French v. Hernandez

• Decision Date: 21 June 2004
• Citation: 850 A.2d 585,370 N.J. Super. 104
• Parties: Linda R. FRENCH, Plaintiff-Respondent/Cross-Appellant, v. Enrique HERNANDEZ, John H. Decker, Decker Landscaping, Defendants-Respondents/Cross-Respondents, v. Harleysville Insurance Company, Third-Party Defendant/Appellant/Cross-Respondent, and New Jersey Manufacturers Insurance Company, Intervenor-Respondent.
• Court: New Jersey Superior Court

850 A.2d 585

370 N.J. Super. 104

Linda R. FRENCH, Plaintiff-Respondent/Cross-Appellant, v. Enrique HERNANDEZ, John H. Decker, Decker Landscaping, Defendants-Respondents/Cross-Respondents, v. Harleysville Insurance Company, Third-Party Defendant/Appellant/Cross-Respondent, and New Jersey Manufacturers Insurance Company, Intervenor-Respondent.

Superior Court of New Jersey, Appellate Division.

Argued March 17, 2004.

Decided June 21, 2004.

Celine Vitale argued the cause for third-party defendant/appellant Harleysville Insurance Company (Stephen E. Gertler, Wall, attorney; Kenneth A. Seltzer, Old Bridge, on the brief).

John J. Hopkins, III, Long Branch, argued the cause for respondent/cross-appellant Linda R. French.

Edward Hoagland, Jr., Somerset, argued the cause for respondents/cross-respondents John Decker and Decker Landscaping.

Respondent/cross-respondent Enrique Hernandez did not file a brief.

Patricia M. Reilly argued the cause for intervenor-respondent New Jersey Manufacturers Insurance Company (Wolff, Helies, Duggan, Spaeth & Lucas, attorneys; John Peter Duggan, Red Bank, of counsel; Ms. Reilly, on the brief).

Before Judges LINTNER, LISA and S.L. REISNER.

The opinion of the court was delivered by

LISA, J.A.D.

This appeal requires a determination of whether the driver of a vehicle, Enrique Hernandez, was a permissive user and thus covered by the insurance policy issued to the vehicle's owner, John H. Decker. Decker conducted a landscaping business and Hernandez was his employee. The vehicle operated by Hernandez was a pickup truck customarily used in the business. Hernandez' operation of the vehicle at the time of the accident was not during working hours and was without Decker's express authorization.

On cross-motions for summary judgment by the injured plaintiff, Linda R. French, her insurance company, New Jersey Manufacturers Insurance Company (NJM), and Decker's insurance company, Harleysville Insurance Company (Harleysville), the trial judge found that Hernandez was a permissive user of Decker's vehicle. The judge reasoned that because Decker had allowed Hernandez to drive the vehicle on prior occasions in connection with his work, and because on the occasion of the accident Hernandez' use of the vehicle did not constitute theft or the like, Hernandez was a permissive user under the initial permission rule. The judge entered summary judgment orders on February 26, 2003 directing Harleysville to provide coverage, within its policy limits, to satisfy French's claim, and relieving NJM of any obligation to indemnify its insured, French, under its uninsured motorist coverage. Harleysville appeals from those orders. Although for reasons different than those expressed by the trial judge, Isko v. Planning Bd. of Township of Livingston, 51 N.J. 162, 175, 238 A.2d 457 (1968), we conclude that Hernandez was a permissive user and we affirm the February 26, 2003 orders.

In an earlier summary judgment proceeding, the judge granted Decker's motion for dismissal of French's claim against him, finding that at the time of the accident Hernandez was not acting in the scope of his employment and thus Decker was not liable under principles of respondeat superior. French cross-appeals from that order, entered on May 24, 2002. Relying on Carter v. Reynolds, 175 N.J. 402, 815 A.2d 460 (2003), she contends the law of respondeat superior in New Jersey has changed since the entry of the order and under the new standard all that is required for respondeat superior liability is employee conduct that was a foreseeable risk of the employer's business. We reject that contention and affirm the May 24, 2002 order.

I

Decker was a police officer who conducted a landscaping business as a second job. During the summer of 2000, Hernandez was Decker's only employee. Hernandez was nineteen-years old. We are uninformed of his employment commencement date, although it is clear this was seasonal employment. Hernandez filed no job application or tax forms. He was paid "off the books" in cash with none of the customary payroll withholdings.

