Case Title: Government Employees Insurance Co v. United Services Automobile Ass'n

Citation: 

Docket Number: 

State: virginia

Court: Virginia Supreme Court

Date: 2011-04-21T00:00:00Z

Document:
PRESENT:  Kinser, C.J., Lemons, Goodwyn, Millette, and Mims, 
JJ., and Lacy and Koontz, S.JJ. 
 
GOVERNMENT EMPLOYEES INSURANCE 
COMPANY, ET AL. 
 
 
 
 
 
 
 
 OPINION BY 
v. 
Record No. 100332 
  
    
JUSTICE WILLIAM C. MIMS 
 
 
 
 
 
 
 
    April 21, 2011 
UNITED SERVICES AUTOMOBILE 
ASSOCIATION, ET AL. 
 
FROM THE CIRCUIT COURT OF THE CITY OF HAMPTON 
Randolph T. West, Judge Designate 
 
In this appeal, we consider whether the evidence adduced 
at trial was sufficient to establish liability under either of 
two automobile insurance policies. 
I. 
BACKGROUND AND MATERIAL PROCEEDINGS BELOW 
In April 1999, Thomas Laffey was injured when a 1989 Acura 
Legend collided with his vehicle.  Sharon Bass (“Sharon”) owned 
the car and her daughter, Krystal Bass (“Krystal”), was its 
primary user.  Steven Parent (“Steven”) was driving the car at 
the time of the collision. 
Sharon had a family automobile insurance policy (“Sharon’s 
Policy”) issued by Government Employees Insurance Company 
(“GEICO”), which listed the car.  Sharon’s Policy afforded 
bodily injury liability coverage for those it insured while 
they operated the car.  As defined by the policy, in such 
circumstances the insured included (1) Sharon, as the named 
insured, or any resident in her household, and (2) “any other 
person using [the car] with the permission of the named 
insured, provided his actual operation . . . thereof is within 
the scope of such permission.” 
Steven’s mother, Annie Parent (“Annie”) had a family 
automobile insurance policy (“Annie’s Policy”) issued by GEICO 
Indemnity Insurance Company (“GEICO Indemnity”).  Annie’s 
Policy afforded bodily injury liability coverage for those it 
insured while they operated a car owned by another.  As defined 
by the policy, in such circumstances the insured included (1) 
Annie, as the named insured, and (2) “any relative, but only 
with respect to a private passenger automobile . . . provided 
his actual operation . . . thereof is with the permission, or 
reasonably believed to be with the permission, of the owner and 
is within the scope of such permission.” 
Following the collision, Laffey presented claims to GEICO 
and GEICO Indemnity for coverage under Sharon’s Policy and 
Annie’s Policy, respectively.  Each denied the claims on the 
ground that Steven lacked permission to operate the car at the 
time of the collision, which was necessary to incur liability 
under either policy.  Laffey then filed a motion for judgment 
alleging that Steven had been negligent in his operation of the 
car.1  Laffey also served his own automobile insurance carrier, 
United Services Automobile Association (“USAA”), to invoke his 
                                                 
1 A separate claim of negligent entrustment against Sharon 
was subsequently dismissed and is not before us in this appeal. 
 
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uninsured/underinsured motorist coverage.  GEICO and GEICO 
Indemnity then filed a declaratory judgment action against 
USAA, Annie, Steven, Sharon, Krystal, and Laffey seeking a 
determination that neither carrier had any coverage obligation 
for the collision.  The declaratory judgment action was tried 
to the circuit court in September 2009. 
A.  EVENTS PRECEDING THE COLLISION 
1.  KRYSTAL’S TESTIMONY 
Krystal testified that she had planned to meet her 
boyfriend, Charlie Daniels, on the evening of April 16.  They 
were to meet either at Steven’s house (the “Parent House”) or 
at the home of Elaine Pamplin (“Elaine”), Daniels’ aunt, which 
was two blocks away (the “Pamplin House”).  Krystal drove first 
to the Pamplin House, then to the Parent House a few minutes 
later, arriving between 8:00 and 8:30 p.m.  Because she did not 
carry a purse, she placed her keys, cigarettes, and lighter on 
a coffee table. 
A group of Daniels’ and Steven’s mutual friends were 
there, listening to music, playing cards, and drinking beer.  
Krystal took a “couple of sips” of beer.  At some point during 
the three hours she waited for Daniels to arrive, she noticed 
her keys were missing.  When she asked where they were, Steven 
said he had taken them so they would not get lost.   
 
