vehicle on the night of the accident in such an impaired state constituted merely a "minor" deviation from the scope of permission.
Furthermore, while there are apparently no Delaware cases on point (the determination of the impact of the use of drugs of alcohol on the scope of permission under an omnibus provision), the Court's holding is supported by decisions from other jurisdictions. For example, in Coronado v. Employers National Insurance Company, the Texas Supreme Court held that evidence of two prior incidents of using the vehicle for personal purposes did not justify the inference that the employer impliedly granted the employee permission to use the vehicle for an eight hour drinking spree wholly unrelated by time, place, or purpose from the objectives for which he was granted use of the vehicle, and that such use was a major deviation from the scope of permission.
Coronado v. Employers National Insurance Company, 596 S.W.2d 502 (Tex. Supr. 1979) (holding that evidence of two prior incidents of using the vehicle for personal purposes did not justify the inference that the employer impliedly granted the employee permission to use the vehicle for an eight hour drinking spree wholly unrelated by time, place, or purpose from the objectives for which he was granted use of the vehicle). See also, Mid-Continent Casualty Company v. Everett, 340 F.2d 65 (10th Cir. 1965) (holding that a bus operator who was driving in the opposite direction from the normal route and two and a half hours behind schedule, without passengers, and while intoxicated, was not a permissive user at the time of the accident); Tull v. Chubb Group of Insurance Companies, 146 S.W.3d 689 (Tex App. 2004) (holding that there was no omnibus coverage where an employee used her employer's vehicle, while in an intoxicated condition, to drive with her boyfriend to visit friends).
Defendant argues that these cases are distinguishable, because in each case there was a company policy prohibiting consuming alcohol while using a company vehicle. However, in Coronado, the employer was aware that the employee had consumed alcohol and driven the company vehicle on at least two prior occasions. While there is no evidence of an express policy that Elizabeth Reader abstain from using illegal drugs and from becoming intoxicated and driving, it is fair to assume that such use would not have been permitted by Sandra Pitts, had Elizabeth Reader requested it.
Def. Supplemental Mem. of Law, at 4.
Additionally, the Court is unconvinced by Defendant's argument that the word "use" instead of the word "operation" in the insurance policy is of significance here. The different meanings of these words was first recognized by the Delaware Supreme Court in Allstate Ins. Co. v. Nationwide Mut. Ins. Co. Allstate involved an automobile accident where a woman and her boyfriend, the driver of the vehicle, were returning home from a trip to the beach. The boyfriend had attempted to pass another vehicle, at which time the accident occurred. An individual in the other vehicle sued the boyfriend for injuries she sustained in the accident.
The Court notes that this argument was raised by Defendants for the first time in Defendant's "Supplemental Memorandum of Law" rather than in their initial Response to Plaintiff's Motion for Summary Judgment.
Allstate Ins. Co. v. Nationwide Mut. Ins. Co., 273 A.2d 261 (Del. 1970).
The issue whether Allstate, under an omnibus provision in its insurance policy covering the vehicle, had to provide coverage to the boyfriend, despite the fact that the owner of the vehicle, the woman's father, though allowing his daughter to borrow the car for the beach trip, had specifically forbade anyone but his daughter from driving the vehicle. The omnibus provision provided coverage to "[a]ny other person with respect to the owned automobile provided the actual use thereof is with permission of the named insured."
Id. at 263.
The Court, in noting the "strong legislative policy insuring financial protection for innocent victims of automobile accidents," construed the provision broadly, and held that "actual use" meant "purpose," i.e., the trip to the beach, while "operation" meant physically driving and/or manipulating the vehicle (emphasis added). The Court stated that "[t]he use of the vehicle concerned is the purpose for which its use is permitted. As long as that use has been permitted, it is immaterial how the vehicle is operated." Thus, the Court reasoned, because the father had permitted the vehicle to be used for the purpose of going to the beach, the boyfriend's "use" was still within the scope of the permission granted.
Id.
Id.
Allstate is distinguishable from the present case. First, Allstate involved the interpretation of an omnibus provision where the original permittee allowed a third party to drive the vehicle; in the instant case, the driver was the permittee. Second, there was no use of cocaine or consumption of alcohol by the driver in Allstate. Third, the individual seeking coverage in Allstate was an "innocent" passenger in another vehicle, and not the apparent cause of the accident, as is the case here. Therefore, the policy considerations present in Allstate that mitigated in favor of a broad construction of the policy favoring the innocent victim in that case are not present in the instant case.
Whether to take a more restrictive approach in interpreting an omnibus provision or a more liberal approach "depends on balancing the various social policies of the jurisdiction." "In general, the purpose [of mandating omnibus coverage] is to increase the number of injured parties who can recover from insurance policies, rather than denying the injured party the ability to recover from available insurance because the permissive driver is otherwise uninsured." "The public policy of the `omnibus' clause is to protect the public for loss caused by [a] negligent, permissive driver" (emphasis added). Indeed, "courts applying [the minor deviation rule] modify the strict rule to the extent that protection will be afforded the bailee if the use made by him or her is not a gross violation of the terms of the bailment." In this case, the ingestion of the alcohol and illegal drugs was a gross violation of the terms of the bailment, and broad construction of the omnibus provision is not warranted under the particular facts of this case.
8 Couch on Ins. § 111:16 (3d ed. 2008).
Id. at § 111:2.
Id. at § 111:7.
Id. at § 113:10.
V. CONCLUSION
IT IS SO ORDERED.
GRANTED.