American Home Assur. Co. v. Erie Ins. Exchange

• Decision Date: 14 January 1969
• Docket Number: No. 12,12
• Citation: American Home Assur. Co. v. Erie Ins. Exchange, 248 A.2d 887, 252 Md. 116 (Md. 1969)
• Parties: AMERICAN HOME ASSURANCE CO. v. ERIE INSURANCE EXCHANGE et al.
• Court: Maryland Court of Appeals

Page 116

252 Md. 116

248 A.2d 887

AMERICAN HOME ASSURANCE CO. v.ERIE INSURANCE EXCHANGE et al.

No. 12.

Court of Appeals of Maryland.

Jan. 14, 1969.

Thomas A. Farrington, Upper Marlboro (Sasscer, Clagett, Powers & Channing, Upper Marlboro, on the brief), for appellant.

James T. Wharton, Rockville (McCarthy & Wharton, Rockville, on the brief), for appellee Erie Ins. Exchange.

No brief filed on behalf of appellee, William E. Chaney.

Before HAMMOND, C.J., and MARBURY, BARNES, McWILLIAMS, SINGLEY and SMITH, JJ.

SMITH, Judge.

The sole question presented in this case is whether appellee(Erie) was obliged to defend Lawrence Wayne Heiston¹ as a result of an accident which took place on June 27, 1965.Heiston was operating the vehicle of William E. Chaney.The pertinent portion of Chaney's policy issued by Erie read:

'PERSONS INSURED

'The following are Insureds under Part I:

'(a) with respect to the owned automobile,

'(1) the named insured and any resident of the same household,

'(2) any other person using such automobile with the permission of the named insured, provided his actual operation or (if he is not operating) his other actual use thereof is within the scope of such permission * * *.'(emphasis in original)

Appellant instituted a declaratory judgment action for the purpose of determining whether Erie was obliged to defend Heiston.The trial court ruled in favor of Erie.We agree.

Heiston and Chaney were neighbors, although there was no indication of their having been out together socially.

Chaney and Heiston lived in Suitland, Maryland.Heiston's wife and child were at the home of her parents on Walker Mill Road, District Heights, Maryland.Heiston approached Chaney relative to borrowing Chaney's car for the purpose of going to get his wife and child.Chaney testified as follows:

'He approached me as far as using my car to go pick up his wife and child and bring them straight home.And I asked him what was wrong with his car and he had told me that the transmission had gone out in his car and he had no transportation to get his wife and children back home.So I asked him approximately how long he would be gone and he said a half hour to forty-five minutes.I said 'All right,' I said, 'On one condition, you only go over and pick your wife up and come straight back and that would be it.'I asked him if that was all he was going to do and he said, 'Yes.'I said, 'Under those conditions I will lend you the car.'' (emphasis added)

Heiston did not dispute this testimony of Chaney.

Heiston described the home of his in-laws as being approximately 2 1/2 miles from the Chaney apartment.Heiston did not know exactly what time he borrowed the automobile, believing it to be about 6:30 P.M.He knew it was daylight.He believed the elapsed time from the time of borrowing to the time of the accident was 20 to 25 minutes.Chaney said it was approximately 8:30 P.M. when the vehicle was borrowed.Mrs. Chaney thought it was around 9:00 P.M.The trial court found that the accident took place 'some two and a half hours after the vehicle had been borrowed.'

Heiston instead of proceeding directly to the home of his in-laws picked up a friend and proceeded to get something to eat and to drink at a restaurant on Marlboro Pike in District Heights.He took with him a friend with whom he had been playing cards earlier in the day.At the restaurant they met another friend whom Heiston agreed to take home.That friend lived in North Forrestville, which was not on the route between the Chaney apartment and the home of Heiston's wife's parents.

The accident occurred within a block and a half or two blocks of the restaurant while en route to the home of the friend, which home was a mile and a half from the restaurant.Heiston agreed that he would have been obliged in order to get his wife to retrace his route after leaving the friend at his home, going back by the restaurant.

It is agreed that there is no Maryland case directly on the point here involved.7 Am.Jur.2d Automobile Insurance, § 119 states:

'In order to determine whether the coverage of the omnibus clause applies to a given accident, it is first necessary to decide whether the permission or consent of the named insured was granted to the person operating a motor vehicle at the time of the accident; the question then arises whether the vehicle was being used at the time of the accident within the scope of the permission granted, and it may be necessary to determine the effect of deviations from the permitted use.Such a deviation may result from the use of the vehicle for other purposes, the extension of the permission by its delegation to a third person, or the use of the automobile in violation of express instructions.

'The courts are not agreed as to the legal theory to be applied in determining when a deviation from the purpose and use for which permission is granted will preclude the coverage under the omnibus clause.In this respect, the courts have adopted three different rules: (1) the strict or conversion rule, (2) the liberal rule, and (3) the moderate or 'minor deviation' rule.The courts are divided sharply as to which of these rules, which are discussed in the following sections, should be applied; but it may be noted here, summarily, that under the strict or conversion rule, the courts hold that any deviation, no matter how slight will defeat liability under the coverage of the omnibus clause; under the liberal rule, the courts held that once permission is given, it will extend to any and all uses of the vehicle; and under the moderate or 'minor deviation' rule, the courts hold that a slight deviation does not preclude coverage under the omnibus clause.'

See also7 Appleman, Insurance Law and Practice, §§ 4366-4368(1962).

We find ourselves in agreement with the statement of Judge Hall in the dissenting opinion in Matits v. Nationwide Mutual Insurance Company, 33 N.J. 488, 166 A.2d 345(1960) when he said:

'The simple words, perhaps too simple, 'actual use * * * with the permission' of the policyholder or named assured, found in substantially similar form in practically all automobile liability policies issued in every jurisdiction save compulsory...