Southern Farm Bureau Casualty Insurance Co. v. Hartford Accident & Indemnity Insurance Co. , 1981 Tex. App. LEXIS 3962 ( 1981 )

AKIN, Justice.

This is an appeal from a summary judgment granted to Hartford Accident & Indemnity Company on the ground that the driver of a vehicle involved in a collision was not covered by the omnibus clause of Hartford’s policy. The principal question presented is whether the driver was operating the vehicle with the implied permission of the insured so as to be covered as an additional insured by the omnibus clause. We hold that the permission given by the insured to his daughter was so broad as to permit a finding of implied permission for the daughter to allow others to use the vehicle. Consequently, Hartford failed to negate implied permission, and the summary judgment must be reversed and the cause remanded.

The summary judgment evidence shows that Lee Henslee, Jr., the named insured under Hartford’s policy had given his daughter permission to use a family automobile “while attending school in Dallas.” In April 1977, the daughter told her roommate she could use the car while she (the daughter) was out of town. The car was involved in an accident and Southern Farm, the roommate’s insurer, settled all claims filed by injured third parties. Southern Farm then sued Hartford claiming that Hartford should reimburse Southern for sums expended in the settlement because the roommate was covered under the omnibus clause of Hartford’s policy.

Recovery by Southern Farm depends upon the language of the omnibus clause, which provides:

Any other person using such automobile with the permission of the named insured, provided his actual operation or (if he is not operating) his actual use thereof is within the scope of such pier mission .... [Emphasis added.]

Essentially, our question is whether the first permittee, the daughter, had implied authority “within the scope of such permission” from her stepfather, the insured, to permit her roommate to use the vehicle for the roommate’s personal business. The evidence as to the “scope of permission” is contained in the insured’s affidavit which states that he gave his daughter the car “for her use while attending school in Dallas,” but that he “never specifically told her not to allow her friends to drive the car.” We hold that a reasonable, permissible inference from this affidavit is that the daughter had general authority from the insured to use the vehicle herself and to authorize others to drive it. Consequently, a fact issue is raised with respect to whether the authority granted the daughter includes an implied permission to let others drive the vehicle.

The precise factual question presented here of whether a second permittee falls within the omnibus clause where the owner and named insured gave possession of the vehicle to a daughter to use without imposing any limitation or restriction as to the vehicle’s use, has not arisen in Texas. However, Texas courts have held that the scope of permission granted must be determined from the surrounding circumstances and the relationship of the parties. Coronado v. Employers’ National Insurance Co., 596 S.W.2d 502, 505 (Tex.1979); Royal Indemnity Co. v. H. E. Abbott & Sons, Inc., 399 S.W.2d 343, 345 (Tex.1966).

For example, in Coronado, supra, our supreme court noted “the construction of the permission given to a close family friend would be different from the specific permission given to a casual acquaintance.” Indeed, an even more liberal construction should be applied to the scope of permission given to a family member, as opposed to just a family friend or acquaintance, in determining whether the first permittee (in this case the daughter) had implied authority from the insured to delegate to another (her roommate) the right to use the vehicle. Other courts, in making this determination have relied on the foreseeability that the first permittee will allow another to use the vehicle. Hughes v. Southeastern Fidelity Ins. Co., 340 So.2d 293 (La.1976). In this case, it should have been foreseeable to the insured that his daughter might authorize her roommate to use the vehicle. In reaching the same result, other courts have reasoned that broad, unrestricted permission to use the insured vehicle puts the first per-mittee in the same position as if he were the owner, at least insofar as it authorizes him to allow others to use the vehicle. Thus, permission of the owner may be implied from such a broad grant of authority so as to render the third person an additional insured under the omnibus clause. American Mutual Fire Ins. Co. v. Reliance Ins. Co., 268 S.C. 310, 233 S.E.2d 114, 117 (1977). Essentially, whether phrased in terms of foreseeability or whether phrased in terms of granting the first permittee the right to use the vehicle as his own, the result is the same. Because our supreme court in Coronado has adopted the “initial permission” rule which turns on the particular circumstances, including the relationship of the insured to the first permittee, we hold that where an insured grants unrestricted permission to a person to use an insured vehicle over an extended period of time, without restricting the first permit-tee’s use thereof, a fact issue exists as to whether the insured had implicitly authorized the first permittee to use the vehicle as his own and, thus to allow others to drive it. Consequently, such a person, as the roommate here, could be an additional insured under the omnibus clause.

Our holding is supported by the Wisconsin Supreme Court’s decision in Krebsbach v. Miller, 22 Wis.2d 171, 125 N.W.2d 408 (1963). In that case, the named insured turned possession of his vehicle over to his son to use in a distant city over a period of months, without placing restrictions upon the vehicle’s use. As here, the son loaned the vehicle to a friend, who was involved in a collision. That court held that where the named insured grants his permittee broad and unfettered dominion over the insured vehicle, he impliedly authorizes his permit-tee to allow a third person to use it, thus making that person an additional insured under the omnibus clause. The rationale of this decision, and others like it, is that by granting the first permittee complete dominion over the insured vehicle, the initial grant by the insured is broad enough to include an implied authority in the first permittee to authorize use of the vehicle by others, just as though the first permittee were the owner. Baesler v. Globe Indemnity Company, 33 N.J. 148, 162 A.2d 854, 857 (1960); see 4 A.L.R.3d 10 (1965).

Our holding is also supported by several Texas cases which have approved the principle that a factual determination is necessary as to whether the insured’s initial permission was broad enough to imply authority in the first permittee to authorize others to use the vehicle. Hartford Accident & Indemnity Corp. v. Lowery, 490 S.W.2d 935, 938 (Tex.Civ.App.—Beaumont 1973, writ ref’d n.r.e.); Phoenix Ins. Co. v. Allstate Ins. Co., 412 S.W.2d 331, 334 (Tex.Civ.App.—Corpus Christi 1967, no writ). It follows that the summary judgment evidence in this case, which shows broad and unrestricted permission granted the daughter by the insured, does not negate implied permission as a matter of law. See City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671, 677 (Tex.1979); see also Fantastic Homes, Inc. v. Combs, 596 S.W.2d 502 (Tex.1979).

Reversed and remanded.