Court Opinion

ID: 9774395
Source: CourtListenerOpinion
Date Created: 2023-08-29 18:18:56.161273+00
Date Added: 2024-06-11T07:32:07.893964
License: Public Domain

DONNELLY, Judge,
dissenting.
The judgment of the trial court was affirmed in the Eastern District of the Missouri Court of Appeals. I adopt, without quotation marks, a substantial portion of the opinion written there by Norwin D. Houser, Special Judge.
The determinative question here is whether Elliott Davis, Jr. was covered as an additional insured within the following definition of the term “insured” in the omnibus provision of the policy of liability insurance issued by Royal Indemnity Company to Hertz (the named insured):
“HI. Definition of insured
(a) With respect to the insurance for bodily injury liability and for property damage liability the unqualified word ‘insured' includes the named insured and, if the named insured is an individual, his spouse if a resident of the same household, and also includes any person while using the automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or such spouse or with the permission of either. * * *”
As applied to the case at hand that language translates as follows: The word “insured” includes any person while using the automobile, provided the actual use of the automobile is with the permission of Hertz.
*631The automobile was delivered to Walker under a printed rental agreement between Hertz and Walker, signed by the parties, providing, inter alia:
“7. Vehicle shall NOT be operated by any person except Customer and the following Authorized Operators, each of whom must be duly qualified and licensed to drive and must have received Customer’s advance permission: (a) persons of full age (21 years) who are members of the immediate family of Customer and permanently residing in Customer’s household; (b) the employer, partner or an executive officer of Customer; (c) a regular employee of Customer.
“8. Lessor provides coverage for persons using Vehicle with the permission of Lessor (and not otherwise) in accordance with the standard provisions of a Basic Automobile Liability Insurance Policy, against liability for bodily injury [stating limits] arising out of use of Vehicle. * * * Permission to me Vehicle is expressly limited by Lessor as provided in paragraphs 6 and 7 hereof. * * *. [Our emphasis.]
“10. No right of Lessor under this Agreement may be waived or modified except by a written instrument signed by the President or Vice President of Lessor or of Hertz System, Inc.”
Contrary to appellants’ contentions, there is substantial evidence to support the decision of the trial court; the judgment is not against the weight of the evidence, and the court did not erroneously apply the law.
Careful consideration of the facts in each particular case is required in determining whether there is coverage under an omnibus clause. This omnibus provision extends coverage to any person while using the automobile, provided the actual use of the automobile is with the permission of Hertz. The only evidence bearing on the question what use of the vehicle was “actually contemplated by the parties at the time of the original bailment” is to be found in the printed agreement itself.
Paragraph 6 prohibits the use of the vehicle to carry persons for hire, or to propel or tow any vehicle, trailer or other object, or in any race, test or contest, or if the vehicle is obtained by fraud or misrepresentation, or is obtained or used in furtherance of any illegal purpose.
Paragraph 7 specifically limits operation of the vehicle to Customer Walker, members of his family over the age of 21, his employer, partner, or regular employee.
Paragraph 8 recites that Hertz provides coverage for persons using the vehicle with the permission of Hertz (“and not otherwise”) and further recites that permission to use the vehicle is “expressly limited” as provided in paragraphs 6 and 7.
