AUTO-OWNERS INSURANCE COMPANY v. DYER, 1:16-cv-00486

On July 13, 2013 Thomas Dyer, a mechanic employed by TKW Auto Sales (TKW),test-drove a customer’s Volkswagen from TKW’s lot and collided with Elois Taylor.
Dyer’s driver’s license had been suspended since ~1992; TKW’s owners knew he lacked a valid license but allowed and encouraged him to test-drive customer vehicles as part of his job.
Auto-Owners issued a garage liability policy to TKW covering bodily injury and property damage for persons "using an auto...with your permission."
Taylor sued Dyer and TKW in state court; Auto-Owners filed this declaratory-judgment action seeking a ruling that the Policy does not cover the Accident because Dyer lacked lawful authority to drive.
The parties agreed there were no material factual disputes; Auto-Owners moved for summary judgment on the narrow legal question whether an insured can give permission to a person who knowingly lacks a valid driver’s license.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether TKW could give Dyer “permission” to operate the vehicle when Dyer knew his license was suspended	Auto-Owners: A person who cannot lawfully drive cannot be deemed a permissive user; permission that authorizes illegal conduct is not “permission” under the Policy	Taylor/TKW: TKW gave express permission to Dyer to test-drive cars; Policy covers any person using an auto with the insured’s permission, regardless of legal status to drive	Court: Denied summary judgment to Auto-Owners — under the Policy’s plain terms TKW’s permission suffices; absence of a valid license does not, as a matter of law, negate "permission."

Smith v. Cincinnati Ins. Co., 790 N.E.2d 460 (Ind. 2003) (driver without a valid license cannot reasonably believe she was entitled to drive; applied to a policy exclusion requiring "reasonable belief" of entitlement)
Mroz v. Ind. Ins. Co., 796 N.E.2d 830 (Ind. Ct. App. 2003) (applies Smith to conclude an unlicensed driver cannot reasonably believe she was entitled to drive)
Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment standard)
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (standard for genuine issues of material fact at summary judgment)
Cincinnati Ins. Co. v. Am. Alt. Ins. Corp., 866 N.E.2d 326 (Ind. Ct. App. 2007) (apply plain-meaning rule to unambiguous insurance contracts)
Auto-Owners Ins. Co. v. Benko, 964 N.E.2d 886 (Ind. Ct. App. 2012) (contract-construction principles in insurance disputes)