In this dеclaratory judgment action the plaintiff seeks to establish that Barry F. Hubbard was not on July 5, 1974, an insured under the “omnibus clause”
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of the liability coverage of a policy issued to T.A.G. Enterprises, Inc. The defendants are Hubbard (who defaulted), Ralph L. Hunt, Sharon Sue Anderson and James Edward Barke (who defaulted). The latter three defendants were allegedly injured in an automobile accident on July 5, 1974, involving the insured automobile while driven by Hubbard. The case was tried to a jury who found the issue submitted in favor of the defendants. Plaintiff’s first point on appeаl is that the trial court erred in not directing a verdict for the plaintiff at the close of all the evidence. This is premised upon its proposition the defendants had the burden of proof to establish coverage and the evidence was not sufficient to support the verdict and judgment. By their brief the defendants agree that the burden of proof to establish coverage was upon them.
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However, as will be developed later, that agreement did not extend to all aspects of the case and certаinly was not binding on the trial court. It is not always the burden of one claiming under a liability insurance policy to prove all issues upon which coverage is dependent. For example, if the insurer seeks to avoid coverage because of an exclusion or breach of condition subsequent, the burden of proof on such issues is upon the insurer.
Mission Insurance Company v. Ward,
The plaintiff’s first point requires a summary of the evidence. T.A.G. was the named insured in the automobile insurance policy in question in which a 1972 Ford was one of the described vehicles. T.A.G. was an investment company and had commercial property and real estate and a used car dealership. Its office was in Columbia. Carson Teel was President of T.A.G. Teel and a business associate decided to attempt to organize a mobile home manufacturing business. The associate introduced Hubbard to Teel. Hubbard had experience in the mobile home manufacturing business. Arrangements were made for Hubbard to help in organizing the business, primarily selling shares in a new company. Hubbard was to provide his own automobile and pay his own expenses. He had no instructions on where to go or whom to contact. His compensation was to be a job and a stock option. He started work in late April or early May. Early in May Hubbard’s automobile broke down. On or about May 10 Teel loaned the insured Ford, which carried a dealer’s tag, to Hubbard. Teel knew that Hubbard had no other automobile for his personal use and granted Hubbard unrestricted use of the automobile. No time limit was placed upon this use.
Approximately the first part of June, because of an adverse development concerning the proposed mobile home plant, Teel realized that the business would not be organized. Teel decided to sell the car. Teel tried to locate Hubbard, apparently by phone calls. A week or two after June 4 an employee of Teel saw the automobile at a bar in Columbia. He reported to Teel who went to the bar.
At this meeting Teel and Hubbard agreed upon a price for the automobile. At that price T.A.G., would make a profit, although Teel couldn’t say how much. Teel related what was said at that meeting in a variety of ways. Teel, on October 9, 1974, gave a statement to a representative of the plaintiff. On October 22, 1974, a second statement was given. These statements, by agreement, were admitted as substantive evidence. Concerning the meeting in the statement of October 9th, Teel said: “[H]e came back to Columbia approximately June the 10th or 11th and I was to pick up the car; . . . and he says I’ll be back in three days and pay you for it and then we started looking for him right after that . .” The next question and answer were: “Q: In other words you discussed settlement, not settlement but sale of the vehicle to him at that time, is that right?"' A: “That’s right.” Teel later agreed with the representative’s statement that as far as Teel was concerned after June 10th, Hubbard was using the car without permission.
In the statement of October 22nd the following references were made: “[H]e just happened to be here and I found him. .
I was looking for the car prior to that without any results and I happened to be going by the Columbia Inn and I saw this car so I walked in on him.” The following questions and answers were:
“Q: Ok. Now what was the extеnt of the discussion at this time? A: He said I’m going to buy your car and I’m going to go get the money and I’ll be back in about three days. Q: Did he say where he was going to go? A: No he didn’t. He said he had a job down south and he never did say where. . . . Q: Ok and then after June the 10th then you had an understanding that he was to pay — bring the car back — or come back in three days then? A: That’s right. Q: And pay you the money for the car. And after that period of time he would have no reason to believe that he had implied permission to use the car. A: That’s exactly right.”
When he had not heard from Hubbard by about June 25, Teel, although he did not believe the automobile tо be in Boone County, contacted a deputy sheriff of that county. This visit was to no avail as he told the deputy he didn’t want a warrant but just wanted his car picked up. Later, Teel called a friend in Rockport who was a highway patrolman. He asked the friend to see if the automobile was at Hubbard’s mother’s as she lived in that area. This call was of a personal rather than an official nature. The accident in question occurred on July 5 in Springfield.
Teel had engaged in the liability insurance business for twenty-three years. He was familiar with the permissive user omnibus clause. About July 14th defendant Hunt called Teel and they discussed insurance coverage on the automobile Hubbard was driving. Teel said nothing concerning the dealings he had with Hubbard in reference to that automobile.
