Farmers Ins. Exchange v. ENTERPRISE LEASING
708 S.E.2d 852
| Va. | 2011Background
- Baasanjav rented from Enterprise, a self-insured rental car company, and declined SLP.
- Lease contained an indemnification provision requiring Renter to defend and indemnify Owner for losses from the rental, with Renter bearing final responsibility.
- Baasanjav was insured by Farmers; Farmers policy covers damages arising from the use of the owned automobile, including temporary substitutes.
- Vehicle Baasanjav rented qualified as a temporary substitute automobile under Farmers, making it an “owned automobile” for policy purposes.
- The accident caused $5,000.34 damages to the other vehicle; Enterprise paid that amount and sought indemnification from Baasanjav and reimbursement from Farmers under the policy.
- Circuit court granted summary judgment—Enterprise indemnification from Baasanjav and Farmers reimbursement; Farmers appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a self-insured rental car company may seek indemnification from the renter. | Baasanjav | Farmers | Yes; indemnity enforceable under lease. |
| Whether Farmers must reimburse Enterprise under the Other Insurance clause. | Enterprise | Farmers | No; self-insurance is not collectible insurance; Farmers must reimburse. |
| Whether Hertz requires primary coverage and forecloses indemnity claims. | Farmers | Enterprise | Hertz requires primary coverage by self-insured rental; indemnity allowed after primary coverage satisfied. |
Key Cases Cited
- Hertz Cas. Ins. Co. v. Hertz Corp., 265 Va. 450 (2003) (self-insured rental cars must provide primary coverage; indemnity issue not foreclosed by Hertz)
- Estes Express Lines, Inc. v. Chopper Express, Inc., 273 Va. 358 (2007) (enforceability of indemnity provisions in contracts)
- Safeway, Inc. v. DPI Midatlantic, Inc., 270 Va. 285 (2005) (indemnity provisions and third-party recoveries)
- Walker v. Vanderpool, 225 Va. 266 (1983) (anti-subrogation limitations apply to insurers, not self-insurers)
- Yellow Cab Co. of Virginia v. Adinolfi, 204 Va. 815 (1964) (distinction between self-insurance and insurance; self-insurance not insurance under typical terms)
- Sherwood Trucking, Inc. v. Carolina Cas. Ins. Co., 552 F.2d 568 (1977) (anti-subrogation rule and insurer-subrogee rights)