Opinion ID: 2219657
Heading Depth: 1
Heading Rank: 3

Heading: Coverage for Tuma.

Text: It is undisputed that Tuma is an insured under the insurance policy. Farm & City contends, however, there is no liability coverage for Tuma because of a policy exclusion stating coverage is not provided for any person [u]sing a vehicle without a reasonable belief that that person is entitled to do so. Farm & City urges that, as a matter of law, Tuma could not have had a reasonable belief that he was entitled to drive Gary's vehicle because he was unlicensed, underage, had previous driving convictions, and had consumed four bottles of beer. Insurance policy exclusions are strictly construed against the insurer. Kalell v. Mutual Fire & Auto. Ins. Co., 471 N.W.2d 865, 867 (Iowa 1991); IMT Ins. Co. v. Amundsen, 376 N.W.2d 105, 107 (Iowa 1985). Although coverage clauses are given a broad and comprehensive meaning, exclusionary clauses are given a narrow or restrictive construction. Grinnell Mut. Reinsurance Co. v. Employers Mut. Casualty Co., 494 N.W.2d 690, 693 (Iowa 1993); Kalell, 471 N.W.2d at 867. The insurer must define exclusions in clear and explicit terms and bears the burden of proving the applicability of an exclusion. West Bend Mut. Ins. Co. v. Iowa Iron Works, 503 N.W.2d 596, 598 (Iowa 1993); Kalell, 471 N.W.2d at 867; First Newton Nat'l Bank v. General Casualty Co., 426 N.W.2d 618, 628 (Iowa 1988). If exclusionary language is not defined in the policy, we give the words their ordinary meaning. West Bend, 503 N.W.2d at 599; Kalell, 471 N.W.2d at 867; Amundsen, 376 N.W.2d at 107. We will determine what the insured as a reasonable person would understand the policy to mean, rather than what the insurer actually intended. First Newton, 426 N.W.2d at 628. An exclusion that is clear and unambiguous must be given effect. Essex Ins. Co. v. Fieldhouse, Inc., 506 N.W.2d 772, 776 (Iowa 1993). If an exclusion is fairly susceptible to two reasonable interpretations, the exclusion is ambiguous and the interpretation most favorable to the insured will be adopted. A.Y. McDonald Indus. v. I.N.A., 475 N.W.2d 607, 618-19 (Iowa 1991); Amundsen, 376 N.W.2d at 107. The exclusionary language, using a vehicle without a reasonable belief that that person is entitled to do so, contain words or phrases not defined in the Farm & City policy. There is no definition for the term entitled nor is there a definition for the phrase reasonable belief. Applying the term entitled to the facts of this case leads to more than one reasonable interpretation. Entitled could mean a legal right or authority to drive under the applicable law. Under this definition, a person must have a valid driver's license to reasonably believe that he is entitled to use a vehicle. Another equally reasonable interpretation is consent or permission from the vehicle owner or apparent owner. Finally, entitled could require both consent and legal entitlement. We find that the term entitled in the policy exclusion is ambiguous and we adopt the interpretation most favorable to the insured. Accordingly, coverage is excluded when a person is using a vehicle without a reasonable belief that he or she had permission of the owner or apparent owner to do so. If Farm & City intended to exclude coverage for unlicensed drivers, it could have easily done so in clear and explicit terms. See 6C J. Appleman, Insurance Law and Practice § 4401, at 278 (1979). Other courts addressing identical exclusionary language under similar facts also found the exclusion to be ambiguous and adopted a similar interpretation. In State Farm Mutual Automobile Insurance Co. v. Moore, 375 Pa.Super. 470, 544 A.2d 1017, 1018 (1988), the daughter of the vehicle owner gave permission to an unlicensed friend to drive the vehicle. The insurer argued the term entitled in the exclusion means the person must have the owner's permission and a valid driver's license. Id. 544 A.2d at 1019. The court interpreted the exclusion to mean a person can reasonably believe he is entitled to use a vehicle once permission is obtained from the owner or a person in lawful possession of the vehicle. Id. at 1020. In Canadian Indemnity Co. v. Heflin, 151 Ariz. 257, 259, 727 P.2d 35, 37 (Ct.App.1986), the insurer argued that the driver could not have reasonably believed that he was entitled to drive the vehicle because he was unlicensed, underage, and speeding. The court interpreted the