Manor v. Statesman Ins. Co.
| Decision Date | 29 April 1993 |
| Docket Number | No. 33A01-9207-CV-234,33A01-9207-CV-234 |
| Citation | 612 N.E.2d 1109 |
| Parties | James D. MANOR and Jonathon W. Manor, d/b/a Manor Brothers Concrete; Joseph J. Journay; Robin R. Campbell; Lana K. Campbell; Jo Ellen West, Next Friend of Robin R. Campbell; and Danny Campbell and Leah Campbell, Next Friends of Lana K. Campbell, Appellants-Defendants, v. STATESMAN INSURANCE COMPANY, An Indiana Corporation, Appellee-Plaintiff. |
| Court | Indiana Appellate Court |
Charles R. Clark, Beasley Gilkison Retherford Buckles & Clark, Muncie, for Lana K. Campbell and Danny and Leah Campbell, as Next Friends of Lana K. Campbell.
David S. Wallace, Warner Wallace McLaren & Dague, Muncie, for Robin R. Campbell and Jo Ellen West, as Next Friend of Robin R. Campbell.
Mark R. Smith, Bishop Smith Bishop & Bemenderfer, Indianapolis, for appellee-plaintiff.
STATEMENT OF THE CASE
Defendants-Appellants, Robin R. Campbell and Jo Ellen West, as her next friend ("Robin"), and Lana K. Campbell and Danny and Leah Campbell, as her next friends ("Lana"), appeal from a declaratory judgment that there was no liability coverage and no duty to defend or indemnify under the omnibus clause in an insurance policy ("Policy") which Plaintiff-Appellee, Statesman Insurance Company ("Statesman"), issued to James and Jonathon Manor, d/b/a Manor Brothers Concrete ("Manor Brothers"). Robin and Lana sustained injuries in an accident on August 13, 1989, ("Accident") with a Manor Brothers' dump truck driven by Joseph J. Journay ("Journay"), a Manor Brothers' employee. The trial court determined that at the time of the Accident, Journay had neither express nor implied permission for personal use of the dump truck and that he was not an insured under the omnibus clause in the Policy. We affirm.
The issue on appeal is whether coverage under an insurance policy's omnibus clause can be implied when personal use of the vehicle is subject to an express use restriction.
The facts most favorable to the judgment show that Journay had been employed by Manor Brothers for approximately five and one-half years prior to the Accident. During the period of Journay's employment, Manor Brothers had a company policy requiring that all but three designated employees first obtain permission before using company vehicles for personal business. While this company policy was not written, Journay understood that he needed to obtain permission for such personal use. On many occasions, Manor Brothers instructed Journay to drive company vehicles, including a dump truck, to Journay's residence and to park the vehicle there overnight. Manor Brothers instructed Journay to take vehicles home overnight because it was more convenient for Manor Brothers to have Journay drive a vehicle home in the evening and then deliver the vehicle directly to the next day's job site. Journay drove company vehicles home for that purpose more than most Manor Brothers employees.
Prior to the date of the Accident, Journay did not own an automobile and Manor Brothers also permitted Journay to use other company vehicles, including a flatbed pickup truck, to drive to and from work. Manor Brothers listed Journay as an authorized driver of Manor Brothers' vehicles with its insurance agent.
Approximately four to five months before the Accident, Jonathon Manor reprimanded Journay for using a company truck on a weekend for personal business without first obtaining permission. Jonathon Manor explained to Journay that Journay should have obtained permission prior to The day before the Accident, Journay, Dan Manor and Tyler Ridge, another Manor Brothers' employee, were working at a job site in Muncie, Indiana. There was a dump truck hitched to a trailer, a backhoe and a pickup truck at the site. When Dan Manor left the site at noon, he told Journay and Ridge to tow the backhoe with the dump truck to a job site in Parker City, Indiana, after they finished work that day, and to leave the dump truck, trailer and backhoe at that site for work Monday. It was Dan Manor's understanding that Journay would drive the dump truck with attached trailer and backhoe to the Parker City job site, Ridge would follow Journay in the pickup truck, and then Journay would drive Ridge home and take the pickup to Journay's residence for the weekend. Record 270, 271, 289. Dan Manor anticipated that Journay would drive the pickup for personal purposes that weekend; however, Manor did not authorize Journay to drive the dump truck other than to deliver it to Parker City. Dan Manor did not authorize or direct Journay to drive the dump truck to his residence on Saturday and then to the Parker City site on Monday, nor did Journay ask Manor's permission to use the dump truck for personal business that weekend.
using the truck. Jonathon Manor testified that he contemplated terminating Journay's employment for this incident, but instead decided to overlook Journay's mistake because Journay was a good employee. Record at 225. This was the only time before the Accident that Journay had used a company vehicle for personal use without first obtaining permission.
