Norman v. King

NORMAN_V_KING.94-069; 163 Vt 612; 659 A.2d 1123

[Filed 21-Mar-1995]


                               ENTRY ORDER

                      SUPREME COURT DOCKET NO. 94-090

                             JANUARY TERM, 1995


Jill Norman and                        }          APPEALED FROM:
The Travelers Companies                }
                                       }
     v.                                }          Chittenden Superior Court
                                       }
                                       }
Michael King, State Farm Mutual        }
Insurance Co., Richard Dodge           }          DOCKET NO. S0745-92 CnC
and Lori Dodge

                     In the above entitled cause the Clerk will enter:

     The Travelers Companies appeals from a decision of the Chittenden
Superior Court denying its attempt to seek reimbursement from State Farm
Insurance Co. for uninsured motorists (UM) benefits paid to Jill Norman.  We
affirm. 

     The benefits were paid by Travelers to compensate Jill Norman for
injuries she received in an accident while riding as a passenger in a car
driven by Michael King.  The car, owned by Richard Dodge, was insured under
an automobile liability policy issued by State Farm.  Dodge gave his
daughter, Lori Dodge, permission to use the car with the express restriction
that she not let anyone else drive it.  On the night of the accident, Lori
drove the car to the Essex Reservoir where she met some friends.  While
there, Lori joined a friend in another vehicle, but before doing so, she gave
the keys to her father's car to Michael King.  She told him he could drive it
around the Reservoir.  The accident occurred on a public highway away from
the Reservoir and caused injuries to Jill Norman, who was a passenger in the
Dodge car. 

     At the time of the accident, Jill Norman's parents held an automobile
policy issued by Travelers, which paid UM benefits to Jill Norman after State
Farm denied coverage under its policy.  Travelers thereafter commenced this
action pursuant to 23 V.S.A.  941(e) to recover the monies that it paid
under its UM coverage.(FN1)  The trial court granted summary judgment for
State Farm concluding that there was no coverage for Michael King or Jill
Norman under State Farm's policy.  Plaintiff appeals on the grounds that
under either Vermont's Financial Responsibility and  Insurance law, 23 V.S.A.
 800-810, or Vermont's Mandatory Uninsured 

 

Motorists statute, 23 V.S.A.  941, defendant's liability section cannot
effectively exclude coverage. 

     The omnibus clause in the State Farm policy defines an insured as "any
other person while using such a car if its use is within the scope of consent
of you or your spouse."  This court previously upheld the enforceability of
such a clause in American Fidelity Co. v. Elkins, 125 Vt. 313, 315, 215 A.2d 516, 518 (1965).  There, as here, a parent had already instructed his son not
to allow anyone else to drive his car, and the parent did not know that
anyone else was driving the car.  In affirming judgment for the insurer, this
Court said, "The exclusionary clause in the policy . . . was for the purpose
of delimiting and restricting coverage.  Policies which specifically and
unambiguously exclude coverage are effective to preclude the insurer's
liability."  Id. at 315, 215 A.2d  at 518. 

     Travelers contends that Elkins is not controlling for two reasons. 
First, it contends the later enactment of Vermont's Financial Responsibility
and Insurance law requires a different outcome.  That act, codified in 23
V.S.A.  800, provides in part: 

     (a)  No owner or operator of a motor vehicle required to be licensed
          shall operate or permit the operation of the vehicle upon the
          highways of the state without having in effect an automobile
          liability policy or bond in the amounts of at least $20,000.00 for
          one person and $40,000.00 for two or more persons killed or
          injured . . . .  In lieu thereof, evidence of self-insurance in the
          amount of $100,000.00 must be filed with the commissioner of
          motor vehicles. . . .

     Plaintiff's reliance on  800(a) is misplaced.   The provision is
directed to owners and operators, not insurance companies.  See Shelter Mut.
Ins. Co. v. Littlejim, 927 F.2d 1132, 1134 (10th Cir. 1991) (statute
requiring owners to insure their vehicles does not operate to require an
insurance company to provide coverage outside the terms of its policy). 
Moreover, it does not purport to prohibit the issuance of a policy of
insurance limiting coverage to consented use. 

     Travelers further argues that Elkins is not controlling because Richard
Dodge knew that on an earlier occasion his daughter had allowed her boyfriend
to drive the car.  The father's affidavit states that upon learning of the
incident he became upset and had a discussion with his daughter in which he
strongly emphasized that she was not to allow her boyfriend or anyone else to
drive his cars.  The daughter's affidavit confirms that after the father
found out about the incident involving the boyfriend, she was told in no
uncertain terms that she was never to let anyone else use any of her father's
cars. 

