Rogers v. Goad

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Rogers v. Goad
1987 OK 59
739 P.2d 519
58 OBJ 1976
Case Number: 62923
Decided: 07/07/1987
Supreme Court of Oklahoma


Appeal from the District Court of Muskogee County; Lyle Burris, Trial Judge.

¶0 The trial court permitted "stacking" of a commercial fleet policy covering eighteen vehicles because, although the policy contained an uninsured motorist clause, it contained no provisions on stacking. We find that an unnamed insured who is injured while driving a company vehicle may not pyramid uninsured motorist coverage under his employer's fleet policy. REVERSED.

Joseph A. Sharp, Patricia K. Lamb, Best, Sharp, Thomas, Glass & Atkinson, Tulsa, for appellants.
Gregory Meier, Muskogee, for appellee.

KAUGER, Justice.

[739 P.2d 520]

¶1 The only issue presented is whether a permissive-user employee, may stack uninsured motorist coverage under his employer's automobile fleet insurance policy. We find that the employee, an unnamed insured, covered under the policy solely because of the policy provisions covering permissive use or occupancy, may not stack uninsured motorist coverages under the employer's commercial fleet policy.

¶2 The appellee, Roy Dale Rogers (employee), was injured in an automobile accident when the appellant, Steve Allen Goad, an underinsured motorist, crossed the center line and struck the pickup driven by the employee. The pickup was insured under a automobile fleet liability policy issued by State Farm Mutual Insurance Company to Rogers' employer, Capps Lumber and Supply, Inc.

¶3 Goad, the underinsured motorist proffered $10,000.00, the maximum amount provided under his liability insurance policy, which was accepted by the employee. Because the amount of Goad's coverage was insufficient to pay for all the damages, he is an uninsured motorist as defined by 36 O.S. 1981 § 3636 (C).


¶4 The question of whether uninsured motorist coverage may be stacked under a commercial fleet policy is one of first impression in Oklahoma. However, the majority of jurisdictions which have considered this problem have held that only named insureds and resident relatives of the named insured's household, the group commonly denominated as Class 1 insureds, may stack uninsured motorist coverages under a commercial fleet policy. The jurisprudential trend on the national level generally prevents permissive users and occupants, the group usually designated as Class 2 insureds, from stacking.

¶5 The distinction between Class 1 insureds and Class 2 insureds was addressed in Babcock v. Adkins, 695 P.2d 1340, 1343 (Okla. 1984). This Court adopted the majority rule that occupants, who are entitled to uninsured motorist coverage simply because of their status as occupants or permissive users, may not stack uninsured motorist coverage. The underlying rationale for allowing a named insured to benefit from all of the policies for which the insured has paid premiums is to enforce the contractual expectations of the party purchasing the policies. The Court held that the occupants of an insured motor vehicle involved in an accident, who are entitled to uninsured motorist coverage merely because of their status as passengers, may [739 P.2d 522] not stack the uninsured motorist coverage under separate policies purchased by the owner of the involved vehicle for a noninvolved vehicle or vehicles unless those passengers also qualify as insureds under those separate policies.

¶6 In Oklahoma, the named insured has been allowed to pyramid insurance policies and receive coverage under the policies, regardless of the vehicle or the circumstances, when the named insured is injured by the negligence of an uninsured motorist.

¶7 Several jurisdictions, which have dealt with the question of stacking uninsured motorist coverage under a fleet policy, have adopted the rationale of the Virginia Supreme Court

¶8 The Virginia Supreme Court disagreed, distinguishing between the broad coverage provided to a named insured, and the coverage available to an insured by virtue of occupancy in an insured vehicle. The court held that granting the same benefits to both the Class 1 insured and the Class 2 insured would place upon the insurer a risk not contemplated by the contracting parties. Therefore, the Virginia Supreme Court refused to permit stacking of the uninsured motorist coverage on 4,368 state owned vehicles contained in a single liability policy. The same rationale was the underpinning for our decision in Babcock.

¶9 Here, the employee was a permissive user of the employer's vehicle. He was not the named insured in the employer's State Farm policy; he occupied the status of a Class 2 insured. As such, he is entitled to the uninsured motorist coverage provided by the specific vehicle he was driving when he was injured.


