General Acc. Ins. Co. v. Safeco Ins. Companies
| Decision Date | 09 March 1994 |
| Docket Number | No. 2174,2174 |
| Citation | 314 S.C. 63,443 S.E.2d 813 |
| Court | South Carolina Court of Appeals |
| Parties | GENERAL ACCIDENT INSURANCE COMPANY, Respondent-Appellant, v. SAFECO INSURANCE COMPANIES, Travelers Insurance Company, Reliance Insurance Company, Kent Lee Pullen, and Eleanor Nancy Gebolys, Defendants, of Whom Safeco Insurance Company is, Respondent, and Travelers Insurance Company is, Appellant-Respondent. . Heard |
M. Dawes Cooke, Jr. and Matthew H. Henrikson, of Barnwell, Whaley, Patterson & Helms, Charleston, for appellant-respondent.
Joseph S. Brockington, of Wise & Cole, Charleston, for respondent-appellant.
R. Davis Howser, Deborah L. Harrison, and Charles E. Carpenter, Jr., all of Richardson, Plowden, Grier & Howser, Columbia, for respondent.
This is a declaratory judgment action to determine insurance coverage for damages arising from an automobile accident which occurred on October 1, 1988, when a rental car driven by Kent Lee Pullen struck Eleanor Gebolys, a pedestrian. Gebolys brought suit against Pullen and his employer, Ace Chicago Great Dane, Inc. (Ace Chicago), and received $225,000 in settlement of her claims. In this action, the four insurance companies sought a declaration of the extent of their coverages. 1 Applying Georgia law, the trial judge found coverage under all four insurance policies. Reliance Insurance Company was declared the primary carrier and the others excess carriers. Travelers Insurance Company and General Accident Insurance Company cross-appeal. We affirm.
On October 1, 1988, Eleanor Gebolys (Gebolys) was injured when she was struck by an automobile which had been leased by Harold Glen Williams (Williams) from Budget Rent-A-Car of Savannah, Georgia. At the time of the accident, the vehicle was being operated by Kent Lee Pullen (Pullen) with Williams riding as a passenger.
Williams was employed as a sales representative of Great Dane Trailers of Dallas, Texas, a factory owned branch of Great Dane Trailers, Inc. (Great Dane Trailers). Williams travelled from Texas to Hilton Head for a national sales meeting which was scheduled to begin on Sunday afternoon, October 2, 1988, the day following the accident. In accordance with instructions from his supervisor, Williams leased a car at the Savannah Airport to travel to Hilton Head. Great Dane Corporation was to reimburse Williams for the cost of this rental.
Pullen was employed by Ace Chicago, a distributor of Great Dane Trailers in the Chicago area. 2 Like Williams, Pullen was in Hilton Head to attend the annual sales meeting of Great Dane Trailers, and had arrived early in order to play golf in an optional golf tournament scheduled for Sunday morning, October 2, 1988. One of the purposes of the annual sales meeting was to discuss various new products of Great Dane Trailers. Great Dane Trailers required all sales personnel of Ace Chicago to attend this meeting.
On Saturday evening October 1, 1988, Williams, two other employees of Great Dane Trailers, and Pullen left the hotel for dinner at a restaurant on Hilton Head in the vehicle rented by Williams. Williams was driving when they left the hotel, however, when the group had difficulty finding a restaurant, Pullen offered to drive the car. As Pullen was driving with the express permission of Williams, he struck Gebolys. Gebolys filed a lawsuit for injuries she received in the accident, and her claim was settled for $225,000. 3
The trial court, sitting without a jury in this action at law, 4 held that Reliance Insurance Company was the primary carrier and liable for its $15,000 policy limits. 5 The court further held that Safeco Insurance Companies (Safeco), Travelers Insurance Company (Travelers), and General Accident Insurance Company (General Accident) bore the responsibility for the remaining $210,000 of the settlement pro rata based on their respective policy limits. Accordingly, Safeco owed $1,891.89, Travelers owed $189,189.19, and General Accident owed $18,918.92 toward payment of the settlement.
On appeal, Travelers contends that it is not responsible for any of the settlement because it has no coverage for Kent Pullen as an insured permissive driver. In the alternative, Travelers maintains that if there is coverage, it is excess to General Accident's coverage and the coverage should not be prorated.
