Winn v. Becker

WINN_V_BECKER.94-167; 163 Vt 615; 660 A.2d 284

[Filed 24-Mar-1995]


                               ENTRY ORDER

                      SUPREME COURT DOCKET NO. 94-167

                             JANUARY TERM, 1995


Laurie H. Winn, Administratrix       }         APPEALED FROM:
of Estate of Elbert J. Winn,         }
Jr., et al                           }
                                     }         Bennington Superior Court
     v.                              }
                                     }
Roland Becker and Universal          }         DOCKET NO. S0226-90-BcC
Underwriters Insurance Company       }
                                     }
     v.                              }
                                     }
Liberty Mutual Insurance             }
Company and Brian Pello,             }
Individually & d/b/a/ Classic        }
Auto Sales


                     In the above entitled cause the Clerk will enter:

     Universal Underwriters Insurance appeals from a trial court order
granting summary judgment to Liberty Mutual Insurance Company, the insurer of
an automobile dealer that sold a vehicle involved in a fatal accident.  We
affirm. 

     The principal facts are not in dispute.  The decedent, Elbert Winn, was
operating a motor vehicle within the scope of his employment when his vehicle
was struck by a G.M.C. Jimmy operated by Roland Becker.  Winn died as a
result of the injuries he suffered in the accident. Becker had purchased the
Jimmy from Brian Pello d/b/a/ Classic Auto Sales (Classic) on the morning of
the accident.  Classic had acquired the vehicle some weeks earlier from Barry
Townsend. 

     On the morning of the accident, Becker arrived at Classic to accept
delivery of the Jimmy.  He paid the agreed purchase price and took possession
of the vehicle.  Pello signed the title certificate and delivered it to
Becker.  Becker intended to have some repairs made to the vehicle and did not
intend to register it until the repairs had been completed.  Pello placed a
dealer plate on the vehicle so Becker could drive the vehicle off Classic's
premises.  Townsend had not signed the assignment-of-title portion of the
title certificate because it was in the possession of his financing bank at
the time of the transfer to Classic.  At Pello's suggestion, Becker intended
to stop at Townsend's house to obtain his signature on the title certificate
before traveling to a repair garage.  The accident occurred before Becker
arrived at the Townsend residence. 

     Decedent's administratrix filed a wrongful death action against Becker,
whose insurance liability limit was $20,000, the minimum limit for one person
under the financial responsibility law.  23 V.S.A.  801(a).  She also sued
Universal, the insurance carrier for decedent's employer, seeking to enforce
the underinsured motorist provisions of its policy.  Universal filed a
third-party claim against Classic, which was insured by Liberty Mutual, on
the theory that a 

 

defect in the Jimmy was the cause of the accident.  Liberty Mutual has
assumed the defense of this claim.  Universal also filed a third-party claim
against Liberty Mutual, alleging that Becker, in addition to Classic, was
insured under the Liberty Mutual insurance policy issued to Classic. 

     The parties filed cross-motions for summary judgment on Universal's
claim that Becker was separately covered under the Classic insurance policy. 
The trial court granted Liberty Mutual's motion, concluding that the Liberty
Mutual policy did not cover Becker because he was a "customer" of Classic and
was excluded from coverage under the terms of the policy.  This appeal
followed. 

     Libery Mutual's insurance policy issued to Classic includes separate
provisions relating to claims involving both covered and noncovered vehicles.
 The provision relating to covered vehicles states: 

D. WHO IS AN INSURED

1. For Covered Autos

                     * * *

b. Anyone else is an insured while using with your permission a
covered auto except:

                     * * *

     (3) Your customers, if your business is shown in ITEM 1
     of the declarations as an auto dealership.  However, if a
     customer of yours:

        (a) Has no other available insurance (whether
        primary, excess or contingent), he or she is an
        insured but only up to the compulsory or
        financial responsibility law limits where the
        covered auto is principally garaged.

        (b) Has other available insurance (whether
        primary, excess or contingent) less than the
        compulsory or financial responsibility law limits
        where the covered auto is principally garaged,
        he or she is an insured only for the amount by
        which the compulsory or financial responsibility
        law limits exceed the limits of his or her other
        insurance.

     The sole issue on appeal is whether Roland Becker was a customer of
Classic and therefore excluded from coverage under the policy language as a
matter of law. 