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After Daniels arrived, he and Krystal began arguing.  The 
argument moved from the house to the street, where he hit her 
and walked away toward the Pamplin House.  She returned to the 
Parent House in tears and asked for her keys so she could go 
home.  She told Steven and the others that Daniels had struck 
her.  Agitated, Steven insisted on confronting Daniels at the 
Pamplin House.  He and one of his friends, Josh Robey, went to 
the car.  Steven, with the keys, got into the driver’s seat.  
Krystal got into the passenger seat and Steven drove to the 
Pamplin House.2 
When they arrived at the Pamplin House, Krystal took the 
keys from the ignition.  Steven and Robey went into the house 
to confront Daniels.  As Krystal approached the house, she 
placed her keys, cigarettes, and lighter either on the front 
step or on a nearby table on the porch.  When she entered the 
Pamplin House, one of the occupants told Steven and Robey that 
Daniels had not hit Krystal.  Krystal and Daniels then spoke 
privately in the back of the living room.  Minutes later, Chris 
Pamplin (“Chris”), Elaine’s son and Daniels’ cousin, yelled to 
Krystal that Steven had taken the car. 
Krystal ran outside but Steven and the car were gone.  She 
called the police to report it stolen and then called her 
                                                 
2 During cross-examination, Krystal admitted that she had 
said in an earlier deposition that she drove the car to the 
Pamplin House. 
 
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parents.  The police later came to the Basses’ house and 
informed them that the car had been in a collision.  Sometime 
thereafter, Steven spoke to her and said that he had taken the 
car because he was angry, believing she had lied to him about 
Daniels hitting her. 
2.  OTHERS’ TESTIMONY 
Sharon corroborated that Krystal had called her to tell 
her the car had been stolen and that Krystal had reported the 
theft to the police.  Sharon also testified that the police 
came to their home after Krystal returned and informed them 
that the car had been in a collision.  
Chris contradicted much of Krystal’s description of the 
events prior to the collision.  He testified that earlier that 
day, Krystal and Robey had driven together in Robey’s car.  
During that time, Steven used her car to pick Chris up and take 
him to the store.  Daniels and Krystal subsequently met at the 
Pamplin House, where the argument began.  Krystal then drove 
her car to the Parent House and soon thereafter Steven drove up 
to the Pamplin House in the car with Krystal, Robey, and two 
more of Steven’s friends.  Krystal and Daniels resumed their 
argument in the front yard and Chris told Steven that Daniels 
had not hit her.  Steven then glared at Krystal, got into the 
car, and drove away.  Krystal did not object for 30 to 45 
minutes when Steven had not returned.  She then called the 
 
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police to report the car had been stolen.  When the police 
arrived to investigate her report, Chris told them that Steven 
had not stolen the car.   
Steven testified that he had been at the home of his 
girlfriend, Shelly Roell, on the afternoon preceding the 
collision.  Roell lived across the street from the Pamplin 
House.  He went over to the Pamplin House around 4:00 p.m. and  
Krystal and Daniels were already there.  He then walked to the 
Parent House where he and his friends watched television and 
played cards.  He did not recall seeing Krystal again until 
around midnight, when she came in crying and said Daniels had 
hit her.  She then gave him her keys and he drove her, Robey, 
and another friend to the Pamplin House, where Chris told him 
that Daniels had not hit her.  He believed she had lied to him 
to start a fight between him and Daniels so he got in the car 
and drove off to “blow[] off steam.”  He denied that he had 
taken her keys from the coffee table at the Parent House and 
that she had ever taken them back from him after he drove her 
back to the Pamplin House to confront Daniels.  He admitted, 
however, that she had not given him permission to drive the car 
after they arrived there.  He also denied speaking with her 
about the collision after it occurred. 
B.  THE COLLISION 
 