General Accident contends that it has no coverage because Kent Pullen was not acting within the course and scope of his employment at the time of the accident.
Safeco admits that it has coverage as the insurer for Kent Pullen. Moreover, Safeco asserts that the trial court correctly held both Travelers and General Accident also have coverage and properly prorated the coverage based on the respective policy limits.
The principal issue on appeal is whether the driver, Pullen, was a permissive user of the car involved in the accident. The trial judge held that Georgia law applied to this issue, and Pullen was a permissive user under Georgia law. Ruling alternatively, the judge also held that the driver was a permissive user under South Carolina law. Travelers does not appeal the merits of the judge's ruling under Georgia law. It contends, however, that South Carolina law is controlling, and the driver was not a permissive user under South Carolina law. Assuming South Carolina law applies, we hold there is some evidence supporting the judge's finding that the driver was a permissive user. See S.C. Farm Bureau Ins. Co. v. Windham, 303 S.C. 330, 400 S.E.2d 497 (Ct.App.1990) (). Accordingly, we affirm without reaching the "choice of law" issue raised by Travelers.
As suggested by Travelers, the controlling inquiries in determining if Pullen was a permissive user of the car are: (1) whether Great Dane Trailers gave the driver, Pullen, express or implied permission to drive the rental car; and (2) if not, did Williams have express or implied authority from his employer to allow a third-party (Pullen) to drive the rental car? We hold there was some evidence that Williams had implied authority to allow Pullen to use the car.
At the time of the accident, Pullen was driving the rental car with the express permission of Williams, and Williams was a passenger in the car. Williams and Pullen were in South Carolina attending a national sales meeting conducted by William's employer. William's employer, Great Dane Trailer's, Inc., was the named insured in the Travelers policy, and this policy expressly provided coverage for permissive users of rented cars. 6 There is no dispute that Williams had the express permission of his employer to drive the rental car. That permission contained no prohibition regarding its use by other attendees at the convention. To the contrary, in an unappealed finding of fact, the trial judge found: "At these national sales meetings it was usual and customary for a number of people attending the meeting to drive the rental cars in connection with various activities related to the meeting."
The controlling principles of law are found in American Mut. Fire Ins. Co. v. Reliance Ins. Co., 268 S.C. 310, 233 S.E.2d 114 (1977). There, our Supreme Court stated that the named insured's mere permission to another to use the car, standing alone, does not authorize the original permittee to allow third-party use of the car. The Court continued:
... It is equally well established, however, that the named insured's grant of authority to the original permittee to delegate to others need not be expressed, but may be implied from the broad scope of the initial permission or from the attending circumstances and the conduct of the parties, and a factual determination must be made in each case to determine whether the scope of the initial grant was broad enough to include an implied authority to delegate to another and thus render the latter an additional insured. Implied authority or permission by the named insured, if established, is as effective to extend the coverage of the omnibus clause as that which is formally conferred.
* * * * * *
Thus, it is almost universally held in the modern cases that where the named insured grants his permittee broad and unfettered dominion over his insured automobile, he also impliedly authorizes his permittee to allow a third person to use it, and thus render him an additional insured. The first permittee, by being granted complete dominion over the insured automobile, is put in the shoes of the named insured, and therefore his permittee is held to be the named insured's permittee.
Id. at 315-317, 233 S.E.2d at 117-118 (citations omitted) (emphasis added). We find there is some evidence to support the judge's finding of permissive use under the principles of South Carolina law stated in American, supra. 7
Travelers next argues that General, an insurer of Pullen's employer and the plaintiff in the present declaratory judgment action, has no legal basis for requiring payment from Travelers. As the basis for this assertion, Travelers appears to rely on the procedural posture of the underlying tort action by the injured pedestrian, wherein she sued Pullen, Ace Chicago (General's named insured), and the rental car. Since the settlement was paid on account of Ace Chicago's potential liability, Travelers contends it should not be required to bear any part of the settlement. Specifically, Travelers argues it has no coverage because: (1) any apportionment of liability should have been between Pullen and Ace Chicago, both being named defendants; (2) Travelers provided no coverage for Ace Chicago; and (3) the settlement was paid due to the potential liability of Ace Chicago. Travelers cites no authority for this argument.
Essentially, Travelers' argument appears to rely on an assumption that there was a...
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