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IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

September 8, 2004 Session

LUDMILLA LAMBRIGHT, ET AL. v. NATIONAL UNION FIRE

INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA

 Appeal from the Chancery Court for Montgomery County

No. 2001-01-0085 Carol Catalano, Chancellor

No. M2003-02133-COA-R3-CV - Filed February 3, 2005

All parties sought declaratory judgment as to whether or not driver Michael George Eberly was an

omnibus insured under the permissive user provisions of his employer’s policy of insurance at the

time of the accident in issue. The Chancellor in non-jury trial found that Eberly had only engaged

in a “minor deviation” from employer restrictions on his permissive use of the vehicle, and required

National Union Fire Insurance Company to protect Eberly as an omnibus insured under the policy.

We reverse the action of the trial court.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court

Reversed and Remanded

WILLIAM B.CAIN,J., delivered the opinion of the court, in which PATRICIA J.COTTRELL and FRANK

G. CLEMENT, JR., JJ., joined.

Robert Orr, Nashville, Tennessee, for the appellant, National Union Fire Insurance Company of

Pittsburgh, Pennsylvania.

Peter M. Olson, Clarksville, Tennessee, for the appellees, Ludmilla Lambright and Antonio

Lambright.

C. Benton Patton, Nashville, Tennessee, for the appellee, United Services Automobile Association.

Frank Thomas, Nashville, Tennessee, for the appellee Michael George Eberly.

John Thomas Feeney, III, Nashville, Tennessee, for the appellee, Progressive Insurance Company.
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OPINION

National Union Fire Insurance Company filed a declaratory judgment action, naming

Ludmilla Lambright and husband, Antonio Lambright, and Michael George Eberly as defendants and

seeking a determination of whether or not Michael George Eberly was afforded insurance coverage

under the omnibus clause of the National Union policy. The Lambrights answered and filed a cross

claim against their own uninsured motorist carrier, Union Services Automobile Association (USAA).

They also joined Progressive Insurance Companyas a defendant since Progressive was the insurance

carrier for Michael George Eberly as to his private automobile. USAA answered. Progressive then

answered and cross claimed against Eberly, seeking to avoid its coverage of Eberly under his private

vehicle policy. National Union then voluntarily non-suited its declaratory judgment action, after

which the Eberlys instituted their own declaratory judgment action against National Union and

Eberly. National Union then filed its motion for summary judgment against the Lambrights and

Eberly, and over the next several months USAA and Progressive responded to National Union’s

motion for summary judgment, with Progressive supporting the motion and USAA opposing the

motion. The Lambrights then filed their opposition to the motion for summary judgment. Since the

final judgment in the case held that Eberly was an omnibusinsured under the National Union policy,

the court likewise held that the Lambrights were not entitled to any relief against their uninsured

motorist carrier, USAA, and further held that Eberly had no claim against Progressive as an insurer

relative to his private vehicle. 

In a rather unorthodox procedure the trial court, with the consent of all parties, converted a

scheduled hearing on a motion for summary judgment into a non-jury trial on the merits. The

controlling facts in the case are all but undisputed. GTE Government Systems Corporation

employed Michael George Eberly in 1989 because of his skill and experience as a service technician

concerning radio and other communications equipment. On his employment application, Eberly

disclosed to GTE that he had two prior convictions for driving under the influence of an intoxicant.

His duties for GTE involved providing technical assistance to the Army at Ft. Campbell, Kentucky.

Beginning in 1992, GTE provided Eberly with a company-owned vehicle for Eberly’s use in

providing technical support service to the U.S. Army. 

Eberly was permitted possession, control and use of a GTE company vehicle from that date

in 1992 until he was involved in the accident in issue in this case which occurred January 15, 1999.

Among Eberly’s duties was to be “on call” twenty-four hours a day. Thus, Eberly was required as

a condition of his employment to drive his service vehicle to and from his home and place of work.

