Cooter v. State Farm Fire & Cas. Co.

• Decision Date: 08 April 1977
• Citation: 344 So.2d 496
• Parties: Wanza COOTER, as guardian, etc. v. STATE FARM FIRE AND CASUALTY CO., a corp. SC 1810.
• Court: Alabama Supreme Court

Page 496

344 So.2d 496

Wanza COOTER, as guardian, etc. v. STATE FARM FIRE AND CASUALTY CO., a corp.

SC 1810.

Supreme Court of Alabama.

April 8, 1977.

C. Lynwood Smith, Jr., and David B. Blankenship, Huntsville, for appellant.

L. Tennent Lee, III, Huntsville, for appellee.

PER CURIAM.

This is an appeal from the decree of the Circuit Court of Marshall County, declaring that the language of a homeowner's insurance policy did not require the insurer to defend or pay any judgment rendered in the suits brought against the insureds.

On December 25, 1972, Bruce Knight was injured in an automobile accident while riding as a passenger in an automobile owned by Billy F. Klelinklaus and driven by his minor son, James Wayne Kleinklaus. At the time of the accident, Billy Kleinklaus had a homeowner's insurance policy with State Farm Fire and Casualty Co., covering him as the named insured and James Kleinklaus as his minor son residing in his household. In pertinent part, the policy provided as follows:

'COVERAGE E--PERSONAL LIABILITY:

'This Company agrees to pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury or property damage, to which this insurance applies, caused by an occurrence. This Company shall have the right and duty, at its own expense, to defend any suit against the Insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless, false or fraudulent, but may make such investigation and settlement of any claim or suit as it deems expedient. This Company shall not be obligated to pay any claim or judgment or to defend any suit after the applicable limit of this Company's liability has been exhausted by payment of judgments or settlements.

'THIS POLICY DOES NOT APPLY:

'1. Under Coverage E--Personal Liability * * *:

'(a) to bodily injury or property damage arising out of the ownership, maintenance, operation, use, loading or unloading of:

'(2) Any motor vehicle owned or operated by, or rented or loaned to any insured: * * *.'

Wanza Cooter, as guardian of Bruce Knight who was non compos mentis, brought two actions in the Circuit Court of Marshall County, one against James Kleinklaus for the negligent operation of an automobile and another against Billy Kleinklaus for the negligent entrustment of an automobile. State Farm brought an action in the same court against all parties, requesting a declaration that, under the terms of its homeowner's policy, it was neither obligated to defend nor to pay any judgment in Ms. Cooter's action against Billy Kleinklaus. She appeals from the decree as to this action. We affirm.

The sole issue before us is whether State Farm, the insurer, is obligated, under the language of the homeowner's policy, to defend and pay any judgment in an action against Kleinklaus, the insured, for negligent entrustment of an automobile.

Counsel for each of the parties assert, and we agree, that the question of coverage under a homeowner's policy for negligent entrustment of an automobile is one of first impression in this State. This Court, however, has defined the doctrine of negligent entrustment in Gardiner v. Solomon, 200 Ala. 115, 75 So. 621 (1917), where Chief Justice Anderson said:

'While automobiles are not inherently regarded as dangerous instrumentalities, and the owner thereof is not responsible for the negligent use of same, except upon the theory of the doctrine of respondeat superior, yet there is an exception if he intrusts it to one, though not an agent or servant, who is so incompetent as to the handling of same as to convert it into a dangerous instrumentality, and the incompetency is known to the owner when permitting the use of the vehicle.'

For later statements of this doctrine, see Spurling v. Fillingim, 244 Ala. 172, 12 So.2d 740 (1943), and Rush v. McDonnell, 214 Ala. 47, 106 So. 175 (1925).

While the rationale of 'negligent entrustment' is not founded upon negligence of the driver of an automobile, but upon the primary negligence of the entruster for supplying an automobile to an incompetent driver, the manifestation of the incompetence of the user is an essential element to the gravamen of the negligent entrustment action. That is to say, but for the incompetent driver's misconduct in the use of the automobile, no liability could result to the entrustor. We will develop this point further as we discuss the respective contentions of the parties.

Appellee, State Farm, in support of the trial Court's holding, asserts two separate contentions:

1. 'Coverage for Negligent Entrustment of a Motor Vehicle is Provided Under the Standard Automobile Liability Policy on the Theory That Bodily Injury Suffered By the Third Party Arises Out of the Ownership, Maintenance and Use of a Motor Vehicle.

2. 'The Bodily Injury Suffered By Bruce Knight Arose Out of the Ownership of the Vehicle By Billy F. Kleinklaus As Well As From Its Use By James Wayne Kleinklaus.'

The first contention (which may be denominated as the 'dovetail' or 'complementary' theory) stresses the wording of the standard automobile liability policy--'. . . (liability) caused by accident arising out of the ownership, maintenance or use . . . of the owned motor vehicle.' The dovetailing effect of this language with the identical language in the homeowner's exclusion, says State Farm produces the logical result '. . . that (because) negligent entrustment under an automobile policy is held to arise out of the ownership of the vehicle, then negligent entrustment would be excluded as arising out of the ownership of a motor vehicle under a homeowner's policy.'

At first glance, the logic of this contention appears almost compelling. On further analysis, however, we are constrained to reject this line of reasoning. While comparison of contractual provisions in separate contracts between the same parties may be a legitimate means to judicial construction, such comparison here could hardly serve as the basis for decision. There is no showing that these parties stand in the relationship of insurer and insured as to an automobile liability policy; and, assuming they did, the nature of the standard pre-prepared contractual provision of policies of insurance would preclude any such comparative analysis for purposes of interpretation. State Farms' contention in this regard could be sustained only on considerations of public policy, and then only where proof shows two or more policies between the same parties, which is not the case before us. Thus, the homeowner's policy must stand or fall on its own merits according to the exclusionary clause quoted above.

We now consider State Farm's second contention--that plaintiff's injuries arose out of the insured's Ownership as well as his son's Use of the vehicle. This argument stands over against the appellant's contention that liability is grounded upon negligent entrustment of the vehicle, not its negligent use by the one to whom it is entrusted. It is on this point that we agree with appellee, State Farm, and thus affirm the trial Court.

The fatal weakness of the appellants' contention for coverage lies in its failure to acknowledge one of the elements essential to recovery for negligent entrustment--the negligent operation of the motor vehicle. An excellent statement of the rule is found in Alabama Pattern Jury Instruction, 26.16:

'The burden of proof is upon the plaintiff to reasonably satisfy (the jury) by the evidence of each of the following conditions:

'1. That the defendant (was the owner) (had the custody and control) of the vehicle involved in the occurrence complained of and did negligently entrust the vehicle to . . . (name driver) . . .

'2. That the driver . . . (name) . . . (was incompetent to operate the vehicle) (or state averments of complaint as to incompetence of driver).

'3. That the defendant knew, or by the exercise of reasonable care should have known that . . . (name driver)...