     Travelers relies upon Jones v. Smith, 564 P.2d 574 (Kan. Ct. App. 1977)
for the proposition that a father's knowledge that his express prohibition
against others driving his car had been violated, together with his
continuing to permit his daughter to use the car, gives rise 

 

to an inference that the daughter's boyfriend was driving with the father's
implied consent. In Jones, the daughter was the co-owner of the vehicle, had
exclusive control and use of the vehicle for her own benefit, and was
responsible for the car's maintenance at the time of the accident. The
father, with the advice of the insurance agent, had listed the vehicle as
his.  All of these factors contributed to the Jones holding that there was an
implied consent.  See Id. at 579; see also Perkins v. McDow, 615 So. 2d 312,
317 (La. 1993) (where insured vehicle used almost exclusively by named
insured's son and it was understood by son and parents that it was son's car,
parents' general admonition that he be careful and not let anyone else drive
car deemed precatory). 

     The present case is distinguishable on its facts from Jones and
therefore dictates a different outcome.  Richard Dodge owned the vehicle
involved in the accident.  His daughter had permission to use it, but shared
its use with others in the family.  The restriction against letting others
drive the vehicle was far from precatory; it was a clear command against such
use. The facts here are virtually identical to those in Motorists Mut. Ins.
Cos. v. Great Lakes Lab., Inc., 687 F. Supp. 198, 199 (W.D. Pa. 1988), where
a father instructed his son not to allow anyone else drive his vehicle, and
admonished his son for a second time upon learning  that son had allowed such
use.  The court recognized that permissive use might be implied from a course
of conduct in which the parties acquiesced, but that the one isolated
instance of loaning out the car in violation of instructions did not amount
to acquiescence in the use by anyone else.  Id. at 200-01.  Here, also,
the one violation followed by the clear and unmistakable command precludes a
finding of implied consent. 

     Travelers next argues that if liability coverage is not extended to
Michael King under State Farm's policy, Jill Norman is entitled to recover
under the UM coverage of State Farm's policy.  Again, Travelers is confronted
with policy language that denies such coverage.  Under the UM section of the
State Farm policy, coverage is afforded to an insured, who is defined as "any
other person while occupying your car," provided such car is being "used
within the scope of the consent of you or your spouse."  Travelers argues
that conditioning coverage on the consent of the use by the named insured is
contrary to Vermont's Uninsured Motorists statute, which provides: 

       (a) No policy insuring against liability arising out of the
       ownership, maintenance or use of any motor vehicle may be
       delivered or issued for delivery in this state with respect to any
       motor vehicle registered or principally garaged in this state unless
       coverage is provided therein, or supplemental thereto, for the
       protection of persons insured thereunder who are legally entitled
       to recover damages, from owners or operators of uninsured,
       underinsured or hit-and-run motor vehicles, for bodily injury,
       sickness or disease, including death, and for property damages
       resulting from the ownership, maintenance or use of such
       uninsured, underinsured or hit-and-run motor vehicle. . . .

 

23 V.S.A.  941(a) (emphasis added).

The plain language of the statute requires coverage only for the protection
of persons insured under the policy.  If the Legislature intended  941(a)
to provide broader coverage, it would have substituted the phrase "for the
protection of persons occupying said motor vehicle" in place of "for the
protection of persons insured thereunder." 

     While uninsured coverage is mandated by the statute and coverage which
is mandated may not be reduced or eliminated by policy provisions, those
protections extend only to those insured under the policy.  See Farmers Ins.
Co. v. Schiller, 597 P.2d 238, 243 (Kan. 1979). The statute was not enacted
to provide coverage for everyone contained in the policy and limiting
coverage to passengers falling within the policy's definition of "insured" is
not barred by the statute.  See Id. at 243; Erie Ins. Exchange v. Reliance
Ins. Co., 493 A.2d 405, 408 (Md. Ct. Spec. App. 1985).  Because Michael King
used the vehicle without the consent of Richard Dodge, Jill Norman is not an
insured entitled to UM coverage under State Farm's policy. 

     Affirmed.

                                   BY THE COURT:


                                   ________________________________________
                                   Frederic W. Allen, Chief Justice




                                   ________________________________________
                                   Ernest W. Gibson III, Associate Justice


                                   ________________________________________
                                   John A. Dooley, Associate Justice


                                   ________________________________________
                                   James L. Morse, Associate Justice


                                   ________________________________________
                                   Denise R. Johnson, Associate Justice
[ ] Publish

[ ] Do Not Publish

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                             Footnotes

FN1.  23 V.S.A.  941(e) provides that the insurer may recover the amount that
 it paid from the proceeds of any settlement or recovery from any person
 legally responsible for the damages.