GTE entrusted Eberly with all responsibility for the upkeep of the vehicle subject to reimbursement

by GTE of the cost of such maintenance. GTE also imposed a policy limiting Eberly from personal

use of the vehicle. GTE also maintained a policy prohibiting the use of a GTE vehicle at any time

that the driver had consumed or was consuming alcohol. 

On January 15, 1999, Eberly was returning from work to his home on the ordinary road route

that he customarily traveled and was within the timeframe that he ordinarily returned to his home

from work. En route to his home, Eberly stopped at the Golden Nugget Lounge where he consumed
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four cans of beer over a one-hour period of time. The location of the lounge was on the road route

customarily traveled byEberly from work to his home. After his stop at the Golden Nugget Lounge,

Eberly resumed his customary road route toward his home. He stopped at a Texaco station to

purchase gasoline with a credit card provided by GTE. He then resumed his customary road route

home, but before arriving at his home he struck the vehicle driven byLudmilla Lambright in the rear.

After the wreck, Eberly registered a .15 blood alcohol content in a breath alcohol test. He pleaded

guilty thereafter to driving under the influence of an intoxicant, resulting in loss of driving privileges

and the necessity of obtaining a restricted drivers license. At the time of the wreck on January 15,

1999, Eberly was aware of the GTE policy prohibiting operation of the company vehicle after

ingesting alcoholic beverages.

Following the accident, Eberly tendered his resignation to his supervisor, Richard Kluck, who

felt that termination of employment was necessary. Regional Manager Cooper, however, chose to

suspend Eberly for three days and possibly withhold a pay raise rather than to terminate his

employment.

The trial court, relying heavily on the employer’s post-accident decision to impose minimal

discipline upon Eberly, determined that his conduct constituted a “minor deviation” from his

permissive user and that such deviation did not disqualify him from insurance coverage under the

omnibus clause of his employer’s insurance policy. National Union Fire Insurance Company filed

a timely appeal.

The as yet unresolved question of respondeat superior of the employer, GTE, for the actions

of Michael George Eberly is not before the court in this declaratory judgment proceeding. That

question will be resolved in the parallel tort case presently pending in the Circuit Court for

Montgomery County, Tennessee, between Ludmilla Lambright and husband, Antonio Lambright,

plaintiffs, and GTE and Michael George Eberly, defendants. This case solely deals with whether or

not National Union Fire Insurance Company must extend coverage to and defend Michael George

Eberly individually under the “omnibus clause” of its insurance policy issued to GTE as named

insured.

Deviation from his route to his home from his place of work has little to do with Eberly’s

status as an omnibus insured under the policy. It is his intoxication while driving his employer’s

vehicle that is determinative. Eberly admits that at the time ofthe accident he had been long familiar

with GTE’s express instructions prohibiting personal use of the vehicle and its further rule

prohibiting driving its vehicles after consuming any alcohol. 

We must reiterate that we are not concerned with Eberly’s violation of the two policies

prohibiting personal use of a company vehicle and operation of a company vehicle after consumption

of alcohol as those policies relate to whether or not Eberly was driving the vehicle within the scope

of his employment by GTE and was on the business of his employer at the time of the accident.

Those questions will be resolved in the tort action. We are dealing here solely with a determination

of whether or not Eberly is an omnibus insured under the permissive user clause of the National
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Union Fire Insurance Company policy. Resolution of this issue is personal to Michael George

Eberly and is not determinative of National Union’s obligation to provide coverage to its named

insured, GTE, in the tort action. 

While both Moore v. Liberty Mut. Ins. Co., 246 S.W.2d 960 (Tenn. 1952) and Tenn. Farmers

Mut. Ins. Co. v. Witt, 857 S.W.2d 26 (Tenn. 1993) concern insured status of drivers who were

driving under the influence of alcohol, neither of those cases involve the omnibus status of a person

driving under the influence of an intoxicant at a time when he had full knowledge of his employer’s

strict rules against personal use of the vehicle or against use of the vehicle after he had consumed

alcohol.

