Insurance Co. of North America v. Coffman

• Decision Date: 05 November 1982
• Docket Number: No. 268,268
• Citation: 52 Md.App. 732,451 A.2d 952
• Parties: INSURANCE COMPANY OF NORTH AMERICA v. Ronald H. COFFMAN et al.
• Court: Court of Special Appeals of Maryland

Page 732

52 Md.App. 732

451 A.2d 952

INSURANCE COMPANY OF NORTH AMERICA v. Ronald H. COFFMAN et al.

No. 268.

Court of Special Appeals of Maryland.

Nov. 5, 1982.

M. King Hill, Jr., Baltimore, with whom were John R. Penhallegon and Smith, Somerville & Case, Baltimore, on the brief, for appellant.

Donald F. Oakley, Baltimore, with whom were Marvin Ellin, Jonathan Schochor and Ellin & Baker, Baltimore, on the brief for appellees, Jeffrey V. and Cleo J. Sippel.

Argued before WILNER, GARRITY and ADKINS, JJ.

WILNER, Judge.

The genesis of this case was an automobile accident that occurred on July 7, 1978, involving a van owned by Bethlehem Steel Corporation. The van was used by Bethlehem as a dispensary vehicle--to transport injured employees to hospitals or other medical facilities.

The accident occurred while Ronald Coffman, a Bethlehem employee, was transporting his fellow employee Jeffrey Sippel to such a facility. Coffman "ran" a red light and collided with a vehicle lawfully in the intersection. Sippel was injured in the accident and he and his wife eventually sued Coffman in the Baltimore City Court to recover for their injuries. Coffman referred the lawsuit to appellant INA--the insurer of his personal car--to defend. On March 30, 1979, INA formally declined such defense (and liability for any resulting judgment) on the ground that "[t]he vehicle being operated by you at the time of this accident does not qualify under the definitions of this policy as being an owned auto, non-owned auto or temporary substitute vehicle...."

Faced with that rejection, Coffman filed this declaratory judgment proceeding in the Superior Court of Baltimore City seeking a declaration that (1) INA is required to defend him and pay any judgment arising from the Sippel lawsuit, in accordance with its insurance policy, and (2) Bethlehem also is required to defend the action and indemnify him against such resulting judgment. Prosecution of the Sippel suit was stayed pending the outcome of this proceeding.

All parties filed motions for summary judgment. Ultimately, the court entered judgments declaring that (1) INA is required to defend and, to the extent of its policy limits, indemnify Coffman, and (2) Bethlehem is not so required. No appeal was taken from the judgment regarding Bethlehem; INA has brought this appeal challenging the judgment adverse to it.

I. The Policy Language

Coffman's policy obligated INA to pay on behalf of Coffman "all sums which the Insured shall become legally obligated to pay as damages because of ... bodily injury ... sustained by any person ... arising out of the ownership, maintenance or use of the owned automobile or any non-owned automobile." (Emphasis supplied.) The "owned automobile" referred to in the policy was Coffman's personal vehicle, which was not involved in the accident. A "non-owned automobile" was defined as "an automobile or trailer not owned by or furnished for the regular use of ... the Named Insured ... other than a temporary substitute automobile." (Emphasis supplied.)

With this definition, Bethlehem's van would not qualify for coverage as a "non-owned automobile" under the policy if it was furnished for Coffman's "regular use."

There are two other provisions of the policy relevant to the controversy. In the "Exclusion" section, the policy provides:

"This policy does not apply under Bodily Injury or Property Damage Liability Coverage:

* * *

* * *

(h) to a non-owned automobile while maintained or used by any person while such person is employed or otherwise engaged in

* * *

* * *

(2) any other business or occupation of the Insured, but this exclusion (h)(2) does not apply to a private passenger automobile operated or occupied by the Named Insured...." (Emphasis supplied.)

The term "private passenger automobile" is defined in the policy as "a four wheel private passenger, station wagon or jeep type automobile."

II. The Controversy

Coffman claims coverage under the policy on the basis that Bethlehem's van was a "non-owned automobile." INA defends on two grounds: (1) that the van was furnished by Bethlehem for Coffman's "regular use," and therefore it does not qualify as a "non-owned automobile"; and (2) that even if the van did qualify as a "non-owned automobile," it is excluded from coverage under section (h)(2) of the policy exclusions. This latter contention is based on the assertion that the van was used in Coffman's "business or occupation" and was not a "private passenger automobile."

Coffman, in response, argues that INA had waived that second defense by failing to mention it in the March 30, 1979, letter of rejection.

