Dorman v. Allstate Ins. Co., 2859.

• Decision Date: 23 June 1998
• Docket Number: No. 2859.,2859.
• Citation: 332 S.C. 176,504 S.E.2d 127
• Court: South Carolina Court of Appeals
• Parties: Bruce H. DORMAN and Angela M. (Renee) Dorman, Appellants, v. ALLSTATE INSURANCE COMPANY, South Carolina Electric & Gas Co., and Alamo Rent-A-Car, Inc., Defendants, Of Whom, Allstate Insurance Company and Alamo Rent-A-Car Inc., are, Respondents.

332 S.C. 176

504 S.E.2d 127

Bruce H. DORMAN and Angela M. (Renee) Dorman, Appellants, v. ALLSTATE INSURANCE COMPANY, South Carolina Electric & Gas Co., and Alamo Rent-A-Car, Inc., Defendants, Of Whom, Allstate Insurance Company and Alamo Rent-A-Car Inc., are, Respondents.

No. 2859.

Court of Appeals of South Carolina.

Heard June 4, 1998.

Decided June 23, 1998.

Michael R. Daniel, of Sottile & Hopkins, Mt. Pleasant, for appellants.

Jessica C. Moe, of Turner, Padget, Graham & Laney; and Richard Ashby Farrier, Jr., of Nelson, Mullins, Riley & Scarborough, Charleston, for respondents.

GOOLSBY, Judge:

Bruce and Angela Dorman brought a declaratory judgment action to determine whether Allstate is required to cover a rental vehicle Mrs. Dorman wrecked. The trial court granted Allstate summary judgment and denied the Dormans' request for attorneys' fees. The Dormans appeal. We affirm in part, reverse in part, and remand.

On May 27, 1996, Mr. Dorman rented a car from Alamo Rent-A-Car, Inc. as a temporary substitute vehicle for a family car being repaired. The rental contract listed Mr. Dorman as the only authorized driver. Two days later, while driving the rental car, Mrs. Dorman ran into an SCE & G telephone pole, damaging both the car and the pole.

The Dormans sought liability coverage under their Allstate policy for the damage to SCE & G property and collision coverage for the Alamo rental car. Allstate initially denied both claims. Before the summary judgment hearing, however, Allstate settled SCE & G's property claim.

The Dormans' initial arguments concern the interpretation of the collision damage provision in the Allstate policy. Under the "insured autos" definitions contained in Part V of the policy (Protection Against Loss to the Auto), the relevant language defining covered substitute vehicles states:

(3) A substitute four wheel private passenger auto or utility auto, not owned by you or a resident, temporarily used with the permission of the owner while your insured auto is being serviced or repaired, or if your insured auto is stolen or destroyed.

I.

The Dormans first argue the trial judge erred in finding the Alamo rental car not covered under this provision because Mrs. Dorman was not listed as an authorized driver on the rental contract. We disagree.

The foremost rule in interpreting an insurance contract is to give effect to the intent of the parties as shown by the language of the contract itself. When the contract language is clear and unambiguous, the language alone determines the contract's force, and terms must be construed to give effect to their "plain, ordinary, and popular meaning." Gray v. State Farm Auto Ins. Co., 327 S.C. 646, 650, 491 S.E.2d 272, 274 (Ct.App.1997); Sphere Drake Ins. Co. v. Litchfield, 313 S.C. 471, 473, 438 S.E.2d 275, 277 (Ct.App.1993).

Here, the plain language of the policy provision stipulates that a temporary substitute vehicle is covered only if used with the permission of the vehicle's owner. In this instance the vehicle's owner is Alamo. The Dormans do not dispute that Mrs. Dorman was not included as an authorized driver in the rental agreement. She did not, therefore, have Alamo's permission to drive the vehicle.

The Dormans, relying on General Accident Ins. Co. v. Safeco Ins. Cos., 314 S.C. 63, 443 S.E.2d 813 (Ct.App.1994), argue that the proper focus of the permissive-use inquiry is on the named insured. They claim that Mr. Dorman, as a named insured with permission from Alamo, in turn granted Mrs. Dorman permission to drive the rental car.

In Safeco, the court mandated liability coverage where an employee of the named insured allowed a third person to drive a car the employee had rented with the named insured's permission, despite a provision in the rental contract prohibiting such third-party drivers.

Although Safeco also involved the issue of consent to drive a rental car, its permissive-use analysis turned on an interpretation of statutory language mandating liability coverage. The applicable statute defines "insured" as "any person who uses with the consent, expressed or implied, of the named insured the motor vehicle to which the policy applies." S.C.Code Ann. § 38-77-30 (1989 & Supp.1997). Accordingly, the Safeco court's permissive-use inquiry focussed on the legislative definition of the policy's named insured. Because the court, using an agency theory analysis, held the policyholder's consent was impliedly granted to the non-permitted third-party driver, it found compliance with the statute and ordered coverage.

The Dormans' reliance on Safeco is misplaced. The language of the Allstate collision policy provision is not mandated by statute. Instead, the Dormans freely contracted with Allstate for collision insurance and were therefore on notice as to the contents of that agreement. This court is limited to interpreting the contract made by the parties themselves, regardless of their failure to safeguard their respective rights under the policy. Gray, 327 S.C. at 649, 491 S.E.2d at 274; Litchfield, 313 S.C. at 473, 438 S.E.2d at 277.

II.

The Dormans next argue that the policy language is ambiguous as to whether permission to the named insured encompasses permission to a resident spouse. We disagree. The Dormans claim that the policy definitions of "you" and "your," which undeniably include a resident spouse, are applicable to permissive use. As discussed above, however, the plain language of the policy limits collision coverage to a substitute vehicle being used with the permission of the owner. Even if one were to substitute "resident spouse," i.e., Mrs. Dorman, in every instance where "you" or "your" occurs in the collision policy provision at hand, it would not change the outcome of this analysis. Simply put, permission of the vehicle's owner is required for each person driving the car. Mr. Dorman was not the vehicle's owner. Alamo was.

That Mrs. Dorman did not have Alamo's permission to drive the rental car is evidenced by the rental agreement itself.¹ Indeed, Mr. Dorman declined to pay the additional driver charge required to add his wife as an authorized driver of the rental vehicle,² notwithstanding the...