Great American Insurance Company v. Anderson, 17499.

• Decision Date: 06 June 1968
• Docket Number: No. 17499.,17499.
• Parties: GREAT AMERICAN INSURANCE COMPANY, Plaintiff-Appellant, v. James P. ANDERSON, Purificacion Y. Gentry, Robert R. Gentry, and Sammy Earl Gentry, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

395 F.2d 913 (1968)

GREAT AMERICAN INSURANCE COMPANY, Plaintiff-Appellant, v. James P. ANDERSON, Purificacion Y. Gentry, Robert R. Gentry, and Sammy Earl Gentry, Defendants-Appellees.

No. 17499.

United States Court of Appeals Sixth Circuit.

June 6, 1968.

Charles J. Gearhiser, Chattanooga, Tenn., for appellant; Stophel, Caldwell & Heggie, Chattanooga, Tenn., Rendigs, Fry, Kiely & Dennis, Cincinnati, Ohio, of counsel.

Harry Berke, Chattanooga, Tenn., (Berke & Berke, Chattanooga, Tenn., on the brief), for appellees.

Before COMBS, Circuit Judge, and CECIL and McALLISTER, Senior Circuit Judges.

McALLISTER, Senior Circuit Judge.

Appellant, Great American Insurance Company, brought an action for a declaratory judgment to determine its liability under a policy of insurance. The policy was for automobile liability insurance and was issued by appellant to Southeastern Fleet Leasing Company, Inc., a company in the business of leasing automobiles.

Robert R. Gentry leased an automobile, so insured, from the Southeastern Fleet Leasing Company, Inc. for the purpose of transporting himself and members of his family from Tennessee to Kentucky. During the trip, there occurred a collision between the leased car and another automobile, as a result of which several people in the Gentry car were injured. At the time of the accident, the leased automobile was being driven by Sammy Earl Gentry, a brother of Robert R. Gentry, the lessee of the car. As a result of the accident, six damage suits were filed on behalf of the passengers in the Gentry car against Sammy Earl Gentry and the Southeastern Fleet Leasing Company, Inc. Thereupon, Sammy Earl Gentry called upon the Great American Insurance Company to defend him in these damage suits; and, subsequently, the Great American Insurance Company filed its suit for a declaration of its rights under the policy, which it had issued to Southeastern Fleet Leasing Company, Inc., asking the court to adjudge that Sammy Earl Gentry was not entitled to any defense by the insurance company under the above-mentioned policy and appellant further asked that the plaintiffs in all other damage suits arising out of the accident be temporarily restrained from prosecuting their actions, pending final decision in such declaratory judgment suit.

The grounds of appellant's suit for a declaration of its rights and judgment that Sammy Earl Gentry was not entitled to require it to defend him under the terms of the policy, and for an injunction that the other plaintiffs be restrained from prosecuting their actions against appellant insurance company, are as follows:

The automobile liability insurance policy issued by appellant to Southeastern Fleet Leasing, Inc. provided, as to drivers other than the named insured lessor, that:

"* * * 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. * * *"

The lease agreement between Southeastern Fleet Leasing, Inc. and Robert R. Gentry, its lessee, provided:

"Also Lessee agrees to not permit leased vehicle to be used or operated by any person other than himself, except his employer, a regular business employee and any member of his immediate family being over twenty-five years of age and having a license to drive without prior written consent of the Lessor."

Appellant submits that Sammy Earl Gentry, the driver of the leased vehicle at the time of the accident, was not the employer or employee of Robert R. Gentry, the lessee of the Southeastern Fleet Leasing, Inc.; that, although Sammy Earl Gentry was a brother of Robert, he was not a member of Robert's immediate family; that, therefore he was not authorized, under the provisions of the lease agreement, to drive the vehicle leased by Robert; and, accordingly, he was not covered by the insurance policy issued by appellant insurance company to Southeastern Fleet Leasing, Inc. covering specified drivers other than the named insured.

On the trial of the case, both Robert R. Gentry, the lessee of the vehicle, and Sammy Earl Gentry, testified, over the objection of appellant, that they told the agent of Southeastern Fleet Leasing, Inc. that they both would be driving the leased vehicle; that it was being used to transport Robert and the members of his family to the State of Kentucky; that, at that time they were informed by the agent of Southeastern Fleet Leasing Inc. that only one of them needed to sign the lease, and that when the vehicle was leased to Robert, both brothers could drive the car and both would be covered by the automobile insurance.

The foregoing testimony was denied by the agent of Southeastern Fleet Leasing, Inc., who testified that no one, other than Robert R. Gentry, was given permission — written or oral — to drive the leased vehicle.

Appellant's action for a declaratory judgment was tried before a jury and submitted upon two issues: Whether Sammy Earl Gentry was operating the vehicle within the scope of any written permission of the Southeastern Fleet Leasing Inc.; and whether Sammy Earl Gentry was operating the vehicle at the time of the accident within the scope of the oral permission given him by Southeastern Fleet Leasing Inc.

The case was submitted to the jury on both...