Decker never asked and did not know whether Hernandez had a driver's license. Hernandez' primary language was Spanish, and he spoke little English. According to Decker, Hernandez was occasionally permitted to drive the pick-up truck on the job, but only on private property and only under Decker's personal supervision. Decker contends Hernandez was never allowed to drive the truck on public roads and was never allowed to use it for personal errands. At the end of work each day the truck and other landscaping equipment were locked up in a garage rented by Decker. The keys to the truck were kept in the garage. Decker denied that Hernandez had keys to the truck, but he could not recall whether Hernandez had keys to the garage.

On the evening of Sunday, August 13, 2000, Hernandez was operating Decker's truck on a public roadway. He drove in an erratic manner, crossing the center line and colliding head-on with French, causing her serious injuries. Hernandez was apparently intoxicated, as indicated by his post-accident demeanor and statements to the police and by the results of a blood test revealing a .166% BAC, well over the legal limit of .10%. N.J.S.A. 39:4-50(a).

We glean from the police reports that are part of the record that the truck was being operated with an ignition key and there was no indication of a break-in or forced entry at the garage. Hernandez was also injured in the accident, but his injuries were not life-threatening. Patrolman Ramon A. Santos of the Dover Township Police Department interviewed Hernandez in Spanish at the local hospital to which he was taken from the accident scene. Santos' report describes what Hernandez told him:

Mr. Hernandez stated that he consumed approximately five to six beers prior to driving the motor vehicle. He stated that he did not remember where he consumed the beverages. He stated that the vehicle that he was driving, (NJ registration: K-L-B-2-7-X; 1985 Dodge Pickup) was parked near where he had been drinking and that he decided to take it for a ride. He did not remember where he gained access to the keys. He said that they could have been in the truck. He stated that he was too drunk to remember who he had been drinking with, however, he remembered that when he started the vehicle, someone told him not to drive because he was too drunk. He stated that the truck belonged to his employer, however, he did not have permission to use it.

Mr. Hernandez stated that he wanted to go visit a friend in Lakewood, NJ, (unknown address), and he did not remember what happened prior to the accident.

The police issued a number of motor vehicle summonses against Hernandez. Decker filed no charges against him for theft of the truck or unauthorized entry into the garage. Hernandez has not been seen or heard from since leaving the hospital. His whereabouts are unknown. It is believed he returned to his native Mexico. According to the police reports, he was an illegal alien and did not produce a driver's license. Decker has been deposed. In the trial court, all parties agreed that further investigation or discovery would not lead to development of any additional facts relevant to the coverage issue.¹

II

The principal issue in this case is whether Hernandez was a permissive user. Harleysville argues he was not. In the trial court and on appeal the parties have framed the issue in terms of the initial permission rule. This construct was adopted by our Supreme Court in 1960:

Accordingly, we hold that if a person is given permission to use a motor vehicle in the first instance, any subsequent use short of theft or the like while it remains in his possession, though not within the contemplation of the parties, is a permissive use within the standard omnibus clause in an automobile insurance policy.

[Matits v, Nationwide Mutual Ins. Co., 33 N.J. 488, 496-97, 166 A.2d 345 (1960) (emphasis added).]

The Court considered but rejected the moderate "minor deviation" rule that would require coverage as long as deviation from the actual permitted use is minor, and the strict "conversion" rule that any deviation from the time, place or purpose of the specified permission defeats coverage. Id. at 492-96, 166 A.2d 345. The Court noted that a broad interpretation of the omnibus clause would better effectuate the legislative policy of making collectible damages wrongfully inflicted on innocent members of the public in the operation of motor vehicles. Id. at 495-96, 166 A.2d 345. The Court concluded that the "minor deviation" and "conversion" rules, "making coverage turn on the scope of permission given in the first instance render coverage uncertain in many cases, foster litigation as to the existence or extent of any alleged deviations, and ultimately inhibit achievement of the legislative goal." Id. at 496, 166 A.2d 345. The "initial permission" rule, on the other hand, fulfills the legislative goal by "providing certain and maximum coverage." Ibid.

An essential element of the initial permission rule is that from the first time permission to use the vehicle is given until the time of the accident the user must be in continuous possession of the vehicle. That is not the case here. The trial judge disregarded that element. He found that because Decker allowed Hernandez to drive the vehicle on prior occasions, his subsequent use on the date of the accident, under circumstances not constituting a theft or the like, was a permissive use.

Harleysville correctly argues that this analysis was flawed and was a misapplication of the initial permission rule. We agree that because of the interruption in Hernandez' possession, the analysis must begin with whether Hernandez' use on the occasion of the accident was, in and of itself, a permissive one. As we will discuss, the prior occasions of authorized use are relevant and evidential, but do not establish a predicate for...