Title: Cooperative Fire Insurance Assoc. v. Gray

State: vermont

Issuer: Vermont Supreme Court

Document:

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, 111 State Street, Montpelier, Vermont 05602 of any errors in order
that corrections may be made before this opinion goes to press.


                                No. 89-463


                                             Supreme Court
Cooperative Fire Insurance Association
of Vermont
                                             On Appeal from
     v.                                      Lamoille Superior Court

Victor Gray, Laurie Gray and                 February Term, 1991
Bonnie Gray

     v.

American Protection Insurance Company


Linda Levitt, J.

Charity A. Downs of Conley & Foote, Middlebury, for plaintiff-appellee

David A. Williams of Williams and Green, Morrisville, for defendants-
   appellees

James W. Coffrin of Pierson, Wadhams, Quinn & Yates, Burlington, for
   defendants-appellants



PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.


     JOHNSON, J.    This case requires us to decide whether either of two
insurance policies, a homeowner's policy and an automobile policy, provides
liability coverage for negligent entrustment of an automobile and negligent
supervision of a minor.  The action before the Court is one for a declara-
tory judgment brought by the issuer of the homeowner's policy against its
insureds and a third-party complaint filed by the insureds against their
automobile insurer.
     On May 4, 1988, Victor Gray, son of defendants Laurie and Bonnie Gray,
was involved in a single car accident causing injuries to two passengers,
Lisa and David Sanders.  The Sanders filed suit in Lamoille Superior Court
alleging negligence against Victor Gray and, against Laurie and Bonnie
Gray, negligent entrustment and negligent supervision in allowing their son
to own and operate an automobile.
     At the time of the accident, Laurie and Bonnie Gray were named insureds
on the homeowner's insurance policy issued by plaintiff Cooperative Fire
Insurance Association of Vermont (Cooperative).  Victor Gray, as their
resident minor son, was also covered under that policy.  The Grays requested
Cooperative to defend them in the case filed by the Sanders.  Cooperative
filed this declaratory judgment action seeking relief from liability and
from the obligation to defend.  The court granted summary judgment in
Cooperative's favor, and the Grays appeal that ruling.
     Laurie Gray was the owner of the automobile policy issued by American
Protection Insurance Company (American).  Victor's car was not listed on the
policy, and was insured under a separate policy.  The Grays filed a third-
party complaint requesting a declaratory judgment that American was required
to defend and cover them in the action by the Sanders.  American moved for
summary judgment, claiming that the automobile policy excluded coverage in
this case.  The motion was denied, and American appeals that ruling.
     We affirm the trial court's ruling as to Cooperative and reverse and
remand as to American.
                                    I.
     We first address the Grays' contention that the trial court should have
required Cooperative to defend them under the provisions of their home-
owner's insurance policy.
     We note at the outset that the duty of Cooperative and American to
defend the Grays under the relevant policies "'is measured by the allega-
tions upon which the claim is stated.'" Commercial Union Insurance Co. v.
City of Montpelier, 134 Vt. 184, 185,