Cases from other jurisdictions are enlightening and somewhat diverse. General Accident Ins.

Co. of America v. Margerum, 544 A.2d 512 (Pa. Super. Ct. 1988) was a declaratory judgment action

under facts quite similar to the case at bar. Peter S. Hricko owned a roofing company and employed

Ira Margerum, whom he considered a dependable employee, as a roofer. 

In mid-January, with the onset of unfavorable winter weather, Hricko offered a van

to Margerum with the following instructions: that it be used solely for commuting

between home and work, that Margerum not drink and drive, and that the van not be

used for personal reasons.

Margerum, 544 A.2d 512, 513.

On January 22, 1982, Margerum requested permission to leave work early in order to attend

his sister’s wedding. Hricko granted the request but specifically instructed Margerum not to take the

van to the reception and not consume alcoholic beverage while driving the van. Margerum followed

these instructions using other means of transportation until he got home from the wedding, then

packed his clothes and drove the van about seven miles toward his fiancee’s residence where he

intended to spend the night. The residence of his fiancee was on the same route he would take to

return to the roofing company, but before he reached her residence he struck and killed a pedestrian

walking along the road. At the time of the accident Margerum was intoxicated, having steadily

consumed alcohol at the wedding reception. He was subsequently charged and convicted of driving

under the influence.

The trial court held that Margerum was an omnibus insured under the policy and General

Accident Insurance Company appealed. The superior court on appeal held that the physical

deviation by Margerum was not a substantial deviation from Hricko’s permission but reversed the

judgment of the trial court as to driving under the influence. Said the court:

Nevertheless, the court erred in concluding that there was no substantial deviation

from Hricko’s permission. By driving under the influence of alcohol, Margerum

violated an express specific restriction on his use of the van. Hricko’s reiteration of

the restriction the day before the accident indicates that the restriction was not
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inconsequential. Since Margerum violated an express specific restriction of Hricko’s

permission to use the van, his deviation in use from Hricko’s express permission was

a substantial deviation. As a result, Margerum is not an insured under General

Accident’s policy with Hricko.

Margerum, 544 A.2d at 514.

Three years after Margerum was decided, the U.S. Court of Appeals for the Third Circuit

applied this rule in Hall v. Wilkerson, 926 Fed. 2d 311 (Third Ct. 1991). The vigorous dissenting

opinion of Senior District Judge Fullam was acknowledged but rejected by the majority in Hall,

which held Margerum to be controlling. Said the majority:

We are not insensitive to the policy concerns forcefully expressed by the dissent.

However, we are not free in diversity cases to apply our own notion of policy, but

must predict that which is likely to be accepted by the Pennsylvania Supreme Court.

The dissent suggests that that court will not accept the holding of the only

Pennsylvania Appellate Court to speak to the issue. We are not convinced that the

Superior Court’s Margerum decision is so far out of the mainstream of state law that

it will be rejected by the Supreme Court.

Hall v. Wilkerson, 926 F.2d 311, 316 (Third Cir. 1991).

In a later case based on diversity jurisdiction, the U.S. District Court for the Eastern District

of Pennsylvania again followed Margerum in a case in which a driver, in direct violation of his

employer’s known rule against driving a vehicle while intoxicated, was denied omnibus coverage.

Tico Ins. Co. v. March, 155 Supp.2d 441 (E. D. Penn. 2001).

Two reported decisions from sister jurisdictions are directly in point as to the issues involved

in the case at bar. See Warner Trucking, Inc. v. Carolina Cas. Ins. Co., 686 N.E.2d 102 (Ind.1997)

and Barfield v. Royal Ins. Co. of America, 492 S.E.2d 688 (Ga. App. 1997).

