Hawkeye-Security Insurance v. BunchHawkeye-Security Insurance v. Bunch
Midwestern Indemnity Company and Hawkeye-Security Insurance Company brought this declaratory judgment action seeking a determination that there was no coverage for an accident involving a company car driven by Daniel Brandt and injuring Donald Bunch. Donald and his wife Patricia were both employed by the insured, The Installers Company (Installеrs). She had limited permission to drive the company car, but she had asked an intoxicated Brandt to drive her husband on a personal errand in violation of company policies. The case was tried to the district court 2 which ruled in favor of the insurers, and the Bunches appeal. We affirm.
I.
Total Lock & Security, Inc. (Total Lock) and its sister comрany Installers install commercial locks. Total Lock and Installers maintained insurance policies with Midwestern Indemnity Company (Midwestern) and Hawkeye-Security Insurance Company (Hawkeye) for several vehicles that were used by employees while traveling for business, including the car that was damaged in the present case. Michele Fogerty was the sole owner and president of both companies. Installers employed Donald and Patricia Bunch at the time of the accident. The district court also found that Brandt was an employee of Installers on the date of the accident despite being on leave from work.
Installers had several poliсies related to company vehicles at the time of the accident. Employees were prohibited from using vehicles for personal reasons except when out of town on business, when returning late at night from an out of town job, or when explicitly authorized. There was to be no driving after drinking, and employees were prohibited from allowing an unauthorized person to drive a company vehicle. While none of these policies were in writing, the district court found that they had been orally communicated and were known by all employees.
Employees did not have free use of company vehicles while at home in St. Louis. In fact Donald Bunch’s authority to drive company vehicles had been revoked before the accident because he had failed to disclose a citation for driving while intoxicated when he was hired. After that revocation, only Patricia was permitted to drive company vehicles when the couple was issued a company car for a work assignment.
The Bunches had been out of town on a business road trip for seven or eight months before the accident. After they returned to St. Louis late on November 21, 2007, Patricia Bunch had authorization to take a vehicle home, keep it at their residence until after Thanksgiving, and use it to purchase food for the holiday. The Bunches went to the Total Lock office on November 23 to meet with Fogerty. Dur
On November 26, while the Bunches were still in St. Louis, Patricia Bunch asked Brandt to drive her husband on a personal errand to deliver leftover Thanksgiving fоod to his mother. Brandt agreed even though he knew that he did not have permission from their employer. He was not working on the day of the accident, no one at the company authorized him to drive the car, and he had been drinking alcohol. Unfortunately Brandt was involved in an accident which left Donald Bunch with severe injuries characterized as “incomplete quadriplegia.”
An officer at the accident scene reported that Brandt was obviously intoxicated. At trial a forensic toxicologist testified that Brandt likely had “over seven and one half beers” in his body at the time of the accident. Patricia Bunch testified that she knew of the company rule against drinking and driving but that she was unaware that Brandt had been drinking. The district court found that Brandt had consumed at least fifteen cans of alcohol on the day of the accident and that the Bunches were aware that Brandt had been drinking.
Total Lock and Installers had a primary insurance policy with Midwestern and an umbrella policy with Hawkeye. The liability policy provided coverage to “[y]ou for any covered ‘auto’ ” and “[a]nyone else while using with your permission a covered ‘auto’ you own, hire or borrow....” ‘You” referred to the named insureds in the policy which were listed as Total Lock and Installers. There was also underinsured and uninsured motorist coverage, but that coverage did not extend to “[a]nyone using a vehicle without a reasonable belief that the person is entitled to do so.”
Midwestern and Hawkeye sought a declaratory judgment that Brandt was not entitled to liability coverage and that Donald Bunch was not entitled to uninsured motorists coverage. The Bunches counterclaimed, seeking а declaration that liability, underinsured, and uninsured coverage existed. After trial the court found that no liability insurance coverage existed because Brandt had not had express or implied permission to use the car and Donald Bunch was not covered by the uninsured and underinsured motorists coverage. The Bunches appeal, asserting that liability coverage exists because Brandt had permission from Patricia Bunch to use the vehicle and that the uninsured and underinsured sections of the policy are ambiguous.
We review a district court’s findings of fact in a court trial for clear error and its conclusions of law de novo.
