Court Opinion

ID: 9481346
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:16:08.144539+00
Date Added: 2024-06-11T17:48:15.138554
License: Public Domain

FULLAM, Senior District Judge,
dissenting.
I respectfully dissent. The decision of the majority in this case is tantamount to ruling that, under Pennsylvania law, persons injured by drunken drivers have no recourse to liability insurance proceeds unless the culpable driver was the owner of the vehicle or a member of the owner’s family. For it is no doubt a condition of every loan of an automobile — whether made explicit, or merely implied — that the lender does not wish the borrower to drive it while intoxicated.
Our task in this diversity case is to predict how the Pennsylvania Supreme Court would resolve the legal issues presented. Decisions of the Pennsylvania Superior Court, an intermediate appellate court, may provide persuasive guidance, but are not controlling. I believe the majority has accorded an unduly broad scope to certain language in a single, anomalous, decision of the Superior Court, and has unfortunately reached a result which is contrary to decisions of the Pennsylvania Supreme Court and all other decisions of the Penn*317sylvania Superior Court. More important, the decision overlooks recent changes in Pennsylvania law which have been wrought by the Pennsylvania Legislature.
Whether the Travelers liability insurance policy provided coverage to Wayne Wilkerson at the time of the accident is determined by the proper interpretation of the policy language, in the context in which the policy was issued. In reviewing the developing Pennsylvania law in this area, it is important to keep in mind significant differences in policy language. What a court decides when the policy provides coverage only when “the actual use is with the permission of the named insured” should not automatically be assumed to apply equally when, as in this case, the policy provides that an “insured” includes “you, any relative, and anyone else using your car if the use is (or is reasonably believed to be) with your permission.”
The Pennsylvania Supreme Court’s first in-depth analysis of omnibus and extended coverage clauses in liability insurance policies occurred when such clauses, and indeed liability insurance itself, were a relatively new phenomenon. In Brower v. Employers’ Liability Assurance Co., 318 Pa. 440, 177 A. 826 (1935), the court, speaking through Mr. Justice Kephart, explained:
“The chief difficulty encountered by the various courts which have considered clauses substantially similar to the one in question relates to the scope to be given the word ‘permission’ contained in the clause. One class takes the position that an indemnity or liability insurance policy is intended to protect any person injured by the legitimate operation of the car regardless of how or where the accident took place and regardless of whether the operator of the car was, at the time of the accident, using it for the restricted purpose for which it had been delivered to him in the first instance. In the view of these authorities, a deviation, material or otherwise, from the terms of the bailment does not place the operator beyond the protection of the policy; ‘permission’ is construed as applying solely to the bailee’s right to the possession of the car in the first instance and is not limited by any restrictions or conditions the owner may impose on the use of the car ...

“This construction of the policy is in accord with the purpose of the various statutes adopted by several states requiring owners of automobiles to carry indemnity insurance ...

“Another line of authorities places a restricted construction on such omnibus clauses in indemnity policies and confines liability thereunder to such accidents as occur while the car is being used for the specific purpose for which permission to operate the ear was granted; if there is a material deviation by the operator from the purpose or terms of the bailment, the insurance company is not liable to an injured party ... In these cases, the fact that the driver has possession of the car under a color of authority seems to be lost sight of in determining the meaning of the word ‘permission’ as used in the omnibus clause; the controversies hinging about where ‘permission’ in the sense of specific authority, stops, and ‘unauthorized use’ steps in, so as to relieve the insurance carrier from liability” (emphasis added). Id. pp. 444, 445-46, 177 A. at pp. 828-29.
In that case, the car had been delivered to a part-time mechanic for the purpose of determining the cause of certain rattling sounds that had recently developed. While this conferred permission for the mechanic to test-drive the car, the court held, it did not grant him permission to drive a group of friends to a social event, late at night, 60 miles away. The court thus aligned Pennsylvania with the “substantial deviation” states. It is this “substantial deviation” rule which the majority purports to apply in the present case.
There are, however, two important points to be observed: (1) the Brower court explicitly recognized that the “substantial deviation” rule would be inappropriate if Pennsylvania had enacted legislation requiring vehicle owners to maintain liability insurance; and (2) the ruling was carefully limited to deviations concerning the time, place and purpose of the trip, rather than the manner of operation. There is, in *318short, no suggestion that merely by stating, or implying, “Don’t drive while drunk” or “Don’t drive into a tree”, the owner could enable the insurance carrier to deny coverage if the driver deviated from these instructions.
Subsequent decisions of the Pennsylvania Supreme Court are in accord with this view. LaRoche v. Farm Bureau Mutual Auto Ins. Co., 335 Pa. 478, 482, 7 A.2d 361, 362 (1939) (permission limited to a specific journey); Volk v. Cacchione, 395 Pa. 636, 150 A.2d 849 (1959) (son had permission to drive car to his prom but not to allow others to drive it; friend to whom son gave the keys did not have owner’s permission to drive 45 miles to a night club while son returned home with someone else).