Warner Trucking involved a car/truck collision with the following facts:

The plaintiffs-appellees, Carl and Sheri Hall, were injured when their

automobile collided with a truck owned by the defendant-appellant Warner Trucking,

Inc., and driven by its employee, Carl Manuel. The Halls brought an action for

damages against Warner Trucking and its driver. The Halls alleged vicarious liability

against the trucking company on grounds that the driver was working within the

scope of his employment when the accident occurred. Warner Trucking’s liability

insurance carrier, Carolina Casualty Insurance Company, brought a separate action

for declaratory judgment to establish that it had no obligation under its insurance

contract with Warner Trucking to defend or provide coverage for the claims seeking

to impose personal liability upon the employee-driver.
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Warner Trucking Co., 686 N.E.2d at 104.

Making the critical distinction between respondeat superior liability of Warner for the acts

of the driver Manuel on the one hand, and the status of Manuel as an omnibus insured under the

policy on the other hand, the Supreme Court of Indiana held:

Contrary to Warner Trucking’s argument, the existence of a rule prohibiting

behavior is not solely determinative. An employer is vicariously liable for the

wrongful acts of employees committed within the scope of employment. Stropes by

Taylor v. Heritage House Childrens Center of Shelbyville, Inc., 547 N.E2d 244, 247

(Ind. 1989). The critical inquiry is not whether an employee violates his employer’s

rules, but whether the employee is in the service of the employer. Even though an

employee violates the employer’s rules, orders, or instructions, or engages in

expressly forbidden actions, an employer may be held accountable for the wrongful

act if the employee was acting within the scope of employment. See Eagle Motor

Lines, Inc. v. Galloway, 426 N.E.2d 1322, 1325 n. 3 (Ind. Ct. App. 1981); Mock v.

Polley, 116 Ind. App. 580, 586-87, 66 N.E.2d 78, 81 (1946); The Pittsburgh,

Cincinnati and St. Louis Ry. Co. v. Kirk, 102 Ind. 399, 402, 1N.E. 849, 852 (1885).

Acts done “on the employee’s own initiative, with no intention to perform it as part

of or incident to the service for which he is employed” are not “in the service of the

employer” and are thus outside the scope of employment. Stropes, 547 N.E.2d at 247

(citations omitted). However, an employee’s wrongful act may still fall within the

scope of his employment if “his purpose was, to an appreciable extent, to further his

employer’s business, even if the act was predominantly motivated by an intention to

benefit the employee himself” or if the employee’s act “originated in activities so

closely associated with the employment relationship as to fall within its scope.” Id.

Warner Trucking’s vicarious liability for the acts of its driver therefore does not

depend upon the driver’s permission to drive, but rather upon the relationship of the

driver’s activities to the business of Warner Trucking. 

Warner Trucking Co., Inc., 686 N.E.2d at 105.

The Indiana Supreme Court then addressed Carolina Casualty’s motion for summary

judgment as to the driver, Manuel, under the omnibus clause of its policy. Said the court:

In its declaratory judgment action, Carolina Casualty does not question its

contractual obligation to provide coverage for Warner Trucking, but seeks to

establish that its insurance policy provides no coverage for liability that may be

personally imposed upon the driver of the Warner Trucking vehicle involved in the

accident. Carolina Casualty contends that its summary judgment motion should have

been granted because the policy provides no coverage for the personal liability of

employees driving a company vehicle without permission. Carolina Casualty’s claim

of no coverage is based not upon the issue of scope of employment, but rather upon
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its contention that the employee drove contrary to Warner Trucking’s express rule

denying permission to drivers who had been drinking.

. . . .

The materials designated for consideration in the summary judgment

proceeding included Warner Trucking’s previously noted rule that “no driver was

allowed to drive a company vehicle if the driver had consumed any alcoholic

beverage that day, regardless of quantity consumed.” . . . The Halls do not challenge

the evidence that the driver was seen consuming alcohol and they designate no

evidentiary materials challenging the existence, nature, or content of the rule

prohibiting driving after consumption of alcohol. Nor do they raise any issue as to

whether Warner Trucking actually communicated this rule to its driver or whether

the rule was consistently enforced. In response to Carolina Casualty’s claim that the

rule expressly restricted the grant of permission, the Halls only point to the fact that

Warner Trucking had provided its driver with his own set of keys to the truck, that

he had an early delivery scheduled for June 15, that the company had provided cash

to purchase fuel, and that drivers regularly filled their tanks with fuel before making

their run.