Journay did not leave the dump truck in Parker City as instructed but instead drove the truck to his residence in Muncie. On the following morning, a Sunday, Journay telephoned Dan Manor at home to request permission to use the dump truck for his personal business. Dan Manor was not home and Journay spoke to Manor's wife who stated that she did not know anything about her husband's business. Manor's wife advised Journay that he should try to contact her husband again later. Journay testified that he did not call Manor again but "just assumed if he [Dan Manor] didn't want me to [use the truck] he'd call me back." Record at 449. Journay admitted that he should have called Manor and obtained his permission to use the dump truck for personal business. Record at 450. Later that same day, Journay, while driving the Manor Brothers' dump truck, was involved in a collision with an automobile driven by Robin. Robin and Lana, a passenger in the automobile, both sustained personal injuries in the collision.
Statesman filed a declaratory judgment action seeking a determination that Journay was not a permissive user of the dump truck at the time of the Accident, that there was no coverage for the Accident, and that Statesman had no duty to defend or indemnify Manor Brothers or Journay under the Policy for any claim made by Robin and Lana for personal injuries or property damage arising out of the Accident. The Policy provision at issue is an "omnibus" clause which provides:
"The following are 'insureds:'
a. You for any covered 'auto.'
b. Anyone else while using with your permission a covered 'auto' you own, hire or borrow...."
Record at 24. The trial court held that there was no coverage under the omnibus clause in the Policy because Journay had driven the dump truck without Manor Brothers' permission as required by the Policy. Robin and Lana have both appealed that determination and filed separate briefs. We will state additional facts in our discussion as needed.
DISCUSSION AND DECISION
After a bench trial, the trial court entered its findings of fact, conclusions and judgment. None of the parties requested special findings pursuant to Ind.Trial Rule 52(A). When a trial court enters special findings sua sponte, those findings control only with respect to the issues which they cover. State ex rel. J.A.W. v. Indiana Juvenile Parole Committee (1991), Ind.App., 581 N.E.2d 989, 991. Our review of special findings and conclusions is two-tiered: we first determine whether the evidence As to any issue upon which the trial court has not entered an express finding, we are not bound by the court's findings and conclusions but we view the case as one decided on a general judgment. J.A.W., 581 N.E.2d at 991. We will affirm the general judgment upon any legal theory supported by the evidence unless uncontradicted evidence leads to a conclusion opposite from that reached in the judgment. Id.
supports the findings and then determine whether the findings support the judgment. Kaminszky v. Kukuch (1990), Ind.App., 553 N.E.2d 868, 870, trans. denied. Special findings will only be set aside if they are clearly erroneous. Id
Robin and Lana allege error in the trial court's conclusion that Journay did not have implied permission to use Manor Brothers' dump truck for personal business. They claim that the trial court erred by failing to apply the "liberal rule" properly because there was "undisputed evidence of implied permission." Robin's Brief at 15. We disagree and conclude that based on its findings of fact, the trial court properly denied coverage under the omnibus clause.
Indiana follows the "liberal rule" in interpreting the scope of coverage for permissive use under an insurance policy omnibus clause. Arnold v. State Farm Mutual Automobile Insurance Co. (7th Cir.1958), 260 F.2d 161. In Arnold, the Seventh Circuit stated the rule as:
"one who has permission of an insured owner to use his automobile continues as such a permittee while the car remains in his possession, even though that use may later prove to be for a purpose not contemplated by the insured owner when he entrusted the automobile to the use of such permittee."
Id. at 165. Under those circumstances, a deviation in use from that intended by the owner will not operate to terminate the initial permission to use the vehicle granted by the owner and to deny coverage under the omnibus clause. Id.
However, the court in Arnold recognized that in some situations there may be factors which our courts would find to terminate the initial permission. Id. Subsequent decisions interpreting Arnold have held that initial permission to use a vehicle is terminated where an employer places express restrictions on the use of company vehicles by employees and an employee violates those restrictions. See ...
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