¶11 All Justices concur.


1 The State Farm policy issued to the employer provided:


(a) The limit of liability stated in the declarations is applicable to `each person' is the limit of the company's liability for all damages, including damages for care and loss of services arising out of bodily injury sustained by one person in any one accident, and subject to this provision, the limit of liability state in the declarations as applicable to `each accident' is the total limit of the company's liability for all such damages for bodily injury sustained by two or more persons in any one accident.

* * * * * *

Insured The unqualified word "insured" means

(1) the first person named in the declarations and while residents of his household, his spouse and the relatives of either;

(2) any other person while occupying an insured motor vehicle; and

(3) any person, with respect to damages he is entitled to recover because of bodily injury to which this coverage applies sustained by an insured under (1) or (2) above. . . .

* * * * * *


To pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operation of an uninsured motor vehicle because of bodily injury sustained by the insured caused by accident and arising out of the ownership, maintenance or use of such uninsured motor vehicle provided, for the purposes of this coverage . . ."

2 Title 36 O.S. 1981 § 3636 (C) provides:

"(C) For the purposes of this coverage the term `uninsured motor vehicle' shall include an insured motor vehicle where the liability insurer thereof is unable to make payment with repect to the legal liability of its insured within the limits specified therein because of insolvency. For the purposes of this coverage the term `uninsured motor vehicle' shall also include an insured motor vehicle, the liability limits of which are less than the amount of coverage of either of the parties in relation to each other."

3 Fuqua v. Travelers Ins. Co., 734 F.2d 616, 620-21, (11th Cir. 1984); Guarantee Ins. Co. v. Anderson, 585 F. Supp. 408, 413 (E.D.Penn. 1984); Burke v. Aid Ins. Co., 487 F. Supp. 831, 835 (D.Kan. 1980); Holloway v. Nationwide Mut. Ins. Co., 376 So. 2d 690, 694 (Ala. 1979); Ohio Cas. Ins. Co., v. Stanfield, 581 S.W.2d 555, 559 (Ky. 1979); Cunningham v. Ins. Co., of North America, 213 Va. 72, 189 S.E.2d 832, 835 (1972); Miller v. Royal Ins. Co., 354 Pa.Super. 20, 510 A.2d 1257, 1259 (1986); Sciple v. Cosse-Hickey Co., 468 So. 2d 15, 17 (La. App. 1985); American States Ins. Co. v. Kelley, 446 So. 2d 1085, 1087 (Fla.App. 1984); Linderer v. Royal Globe Ins. Co., 597 S.W.2d 656, 662 (Mo. App. 1980); Continental Gas. Co. v. Darch, 27 Wash. App. 726, 620 P.2d 1005, 1008 (1980). See also, Annot., "Combining or `Stacking' Uninsured Motorist Coverages Provided in Fleet Policy," 25 A.L.R.4th 896, 899 (1983); Note, "Insurance Law", 58 Temple L.Quar. 443-44, 446 (1985).

4 Fenasci v. Travelers Ins. Co., 642 F.2d 986, 992 (5th Cir. 1981), cert. den'd, 454 U.S. 1123, 102 S. Ct. 971, 71 L. Ed. 2d 110 (1981); General Mutual Ins. Co. v. Gilmore, 294 Ala. 546, 319 So. 2d 675, 678 (1975); Marchese v. Aetna Cas. & Sur. Co., 284 Pa.Super. 5769, 426 A.2d 646, 649 (1981); Holmes v. Reliance Ins. Co., 359 So. 2d 1102, 1106 (La. App. 1978).

5 See Babcock v. Adkins, 695 P.2d 1340, 1343 (Okla. 1984); Lake v. Wright, 657 P.2d 643, 646 (Okla. 1982); Richardson v. Allstate Ins. Co., 619 P.2d 594, 598 (Okla. 1980); Keel v. MFA Ins. Co., 553 P.2d 153, 156 (Okla. 1976). See also Lambert v. Liberty Mutual Ins. Co., 331 So. 2d 260, 264 (Ala. 1976).

6 Note, "Insurance Law," see note 3, supra.

7 See note 3, supra.

8 Linderer v. Royal Globe Ins. Co., see note 3, supra.