Farmers Mutual Automobile Insurance Co. v. Noel

Citation211 F. Supp. 216
Decision Date09 August 1962
Docket NumberNo. 1093.,1093.
PartiesFARMERS MUTUAL AUTOMOBILE INSURANCE COMPANY, a Corporation, Plaintiff, v. Billy NOEL, E. Rock Louden, Administrator of the Estate of Louis Marian Morris, Otto J. Moser, Rex Allen Young, Allen Young, and Geraldine Young, Norman Crouse, Ronald Crouse, Norman Crouse, Sr., and Edna Crouse, Carolyn Martin, Viola Martin, Mary Ann Ramsey, William Ramsey and Doris Ramsey, Peggy Kreek, John Kreek and Sadie Kreek, and Kenneth Kelly, Defendants.
CourtU.S. District Court — Western District of Missouri

Ewing & Beavers, Maryville, Mo., Popham, Thompson, Popham, Trusty & Conway, Kansas City, Mo., for plaintiff.

Pettijohn & Eiser, Oregon, Mo., for defendant Noel.

Gene Thompson, Maryville, Mo., for defendants Crouse.

Shoemaker & Reital, St. Joseph, Mo., for defendants Young.

Dale, Potter & Flynn, St. Joseph, Mo., for defendants Ramsey.

Waldo P. Goff and Merrill M. Steeb, St. Joseph, Mo., for defendant Moser.

Louis V. Stigall, St. Joseph, Mo., guardian ad Litem for minor defendants.

DUNCAN, District Judge.

Plaintiff, a resident and citizen of the State of Wisconsin, instituted this suit against the defendants, all residents of the State of Missouri, under the provisions of § 2201 Title 28 U.S.C.A. to determine its liability under a policy of liability insurance written by it, insuring the defendant Billy Noel, against loss or damage growing out of the use of certain motor vehicles.

The policy was in full force and effect at all times material to the issues in this case, and provided among other things:

"Coverages A and B—Bodily Injury and Property Damage Liability.
To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of:
"Coverage A—Bodily injury, sickness or disease,
including death at any time resulting therefrom, sustained by any person, caused by accident and arising out of the ownership, maintenance or use of the automobile;
"Coverage B—Injury to or destruction of property,
including the loss of use thereof, caused by accident and arising out of the ownership, maintenance or use of the automobile."

"Insured" is defined under the policy as:

"(a) With respect to the insurance for bodily injury liability and for property damage liability the unqualified word `insured' includes the named insured and, if the named insured is an individual, his spouse if a resident of the same household and also includes any person while using the automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or such spouse or with the permission of either." Emphasis supplied.

There is no dispute as to any substantial fact in this case, with the possible exception of the identity of the person who was driving the car at the time of the happening of the event out of which this litigation arose.

Defendant, Billy Noel, was a farmer living several miles from Mound City, Missouri. One Louis Marian Morris, who lived about one and one-half miles from Noel, was employed by the defendant Noel as a farmhand.

Noel was the owner of a 1950 Oldsmobile upon which the policy of insurance was issued. On Monday morning, October 10, 1960, Noel gave defendant Morris the automobile in question and told him that "he could take the car and drive it to and from work and that was all". On Thursday following, the weather was unsuitable for work and Noel told Morris to return to his home and he would call him when it would be possible to work.

The weather continued to be inclement Friday and Morris did not receive a call from Noel. There is no evidence that Noel renewed his restriction that Morris was to "drive the car to and from work and that was all".

The evidence revealed that sometime between Monday and Friday, Noel directed Morris to drive the car into Oregon, Missouri, so that Noel might use it to go to a sale. On this occasion, Morris returned home in a truck which had been driven into Oregon by Noel. With the exception of driving the car "to and from work", there is no suggestion or claim that Morris had ever driven the car on any other occasion.

Defendants raise the contention that these instructions were given to Morris but once, that is, on Monday morning, and that on Thursday morning, the last day he worked, he was told to go home and await a call from his employer. The instructions were not renewed. Thus they were not applicable. I am not able to agree with the defendants in this contention. Certainly there is no reason why the admonition should have been repeated every time the employee took the car. Especially as there was no suggestion of any kind or character that the driver was to use the car for any other purpose. In fact, considering all the inferences, it would be to the contrary.

On Friday, October 14, 1960, Morris drove the automobile into Oregon, Missouri, where he apparently indulged in some drinking. He thereafter came into association with the defendants Moser and Kelly.