exclusion to mean coverage was excluded only where the insured was driving a non-owned vehicle without a reasonable belief that he had the permission of the apparent owner. Id. at 258, 727 P.2d at 36. In Safeco Insurance Co. v. Davis, 44 Wash. App. 161, 721 P.2d 550, 551 (1986), a fourteen-year-old girl was given permission to drive a car by an acquaintance who regularly drove his parents' car to school. The court found that the unlicensed girl had a reasonable belief that she was entitled to drive the vehicle. Id. 721 P.2d at 553. See also Cooper v. State Farm Mut. Auto. Ins. Co., 849 F.2d 496, 499 (11th Cir.1988) (under North Carolina law the legal right to drive is not a necessary prerequisite to establish a reasonable belief of entitlement under the exclusion); Safeway Ins. Co. v. Holmes, 194 Ga. App. 160, 390 S.E.2d 52, 54-55 (1989) (statute forbidding fifteen-year-old drivers to operate a vehicle unless accompanied by a licensed driver at least eighteen years old does not abrogate the fact a fifteen-year-old driver received permission to drive a vehicle from the appropriate source resulting in a reasonable belief that she was entitled to do so); State Auto. Mut. Ins. Co. v. Ellis, 700 S.W.2d 801, 802 (Ky.Ct.App.1985) (policy does not specify whether entitled means obtaining permission from the owner or whether a valid driver's license is also required); Aetna Casualty & Surety Co. v. Nationwide Mut. Ins. Co., 326 N.C. 771, 392 S.E.2d 377, 380 (1990) (a person knowingly driving a vehicle without a driver's license may nevertheless have a reasonable belief that he was entitled to use the vehicle). But see Safeway Ins. Co. v. Jones, 202 Ga.App. 482, 415 S.E.2d 19, 20 (1992) (an unlicensed driver could not have reasonably believed that he was entitled to drive any vehicle regardless of whether he had permission to do so). Other courts, also applying the exclusion to unlicensed drivers, have found the exclusion to be unambiguous by adopting a state of the mind approach. See General Accident Fire & Life Assurance Corp. v. Perry, 75 Md.App. 503, 541 A.2d 1340, 1348 (1988). These decisions, however, are distinguishable because the unlicensed drivers did not have proper permission to use the vehicle, while here, Brian clearly granted Tuma permission to drive the vehicle. See Cincinnati Ins. Co. v. Plummer, 213 Ga.App. 265, 444 S.E.2d 378, 379 (1994) (unlicensed driver took her mother's car keys without permission and knew she did not have permission to drive the car); Perry, 541 A.2d at 1341 (unlicensed driver, who was co-owner of the vehicle with his mother, took the vehicle without his parents' permission onto a public highway); Omaha Property & Casualty Ins. Co. v. Peterson, 865 S.W.2d 789, 790 (Mo.Ct.App.1993) (unlicensed driver not only did not have the owner's permission to drive the vehicle, but believed the owner did not want her to drive the vehicle); Newell v. Nationwide Mut. Ins. Co., 334 N.C. 391, 432 S.E.2d 284, 288 (1993) (driver's license had been permanently revoked and he was expressly forbidden to use any of his father's vehicles); Omaha Property & Casualty Ins. Co. v. Johnson, 866 S.W.2d 539, 540 (Tenn.Ct.App.1993) (unlicensed driver who was expressly forbidden to use his father's car took his father's car keys without permission). The district court found that Tuma was driving the vehicle with a reasonable belief that he was entitled to do so. He was driving the vehicle with the permission and at the request of Brian. Tuma could reasonably believe that Brian, who had been driving the vehicle regularly for all of his transportation needs, had authority to permit him to drive the vehicle. Tuma had ridden in the vehicle with Brian on numerous occasions prior to the accident and had driven the vehicle earlier that night and on at least one prior occasion. Although Tuma knew he did not have a driver's license and his actions violated traffic laws, he also believed he not only was driving with the permission of the apparent owner of the vehicle, but was doing so at the specific request of Brian. The actual owner of the vehicle, Gary, never instructed Tuma not to drive the vehicle nor instructed Brian not to allow others to drive the vehicle. We find there is sufficient evidence to support the court's finding. Construing the exclusion strictly against the insurer, we hold that Tuma had a reasonable belief that he was entitled to use the vehicle.