While these matters may be relevant to whether the employee acted within the

scope of the employment, they are insufficient to contradict the designated materials

which establish that the Warner Trucking driver’s use of the company truck was

restricted in the first instance – when he began to use the company truck after

consuming alcohol. As recognized in Gonterman, implied permission is inadequate

as a matter of law to overcome Warner Trucking’s express restriction upon

permission in the first instance. Gonterman, 637 N.E.2d at 814. Thus, because there

is no issue of fact regarding the driver’s violation of the company rule restricting

permission, the Halls’ claim of implied permission fails. There is no genuine issue

of material fact as to the application of section (D)(2) defining “who is insured” in

the Carolina Casualty insurance policy. The driver is not an insured under this

provision. 

Warner Trucking, Inc., 686 N.E.2d at 106-7 (footnotes omitted).

The court then affirmed the denial of Warner Trucking’s motion for summary judgment as

to respondeat superior and remanded the case to the trial court with instructions to grant the summary

judgment motion of Carolina Casualty under the omnibus clause of the policy. 
The Barfield case from Georgia was issued October 1, 1997, while the Warner Trucking, Inc., opinion

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from Indiana was issued October 7, 1997.

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The same issues were before the Court of Appeals of Georgia in Barfield, et al. v. Royal Ins.

Co. of America, et al., 492 S.E.2d 688 (Ga. App. 1997). This was a declaratory judgment action 1

brought by Royal Insurance Company and its named insured, Single Source Roofing Corp., to

determine their liability for damages arising from an automobile accident involving Single Source’s

employee, Andrew Fisher, who was a named defendant in the case. The other named defendants in

the case were Billy Barfield and other occupants of four vehicles, these occupants having been

injured in an automobile wreck with a Single Source vehicle driven by Andrew Fisher. The driver,

Fisher, had express instructions not to drive the vehicle after drinking. The trial court granted

summary judgment to Single Source under respondeat superior and to Royal under the permissive

user provisions of the omnibus clause in the policy. Based upon reasoning very closely parallel to

the reasoning in Warner Trucking, the Court of Appeals of Georgia held that summary judgment was

improperly granted as to respondeat superior. As to the omnibus clause of the policy and relying

on General Accident Ins. Co. of America v. Margerum, 544 A. 2d 512 (Penn. Super. Ct. 1988), the

Georgia Court held:

“Permissive use” clauses such as the one in Royal’s policy are valid, even

where the named insured can limit the scope of the permission through instructions,

rules, or regulations. See Massachusetts Bay. Ins. Co. v. Wooten, 215 Ga. App. 386,

387(1), 450 S.E.2d 857 (1994). On several occasions, this Court has held that where

a driver uses a vehicle with permission, but violates the scope of the permission

granted by engaging in activity the named insured has expressly forbidden, the driver

is not an “insured” under the permissive use clause of a policy such as Royal’s for

any collision occurring during the driver’s unauthorized use. See, e.g., Wooten, 215

Ga. App. at 387-388, 450 S.E.2d 857; Select Ins. Co. v. Register, 192 Ga. App. 145,

147, 384 S.E.2d 238 (1989).

Both Wooten and Register involved drivers who used the insured vehicle for

a purpose forbidden by the owner. Here, although Fisher used the truck in an

unauthorized manner by driving it while under the influence of alcohol, we find the

rationale of the prior cases applicable. “[T]here is an absence of permission within

the meaning of the policy if the vehicle is being driven at a time or a place or for a

purpose not authorized by the insured.” (Citation and punctuation omitted.)

