Maryland Indem. Ins. Co. v. Kornke

• Decision Date: 17 May 1974
• Docket Number: No. 594,594
• Citation: 319 A.2d 603,21 Md.App. 178
• Parties: MARYLAND INDEEMNITY INSURANCE CO. v. William T. KORNKE, Sr., et al.
• Court: Court of Special Appeals of Maryland

Page 178

21 Md.App. 178

319 A.2d 603

MARYLAND INDEEMNITY INSURANCE CO. v. William T. KORNKE, Sr., et al.

No. 594.

Court of Special Appeals of Maryland.

May 17, 1974.

Matthew Swerdloff, Baltimore, with whom were Swerdloff, Rabineau & Murphy, Baltimore, on the brief, for appellant.

Robert E. Cadigan, Baltimore, with whom were Smith, Somerville & Case, Baltimore, on the brief, for appellees.

Argued before THOMPSON, MOORE and LOWE, JJ.

MOORE, Judge.

We are here confronted with a 'clearcut set of facts' ¹ requiring a decision as to whether the coverage afforded by the omnibus clause of an automobile liability insurance policy extends to the 'second permittee'-the driver of the insured vehicle a distinguished from the borrower or 'first permittee'-and under circumstances where the insured owner restricted the operation of his car to the first permittee but the latter was a passenger at the time of the accident.

The issue was presented to the trial court (Jenifer, J.) upon a stipulation of facts and the deposition of the first permittee, in a suit for declaratory judgment wherein Maryland Indemnity Insurance Company ('Maryland Indemnity') sought in effect a determination that Nationwide Mutual Insurance Company ('Nationwide')-and not Maryland Indemnity-was required to provide coverage and a defense to the second permittee in two separate personal injury actions filed in the Circuit Court for Baltimore County, on behalf of the first permittee and another passenger, respectively. Nationwide had issued a policy to the father of the second permittee and the latter was covered by a so-called JR-11 endorsement to her father's policy. ² In a carefully considered written opinion, the trial judge held that Maryland Indemnity was the primary insurer. We affirm.

The so-called 'omnibus clause,' required by statute in a number of states, ³ is in addition to the general insuring clause and extends the protection of the automobile liability insurance policy to any person using the insured vehicle provided the use (or 'actual use') ⁴ is by the named insured or with his permission or consent. The clause, irrespective of language variations, clothes the named insured with broad authority to constitute other persons as 'additional insureds.'

The Maryland Indemnity omnibus clause at issue in this case contains fairly standard provisions and reads as follows:

'Definition of Insured. (a) 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 responsibile for the use thereof, provided the actual use fo the automobile is by the named insured or such spouse or with the permission of either.' (Emphasis added.)

With respect to the 'simple words, perhaps too simple, 'actual use . . . with the permission' of', the Court of Appeals has at least twice recorded its agreement with the observation of a dissenting judge in a 1960 New Jersey case ⁵ that these words

'. . . have engendered probably as much reported litigation as any common contractual phrase. The absence of any express definition of the key words, either legislatively or within the instrument, coupled with the infinite variety of factual situations arising, has resulted in the widest conceivable range of judicial approach, reasoning and result.'

Appellant's principal contention is that the trial court erred in determining that at the time of the accident in question the 'actual use' of the automobile was by the named insured (William T. Kornke, Sr.) or with his permission, or, as alternatively stated, the court erred in its determination that Kornke, Sr. 'had, in fact, given to his son permission to operate the vehicle for the use as established by the facts. ⁶

The facts are uncomplicated and substantially undisputed. They present the familiar picture of an 18 year old high school student, William T. Kornke, Jr., living at home with his parents in Baltimore County in June, 1968. He enjoyed permission to drive his father's car, a 1960 Chevrolet hardtop, for purposes of going to 'school and work, mostly,' and for those purposes drove the car 'almost every day.' On these occasions he was not required to ask his father's permission to drive the car but rather 'it was agreed that it was my responsibility.' When, however, he wanted to use the car for a date or other social purpose the case was somewhat different; then 'I always had to tell him that I was going out.' This was, in effect, asking permission:

'. . . I like asked that permission when I said, I am going out; that was like asking can I have the car also.