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Officer Paul Hogge of the Poquoson Police Department was 
working radar near the boundary between Hampton and Poquoson in 
the early morning hours on April 17.  At approximately 1:00, he 
saw an Acura speed from Poquoson into Hampton at 90 miles per 
hour.  Hogge pursued and discovered the car he was pursuing had 
collided with another car about a quarter mile inside the 
Hampton city limits.   
Thereafter Officer Brian Wyer of the Hampton Police 
Department responded to the scene.  He ascertained that the 
Acura Hogge had pursued was the car owned by Sharon and that 
Steven had been driving it.  Wyer detected the odor of alcohol 
coming from the car, which contained at least twelve beer 
bottles, many of which were empty.   
C.  PERMISSION TO USE THE CAR 
Sharon testified that she and her husband expressly and 
repeatedly instructed Krystal not to allow anyone else to use 
the car.  She also testified that she never had met Steven, and 
if Krystal allowed others to use the car it was without her 
knowledge and without her permission.   
Krystal also testified that her parents had expressly and 
repeatedly instructed her not to allow anyone else to use the 
car.  However, she testified that she had allowed Daniels to 
drive the car once, contrary to their instructions.  She 
further testified that she concealed the fact of Daniels’ use 
 
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from them because she would get in trouble if they found out.  
She testified that she never allowed Steven or anyone else to 
drive the car.   
Chris contradicted Krystal’s testimony that she allowed 
only Daniels to drive the car, and only once.  According to 
Chris, Krystal routinely let anyone who asked use the car while 
she was at work or while she was at the Parent House or Pamplin 
House with the group of friends.  He testified that Daniels had 
driven it on multiple occasions, and that Krystal and Daniels 
previously argued because Daniels had been seen driving it.  
Chris also testified that he himself had driven it multiple 
times and that he had seen Robey and Steven drive it three or 
four times each before the day of the collision.  Chris 
recalled only one occasion when she denied a request to use the 
car, when she told Robey he could not use it because he had not 
put gas in it after a prior use. 
Steven testified that he had driven the car once or twice 
before the events leading up to the collision, but only between 
the Pamplin House and the Parent House.  He also testified that 
he had seen Daniels drive the car ten times but had never seen 
anyone else drive the car. 
Roell testified that she also had seen Daniels drive the 
car three or four times.  Sometimes he drove the car alone and 
other times Krystal or Robey accompanied him.  She also 
 
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testified that Steven had told her he had used the car before 
the collision. 
Christina Parent, Steven’s older sister, testified that 
she had seen Daniels drive the car countless times, and Krystal 
would lend it to anyone who asked.  She also testified that she 
witnessed Krystal give the car keys to Steven the evening 
before the collision, telling him to take them from her because 
she had been drinking.  However, Christina also testified that 
she believed Krystal gave him the keys to hide because she was 
upset and had been drinking, rather than to use himself. 
D.  THE CIRCUIT COURT’S JUDGMENT 
The circuit court announced its ruling from the bench: 
Quite candidly, it was difficult for me to 
believe the testimony of a lot of the witnesses, 
and I assure you, particularly the testimony of 
Krystal and her mother.  If either of you or any 
of you watched Krystal as she testified, every 
time she started--got stammered in any way, she 
would look to her mother for assurances over 
what she was saying, every time.  She wasn’t 
sure if she was testifying to what her mother 
wanted her to testify. 
 