Concerning plaintiff’s point of the insufficiency of the evidence, there is no question but what Hubbard was granted indefinite permission to make unrestricted use of the automobile. The decisive question is whether or not the evidence is conclusive that such permission was terminated. The answer hinges upon a determination of what is necessary to effectively terminate such permission. The court has been cited to no Missouri case expressly dealing with the subject. Independent research has developed but little authority.
In determining the question of permissive use relative to an omnibus clause, the courts to one degree or another follow one of three rules. They are the initial permission rule, the conversion rule, and the minor deviation rule.
McKee v. Travelers Insurance Company, 315
S.W.2d 852 (Mo.App.1958); Annot.
Under the minor deviation rule it is said “if the use made by the bailee is not a gross violation of the terms of the bailment, even though it may have amounted to a deviation, protection is still afforded such additional insured.” 6C Appleman, Insurance Law and Practice (Buckley ed.), § 4368, p. 216. Or, stated another way, a material deviation from the scope of permission constitutes a use without permission.
McKee v. Travelers Insurance Company,
supra. Under this rule coverage hаs been denied where an employee contrary to instructions was using a vehicle for personal purposes,
McKee v. Travelers,
supra; where an employee was returning his employer’s automobile and for personal reasons was two and one half miles off the route,
Speidel v. Kellum,
supra; where at 9:30 a. m. initial permission was granted to use an automobile in town for one and a half hours and the accident occurred at 7:00 p. m. out of town,
Savage v. American Mutual Liability Ins. Co.,
But, such cases dealing with a deviation from a limited scope of permission are not decisive here. This case does not involve a deviation from the scope of permission which, when granted, was expressly or impliedly limited. The expressly granted permission in this case was for indefinite, unrestricted or unfettered use. The question
While . no Missouri. ease has expressly defined what is nеcessary to terminate such unrestricted permission, principles have been enunciated which are applicable. In
Hauser v.
Hill,
Other principles of insurance law are applicable. When express permission is relied upon to establish omnibus coverage, that permission must be “of an affirmative character, directly and distinctly stated, clear and outspoken.”
Bourne v. Manley,
A standard for the termination of express unfettered use cannot be expressed in the abstract. As demonstrated by the cases cited, language and conduct considered effective under some circumstances may not be effective under different conditions. The standard must take into consideration the context in which the termination is expressed. Since the purposes of the omnibus clause include the protection of the public and one using the vehicle of another, 12 Couch on Insurance 2d 45:293, pp. 305-307, it is logical that a standard should be premised upon the reasonable belief оf the user. While a summarization by its nature is subject to exceptions and modifications, it seems appropriate that the indefinite, unfettered use of a vehicle created by express permission must be terminated by such language and conduct that a reasonable person, in the same or similar circumstances as the permittee, should clearly understand the permissive use had ended.
While such a standard has not always been clearly expressed, it has been applied. In
Standard Accident Insurance Company v. Gore,
Turning to the facts of this case, the question of termination primarily turns upon the testimony of Teel concerning what transpired at his meeting with Hubbard. The plaintiff adroitly argues that since the burden of proving coverage was on the defendants (which proposition is not decided) the defendants are bound by the only evidence on that issue, the testimony of Teel. The plaintiff then asserts that testimony conclusively fails to make a submissi-ble case for the defendants. This does not follow. The testimony of Teel does without equivocation establish that Hubbard had been granted the unfettered use of the automobile. The evidence concerning revocation of that permission is not so conclusive. The statements of Teel on that subject were conflicting. In Teel’s October statements the reference to a time limit was Hubbard’s self-imposed expectation concerning when he would get the money. These statements are to be measured in the light of all the circumstances such as: Hubbard had for several weeks without compensation tried to assist Teel in a venture that had failed; Teel’s desire to sell the car; and Teel permitting Hubbard to continue with the unfettered use оf the automobile, knowing it was going to be used as a personal car, with no idea of where Hubbard was going to get the money. The evidence would permit the conclusion the overriding desire of Teel was to sell the automobile and the conversation was not a termination by such language and conduct that a reasonable person in the position of Hubbard clearly understood his permissive use was terminated in three days.
Plaintiff’s next point concerns a motion to produce filed by defendant Hunt the morning of, but рrior to, the trial commencing. Some months before this defendant had requested copies of statements given by officers of T.A.G. to the plaintiff concerning matters raised in the petition. Plaintiff by letter declined, stating its reasons. The motion in question sought such a statement given by Teel. It further alleged that Hunt’s attorney two days before trial talked with Teel who said he could not remember any specifics but his memory was recorded in a statement given the plaintiff. Counsel for plaintiff objected to the motion, including an objectiоn that the motion was untimely filed. Nevertheless, the court proceeded to hear counsel upon the merits of the motion and ordered production.
