Allstate Ins. Co. v. Napier

• Decision Date: 01 February 1974
• Citation: 505 S.W.2d 169
• Parties: ALLSTATE INSURANCE COMPANY, Appellant, v. John NAPIER et al., Appellees. John NAPIER, Jr., et al., Appellants, v. ALLSTATE INSURANCE COMPANY et al., Appellees.
• Court: United States State Supreme Court — District of Kentucky

Page 169

505 S.W.2d 169

ALLSTATE INSURANCE COMPANY, Appellant, v. John NAPIER et al., Appellees.

John NAPIER, Jr., et al., Appellants, v. ALLSTATE INSURANCE COMPANY et al., Appellees.

Court of Appeals of Kentucky.

Feb. 1, 1974.

Edward J. Utz, Cincinnati, Ohio, for appellant Allstate Ins. Co.

G. Wayne Bridges, Covington, for appellants-appellees John Napier, Jr., Juanita Napier, and John Napier, Jr., Father and Next Friend of Gary Napier and Ricky Napier.

Adams, Brooking & Stepner, Covington, for appellees Selective Ins. Co. and John Sweeney Pontiac, Inc.

L. T. GRANT, Special Commissioner.

These consolidated appeals arise from a declaratory judgment adjudicating the rights and liabilities of the parties under a garage liability insurance policy and the limits of uninsured-motorist coverage under a standard automobile liability insurance policy.

The appellant Allstate Insurance Company (hereinafter referred to as Allstate) appeals from the trial court's judgment holding that its insureds, John Napier and Juanita Napier, Gary Napier and Ricky Napier (hereinafter referred to as Napiers), were entitled to limits of $10,000 per person and $20,000 per accident for each of two automobiles listed on their policies of insurance for which a separate premium was paid, thereby increasing the limits for uninsured-motorist coverage to $20,000 per person and $40,000 per accident.

The appellants Napiers appeal from the trial court's judgment holding that appellee Warren Pierson was not an additional or omnibus insured under a garage liability insurance policy issued by appellee Selective Insurance Company (hereinafter referred to as Selective) to appellee Jake Sweeney Pontiac, Inc. (hereinafter referred to as Sweeney).

Selective provided garage liability insurance coverage for Sweeney of Cincinnati, Ohio, under a contract of insurance entered into in the State of Ohio. There was an exclusion provision contained in the policy which provided that:

'None of the following are insureds . . . any person or organization, other than the named insured, with respect to any automobile . . . possession of which has been transferred to another pursuant to an agreement of sale . . ..'

On or about March 4, 1968 Warren Pierson, an employee of Sweeney, offered to buy a 1968 Pontiac automobile from Sweeney. On March 6, 1968 Pierson received delivery of the automobile and made application for a ten-day temporary Ohio license tag. As a trade-in on this automobile Pierson traded in a jeep which was delivered to Sweeney, although transfer of title had not taken place.

A purchase order was signed by Pierson in March with no date entered. The purchase order was not signed by Sweeney or any of his agents. Both Pierson and Sweeney signed a security agreement on March 8, 1968. On the same day Pierson made application for an Ohio certificate of title to his new Pontiac automobile which was not issued until March 15, 1968. Sweeney delivered to Pierson an owner's identification and new vehicle warranty form on March 9, 1968.

On March 10, 1968, while driving this automobile, Pierson, engaged in his own business, was involved in an accident in Kenton County, Kentucky. As a result of injuries sustained in the accident, the Napiers obtained judgments against Pierson and one Dawson Eubank. Eubank's insurance carrier satisfied the Napier judgment as to Eubank. The unsatisfied portion of the judgments against Pierson amounts to approximately $70,844.00.

The question presented is whether Pierson is an additional insured under the Selective policy issued to Sweeney so as to make Selective liable for satisfaction of the judgments obtained by the Napiers. The answer to this question hinges on...