. . . . And . . . to have somebody come in, 
such as [Sharon] and say, Oh, I have told my 
daughter that she is to never ever let someone 
else drive this car, and the daughter comes in 
and says, Yes, that’s exactly what she told me, 
and I never let anybody else drive the car.  The 
only thing that gives me any problem in this 
case is that no one testified that [Sharon] had 
ever seen anyone else drive this vehicle. 
 
. . . .  The everyday conduct that 
[Krystal] exhibited, and the use of the vehicle, 
 
9
I don’t believe for a moment that nobody else 
drove this car.  I have every belief that, in 
fact, anybody that wanted to use this car used 
it. 
 
Is that sufficient to say that there is no 
dispute as to whether or not the prohibition 
that the mother testified to was sufficient?  
And I think that’s the only question that I have 
in this case.  I don’t have any doubt about 
[Annie’s Policy].  That policy is going to be 
effective as far as this Court is concerned. 
 
Krystal allowed people to use that car.  I 
have every reason to believe that from the 
evidence here, that Steven had the permission.  
He had the keys.  That’s the way I read the 
evidence, so I don’t have any problem with that 
whatsoever. 
 
The only one that gives me a problem is 
whether or not . . . the course of conduct set 
forth – and I agree that the case says it’s 
irrelevant who owned the car[– b]ut I say for 
all practical purposes in this case[,] that the 
daughter was the owner of this vehicle. 
 
[W]ho used the vehicle?  The mother said 
they used the vehicle occasionally to take 
trips.  I have very little confidence in the 
conduct of the mother. 
 
. . . .  I think the course of conduct in 
this was general use of the vehicle.  I’m going 
to [find] both policies effective. 
 
Accordingly, the circuit court entered a final order that 
Steven was entitled to coverage under both Sharon’s Policy and 
Annie’s Policy.  We awarded GEICO and GEICO Indemnity this 
appeal. 
II. ANALYSIS 
A. STANDARD OF REVIEW 
 
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The case was tried to the circuit court without a jury.  
We therefore review the judgment for clear error and will not 
set it aside unless it is plainly wrong or there is no evidence 
to support it.  County of Albemarle v. Keswick Club, L.P., 280 
Va. 381, 389, 699 S.E.2d 491, 495 (2010).  We consider the 
evidence and all reasonable inferences fairly deducible from it 
in the light most favorable to the prevailing party below.  
Syed v. ZH Techs., Inc., 280 Va. 58, 68, 694 S.E.2d 625, 631 
(2010).  We review questions of law de novo.  Id. 
B.  ANNIE’S POLICY 
Annie’s Policy covered Steven’s use of the car only if the 
use was “with permission, or reasonably believed to be with the 
permission, of the owner and is within the scope of such 
permission.”  GEICO Indemnity concedes that Krystal was a 
custodian of the vehicle and that by operation of Code § 38.2-
2204(A) she had the authority to give Steven permission to use 
it for the purpose of Annie’s Policy.  It also concedes that 
the circuit court had the discretion to weigh the testimony and 
the credibility of the several witnesses:  it does not 
challenge the court’s finding that Krystal allowed “anybody 
that wanted to use” the car to use it.  However, GEICO 
Indemnity asserts there is no evidence establishing that Steven 
was operating within the scope of that permission at the time 
of the collision.  We agree. 
 
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A trial court sitting without a jury is the judge of the 
weight of the testimony and the credibility of the witnesses.  
Cheatham v. Gregory, 227 Va. 1, 4, 313 S.E.2d 368, 370 (1984).  
Nevertheless, “[t]here must be some evidence in order to 
support the verdict.”  Barnes v. Hampton, 149 Va. 740, 744, 141 
S.E. 836, 837 (1928).  
Generally, there are two types of evidence 
presented during a trial – direct evidence and 
circumstantial evidence.  Direct evidence is 
offered to prove as a fact the point in issue.  
Circumstantial evidence, by contrast, is offered 
to prove a fact not directly in issue, from 
which a fact in issue may reasonably be 
inferred. 
 
