Lambright v. Nat. Union Fire Ins. Co.
| Decision Date | 22 August 2005 |
| Docket Number | No. M2003-02133-COA-R3-CV.,M2003-02133-COA-R3-CV. |
| Citation | 173 S.W.3d 756 |
| Parties | Ludmilla LAMBRIGHT, et al. v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA. |
| Court | Tennessee Supreme Court |
Robert Orr, Nashville, Tennessee, for the appellant, National Union Fire Insurance Company of Pittsburgh, Pennsylvania.
Peter M. Olson, Clarksville, Tennessee, for the appellees, Ludmilla Lambright and Antonio Lambright.
C. Benton Patton, Nashville, Tennessee, for the appellee, United Services Automobile Association.
Frank Thomas, Nashville, Tennessee, for the appellee, Michael George Eberly.
John Thomas Feeney, III, Nashville, Tennessee, for the appellee, Progressive Insurance Company.
WILLIAM B. CAIN, J., delivered the opinion of the court, in which PATRICIA J. COTTRELL and FRANK G. CLEMENT, JR., JJ., joined.
All parties sought declaratory judgment as to whether or not driver Michael George Eberly was an omnibus insured under the permissive user provisions of his employer's policy of insurance at the time of the accident in issue. The Chancellor in non-jury trial found that Eberly had only engaged in a "minor deviation" from employer restrictions on his permissive use of the vehicle, and required National Union Fire Insurance Company to protect Eberly as an omnibus insured under the policy. We reverse the action of the trial court.
National Union Fire Insurance Company filed a declaratory judgment action, naming Ludmilla Lambright and husband, Antonio Lambright, and Michael George Eberly as defendants and seeking a determination of whether or not Michael George Eberly was afforded insurance coverage under the omnibus clause of the National Union policy. The Lambrights answered and filed a cross claim against their own uninsured motorist carrier, Union Services Automobile Association (USAA). They also joined Progressive Insurance Company as a defendant since Progressive was the insurance carrier for Michael George Eberly as to his private automobile. USAA answered. Progressive then answered and cross claimed against Eberly, seeking to avoid its coverage of Eberly under his private vehicle policy. National Union then voluntarily non-suited its declaratory judgment action, after which the Eberlys instituted their own declaratory judgment action against National Union and Eberly. National Union then filed its motion for summary judgment against the Lambrights and Eberly, and over the next several months USAA and Progressive responded to National Union's motion for summary judgment, with Progressive supporting the motion and USAA opposing the motion. The Lambrights then filed their opposition to the motion for summary judgment. Since the final judgment in the case held that Eberly was an omnibus insured under the National Union policy, the court likewise held that the Lambrights were not entitled to any relief against their uninsured motorist carrier, USAA, and further held that Eberly had no claim against Progressive as an insurer relative to his private vehicle.
In a rather unorthodox procedure the trial court, with the consent of all parties, converted a scheduled hearing on a motion for summary judgment into a non-jury trial on the merits. The controlling facts in the case are all but undisputed. GTE Government Systems Corporation employed Michael George Eberly in 1989 because of his skill and experience as a service technician concerning radio and other communications equipment. On his employment application, Eberly disclosed to GTE that he had two prior convictions for driving under the influence of an intoxicant. His duties for GTE involved providing technical assistance to the Army at Ft. Campbell, Kentucky. Beginning in 1992, GTE provided Eberly with a company-owned vehicle for Eberly's use in providing technical support service to the U.S. Army.
Eberly was permitted possession, control and use of a GTE company vehicle from that date in 1992 until he was involved in the accident in issue in this case which occurred January 15, 1999. Among Eberly's duties was to be "on call" twenty-four hours a day. Thus, Eberly was required as a condition of his employment to drive his service vehicle to and from his home and place of work. GTE entrusted Eberly with all responsibility for the upkeep of the vehicle subject to reimbursement by GTE of the cost of such maintenance. GTE also imposed a policy limiting Eberly from personal use of the vehicle. GTE also maintained a policy prohibiting the use of a GTE vehicle at any time that the driver had consumed or was consuming alcohol.