It is clear that Walker, the lessee from Hertz, was “using” but not operating the vehicle, and that Davis, at the wheel by permission from Walker, was both “operating” and “using” the vehicle at time of accident. In this case, involving the question whether Davis (not Walker) is covered by the omnibus clause, the use by Walker of the vehicle is not the compelling circumstance. Our concern is whether the actual use of the vehicle by Davis was with the permission of Hertz; i. e., whether Davis’ use of the vehicle at the time of accident was “one actually contemplated by the parties at the time of the original bailment.” Allstate Ins. Co. v. Hartford Accident & Indem. Co., 486 S.W.2d 38, 44 (Mo.App.1972). The statement of the question compels a negative answer. Both the insurer and the bailor had an interest in the use to which the vehicle would be put. Royal Indemnity Company, by insuring Hertz, evidently had confidence in Hertz as a risk, and in extending its assumption of risk under the omnibus clause to others the insurer had the right to restrict coverage to actual use by persons securing permission from Hertz, evidently having confidence that insured, Hertz, would only permit its vehicles to be placed in the possession and care of persons worthy of trust. The insured, Hertz, by entering into a contract of *632bailment with Walker, evidently had sufficient confidence in Walker to entrust its automobile to him, but in closely restricting the classes of persons permitted to use or operate the vehicle, Hertz demonstrated its lack of confidence in any others using or operating the vehicle. Both insurer and bailor had a right, for their own protection, to circumscribe the extent of and limit the risk each of them was taking, and to place strict limitations on the classes of persons authorized to operate or use the vehicle in question. The coverage of the omnibus clause did not extend to second permittees such as Davis. Only first permittees of Hertz, such as Walker, were covered by the omnibus clause. The parties to the bailment (Hertz and Walker) did not contemplate the use or operation of the vehicle by persons other than Walker, members of Walker’s family over 21 years of age, employers or partners of Walker, and Walker’s regular employees. These designated classes of persons, upon receiving Walker’s permission, and no others, were to be entrusted with Hertz’ merchandise. In violation of these strictures, and exposing both insurer and bailor to unassumed risks, bailee Walker permitted Davis to use and operate the insured vehicle. Davis was not a person actually contemplated by the parties to the bailment as within the class of eligible users. By reason of the fact that he was operating the vehicle he was devoting it to a use not permitted by and in direct violation of the bailment agreement. Davis was not one of the classes of persons to whom Walker was authorized to grant permission to drive. Nor was Davis “using” or “actually using” the vehicle with the permission of Hertz, as required under the insurance policy to activate the omnibus clause.
This is not a situation in which the consent of the named insured to the operation of the automobile by the second permittee may be implied from the prior course of conduct of the parties, or from any of the other factors so thoroughly delineated in Allstate Ins. Co. v. Hartford Accident & Indem. Co., supra, 486 S.W.2d 1. c. 44-45. A typical example of implied permission from the named insured arising out of a course of conduct is United States Fidelity & Guaranty Co. v. Safeco Ins. Co. of America, 522 S.W.2d 809 (Mo. banc 1975), which although it involved a factual situation not comparable to that existing in this case, laid down one general rule pertinent to the present inquiry, on the question whether a second permittee is covered under the usual omnibus clause, namely, that “[t]he permission [to drive the insured car] must come from the named insured, not simply from the first permittee.” 522 S.W.2d 1. c. 816. In the case here for review the permission did not come from Hertz, the named insured, but from Walker, the first permittee.
At the time of collision Walker and Davis were driving in the City of St. Louis, on the way to the home of one Shirley Townsend, a person with whom they had became acquainted while all three were attending the Upward Bound Program. Assuming that a benefit accrued to the first permittee from the operation of the vehicle on this trip, appellants are still faced with the uncontro-vertible fact that the insurance policy contains no exception authorizing a Hertz customer to permit a third person to operate the vehicle where the customer is a passenger, or where the customer is benefited by the trip. This court may not amend, change or modify the terms of the contract of insurance to extend coverage to second permittees on the basis of real or fancied benefits to first permittees. No implication of authority in the second permittee is to be drawn from these facts, because the first permittee was specifically forbidden by the rental agreement from entrusting the driving to another. Nationwide Mut. Ins. Co. v. State Farm Mut. Auto. Ins. Co., 209 F.Supp. 83, 86 (N.D.W.Va.1962). Davis’ operation of the car was outside the use of the vehicle permitted to Walker by Hertz. The actual use was not “in conformity with that permitted by the named insured,” and therefore coverage did not extend to Davis. Prisuda v. General Casualty Co. of America, 272 Wis. 41, 74 N.W.2d 777, 782[4] (1956). Davis was operating the car without express permission of Hertz, and without per*633mission arising by implication from Hertz’ conduct, or from the circumstances. Walker’s right to use the vehicle “ended with his turning over the wheel of the car” to Davis contrary to the express provisions of paragraph 7 of the lease agreement. Helwig v. Esterly, 205 Pa.Super. 185, 208 A.2d 10, 12 (1965), and cases cited 1. c. 11, 12. And see Johnson v. Aetna Casualty and Surety Co., 274 So.2d 769 (La.App.1973); State Farm Mutual Auto. Ins. Co. v. Allstate Ins. Co., 255 S.C. 392, 179 S.E.2d 203 (1971); Southern Farm Bureau Cas. Ins. Co. v. Hartford Accident & Indem. Co., 255 S.C. 427, 179 S.E.2d 454 (1971); Selected Risk Ins. Co. v. Travelers Ins. Co., 287 A.2d 675 (Del.Super. 1972); Allstate Ins. Co. v. Employer’s Group Ins. Co., 18 Ohio Misc. 62, 246 N.E.2d 924 (1969).
I respectfully dissent.