Title: Winn v. Becker

State: vermont

Issuer: Vermont Supreme Court

Document:

WINN_V_BECKER.94-167; 163 Vt 615; 660 A.2d 284

[Filed 24-Mar-1995]


                               ENTRY ORDER

                      SUPREME COURT DOCKET NO. 94-167

                             JANUARY TERM, 1995


Laurie H. Winn, Administratrix       }         APPEALED FROM:
of Estate of Elbert J. Winn,         }
Jr., et al                           }
                                     }         Bennington Superior Court
     v.                              }
                                     }
Roland Becker and Universal          }         DOCKET NO. S0226-90-BcC
Underwriters Insurance Company       }
                                     }
     v.                              }
                                     }
Liberty Mutual Insurance             }
Company and Brian Pello,             }
Individually & d/b/a/ Classic        }
Auto Sales


                     In the above entitled cause the Clerk will enter:

     Universal Underwriters Insurance appeals from a trial court order
granting summary judgment to Liberty Mutual Insurance Company, the insurer of
an automobile dealer that sold a vehicle involved in a fatal accident.  We
affirm. 

     The principal facts are not in dispute.  The decedent, Elbert Winn, was
operating a motor vehicle within the scope of his employment when his vehicle
was struck by a G.M.C. Jimmy operated by Roland Becker.  Winn died as a
result of the injuries he suffered in the accident. Becker had purchased the
Jimmy from Brian Pello d/b/a/ Classic Auto Sales (Classic) on the morning of
the accident.  Classic had acquired the vehicle some weeks earlier from Barry
Townsend. 

     On the morning of the accident, Becker arrived at Classic to accept
delivery of the Jimmy.  He paid the agreed purchase price and took possession
of the vehicle.  Pello signed the title certificate and delivered it to
Becker.  Becker intended to have some repairs made to the vehicle and did not
intend to register it until the repairs had been completed.  Pello placed a
dealer plate on the vehicle so Becker could drive the vehicle off Classic's
premises.  Townsend had not signed the assignment-of-title portion of the
title certificate because it was in the possession of his financing bank at
the time of the transfer to Classic.  At Pello's suggestion, Becker intended
to stop at Townsend's house to obtain his signature on the title certificate
before traveling to a repair garage.  The accident occurred before Becker
arrived at the Townsend residence. 

     Decedent's administratrix filed a wrongful death action against Becker,
whose insurance liability limit was $20,000, the minimum limit for one person
under the financial responsibility law.  23 V.S.A.  801(a).  She also sued
Universal, the insurance carrier for decedent's employer, seeking to enforce
the underinsured motorist provisions of its policy.  Universal filed a
third-party claim against Classic, which was insured by Liberty Mutual, on
the theory that a 

 

defect in the Jimmy was the cause of the accident.  Liberty Mutual has
assumed the defense of this claim.  Universal also filed a third-party claim
against Liberty Mutual, alleging that Becker, in addition to Classic, was
insured under the Liberty Mutual insurance policy issued to Classic. 

     The parties filed cross-motions for summary judgment on Universal's
claim that Becker was separately covered under the Classic insurance policy. 
The trial court granted Liberty Mutual's motion, concluding that the Liberty
Mutual policy did not cover Becker because he was a "customer" of Classic and
was excluded from coverage under the terms of the policy.  This appeal
followed. 

     Libery Mutual's insurance policy issued to Classic includes separate
provisions relating to claims involving both covered and noncovered vehicles.
 The provision relating to covered vehicles states: 

D. WHO IS AN INSURED

1. For Covered Autos

                     * * *

b. Anyone else is an insured while using with your permission a
covered auto except:

                     * * *

     (3) Your customers, if your business is shown in ITEM 1
     of the declarations as an auto dealership.  However, if a
     customer of yours:

        (a) Has no other available insurance (whether
        primary, excess or contingent), he or she is an
        insured but only up to the compulsory or
        financial responsibility law limits where the
        covered auto is principally garaged.

        (b) Has other available insurance (whether
        primary, excess or contingent) less than the
        compulsory or financial responsibility law limits
        where the covered auto is principally garaged,
        he or she is an insured only for the amount by
        which the compulsory or financial responsibility
        law limits exceed the limits of his or her other
        insurance.

     The sole issue on appeal is whether Roland Becker was a customer of
Classic and therefore excluded from coverage under the policy language as a
matter of law. 

     Clearly, Becker was a customer within the plain meaning of the policy
provision relating to covered vehicles as a matter of law.  Universal does
not deny that Becker's primary relationship to Classic -- the reason he
was driving the vehicle involved in the accident -- was that of a
purchaser from Classic of the vehicle.  Universal's argument is that until
title passed to Becker, he was not a customer within the meaning of the
policy. 

     Although Universal examines the question of title in detail, it never
explains why the title 

 

issue is relevant to whether Becker was a "customer" of Classic, other than
to point out that the court first examined "who owned the Jimmy at the time
of the accident" as a "preliminary question to be decided."  We hold that
Becker's status as a customer of Classic did not depend on who owned the
vehicle at the moment the accident occurred.  He became a customer, not when
he took title to the purchased item, but when he was first "a potential
purchaser of a commodity."  Farm Bureau Ins. Co., Inc. v. Select Ins. Co.,
762 F. Supp. 895, 899 (D. Kans. 1991) (dealership employee was also potential
purchaser of vehicle and hence a "customer"); American States Ins. Co. v.
McCann,