. Plaintiff seeks reversal because of the untimeliness of the motion. V.A.M.R. 44.-01(d) provides for service of a written motion and notice of hearing five days before the time specified for the hearing “unless a different period is fixed by law or court rule or by order of the court”. V.A.M.R. 55.30(a) provides for the establishment of regular times for the hearing of motions and specificаlly provides the court “at any time or place and on such notice,
if any,
as
The plaintiff next complains that the production of the Teel statement violated the “insured-insurer privilege”, citing
State ex rel Cain v. Barker,
Plaintiff’s next point is that the trial court erred in not permitting it to show to the jury that Hubbard was a defendant and he defaulted. This point is premised upon the proposition that such default by implication gives rise to an admission that he had no coverage. It is then asserted that since the other defendаnts, allegedly injured parties, have no greater rights than Hubbard, citing cases such as
Drennen v. Wren,
This does not follow even if Hubbard’s failure to plead constitutes an admission by pleading. “The general rule is that the admissions of a defendant are not admissible against his codefendants unless they consent thereto, adopt the statements as their own, or, as hereinafter noted, there is privity between the defendant making the admission and the codefendants.” 29 Am. Jur.2d Evidence, § 699, p. 756. In the sense that if Hubbard could not establish coverage the other defendants cannot, , the other defendants have no greater rights as stated in
Drennen v. Wren,
supra. But, this does not mean the other defendants, at least in regard to circumstances up to the time of the accident, are now claiming through him.
Of course, the conduct of the parties after an accident may provide some inference to the relationship of the parties before the accident. The vehicle owner’s failure to check on or complain of the driver’s wrongdoing was so considered in
Winterton v. Van Zandt,
The case was submitted to the jury upon Instruction No. 2 (submitted by plaintiff) providing for a verdict for the plaintiff if the jury found that on June 10 Teel told Hubbard to return the automobile or to pay for it within three days. The defendants offered an instruction providing for a verdict for the defendants if Teel’s permission was not withdrawn or the withdrawal of the permission was not communicated to Hubbard in a manner which should lead a reasonable man, under the circumstanсes, to believe he no longer had permission. This was refused. The plaintiff seeks reversal because the court did not give an instruction providing for a verdict for the defendants.
The plaintiff cites Page XLIX of the M.A.I. volume which states: “The failure to instruct on every issue has been error, and it continues to be error." It is also asserted that the omission is fatal because the defendants had the burden of proof. These contentions overlook the in-court agreement of the parties before the case was submittеd. In referring to Instruction No. 2 it was agreed “that is the only fact issue, as submitted in that instruction” and on that issue the plaintiff assumed the burden of proof. Under this stipulation no error was made in instructing the jury.
Plaintiff’s next point is that the trial court erred in giving Instruction No. 1, which was M.A.I. No. 2.01. This instruction was read to the jury as the trial opened. Plaintiff’s complaint is that this instruction should have been modified to require the defendants to proceed first. This contention is without merit for two reasons. First, the plaintiff made no objection to proceeding first. “And, having done so, they сannot very well insist that, in reality, they assumed a burden which was not theirs.”
Pacific Portland Cement Co. v. Food Mach. & Chem. Corp.,
The judgment is affirmed.
Notes
. The omnibus clause provided coverage for “(2) any other person while using such automobile and any other person or organization legally responsible for its use, provided the actual use of such automobile is by the named insured or with his permission.” For cases dealing with the distinction between use with permission and
driving
with permission see
Weathers v. Royal Indemn. Co.,
. So. held where the issue was renewal after expiration,
M. F. A. Mut. Ins. Co. v. Quinn,
.To be distinguished are those cases in which a vehicle subsequent to permissive use was returned and retaken without further permission.
Bekaert v. State Farm Mutual Automobile Ins. Co.,
. The failure to give a burden of proof instruc- • tion, when that burden was upon the prevailing party in a declaratory judgment action to determine coverage, was held to be reversible error. State Farm Mut. Auto. Ins. Co. v. Johnson, supra, n. 2.
.
Hauser v. Hill,
. For the distinction concerning an allegation of error based on privilege as distinguished from work product see
Halford v. Yandell,
. For the scope of the privilege when an insurer employs air attorney to represent the company see
State ex rel. Great Am. Ins. Co. v. Smith,
. “Until the issue of the obligation to defend is finally resolved the necessary attorney-client relationship does not exist . . . .”
Kansas City Fire & Marine Ins. v. Hartford Ins.,
. If the document contained privileged information, it could be presented to the court and the privileged information kept confidential. Kansas City Fire & Marine Ins. v. Hartford Ins., supra, no. 8.
. Concerning the basic power of the court to make such an award see
St. Paul Insurance Company v. Carlyle,