Register, 192 Ga. App. at 147, 384 S.E.2d 238. The test of permission under the

provision at hand is an objective one, and does not involve the question of whether

Fisher “reasonably believed” he had permission to drive the truck. See Hurst v.

Grange Mut. Cas. Co., 266 Ga. 712, 713(1), 470 S.E.2d 659 (1996). Because the

uncontradicted evidence shows Single Source told Fisher he could not drive the

vehicle when he was drinking, his use of the vehicle at a time he was admittedly

under the influence of alcohol was unauthorized and non-permissive.
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Barfield v. Royal Ins. Co. of America, 492 S.E.2d 688, 690-91(Ga. App. 1997).

The Court of Appeals of Missouri took a position directly contrary to the rules set forth in

Margerum, Warner Trucking, and Barfield, holding under Missouri law:

Relying on Sullivan and Lewellen, we find the omnibus clause in Employer’s

policy extended coverage to Hyman for this accident despite his violation of

Employer’s rule against drinking alcohol while driving the van. 

In reaching this conclusion, we have not ignored cases cited by United from

other jurisdictions which hold that an employee who uses his employer’s vehicle

while under the influence of alcohol, in violation of an express specific restriction

against such use, substantially deviates from the original use, and, thus, the employee

is not insured under the employer’s policy. See, e.g., General Accident Ins. Co. of

Am. v. Margerum, 375 Pa. Super. 361, 544 A.2d 512 (1988); Warner Trucking, Inc.,

v. Carolina Cas., 686 N.E.2d 102 (Ind. 1997); Barfield v. Royal Ins. Co. of Am., 492

S.E.2d 688 (Ga. App. 1997). When there is no controlling authority from Missouri

courts, we may look to judicial decisions of sister states for assistance in discovering

expressions of public policy. Eyerman v. Mercantile Trust Co., 524 S.W.2d 210,

217[9] (Mo. App. 1975). Earlier in this opinion, we did rely on foreign authority for

guidance. However, opinions of courts of other states, even on similar facts, do not

have controlling effect. Triplett v. Shafer, 300 S.W.2d 528, 530 (Mo. App. 1957).

“Like witnesses, foreign authority should be weighed and not counted.” Michigan

Mut. Liab. Co. v. Stallings, 523 S.W.2d 539, 545[6] (Mo. App. 1975). This court

adopts the views expressed in Sullivan and Lewellen rather than those stated in

Margerum, Warner Trucking, and Barfield. We do so in the belief that Sullivan and

Lewellen are in harmonywith Missouri’s public policy concerning liability coverage

for negligent motor vehicle operators. See Halpin v. Am. Family Mut. Ins. Co., 823

S.W.2d 479, 482[4] (Mo. Banc 1992).

United Fire and Cas. Co. v. Tharp, 46 S.W.3d 99, 107-8 (Mo. App. 2001).

While there is a certain parallelism between respondeat superior under agency principles and

permissive user under omnibus insurance clauses, the law as to each is separate and distinct.

Tennessee law as to the scope of permissive user under an omnibus clause is considered at length

in Estate of Adkins v. White Consolidated Ind., Inc., et al., 788 S.W.2d 815 (Tenn. Ct. App. 1989).

Subsequent cases have considerably narrowed the scope of “the liberal initial permission or hell or

high water rule . . .” See Estate of Adkins, 288 S.W.2d at 817(quoting Couch, G., Couch on

Insurance 2d, § 45:464 at 845-46 (1981 and Supp. 1988) (footnotes omitted) This rule enunciated

by our Supreme Court in Stovall v. New York Indemn. Co., 8 S.W.2d 473 (Tenn. 1928) provided that

when the owner’s permission was granted initially what happened thereafter was immaterial for

omnibus clause purposes. 
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If . . . the automobile covered by the policy is delivered to another for use,

with the permission of the owner or insured, his subsequent use of it is with the

permission of the insured, within the meaning of the policy, regardless of whether the

automobile is driven to a place or for a purpose not within the contemplation of the

insured when he parted with possession. 

