Opinion ID: 902010
Heading Depth: 1
Heading Rank: 4

Heading: Implied Permission Under the Permittee/Second Permittee Theory

Text: [¶ 14.] Jozette argues that coverage is also available under the theory that Brittany and Jacob, as permittees of their parents, either expressly or impliedly consented to Shane and Jozette's use of the ATV. It is generally held that if a permittee exercises broad dominion and control over an insured vehicle, even if not a named insured, that permittee can be found to have the authority to grant permission to a third party to use the vehicle. See Allied Group v. Allstate Ins. Co., 123 Idaho 733, 852 P.2d 485 (1993); Subscribers at the Auto. Club Inter-Ins. Exchange v. McClanahan, 607 S.W.2d 718 (Mo.1980); American Mut. Fire Ins. Co. v. Reliance Ins. Co., 268 S.C. 310, 233 S.E.2d 114 (1977); Foote v. Douglas County, 29 Wis.2d 602, 139 N.W.2d 628 (1966). See also State Farm Mut. Auto. Ins. v. Auto. Underwriters, Inc., 371 F.2d 999 (7th Cir. 1967). We have adopted this theory of liability concluding that the first permittee is merely a conduit through which implied permission flows from the named insured to the second permittee. Ragatz, 1997 SD 123, ¶ 22, 571 N.W.2d at 159. However, this theory is qualified. The second permittee's implied permission is limited to situations where the delegated authority is not in violation of the named insured's restrictions. For example: If the owner of the car expressly forbids the permittee to lend his car to another, but the permittee nevertheless allows a second permittee to drive the car in violation of the named insured's express orders, the insurer is not liable while the second permittee is driving, on the theory that a prohibition against delegation is a restriction upon the use of the vehicle. [Therefore, the second permittee] is not an omnibus insured. Id. ¶ 18, 571 N.W.2d at 159 (citing 12 Couch on Insurance 2d (RevEd) § 45:410, at 778 (1981)). [5] In applying this limitation, we adopted the minor deviation rule. Under that rule, once permission is conferred, the protection afforded by the omnibus clause will not terminate unless the permittee commits a material violation or deviation from the terms of the permission conferred or contemplated at the time permission was given in the first instance. Id. ¶ 24, 571 N.W.2d at 160 (citation omitted). [¶ 15.] Under the permittee theory, we must first determine whether Shane had permission from Jacob or Brittany. Although State Farm concedes that Jacob had permission to operate the ATV on the day of the accident, State Farm argues that Shane was not Jacob's permittee because the undisputed material facts of this case reveal that Shane ... lacked permission [from Jacob] to use the Hansons' ATV[.] For purposes of summary judgment, we disagree. We believe that there is a genuine issue of disputed fact concerning this issue. [¶ 16.] There is testimony in the record inferentially indicating that Jacob not only acquiesced to Shane's use of the ATV, he allowed it. Jacob testified that Shane could drive the ATV at the Hickman farm without his parents' permission, so long as Shane remained around Jacob: Q: You're there (at the Hickman farm), and they (Shane and Jozette) have your permission as long as they follow your rules and stay around you; correct? A: Yes. Yes. Shane also testified that Jacob could have stopped us before we left [on the ATV], and that Jacob pretty much knew. [He] pretty much had it figured out what we were going to do. Shane finally indicated that he understood he had Jacob's permission: Q: Okay. There is a difference between [Jacob] knowing and [Jacob] giving permission. Did you think you had Jacob's permission to drive that four-wheeler that afternoon? A: Yes. (Emphasis added.) Moreover, there is record evidence that Brittany twice gave Shane express permission to drive the ATV on the day of the accident. Therefore, Jozette presented sufficient conflicting evidence for a jury to determine whether Jacob and/or Brittany gave Shane permission to operate the ATV that day.