Even under an “actual use” limitation in the policy, however, some deviation from limited permission is acceptable. In Exner v. Safeco Ins. Co., 402 Pa. 473, 167 A.2d 703 (1961), for example, a young man who was authorized to take the owner’s car out to be waxed, instead drove with a friend to another town 15 miles away to see if a certain young lady was at home. The trip lasted much longer than the owner had anticipated, but the occupants of the car did manage to wax half of the car in the course of the afternoon and evening, before the accident occurred. It was held that the insurance policy covered the operator, since the “actual use” was with the permission of the owner.
My review of the reported Pennsylvania decisions does not disclose a single case in which the Pennsylvania Supreme Court has held that a “substantial deviation” can result from improper manner of operation of the vehicle, as distinguished from not having permission to use the car for that particular trip, or at that particular time or location, or for that particular purpose.
In our case, there can be no doubt that Wayne Wilkerson had general permission to use Ms. Hall’s vehicle, without regard to time, place, purpose or occasion: Ms. Hall was on a sabbatical in Europe, had been driven to the airport by Wayne Wilkerson, and had granted him permission to use her car while she was away. Both sides agree that, because of her son’s mental problems and the medications he was taking, Ms. Hall was very concerned that he not be exposed to drugs, and emphatically cautioned Wayne on that subject. Ms. Hall testified at trial (but not at her deposition) that she also expressly instructed Wayne not to drive while drinking; Wayne disputes this, but concedes, at least in retrospect, that Ms. Hall intended to include alcohol within her proscription of “drugs”. The case was tried in the district court as if this dispute were crucial. In my view, both kinds of limitation would normally be implicit in any loan of an automobile — at least in the absence of evidence that the parties contemplated drunken driving by the bailee, an admittedly unlikely proposition.
But I am not persuaded that the Pennsylvania Supreme Court would deny insurance coverage in these circumstances; Wayne Wilkerson was clearly within the definition of an “insured” under the language of this policy (“anyone else using your car if the use is (or is reasonably believed to be) with your permission”). He had blanket permission to use the car; the fact that he operated it in a liability-producing manner on this particular occasion does not negate the grant of general authority.
There is only one Pennsylvania appellate decision to the effect that departing from the owner’s instructions concerning the manner of operation vitiates insurance coverage, the case of General Accident Ins. Co. v. Margerum, 375 Pa.Super. 361, 544 A.2d 512 (1988), which the majority views as squarely controlling in the present case. I concede that in that case a panel of the Superior Court expressed the view that operating the vehicle while intoxicated, in violation of strict instructions from the owner to the contrary, constituted such a “substantial deviation” as to render the use of the vehicle unauthorized.
The facts of the Margerum case are distinguishable from the present case. In Margerum, an employer had made a vehicle available to a new employee who had no other means of travel to and from work. After two weeks on the job pursuant to this arrangement, the young man asked for *319time off so that he might attend a wedding in a nearby town. The employer granted the requested time off, but with the express understanding that the employee was not permitted to use the employer’s vehicle to attend the wedding, or while drinking. The employee attended the wedding reception, continued to imbibe thereafter, and became intoxicated. After returning to his parents’ home from the wedding reception, he drove the employer’s van to his girl friend’s house, where he planned to spend the night and proceed directly to his place of employment the following morning. The (fatal) accident occurred en route to his fiancee’s house. The Superior Court panel ruled that, although the trip from his parents’ house to his girl friend’s house could be regarded as within the “to and from work” restriction — i.e., that the geographical deviation was not substantial — the fact that the employee was intoxicated did vitiate the employer’s grant of permission to use the vehicle.
It is important to note that the initial grant of permission in the Margerum case was strictly limited, and that the employer’s instructions concerning the day of the wedding virtually amounted to a prohibition against any use of the vehicle at all on that day, given the likelihood that the employee would be drinking.
Just six days after the Margerum decision was rendered, another panel of the Pennsylvania Superior Court decided State Farm Mutual Auto Ins. Co. v. Moore, 375 Pa.Super. 470, 544 A.2d 1017 (1988), allocatur denied, 521 Pa. 622, 557 A.2d 725 (1989), in which the court upheld a jury finding that an unlicensed driver who was permitted to operate the ear by the teenage daughter of the owner, was entitled to liability coverage under the owner’s insurance policy, which expressly excluded coverage for “any person using a vehicle without a reasonable belief that the person is entitled to do so”.