Stovall, 8 S.W.2d at 477.

The supreme court retreated from Stovall in Hubbard v. U.S. Fidelity & Guaranty Co., 240

S.W.2d 245 (Tenn. 1951). Repetition of the analysis of cases subsequent to Stovall such as appears

in Estate of Adkins is unnecessary to a decision in this case. It is enough to say that Stovall and its

progeny apply only to cases where the initial permissive user is broad and unrestricted. Said the

court in Adkins:

In Moore v. Liberty Mut. Ins. Co., 193 Tenn. (29 Beeler) 519, 246 S.W.2d

960 (1952), the Supreme Court again clarified the permission rules in Hubbard,

Stovall, and an unreported case, Romines v. The Preferred Accident Ins. Co., decided

November 26, 1932. According to the Moore Court, Hubbard and Romines held:

[W]here one has only limited permission of the owner to use the car in a

specified area for a limited time and particular purpose and does not have

general discretion as to the use of the car, then the coverage of the omnibus

clause is not extended to his use of the car any place or for a purpose not

consented to nor reasonably contemplated by the owner in giving the initial

permission.

193 Tenn. at 522, 246 S.W.2d at 961 (emphasis added).

In Moore, the employee truck driver had his employer’s limited permission

to personally use the truck after hours to move furniture within the city of Nashville.

Instead, he went on an entirely different and independent mission to Murfreesboro,

drank whiskey with a friend, and was involved in an accident. The court found that

the employee was not acting with the permission of the named insured and therefore

there was no coverage under the policy. The Hubbard, Romines, and Stovall cases

“turn upon the distinction of general custody and limited permission.” Id.

Shortly after the Moore decision was announced, the Sixth Circuit Court of

Appeals addressed the same issue in Branch v. U.S. Fidelity & Guaranty Co., 198

F.2d 1007, 1011 (6 Cir. 1952). The court noted that Tennessee had adopted the th

liberal initial permission rule in Stovall in 1928, but that the Caldwell, Romines,

Hubbard, and Moore cases limit the broad rule as stated in Stovall. The Branch court

stated:
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In our opinion, the controlling rule of law in Tennessee, as it

presently exists, is as expressed in the case of Moore v. Liberty

Mutual Ins. Co., supra, its latest ruling on the question, which draws

the distinction between general custody of and limited permission to

use the insured automobile, rejecting the earlier rule announced in the

Stovall case that liability exists where the original possession of the

car was with the permission of the owner, regardless of its

unauthorized and unanticipated use thereafter.

198 F.2d at 1011.

Estate of Adkins v. White Consol. Ind., et al., 788 S.W.2d 815, 819 (Tenn. Ct. App. 1989).

Tennessee cases involving use of alcohol point clearly in the direction of the rules set forth

in Warner and Barfield. Closest by analogy is Moore v. Liberty Mut. Ins. Co., 246 S.W.2d 960

(Tenn. 1952). However, the court in the Moore case did not specifically address any issue about the

use of alcohol nor does the opinion show any specific rule of the employer about the use of alcohol.

In Tenn. Farmers Mut. Ins. Co. v. Witt, 857 S.W.2d 26 (Tenn. 1993), a policy of insurance

was issued to Ronald Witt, who was, in fact, the driver of the automobile at the time of the accident.

While Witt and a fellow employee, Robert Michalski, were on the business of their employer,

Michalski leased an automobile from a Hertz rental agency. At the time of the accident, Witt was

driving the automobile with the permission of Michalski and was driving under the influence of

alcohol. This vehicle qualified as “a non-owned auto” under the Tennessee Farmers Mutual policy

issued to Witt. The position of Tennessee Farmers Mutual is a bit puzzling:

Tennessee Farmers Mutual contends that the operation of the vehicle while

under the influence of alcohol was not use of the vehicle “within the scope of the

consent of the owner” as required by the insurance contract and, therefore, coverage

was excluded. It implicitly acknowledges that the policy extended coverage to the

leased vehicle as “a non-owned auto” while operated by Witt, except when Witt was

under the influence of alcohol. Its argument apparently is that coverage ceased at

such time as the insured became under the influence of alcohol because he then no

longer had the owner’s consent to operate the rental car. 

