Moritz v. St. Paul Fire & Marine Insurance , 48 Wash. App. 521 ( 1987 )

Green, J.

Victoria R. Moritz, individually and as personal representative of the estate of Richard Charles Moritz, appeals a summary judgment in favor of St. Paul Fire and Marine Insurance Company, Inc. The only issue presented is the question of coverage. We affirm.

Mr. Sears was employed by Flowing M, Inc., a business which installs heating and air conditioning systems. In connection with his employment, Mr. Sears was given the use of a GMC pickup. Flowing M maintained the vehicle and provided both fuel and insurance. According to John Morgan, the owner of Flowing M, the company had an oral general policy regarding the use of company vehicles. Mr. Morgan stated:

When the employee was really what we felt a good employee then he would get the privilege of taking the truck directly from the shop to his home and back to the shop, no stops, no passengers, absolutely no stops of any kind. That was the policy.

According to Mr. Morgan, any employee who violated this policy would be terminated. Further, Flowing M had fired employees who had used company vehicles to facilitate drinking.

Also, at an employees' meeting on August 29, 1980, the use of company vehicles was discussed. At that meeting, Jack Lambert, part owner of the company, outlined the company policy for the employees:

Corp. Trucks & Equip.

1. No riders except employees.

2. To be used for travel to and from job only.

3. Use on off time to be OKed in advance by office.

The next day, August 30, Mr. Sears drove the company GMC pickup truck from his home in Selah to the Flowing M office in Yakima. He then drove to Toppenish to pick up co-worker Mark Welch and they both drove to a project in Sunnyside where they worked from 6 a.m. to approximately 2:30 p.m. Messrs. Welch and Sears then spent several hours first at a Sunnyside bar and then at Mr. Welch's home. After leaving Mr. Welch's home, Mr. Sears proceeded on Highway 97, and approximately one-quarter of a mile south of Union Gap he collided with a 1977 Sportscoach motorhome owned and driven by Richard C. Moritz. Both drivers were killed. At the time of his death, Mr. Sears' blood alcohol level was 0.24 percent.

St. Paul Fire and Marine Insurance Company insured the 1979 GMC pickup Mr. Sears was driving. The policy contained comprehensive auto liability protection, which provided in pertinent part as follows:

How this agreement protects your business

We've designed this agreement to protect your business against two kinds of liability claims involving autos. Claims resulting from bodily injury to others. And claims resulting from damage to other people's property.

What this agreement covers

Your auto liability protection covers you and other persons protected under this agreement against claims for bodily injury or damage to tangible property resulting from an accident. . . .

Who is protected under this agreement

Here's a list of "protected persons" and the limitations on their coverage under this agreement.

1. You are protected under all circumstances covered by this agreement.

2. Any person you allow to use an auto you own, rent or borrow is protected except: [exceptions are miscellaneous and irrelevant].

(Italics ours.)

On September 4, 1981, Victoria Moritz commenced legal action against Flowing M and the estate of Daniel Sears in her capacity as her husband's personal representative, as guardian ad litem for their two children, and on behalf of herself. The court granted Flowing M's motion for summary judgment on the ground there was no issue of fact regarding whether Mr. Sears was within the scope of his employment when the accident occurred. The summary judgment was affirmed by this court in an unpublished opinion filed on November 29, 1984.

On January 16, 1986, a jury returned a verdict in favor of Mrs. Moritz against the estate of Daniel Sears in the amount of $766,680. Mrs. Moritz sought payment of that judgment pursuant to the St. Paul insurance policy covering vehicles owned by Plowing M. St. Paul refused to pay. Thereafter, Mrs. Moritz commenced this action for declaratory judgment. Both parties moved for summary judgment on the issue of coverage. The court granted St. Paul's motion. Mrs. Moritz then sought direct review by the Supreme Court. It transferred the appeal to this court.

Mrs. Moritz contends the policy between St. Paul and Flowing M covered any person Flowing M allowed to use any vehicle it owned, rented or borrowed. Since the policy is unambiguous, she asserts the court erred in construing the term "allow" to mean "permit" and then employing a "scope of permission" analysis. She argues the court erred in comparing the language in the policy to other cases dealing with omnibus or permissive use clauses because St. Paul deliberately revised its policy to delete the scope of permission exclusion. We disagree.

The terms used in an insurance policy must be understood in their plain, ordinary and popular sense. Federated Am. Ins. Co. v. Strong, 102 Wn.2d 665, 670, 689 P.2d 68 (1984). Webster's Third New Int’l Dictionary 58 (1969) defines "allow" as: "4: permit ... a: to permit by way of concession . . . b: to permit by neglecting to restrain or prevent..." See also Roget's Int'l Thesaurus 804, 1123 (4th ed. 1977). It is clear "permit" is synonymous with "allow".

Also, Washington cases have used the words "permission" and "allow" interchangeably when discussing insurance contracts. See Safeco Ins. Co. of Am., Inc. v. Pacific Indem. Co., 66 Wn.2d 38, 45, 401 P.2d 205 (1965) (quoting State Farm Mut. Auto. Ins. Co. v. Williamson, 331 F.2d 517, 520 (9th Cir. 1964)); Grange Ins. Ass'n v. Ochoa, 39 Wn. App. 90, 93-94, 691 P.2d 248 (1984).

Since "allow" is synonymous with "permit", the question then becomes whether the court erred in relying on Washington case law on "permissive use" or omnibus clauses in reaching its decision. Mrs. Moritz contends that in the absence of specific language limiting coverage to uses "within the scope of permission", the policy must be read to cover any person allowed to use the vehicle for whatever purpose. We disagree.

