Opinion ID: 1255131
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Heading: negligent entrustment and the named driver exclusion

Text: Pierce next asserts that the named driver exclusion does not operate to bar coverage for Teresa's negligent entrustment. As interpreted by Pierce, the policy exclusion only applies to the negligence of Gerald. Oklahoma Property disagrees, pointing out that the exclusion is not limited to merely the damages caused by Gerald's negligence, but rather, as the express language of the clause states, the policy is not in force and effect when Gerald drives the vehicle. Oklahoma has long recognized the negligent entrustment theory of liability. Coker v. Moose, 180 Okla. 234, 68 P.2d 504 (1937); see also Bennett v. Morris Farrar Truck Co., 520 P.2d 705 (Okla. Ct. App. 1974). In Shoemake v. Stich, 534 P.2d 667, 669-70 (Okla. 1975), we explained that negligent entrustment occurs when an individual supplies a chattel for the use of another whom the supplier knows or should know is likely to use the chattel in a way dangerous and likely to cause harm to others. [4] Although it is the direct action of a different individual that causes the injury, the negligence of the supplier can be actionable as well. With this in mind we must decide whether the policy exclusion operates to shield the insurer from liability arising out of the negligent entrustment of the vehicle. We addressed a similar issue in Phillips v. Estate of Greenfield, 859 P.2d 1101 (Okla. 1993), with regard to a homeowners' liability policy. There the defendant was sued for negligent supervision of his son for injuries which arose out of the son's driving of a motorcycle. [5] The defendant confessed judgment, and the plaintiff then brought a garnishment action, seeking to recover from the insurer who provided homeowners' insurance. The insurer denied coverage, relying on a policy exclusion which stated that the homeowners' insurance did not extend to coverage of injuries arising out of the ownership or operation of a motor vehicle. The plaintiff urged that the theory of negligent supervision leapfrogged the exclusion, because it focused on the negligence of the supplier, rather than the negligence of the automobile driver. We disagreed, holding that the language applied to bar coverage, because the coverage does not turn on the legal theory under which liability is asserted, but on the cause of the injury. Id. at 1105 quoting Farmers Ins. Group v. Nelsen, 78 Or. App. 213, 715 P.2d 492, 494-495 (1986), rev. denied, 301 Or. 241, 720 P.2d 1280 (1986). Listing a number of jurisdictions which held similarly [6] , we stated that the claim of negligent supervision is intimately connected with the ownership and operation of the vehicle. To interpret the homeowner's policy to include such automobile coverage would expand the policy terms beyond those stated and agreed upon by the contracting parties. It would require us to rewrite the clear language of the policy or construe the plain language of the exclusion in a tortured fashion. Id. at 1106. Other courts which have considered the precise issue of whether a named driver exclusion precludes coverage for negligent entrustment have unanimously agreed that it does. Wilkerson v. Michael, 104 Md. App. 730, 657 A.2d 818 (1995); Neale v. Wright, 322 Md. 8, 585 A.2d 196 (1991); State Farm Auto. Ins. Co. v. Dressler, 153 Ariz. 527, 738 P.2d 1134 (1987); Torrez v. State Farm Mut. Auto. Ins. Co., 130 Ariz. 223, 635 P.2d 511 (Ct.App. 1981). Each relied on the specific language of the policy, and determined that to permit liability for negligent entrustment of a vehicle to the driver named in the exclusion would be forcing an insurer to accept a risk not bargained for and for which no additional premium had been paid. If the insurer of the family car were still liable under the policy if the excluded driver operates the vehicle, on a theory of negligent entrustment by the non-excluded insured spouse, the purpose of the named driver exclusion would be defeated. Neale, 585 A.2d at 202. In Neale, a negligent entrustment action was brought against the wife after the husband was involved in an accident. The husband was specifically excluded from coverage in a named driver endorsement. Although Maryland recognizes the theory of negligent entrustment, the court held that imposing liability on an insurer under these circumstances would in effect make the insurer liable for the negligent driving of the excluded driver. The court declined to impose such liability. Similarly, we decline to construe the policy to provide coverage. The specific language of the exclusion states that the policy is not in effect while a vehicle is being operated by Gerald Horse. There was no contract for insurance coverage for injuries due to Gerald's negligent driving. To hold otherwise would nullify the exclusion, and force the insurer to pay indirectly for the injuries caused by Gerald's unlicensed and negligent driving.