Lowery v. Kovac
| Decision Date | 28 December 1970 |
| Docket Number | Civ. No. 11877. |
| Citation | 320 F. Supp. 215 |
| Court | U.S. District Court — District of Connecticut |
| Parties | Nathan LOWERY, p.p.a. Joan Lowery v. Peter J. KOVAC. |
Richard L. Jacobs, Jacobs, Gray & Messinger, New Haven, Conn., for plaintiff.
George E. McGoldrick, New Haven, Conn., for defendant Kovac.
The issue before the Court involves the interpretation of the omnibus clause of a public liability insurance policy issued by the third-party defendant herein, United States Fidelity and Guaranty Company.
On December 17, 1966, Nathan Lowery, a plaintiff in this action, and Patricia Pelz, a plaintiff in Civil Action No. 12001, were seriously injured in an automobile accident in New Haven, Connecticut. At the time, the vehicle was being operated in a negligent manner by Peter J. Kovac, a Yale student and a defendant in both suits. The Pelz case was settled prior to trial by Kovac's insurer, Federal Insurance Company, for $60,000; the Lowery suit was settled after several days of trial and the same insurance company paid him $170,000 in damages. In this third-party action Federal seeks to establish that the United States Fidelity and Guaranty Company, as the insurer of the owner of the automobile in question, bears primary responsibility for these payments up to the limits of its policy.
When the accident occurred, Kovac was driving a 1965 Volkswagen sedan automobile owned by Harlan Pahlka, a resident of Oklahoma City, Oklahoma, and insured under a Family Automobile Policy issued on April 15, 1966, by the third-party defendant insurer. The parties agree that coverage under the omnibus clause of the policy as written extended to any person using the vehicle with the permission of the named insured, Harlan Pahlka.
While the insurance was in force in August 1966, William Pahlka, the son of Harlan Pahlka, requested his father's permission to take the car to Yale College and use it during the school year. Harlan Pahlka testified by deposition that he acceded to the request only after his son agreed that "no one, except himself, was to ever drive that vehicle, under any circumstances." William took the car to New Haven and on at least ten occasions permitted classmates to use the car. In December 1966, William returned to Oklahoma for the Christmas recess to visit his parents and to be married, leaving the automobile in New Haven in the care of a fellow-student, Gary Drobnack. Drobnack had William's permission to use the car while William was on vacation.
On December 17, 1966, the defendant Peter Kovac asked Drobnack if he could borrow William's automobile to take his girlfriend, Patricia Pelz, to a movie and to drive the plaintiff Nathan Lowery to his home in New Haven. Drobnack gave Kovac the keys to the vehicle and the accident occurred while Kovac was driving the car with Pelz and Lowery as passengers.
A threshold question raised by the parties is whether the law of Connecticut or the law of Oklahoma applies.
The general rule is that, in the absence of a showing that an insurance contract is to have its operative effect in a jurisdiction other than the place it was entered into, the validity and construction of the contract are determined by the law of the state where the contract was made. Jenkins v. Indemnity Ins. Co., 152 Conn. 249, 253, 205 A.2d 780 (1964).
In the instant case the declarations in the policy indicate that the named insured, Harlan Pahlka, and the company's agent were residents of Oklahoma City, Oklahoma. The policy was issued in Oklahoma and provided coverage for two family automobiles, the Volkswagen in question and a Chevrolet, both of which were registered in the State of Oklahoma and both of which were to be principally garaged in Oklahoma City. At the time the renewal policy was executed in April 1966, it was not known that William would be permitted to take his father's car to Yale. Thus the law of Oklahoma must govern here because at the time the policy was issued the parties intended that it was to have its beneficial operative effect and performance in that state. Cf. Breen v. Aetna Cas. & Sur. Co., 153 Conn. 633, 638, 220 A.2d 254 (1966); see also Travelers Corp. v. Kaminski, 304 F.Supp. 481, 488 (D.Md.1969).
In any event, it seems clear to the Court that, for the reasons stated hereinafter, the so-called "liberal" law of Connecticut and the so-called "conservative" approach of the Oklahoma courts command the same result when applied to the facts of this case.
The main issue presented is whether on December 17, 1966, the operation of Harlan Pahlka's automobile by the defendant Kovac was covered under the omnibus clause of the insurance policy issued by the third-party defendant to Pahlka. In other words, the Court must decide whether Kovac was using the insured vehicle with the permission of the owner, Harlan Pahlka.
Certain general principles are applicable. Under the provisions of the omnibus clause a named insured may extend the coverage of the policy to others by granting a permission to use the vehicle. Once permission is granted by the named insured to his permittee, the authority of the first permittee to further extend coverage to a second permittee depends on whether the named insured granted permission to the first permittee to lend the car to others. St. Paul Fire and Marine Ins. Co. v. Dean, 308 F.Supp. 1378, 1383 (W.D.Ark.1970); Schevling v. Johnson, 122 F.Supp. 87, 88 (D.Conn.1953).
Such permission may be express, or implied from the circumstances. See, e. g., Duff v. Alliance Mut. Cas. Co., 296 F.2d 506, 508 (10 Cir. 1961) (Oklahoma law); Schevling v. Johnson, supra (Connecticut law). Implied permission may arise not only by a definite arrangement between the named insured and his permittee, but also it may be inferred from "evidence tending to show a course of conduct or practice known to the owner and acquiesced in by him or by someone having authority to give permission." Sunshine Mut. Ins. Co. v. Mai, 169 F. Supp. 702, 705 (D.N.D.1959). See also Tomasetti v. Maryland Cas. Co., 117 Conn. 505, 508, 169 A. 54 (1933).
Applying these rules to the facts of the instant case, the Court is of the opinion that Kovac's operation of the insured vehicle on the day in question was not within the coverage afforded by the omnibus clause of the...
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...construction of an insurance contract is determined by the law of the state where the contract was made." Id. (citing Lowery v. Kovac, 320 F.Supp. 215 (D.Conn. 1970)). P.W. Stephens argues that these statements from Field and Smith establish a per se rule that insurance contracts are govern......
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