     Clearly, Becker was a customer within the plain meaning of the policy
provision relating to covered vehicles as a matter of law.  Universal does
not deny that Becker's primary relationship to Classic -- the reason he
was driving the vehicle involved in the accident -- was that of a
purchaser from Classic of the vehicle.  Universal's argument is that until
title passed to Becker, he was not a customer within the meaning of the
policy. 

     Although Universal examines the question of title in detail, it never
explains why the title 

 

issue is relevant to whether Becker was a "customer" of Classic, other than
to point out that the court first examined "who owned the Jimmy at the time
of the accident" as a "preliminary question to be decided."  We hold that
Becker's status as a customer of Classic did not depend on who owned the
vehicle at the moment the accident occurred.  He became a customer, not when
he took title to the purchased item, but when he was first "a potential
purchaser of a commodity."  Farm Bureau Ins. Co., Inc. v. Select Ins. Co.,
762 F. Supp. 895, 899 (D. Kans. 1991) (dealership employee was also potential
purchaser of vehicle and hence a "customer"); American States Ins. Co. v.
McCann, 845 P.2d 74, 78 (Kan. Ct. App. 1993) ("[I]interpreting `customer' [to
require an actual purchase] would seem to defeat the whole purpose of the
exclusion"); Frontier Ford, Inc. v. Carabba, 747 P.2d 1099, 1103 (Wash. Ct.
App. 1987) (potential purchaser of car involved in accident during test drive
was "customer").  Cf.  State Farm Mut. Auto. Ins. Co. v. Burgin, 752 F. Supp. 877, 881 (W.D. Ark. 1990) (businessman was loaned by dealership to drive out
of state was not customer, where there was no clear evidence of interest in
purchasing the car loaned).(FN1) 

     The cases cited by Universal, whose outcomes are determined by the
moment of title transfer, have no relevance on the issue of whether a
vendor-customer relationship exists. United States Fidelity & Guar. v. Myers
Motors, Inc., 143 F. Supp. 96, 98 (W.D. Va. 1956) (where seller had not
transferred certificate of title, policy insuring seller against claims
arising out of ownership applied); Fireman's Fund Ins. Companies v. Blais,
438 N.E.2d 360, 363 (Mass. App. Ct. 1982) (insured, who agreed to sell car to
his employee, had not transferred title and was still within policy
coverage). 

     Even if title were to play some role in whether Becker was a "customer"
of Classic, it is clear that title had passed to Becker before the accident
occurred.  Universal argues that the issue is governed by Vermont's Uniform
Motor Vehicle Certificate of Title and Anti-Theft Act, 23 V.S.A. 
2001-2095.  Even under this statute, however, Classic had no legal or
equitable claim to the vehicle sold to Becker.  Classic accepted the purchase
price, delivered the vehicle, signed the title certificate, and delivered the
title certificate executed by Pello to Becker. Consequently, as between
Becker and Classic, Becker owned the vehicle.  23 V.S.A. 2023(d) (when owner
delivers possession and application for certificate of title is made,
interest in vehicle is transferred). 

     Universal argues that because the prior owner, Townsend, had not
executed his certificate of title at the time of Classic's transfer to
Becker,  2023(d) did not apply to the subsequent transaction between
Classic and Becker.  But with or without the Townsend certificate in hand,
Classic was the owner of the vehicle when it sold the vehicle to Becker. 
Clearly,  2023(d) did apply. 

     Finally, Universal argues that because Becker was performing an errand
for Classic -- i.e.,  obtaining a prior owner's signature on a title
certificate and delivering the vehicle to a garage -- he was then a
"servant," rather than a "customer."  The argument for Becker's servant
status is farfetched.  See Stevens v. Nurenburg, 117 Vt. 525, 528, 97 A.2d 250, 253 (1953) ("If both parties understand that the rendition of the
service is merely a courtesy extended by one to the other, without intent to
create the relationship of master and servant, then the relationship does not
exist."). 

     In sum, the provisions of the policy must be taken "in their plain,
ordinary and popular 

 

sense."  Medlar v. Aetna Ins. Co., 127 Vt. 337, 344, 248 A.2d 740, 745-46
(1968).  Becker was a customer of Classic, and the trial court properly
granted Liberty Mutual's summary judgment motion.  V.R.C.P. 56(c). 

     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



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                              Footnotes


FN1.   We reject in this context the notion that, to be a customer, more than a
 single exchange is implied.  See Matthews v. Konieczny, 527 A.2d 508, 513
 (Pa. 1987) (in context of dram shop act, "customer" connotes capacity to
 engage in regular transactions).