In Eshelman v. Grange Ins. Ass'n, 74 Wn.2d 65, 442 P.2d 964 (1968), Mr. Shephard, an employee of Mr. and Mrs. Pease, was given permission by the Peases to use their car to drive to and from work, but was told specifically not to use the car for any other purpose. One evening Mr. Shephard began drinking and the following morning he was involved in an accident while driving the car 250 miles from the Peases' farm. The Peases' policy of casualty insurance provided:

. . . the unqualified word "insured" includes the named insured, . . . and also includes any person while using the automobile . . . provided the actual use of the automobile is by the named insured ... or with the permission of [the named insured].

Eshelman v. Grange Ins. Ass’n, supra at 66. The policy did not contain any language limiting coverage to uses "within the scope of permission." See also Wallin v. Knudtson, 46 Wn.2d 80, 81, 278 P.2d 344 (1955).

The court in Eshelman, at pages 67-68, set out three approaches for interpreting permissive use clauses: (1) Strict or conversion rule. For the use of the vehicle to be with the permission of the insured within the meaning of the omnibus clause, the driver must be using it, at the time of the accident, exactly within the scope of the permission given, during the time limits expressed and within the geographic limits contemplated. (2) Liberal rule. The employee or permittee need only have received permission to take the vehicle in the first instance; and any use while it remains in his possession is "with permission," though that use may be for a purpose not contemplated by the insured when he parted with possession. This is called the "hell or high water" rule. (3) Middle ground rule. It is necessary in each case to consider the extent and effect of the particular deviation involved. A material deviation voids the initial permission and the omnibus clause is not operative. A minor deviation leaves the permission unaffected so that the omnibus clause is operative. See 12 G. Couch, Insurance §§ 45:464-:479, at 845-75 (2d ed. 1981).

Eshelman then held at pages 68-69 that Washington follows the "middle ground" rule, refusing to adopt the liberal rule, but allowing coverage when the deviation from permissible use is relatively minor. See also Western Pac. Ins. Co. v. Farmers Ins. Exch., 69 Wn.2d 11, 14-15, 416 P.2d 468 (1966); Foote v. Grant, 56 Wn.2d 630, 633, 354 P.2d 893 (1960); Wallin v. Knudtson, supra at 82-84. This rule permits a deviation beyond the letter, but within the spirit of the express or implied permission to the use of the motor vehicle given by the named insured. Eshelman v. Grange Ins. Ass'n, supra; Western Pac. Ins. Co. v. Farmers Ins. Exch., supra at 14; Foote v. Grant, supra at 633; Progressive Cas. Ins. Co. v. Cameron, 45 Wn. App. 272, 277, 724 P.2d 1096 (1986); Rocky Mt. Fire & Cas. Co. v. Goetz, 30 Wn. App. 185, 192, 633 P.2d 109 (1981). The court must weigh the circumstances under which the insured owner gave permission for the use of his vehicle including any limits on purpose, place, distances and time, and "undertake therefrom to virtually read the mind of the insured to the extent ... of determining whether he would have prohibited the deviation had he been asked concerning it." Western Pac. Ins. Co., at 15. Eshelman makes it clear the terms "allow" or "permit" carry with them that the use of the vehicle must be within the scope of that allowance or permission given even though the policy does not expressly contain the language "the use must be within the scope."

Here, it is clear from the facts Mr. Sears was acting outside the scope of his permission when the accident occurred. Flowing M permitted Mr. Sears to only drive the truck directly from the shop to his home and back with no stops of any kind. Use of the truck on off time was to be approved in advance. Also, Flowing M had fired employees who had used company vehicles to facilitate drinking.

St. Paul argues the prior judgment in favor of Flowing M is also determinative of the question of insurance coverage. We disagree. The prior judgment merely resolved the issue of whether Mr. Sears was acting "within the scope of employment". The issue of "acting within the scope of employment" is different from "acting within the scope of permission" so as to permit insurance coverage. The omnibus clause or permissive use clause of a policy may extend coverage beyond the limitations which would otherwise exist under the law of principal and agent. Foote v. Grant, supra at 632.

Finally, Safeco Ins. Co. of Am. v. Davis, 44 Wn. App. 161, 721 P.2d 550 (1986) and United Pac. Ins. Co. v. Larsen, 44 Wn. App. 529, 723 P.2d 8, review denied, 107 Wn.2d 1012 (1986), relied on by Mrs. Moritz, are both distinguishable from the instant case on several points. (1) Both of those cases dealt with exclusionary provisions in the policy and the rules of construction and interpretation of such provisions are different than those for inclusive language. (2) The insurers issued their policies in these two cases to exclude coverage '"for any person using a vehicle without a reasonable belief that the person [was] entitled to do so.'" Larsen, at 531; Davis, at 163. (a) This language is different from that used in the policy in the instant case. Also, at least in Larsen, at 532, this language replaced the standard omnibus clause. In both cases the court found this new language ambiguous and less explicit, (b) The focus of the new language in those cases was placed on the subjective belief of the permittee while that of standard omnibus clauses and of the instant case is on the objective belief of the insured. (3) Davis did not arise in a business setting and while Larsen involved an employer/employee relationship, the employer had granted the employee permission to drive the vehicle for social purposes, i.e., to visit his sick mother. The master/servant relationship raises distinct and peculiar problems regarding permissive use of the employer's vehicle which does not exist with a situation where the relationship involved is nonbusiness or social. Foote v. Grant, supra at 633; Wallin v. Knudtson, supra at 84. Here, Mr. Sears was granted permission to use the vehicle as an employee in performance of his employment only.

Affirmed.

Munson, J., concurs.