The court gave no explanation for its decision to grant Coffman's motion for summary judgment, other than a reference to "the reasons set forth in Defendants' Motion for Summary Judgment and the supporting Memorandum...." (Emphasis supplied.) We must assume that that reference was a mistaken one, as INA's motion and memorandum would hardly support the court's action. In any event, the issues now before us are (1) whether there was undisputed evidence before the court sufficient to support its implicit conclusion that, as a matter of law, the van qualified as a "non-owned automobile"; (2) whether INA had waived its right to raise the "exclusion" defense; and (3) if it did not waive that right, whether the evidence sufficed to support an implicit finding that the exclusion did not apply.

III. The Evidence

Coffman had been employed by Bethlehem since 1969 as a forktruck driver. His job involved moving heavy materials around the Bethlehem shipyard on a forktruck. In addition to the forktruck and other such vehicles used within the confines of the shipyard, Bethlehem owned several vehicles that were used outside the shipyard. In addition to the dispensary van, the company owned two limousines used for transporting "dignitaries" and a "stake-body" truck used for transporting less dignified cargo. These were commonly known as "over-the-road" vehicles.

The dispensary van was a 1974 Ford Econoline Club Wagon designed to seat eight people. It had a six-cylinder engine and was built on a unibody sedan chassis. As noted, the van was used exclusively to transport sick or injured workers to appropriate medical facilities in and around the city. It was not available for the personal use of Bethlehem employees; when a trip was completed, the van was returned to the Bethlehem shipyard.

Jimmy Swaine was the Bethlehem employee regularly assigned to drive the dispensary van. On those few occasions when he was ill or on vacation, a supervisor in Bethlehem's transportation department would designate one of five employees in that department to act as substitute driver. Coffman was one of those five employees, and occasionally he was selected to drive the van, or the "stake-body" truck, or one of the limousines. In the ten years of Coffman's employment prior to the accident, he had been assigned to drive the van as a substitute for Swaine a total of four times, some of those times being for a day or less, some apparently for longer periods. He drove the limousines an average of twice a year and the "stake-body" truck about five times a year.

Swaine was due to be on vacation from July 3 through July 7, and Coffman was designated to substitute for him that week. He drove the van, using itineraries chosen by the supervisor, on July 3, 5, and 6, and was, of course, driving it on July 7, when the accident occurred.

IV. Was The Van A Non-Owned Automobile?

INA argues that, despite Coffman's rather infrequent use of the van, it nevertheless was furnished for his "regular use." Attempting to latch onto a concept expressed in Winterwerp v. Allstate Insurance Co., 277 Md. 714, 357 A.2d 350 (1976), INA argues that the van was one of a "pool" of "over-the-road" vehicles--i.e., the limousines and "stake-body" truck--and that the question of "regular use" has to be judged in terms of his use of any and all of the vehicles in that pool. We think that INA has stretched Winterwerp well beyond its logical circumference.

Mr. Winterwerp, a fireman employed by the Baden Volunteer Fire Department, was involved in an accident while driving a "brush wagon"--a type of firetruck--owned by the Department. It was one of six emergency vehicles owned by the Department and "used in varying combinations depending on the nature and extent of the particular emergency to which they were responding." 277 Md. at 716, 357 A.2d 350. The record showed that in the two-year period preceding the accident, Winterwerp had driven one or another of the six vehicles on seventy occasions and had driven the "brush wagon" on ten occasions.

Adopting the conclusions reached in Aler v. Travelers Indemnity Co., 92 F.Supp. 620, 623 (D.Md.1950), the Court, 277 Md. at p. 718, 357 A.2d 350, regarded the "furnished for regular use" clause as follows:

"The general purpose and effect of this provision of the policy is to give coverage to the insured while engaged in the only infrequent or merely casual use of an automobile other than the one described in the policy, but not to cover him against personal liability with respect to his use of another automobile which he frequently uses or has the opportunity to do so." (Emphasis added by Court of Appeals.)

The word "regular" in that clause, said the Court, quoting from Allstate v. Humphrey, 246 Md. 492, 497, 229 A.2d 70 (1967), is "the antonym of 'casual' or 'occasional'; and mean[s] ' "steady or uniform in course, practice or occurrence; ... steadily pursued; ... functioning at proper intervals; ... recurring ... at stated, fixed, or uniform intervals." ' " Id. 277 Md. at 719, 357 A.2d 350. In determining whether a given use is "regular" or only "casual or occasional," a court might properly consider "the period and frequency of the permitted use," whether "special permission must be obtained whenever [the vehicle] is driven," and, where the vehicle is owned by the...