At approximately 10:30 that evening, while the Noel car was being operated on a country road several miles from Oregon, and in an opposite direction from either the home of Noel or Morris, it came into collision with an automobile owned by the defendant Geraldine Young and being operated by defendant Rex Allen Young. The collision resulted in the death of Morris, and in injury to the occupants of the other car, all of whom are defendants in this case. No actions for damages have been brought by any of the parties.

All of the parties made, or threatened to make claim against the defendants Noel, Moser and Morris. The plaintiff denied liability both to its insured Noel and to Morris and Moser, and instituted this suit, on the ground that the motor vehicle was not being operated at the time of the collision with the permission of the named insured or of his spouse, and therefore, was not covered under the provisions of the policy.

It is the contention of the defendants Moser and Morris' administrator, that it is the duty of plaintiff, under the terms of the policy, to defend them against any action that might be brought against them by any of the other defendants, and to pay any judgment that might be rendered against them. They contend that under the law of Missouri, the operator of the vehicle had the permission of the named insured.

Under the omnibus clause in cases dealing with employer-employee relationship, three different rules have emerged. These views were stated in the case of McKee v. Travelers Ins. Co., Mo.App., 315 S.W.2d 852, 855:

"The first view, claimed by appellants to have been adopted by a majority of jurisdictions, is the so-called initial permission or liberal rule under which the employee need only to have received permission to take the vehicle in the first instance, and any use while it remains in his possession is said to have been with the permission of the named insured, though the particular use at the time of the accident may not have been within the contemplation of the named insured when he parted with the possession of the vehicle. See Stovall v. New York Indemnity Co., 157 Tenn. 301, 8 S.W.2d 473, 72 A.L.R. 1368; Dickinson v. Maryland Casualty Co., 101 Conn. 369, 125 A. 866, 41 A.L.R. 500; Drewek v. Milwaukee Automobile Insurance Co., 207 Wis. 445, 240 N.W. 881; Konrad v. Hartford Accident & Indemnity Co., 11 Ill.App.2d 503, 137 N.E.2d 855.
"Under the second rule, known as the strict or conversion rule, for the use of the vehicle to be within the omnibus clause the permission given to the employee must extend, not only to the initial use of the vehicle, but also to the particular use being made of the car at the time of the accident. Johnson v. American Automobile Ins. Co., 131 Me. 288, 161 A. 496; Gray v. Sawatzki, 291 Mich. 491, 289 N.W. 227; Travelers Ins. Co. v. Marcoux, 91 N.H. 450, 21 A.2d 161.
"The third and final rule is called the moderate or minor deviation rule. Under this rule a minor deviation from the purpose for which the employer granted the employee permission to use the vehicle will not be sufficient to exclude the employee from coverage under the omnibus clause, while a material deviation is held to constitute a use of the automobile without the employer's permission. Kazdan v. Stein, 26 Ohio App. 455, 160 N.E. 506, affirmed 118 Ohio St. 217, 160 N.E. 704; Hodges v. Ocean Accident & Guarantee Corp., 66 Ga.App. 431, 18 S.E.2d 28, certiorari denied 316 U.S. 693, 62 S.Ct. 1299, 86 L.Ed. 1763, rehearing denied 317 U.S. 705, 63 S.Ct. 25, 87 L.Ed. 563; United States Fidelity & Guaranty Co. v. Hall, 237 Ky. 393, 35 S.W.2d 550; Brower v. Employers' Liability Assurance Co., 318 Pa. 440, 177 A. 826."

Defendants contend that broad interpretation must be given to the omnibus clause of the policy, which is the usual provision to be found in most liability policies, and that there must be read into it the provisions of the Motor Vehicle Safety Responsibility Law of Missouri, § 303.170 V.A.M.S. That law, however, does not require more than is written into this policy, which provides among other things:

"The policy shall provide financial responsibility and shall insure any other person using such motor vehicle with the express or implied permission of such named insured."

In the case of Speidel v. Kellum, 340 S.W.2d 200, Judge Broaddus, speaking for the Court of Appeals, had this to say after quoting the three rules of construction:

"We are of the opinion it should be the third, the moderate or minor diversion rule. Our courts have taken a firm position in cases arising under the respondeat superior doctrine where employees have deviated from the scope and course of their employment. As said in the case of Rainwater v. Wallace, Mo.App., 169 S.W.2d 450, 456, affirmed 351 Mo. 1044, 174 S.W.2d 835:
"`It is the well established rule in this state, that a servant does not step without the scope of his employment, as a
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