Eckert v. Titan Tire Corp.,
The first issue raised by the Bunches is whether liability coverage extended to Brandt. The liability policy covers “[a]nyone ... using with your permission a covered ‘auto’ ...” under a section commonly known as an оmnibus clause. Such permission may be express or implied. Express permission exists when the named insured or someone with authority “directly and distinctly” gave such permission.
Shelter Mut. Ins. Co. v. See et al.,
The district court found that Brandt did not have express or implied permission to use the vehicle because he had never received permission from Total Lock or Installers, Patricia Bunch had not been authorized to give him permission, and he had violated company policy against drinking and driving. The Bunсhes do not dispute that Brandt did not have permission from Total Lock or Installers. Instead, they argue that the district court erred in denying liability coverage because Patricia Bunch had the authority to give permission to Brandt and she did give it.
The Bunches first contend that Patricia Bunch, acting as a “Named Insured,” could give permission to Brandt because the policy did not specify who at Total Lock and Installers could grant permission. This argument is unavailing. The policy lists Total Lock and Installers as the named insureds, and permission must come from the named insured “or someone having authority to bind him in that respect.”
Hanover Ins. Co. v. Abchal et al.,
We are not persuaded that Fogertys authorization to Patricia Bunch enabled her to give Brandt permission to drive the vehicle as a second permittee. Under Missouri law а second permittee must obtain express or implied permission to use the vehicle from the named insured.
U.S. Fidelity & Guar. Co. v. Safeco Ins. Co. of Am. et al.,
Patricia Bunch lacked authority to permit Brandt to use the vehicle as a second permittee. The Bunches did not
Internal company rules also indicate that Patricia Bunch did not have authority to allow Brandt to use the vehicle on this occasion. The Bunches suggest that reference to these rules is improper, but whether an individual had permission to use a vehicle under an omnibus clause is always a question of fact.
State Farm, Mut. Auto. Ins. Co. v. Scheel et al.,
The Bunches concede that Brandt did not have express or implied permission from Total Lock or Installers to drive the car, and we conclude that Patricia Bunch lackеd the authority to give Brandt permission to use the vehicle as either a named insured or as a second permittee. The district court did not err in concluding that liability coverage did not extend to Brandt.
III.
The second argument advanced by the Bunches is that Donald Bunch is entitled to uninsured and underinsured motorist coverage because the policy is ambiguous. The uninsured and underinsured motorists sections cover “[ajnyone ... ‘occupying’ a covered ‘auto’ ...” and then exclude “[ajnyone using a vehicle without a reasonable belief that the person is entitled to do so.” The parties do not dispute that Donald Bunch was “occupying” the car as a passenger at thе time of the accident, but they disagree about the effect of the exclusion. The Bunches also contend that the policy is ambiguous because it does not define the word “vehicle.” The district court determined that Donald Bunch was not covered by the uninsured and underinsured motorists provisions because he could not have had a reasonable belief that he was entitled to use the car.
The Bunches argue that the policy is ambiguous because it “promises something at one point and takes it away at another....” Bur
ns,
Exclusions in insurance contracts are enforceable so long as they are unambiguous.
Todd et al. v. Mo. United Sch. Ins. Council,
The district court properly found that Donald Bunch was excluded from uninsured and underinsured mоtorist coverage because he lacked a reasonable belief that he was entitled to use the vehicle for personal use at the time of the accident. Whether a person has a reasonable belief that he can use a vehicle is determined by several factors, including whether he had express permission, whether he exceeded the scope of that permission, whether the law prohibited the use, whether he owns the car, and the relationship between the driver and the insured.
Marchand v. Safeco Ins. Co. of Am.,
We are also not persuaded that the lack of a definition of the word “vehicle” in the uninsured and underinsured motorists sections renders them ambiguous. The Bunches contend that the word vehicle could refer to all covered autos or any vehicle other than a covered auto. An unambiguous term in an insurance policy will be given its “plain meaning and enforced as written.... ”
Lindsay et al v. Safeco Ins. Co. of Am. et al.,
For these reasons we affirm the judgment of the district court.
Notes
. The Honorable E. Richard Webber, United States District Judge for the Eastern District of Missouri.
. The Bunches nevertheless argue that since that the omnibus clause in this policy does not contain a "scope of permission clause,” Patricia was not prohibited from allowing Brandt to drive the vehicle as a second permittee. Missouri courts consider the scope of a driver’s permission regardless of whether such a clause is in a policy, however.
See Nautilus Ins. Co. v. I-70 Used Cars, Inc. et al.,