Commonwealth v. Hudson, 265 Va. 505, 512, 578 S.E.2d 781, 785 
(2003). 
“There is no distinction in the law between the weight or 
value to be given to either direct or circumstantial evidence,” 
id., and we have expressly stated that “[c]ircumstantial 
evidence, if convincing, is entitled to the same weight as 
direct testimony.”  Britt v. Commonwealth, 276 Va. 569, 573, 
667 S.E.2d 763, 765 (2008).  Thus, “[t]he finder of fact is 
entitled to consider all of the evidence, without distinction, 
in reaching its determination.”  Hudson, 265 Va. at 512-13, 578 
S.E.2d at 785. 
We agree with GEICO Indemnity that the circuit court was 
wholly within its singular competence to observe the witnesses 
 
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and evaluate their credibility, thereby weighing their 
testimony and making its findings of fact.  The circuit court 
discounted as unreliable Krystal’s testimony that she only 
allowed Daniels to drive the car, and only once.  We accept the 
court’s finding that she routinely allowed others to drive the 
car.  Based on that finding, Steven reasonably could have 
believed he had her permission to use the car.  However, we 
also must examine whether his particular use – the angry 
escapade that culminated in the collision – was within the 
scope of that permission. 
Each witness testified that those whom Krystal allowed to 
drive the car did so with her express permission and that they 
drove only for short distances, either between the Parent House 
and the Pamplin House, within the confines of the neighborhood 
encompassing those houses, or to nearby stores.  No witness, 
including Steven and Chris, who themselves drove the car, 
testified that Krystal ever had permitted anyone to drive the 
car out of Hampton into surrounding localities.  To the 
contrary, though Chris substantially discredited much of 
Krystal’s testimony, he testified that she called police to 
report the car stolen when Steven failed to return within 30 to 
45 minutes, indicating that such a lengthy excursion was 
extraordinary and unexpected.  He also testified that she 
routinely warned those to whom she lent the car to “[b]e 
 
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careful,” “take care of it,” and not to “go out . . . hot 
riding in it.” 
There simply is no evidence in the record supporting the 
circuit court’s judgment that Steven’s use of the car at the 
time of the collision was within the scope of the permission he 
may reasonably have believed he had.  Likewise, such a 
conclusion is not a reasonable inference from the direct 
evidence in the face of the contradictory testimony.  
Accordingly, we will reverse that portion of the court’s 
judgment. 
C.  SHARON’S POLICY 
Sharon’s Policy covered Steven’s use of the car only if 
the use was “with the permission of the named insured,” i.e., 
Sharon, provided the use was “within the scope of such 
permission.”  The parties agree that there is no evidence that 
Sharon either met Steven before the collision or expressly 
granted him permission to use the car.  GEICO concedes that 
under Code § 38.2-2204(A) Sharon’s permission may be express or 
implied. 
When a named insured entrusts a car to another for his 
general use, the person so entrusted--i.e., the first 
permittee-- also may permit a third person to use the car--
i.e., the second permittee.  In such instances, we have held 
that the second permittee has the implied permission of the 
 
14
named insured to use the vehicle.  Virginia Farm Bureau Mut. 
Ins. Co. v. Appalachian Power Co., 228 Va. 72, 77, 321 S.E.2d 
84, 87 (1984).  The second permittee then is covered under the 
policy of the named insured.  Code § 38.2-2204(A) (“No policy 
or contract of bodily injury or property damage liability 
insurance, covering liability arising from the ownership, 
maintenance, or use of any motor vehicle . . . shall be issued 
or delivered in this Commonwealth . . . unless the policy 
contains a provision insuring the named insured, and any other 
person using or responsible for the use of the motor vehicle 
. . . with the expressed or implied consent of the named 
insured, against liability for death or injury sustained, or 
loss or damage incurred within the coverage of the policy or 
contract as a result of negligence in the operation or use of 
such vehicle . . . by the named insured or by any such 
person.”) 
Code § 38.2-2204, the omnibus clause, is a remedial 
statute enacted to serve the public policy of broadening the 
coverage of automobile liability insurance for the protection 
of the injured persons.  Liberty Mut. Ins. Co. v. Tiller, 189 
Va. 544, 548-49, 53 S.E.2d 814, 816 (1949).  Whether a 
particular operator of a vehicle comes within such coverage 
depends on the facts of each case.  Fidelity & Cas. Co. of New 
York v. Harlow, 191 Va. 64, 68, 59 S.E.2d 872, 874. (1950).  
 