Witt, 857 S.W.2d 26 at 29.

Holding that Witt’s permission to drive the automobile was general and without limitation, the

supreme court found that he was covered under his own policy of insurance.

Here, Witt’s permission as an “authorized driver” to use the vehicle without

limitation as to time, place, and purpose constitutes general custody of the vehicle.

At the time of loss, Witt was an authorized operator. His operation of the vehicle
At the time of the accident TCA § 55-10-408 provided that (.10%) weight of blood alcohol created the 2

presumption. The statute was amended by Chapter 855 of the Public Acts of 2002 to reduce the weight of alcohol

level to (.08%).

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while under the influence of alcohol did not violate any provision of the lease

contract regarding time, place, or purpose of use. Nor did the circumstances of his

operation of the vehicle, while under the influence of alcohol, convert the general

custody bailment into one of limited permission. He still had the owner’s consent to

operate the vehicle, though he did not have permission to operate it while under the

influence of alcohol. 

Witt, 857 S.W.2d 26, 31. The Witt case sheds very little light on permissive user under the omnibus

clause of an insurance policy. 

In this case, Eberly was well aware for many years of his employer’s policies prohibiting

personal use ofits vehicle and specificallyprohibiting anyone to drive a company vehicle at any time

after consuming alcohol. Driving home from work he stopped and consumed enough alcohol to

register a .15 on the intoximeter. He then re-entered the company vehicle, drove to a service station,

filled the truck with gasoline and proceeded on toward his home. The collision occurred before he

could reach home. He does not deny that he drank alcohol before resuming his journey home.

While he denies that he was under the influence of alcohol, he pleaded guilty to driving under the

influence.

We believe that the policy most in conformity with existing Tennessee law and the more

sound policy is to follow Margerum, Warner and Barfield in holding that driving under the influence

of an intoxicant, in and of itself, in violation of express rules of the employer is fatal to the driver’s

status as a permissive user under the omnibus clause of an insurance policy. 

Under the Margerum, Warner and Barfield analysis, time, place and purpose in the use of

the vehicle have little relevance. If Eberly, with permission to drive the vehicle to his home, had

driven in a straight route from work to home and, without deviating from that route, had taken

alcoholic beverages from the glove compartment of the truck and consumed them en route, time,

place and purpose remained within the scope of his permissive use. What exceeds the scope of his

permissive use for omnibus insured purposes is his consumption of alcohol in violation of the

limitations imposed upon him by his employer. This is not to say that the “zero tolerance” policy

of the employer rule automatically controls the issue. The logical result of such a holding would be

that the driver stopping for holy communion en route to his home would lose his omnibus insured

status. The employer rule relative to the use of alcohol is subject to the same “minor deviation” rule

as is applicable to personal use of the vehicle in violation of an employer rule. In this case, Eberly

consumed alcohol to the extent that his blood alcohol level was one and one-half times the statutory

level creating presumptive impairment. 

2

Whether or not National Union Fire Insurance Company must answer to the plaintiffs in

damages for the conduct of Eberly must wait the determination in the tort case of respondeat superior

issues. The only issue in this case is whether or not Eberly is an omnibus insured under the National
13

Union policy under its permissive user provisions. His voluntary intoxication in violation of his

employer’s rules disqualifies him from such status.

The judgment of the trial court is reversed and judgment will be entered in favor of the

National Union Fire Insurance Company. The case is remanded for such further proceedings as may

be necessary. Costs of the appeal are assessed to Ludmilla Lambright and Antonio Lambright.

___________________________________ 

WILLIAM B. CAIN, JUDGE