Case Title: Champlain Casualty Co. v. Agency Rent-A-Car, Inc.

Citation: 168 Vt. 91, 716 A.2d 810

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 1998-06-12T00:00:00Z

Document:
Champlain Casualty Co. v. Agency Rent-A-Car, Inc. (97-101); 168 Vt. 91;
716 A.2d 810

[Filed 12-Jun-1998]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.

                            No. 97-101

Champlain Casualty Company                   Supreme Court

                                             On Appeal from
    v.                                       Washington Superior Court

Agency Rent-A-Car, Inc.                      December Term, 1997

Alan W. Cheever, J.

       Paul R. Bowles, Montpelier, and Steven A. Bredice, Essex Junction, of
  Hill, Unsworth, Barra & Bowles, for Plaintiff-Appellant.

       John P. Cain and Lori Reuschel Choiniere of McCormick, Fitzpatrick,
  Kasper & Burchard, P.C., Burlington, for Defendant-Appellee.

PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.

       DOOLEY, J.   Plaintiff Champlain Casualty Company of Vermont appeals a
  Washington Superior Court order granting summary judgment to defendant
  Agency Rent-A-Car, in a dispute over liability for damages caused by the
  lessee of one of Agency's vehicles.  Champlain is the lessee's insurer
  under a comprehensive automobile liability policy.  The trial court held
  that Agency's self-insurance obligation, created to comply with Vermont's
  Motor Vehicle Financial Responsibility Law, 23 V.S.A. §§ 800-810, does not
  constitute "other collectible insurance" and consequently, Champlain is
  responsible for providing primary liability coverage.  Champlain appeals. 
  We affirm, but on grounds different from those employed by the trial court.

       The facts of this case are largely undisputed.  On November 9, 1993,
  Alex Roberts of Stowe, Vermont, rented a car from Agency and signed a
  rental contract.  While driving the rented car, Roberts collided with a
  vehicle driven by Patricia Alley.  Roberts died as a result of injuries he
  suffered in the crash.  Alley was injured, and she and her husband later
  filed suit against Roberts and his estate.

 

       The parties in the underlying suit looked to both Champlain and Agency
  to defend and indemnify.  This led to the litigation before us, in which
  Champlain sought a declaratory judgment that Agency was obligated to defend
  and pay any claim against Roberts' estate. Agency responded that Champlain
  had the duty to defend and indemnify.

       Champlain's responsibility is based on a comprehensive automobile
  liability insurance policy it issued to Roberts.  The policy covered
  Roberts'operation of a non-owned automobile, but stated that:

   If there is other applicable similar insurance we will pay only our
   share of the loss.  Our share is the proportion that our limit of
   liability bears to the total of all applicable limits.  However, any
   insurance we provide with respect to a vehicle you do not own
   shall be excess over any other collectible insurance.

       Agency's responsibility is based on Vermont's financial responsibility
  law.  No owner of an automobile may permit the operation of the vehicle
  upon the highways of the state without having in effect an automobile
  liability policy or bond, in the amount specified in the statute and
  covering persons killed or injured in an accident and property damage.  See
  23 V.S.A. § 800(a). In lieu thereof, the owner may file self-insurance in
  the amount of $100,000.  See id. § 801(c). The Commissioner of Motor
  Vehicles may issue a self-insurance certificate to a person when the
  Commissioner is satisfied that the person has "at least $100,000.00 of
  unencumbered net worth."  Id.  The statute goes on to provide:

   A certificate of self-insurance obtained by a self-insurer shall
   insure every person operating a motor vehicle, owned by said self-
   insurer, with his express or implied permission, against loss within
   statutory limits from the liability imposed by law upon such person
   arising out of the operation of said motor vehicle and shall be for
   the benefit of any person suffering personal injuries or property
   damage arising out of the use of such motor vehicle with such
   express or implied permission.

  Id.

       Agency obtained a certificate of self-insurance from the Commissioner
  of Motor Vehicles.  Agency does not offer insurance to those who rent cars
  from it.  In fact, the rental

 

  agreement entered into between Roberts and Agency required that Roberts
  have his own liability insurance covering his operation of Agency's
  vehicle.  The rental agreement provided that Robert's "valid and
  collectible liability and personal injury protection insurance coverage
  maintained with Champlain shall be primary."  The agreement explained that
  Agency was self-insured and provided:

   If required by the financial responsibility laws of the state in which
   this agreement was executed the company shall settle or defend, up
   to the minimum limits required for any one rental vehicle per
   occurrence, as it considers appropriate, any claim or suit for
   bodily injury and/or property damage arising out of the authorized
   use of this vehicle by the renter, renter's spouse or listed
   additional licensed driver. . . . These protections, if required, shall
   be excess over any self-insurance certificate, surety bond, financial
   responsibility bond, cash deposit, or insurance policy or benefit
   including but not limited to: health and accident, medical, dental
   insurance and/or disability benefit available to any individual
   making a claim under this agreement.

       Champlain argues that the "other collectible insurance" clause
  contained in its policy with Roberts made Agency the primary insurer. 
  Alternatively, it argues that both it and Agency should be treated as
  excess carriers, and the loss should be apportioned between them.
  Meanwhile, Agency argues that its self-insurance status is not "other
  collectible insurance," and, as a result, Champlain is responsible for
  primary coverage.  Alternatively, it argues that even if the "other
  collectible insurance" clause applies, the nature of its relationship with
  Roberts is such that its liability should be secondary.  The trial court
  agreed with Agency's first argument holding that self-insurance is not
  insurance for purposes of Champlain's "other collectible insurance" clause.
  Thus, the court determined that Champlain was the primary insurance
  provider, requiring Champlain to defend and indemnify the estate of Alex
  Roberts up to its policy limits, before Agency is required to indemnify
  under the financial responsibility laws.

       Both parties have framed the issue in this case as whether
  self-insurance is "other collectible insurance."  As the briefing reflects,
  other jurisdictions are split on this issue. Compare White v. Howard,