15
Accordingly we have resolved coverage questions by determining 
whether the actions of a permittee who operated the vehicle 
were consistent with the scope of the actual or implied 
permission from the named insured.  Liberty Mut. Ins. Co., 189 
Va. at 549, 53 S.E.2d at 816 (citing State Farm Mut. Ins. Co. 
v. Cook, 186 Va. 658, 666-67, 43 S.E.2d 863, 867 (1947)).  
However, we have not addressed directly the circumstances in 
which a permittee vested with general use permission from the 
named insured may limit coverage under the omnibus clause to a 
second permittee by imposing restrictions on the use of the 
vehicle. 
In Robinson v. Fidelity & Casualty Co. of New York, 190 
Va. 368, 57 S.E.2d 93 (1950), we considered the argument that 
operation of the vehicle by a second permittee beyond the scope 
of permission granted by the first permittee negated coverage 
of the second permittee under the omnibus clause.  In that 
case, the first permittee, who had been given general use of 
the vehicle by the named insured, loaned the vehicle to a 
second permittee but did not loan the car to the second 
permittee for “his general personal use.”  Id. at 372, 57 
S.E.2d at 95.  The second permittee was using the vehicle for 
his personal use at the time of the accident.  We concluded 
that, considering the facts of that case, a jury could find 
that the use by the second permittee was reasonably within the 
 
16
scope of his authority to drive the car.  Id. at 372-73, 57 
S.E.2d at 94-95.  
Although coverage under the omnibus clause was sustained 
in Robinson, we acknowledged that under different facts 
coverage could be limited under the omnibus clause for a second 
permittee based on the scope of permission received from the 
first permittee.  Whether the second permittee exceeded such 
permission was a factual issue to be resolved by the fact-
finder.  Id. at 373, 57 S.E.2d at 95; see also Columbia Cas. 
Co. v. Hoohuli, 437 P.2d 99, 106 (Haw. 1968) (opining as dictum 
that a first permittee may limit the permission of a second 
permittee).  This case presents such facts.  We hold that a 
first permittee with general use has authority to permit either 
general use or to impose such limits on use by a second 
permittee as the first permittee may find prudent, just as a 
named insured may limit use by a first permittee. 
Thus, we may assume without deciding that Krystal had 
permission for general use from Sharon and thus, pursuant to 
the omnibus clause, Stephen had Sharon’s implied permission to 
use the car.  However, we have determined for the purposes of 
Annie’s Policy that Stephen’s use of the car at the time of the 
accident, unlike that of the second permittee in Robinson, was 
beyond the scope of the permission given him by Krystal, the 
first permittee.  Just as the remedial purpose of the omnibus 
 
17
clause is not extended to provide coverage when the first 
permittee operates a vehicle beyond the scope of permission 
received, it should not be extended to circumstances in which a 
second permittee operates the vehicle beyond the scope of 
permission received from the first permittee who “ ‘st[ands] in 
the shoes’ ” of the named insured.  Virginia Farm Bureau Mut. 
Ins. Co., 228 Va. at 78, 321 S.E.2d at 87 (quoting Robinson, 
190 Va. at 371, 57 S.E.2d at 94). 
Accordingly, we will reverse that portion of the circuit 
court’s judgment extending coverage for the collision under 
Sharon’s Policy. 
III.  CONCLUSION 
For the foregoing reasons, we will reverse the judgment of 
the circuit court and enter final judgment in favor of GEICO 
and GEICO Indemnity. 
 
Reversed and final judgment. 
 
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