On January 15, 1999, Eberly was returning from work to his home on the ordinary road route that he customarily traveled and was within the timeframe that he ordinarily returned to his home from work. En route to his home, Eberly stopped at the Golden Nugget Lounge where he consumed four cans of beer over a one-hour period of time. The location of the lounge was on the road route customarily traveled by Eberly from work to his home. After his stop at the Golden Nugget Lounge, Eberly resumed his customary road route toward his home. He stopped at a Texaco station to purchase gasoline with a credit card provided by GTE. He then resumed his customary road route home, but before arriving at his home he struck the vehicle driven by Ludmilla Lambright in the rear. After the wreck, Eberly registered a .15 blood alcohol content in a breath alcohol test. He pleaded guilty thereafter to driving under the influence of an intoxicant, resulting in loss of driving privileges and the necessity of obtaining a restricted drivers license. At the time of the wreck on January 15, 1999, Eberly was aware of the GTE policy prohibiting operation of the company vehicle after ingesting alcoholic beverages.
Following the accident, Eberly tendered his resignation to his supervisor, Richard Kluck, who felt that termination of employment was necessary. Regional Manager Cooper, however, chose to suspend Eberly for three days and possibly withhold a pay raise rather than to terminate his employment.
The trial court, relying heavily on the employer's post-accident decision to impose minimal discipline upon Eberly, determined that his conduct constituted a "minor deviation" from his permissive user and that such deviation did not disqualify him from insurance coverage under the omnibus clause of his employer's insurance policy. National Union Fire Insurance Company filed a timely appeal.
The as yet unresolved question of respondent superior of the employer, GTE, for the actions of Michael George Eberly is not before the court in this declaratory judgment proceeding. That question will be resolved in the parallel tort case presently pending in the Circuit Court for Montgomery County, Tennessee, between Ludmilla Lambright and husband, Antonio Lambright, plaintiffs, and GTE and Michael George Eberly, defendants. This case solely deals with whether or not National Union Fire Insurance Company must extend coverage to and defend Michael George Eberly individually under the "omnibus clause" of its insurance policy issued to GTE as named insured.
Deviation from his route to his home from his place of work has little to do with Eberly's status as an omnibus insured under the policy. It is his intoxication while driving his employer's vehicle that is determinative. Eberly admits that at the time of the accident he had been long familiar with GTE's express instructions prohibiting personal use of the vehicle and its further rule prohibiting driving its vehicles after consuming any alcohol.
We must reiterate that we are not concerned with Eberly's violation of the two policies prohibiting personal use of a company vehicle and operation of a company vehicle after consumption of alcohol as those policies relate to whether or not Eberly was driving the vehicle within the scope of his employment by GTE and was on the business of his employer at the time of the accident. Those questions will be resolved in the tort action. We are dealing here solely with a determination of whether or not Eberly is an omnibus insured under the permissive user clause of the National Union Fire Insurance Company policy. Resolution of this issue is personal to Michael George Eberly and is not determinative of National Union's obligation to provide coverage to its named insured, GTE, in the tort action.
While both Moore v. Liberty Mut. Ins. Co., 193 Tenn. 519, 246 S.W.2d 960 (1952) and Tenn. Farmers Mut. Ins. Co. v. Witt, 857 S.W.2d 26 (Tenn.1993) concern insured status of drivers who were driving under the influence of alcohol, neither of those cases involve the omnibus status of a person driving under the influence of an intoxicant at a time when he had full knowledge of his employer's strict rules against personal use of the vehicle or against use of the vehicle after he had consumed alcohol.
Cases from other jurisdictions are enlightening and somewhat diverse. General Accident Ins. Co. of America v. Margerum, 375 Pa.Super. 361, 544 A.2d 512 (1988) was a declaratory judgment action under facts quite similar to the case at bar. Peter S. Hricko owned a roofing company and employed Ira Margerum, whom he considered a dependable employee, as a roofer.
In mid-January, with the onset of unfavorable winter weather, Hricko offered a van to Margerum with the following instructions: that it be used solely for commuting between home and work, that Margerum not drink and drive, and that the van not be used for personal reasons.
Margerum, 375 Pa.Super. 361, 544 A.2d 512, 513.
On January 22, 1982, Margerum requested permission to leave work early in order to attend his sister's wedding. Hricko granted the request but specifically instructed Margerum not to take the van to the reception and not consume alcoholic beverage while driving the van. Margerum followed these instructions using other means...
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