If an unlicensed driver who knows that the owner is unaware that he is operating the car can entertain “a reasonable belief that [he] is entitled to do,” surely Wayne Wilkerson, who had been granted blanket permission to use the car during the owner’s absence in Europe, and whose consumption of alcoholic beverages barely sufficed to trigger a presumption of impairment, could reasonably believe that he was entitled to do so as well. Among the striking features of this case is the fact that, thus far, no one has even addressed the correct factual question. Even if the majority’s interpretation of Pennsylvania law were correct, under the language of the policy in this ease the issue is not whether, from Ms. Hall’s perspective, Wayne Wilkerson had her permission to use the car on this occasion; the issue is whether Wayne Wilkerson reasonably believed that he had her permission. There is no testimony on that precise subject; and, needless to say, the district court made no findings in that respect. Thus, under any view of the matter, this case should be remanded for resolution of that factual issue.
But I am of the view that, as a matter of law, Wayne Wilkerson was an insured under the terms of the Travelers policy. I reach that conclusion because I am convinced that the Supreme Court of Pennsylvania would not adopt the Superior Court’s anomalous extension of the “substantial deviation” doctrine as expressed in the Margerum case, but would instead follow its own decisions, and other decisions of the Superior Court, which imply that the manner of operation can never be a basis for concluding that use of the vehicle is unauthorized. This conclusion is reinforced — indeed, in my view, made inevitable — by the fact that the Pennsylvania Legislature has, in recent years, clearly evinced an intent that this result obtain.
Pennsylvania now requires, as a condition of registering a motor vehicle in this Commonwealth, owners to certify that they maintain the requisite level of liability insurance; and provides significant penalties, including loss of registration and operating privileges, for failure to maintain such insurance. 75 Pa. C.S.A. §§ 1781-1785 (Interestingly enough, owners who fail to maintain the requisite liability coverage are expressly precluded from recovering first-party benefits {i.e., medical benefits, income-loss benefits, etc.) (§ 1714), but such *320benefits may not be denied “solely because the driver of the insured motor vehicle is determined to be under the influence of drugs or intoxicating beverages at the time of the accident for which benefits are sought”, § 1724(a)).
Particularly pertinent to my disagreement with the majority in this case is § 1724(b):
“Provisions of an insurance policy which exclude insurance benefits if the insured causes a vehicular accident while under the influence of drugs or intoxicating beverages at the time of the accident are void.”
In Donegal Mutual Ins. Co. v. Long, 387 Pa.Super. 574, 564 A.2d 937 (1989), allocatur denied, — Pa. —, 582 A.2d 323 (1990), the court held that this statute invalidates provisions in insurance policies issued pursuant to car-rental agreements, denying liability insurance coverage to persons operating the vehicle while intoxicated. Moreover, although the statute did not become effective until July 1, 1986, the court relied in part upon the enactment of the statute to invalidate, as contrary to public policy, a similar provision in an insurance policy which predated the statute, with respect to an accident which occurred before the effective date of the statute.
Noting that the purpose of the motor vehicle responsibility law is “to require owners of registered vehicles to be financially responsible” (citing eases), the court stated:
“The clause in the rental agreement which excludes coverage for liability arising from the operation of the vehicle while under the influence of drugs or alcohol is inimical to this purpose ... The public policy enunciated by the Motor Vehicle Financial Responsibility Law, pursuant to its 1985 provisions, is to foster financial responsibility for damages caused to individuals on the roadways, not to promote uninsurance.” (387 Pa.Super. at pp. 586, 587, 564 A.2d at pp. 943, 944).
Although earlier Superior Court decisions were arguably to the contrary the court declined to follow its earlier precedent, stating:
“The public policy considerations which we must heed in this appeal are grounded in the Motor Vehicle Responsibility Law governing the financial responsibility of owners of motor vehicles. [The public policy considerations relevant to the earlier cases] while perhaps related, are clearly distinguishable from the very basic consideration raised by the issue before us: that owners of licensed vehicles in this Commonwealth must maintain a financial responsibility so that victims of motor vehicle accidents will have recourse. That responsibility cannot be curtailed by a clause in a rental agreement denying coverage when liability arises when the driver is under the influence of alcohol or drugs. The public policy of this Commonwealth on this matter, as clear in 1985 as it is today, most definitely outweighs the enforcement of the exclusion clause.” Id., p. 591, 564 A.2d at 946.
I recognize that it could perhaps be argued that § 1724(b) addresses only denial of first-party benefits; on the other hand, the statutory language is very broad, and the Superior Court’s construction of the language as including liability coverage in the Donegal case is persuasive. Moreover, the public policy inferences for the present case are equally strong under either construction of the statute. At the very least, the Donegal decision calls into question the continued validity of the Margerum case relied upon by the majority.
As Pennsylvania law now stands, at least in the view of the Pennsylvania Superior Court, it would be contrary public policy for the owner of a motor vehicle to withhold liability coverage for the operator for accidents caused by the operator’s intoxication. If that result cannot be achieved by express language in the policy of insurance, surely it cannot be achieved by oral instructions to the driver.
The judgment appealed from should be reversed.