Q. Your father knew what you meant by that?

A. Yes. . . . If he didn't want me to use it, he would say, well, don't take the car.'

At the same time, William was under explicit instructions not to allow anyone else to drive the father's car. When he had first obtained his license his father had 'made it clear like it was a law, a rule.' Thereafter, 'along the way, ever so often he would mention that, you know, never let anybody drive your car,' meaning in the present context, the father's car.

On the evening of June 22, 1968 William had invited friends, about 15 people, home for crabs and beer. At about midnight the group decided to ride out to Billingslee Farm in Harford County and 'build a campfire near the river and sit around.' William told his father that he was going out and the group set out in two other cars and the Kornke Chevrolet which had four occupants including William's date, Sue Peters, and her close friend, Lynanne Hampshire. ⁷ With William driving his father's car they drove north. When they were about equidistant between their destination and the Kornke home the car began to misfire. William had had similar trouble before with the car and each time would stop and fix it, which involved essentially reattaching wires that had come loose from the top of the distributor. While attempting to replace one wire, however, he inadvertently touched the uninsulated portion of another and received an electric shock. He explained the effect:

'A. Well, I wasn't wearing any shoes and I was grounded right against the pavement and it knocked me back, knocked me from under the car. . . . the engine was running . . . it knocked me back and numbed me pretty well, numbed my right hand and arm, and I decided . . . let me see . . . I was tired, also, because I was working quite a bit the past two weeks before that, and I just-my my right arm and hand, I just couldn't move them.'

Since 'it was kind of taken for granted that we were headed out there, out still further, and we had a ways to go, we were only halfway there,' the question arose as to who would drive. William was 'like ushered into the front seat.' He did not ask anyone else to drive but 'just mentioned that my arm was sore and I probably couldn't drive. . . . It wouldn't be safe.' He conceded that if no one had volunteered to drive, '(w)e could have just sat there until my arm got okay and then taken off again.' Lynanne Hampshire offered to drive, however, and when evidently there was no objection, she took over the wheel. For William's part, 'as soon as I was in the seat and my head was down . . . it was no time before my eyes were closed and I was asleep.' He was still asleep when the car struck a bridge abutment while Lynanne was driving.

Upon these facts the trial court could readily conclude that 1) William Kornke, Jr. received permission from his father on the evening of June 22 to use the father's car for a social purpose; and 2) Kornke, Jr., in turn, consented to the operation of the car by Lynanne Hampshire for the continuation of the trip to the Billingslee Farm when, in his opinion, he became temporarily unable to drive. The question for decision, therefore, is whether in these circumstances the use of the car continued, until the time of the accident, with the permission of Kornke, Sr., and the effect of the express prohibition, repeatedly communicated by father to son, against allowing anyone else to drive.

In 1965, then U. S. District Judge Harrison L. Winter observed that 'there is no direct decision of the Maryland Court of Appeals deciding whether, or under what circumstances, a second permittee becomes an insured under an omnibus clause. . . .' Ohio Casualty Ins. Co. v. Pennsylvania Nat. Mut. Cas. Ins. Co., 238 F.Supp. 706 (D.C.D.Md.1965), aff'd per curiam, 352 F.2d 308 (4th Cir. 1965). ⁸ This remains true today. A review of applicable Maryland cases, however, points the way to the proper resolution of the issue upon the facts in this case.

Immediate guidance, in terms of the meaning of 'actual use' as employed in the omnibus clause, is presented in the cases of Hardware Mutual Casualty v. Mitnick, 180 Md. 604, 26 A.2d 393 (1942) and Melvin v. American Automobile Insurance Company, 232 Md. 476, 194 A.2d 269 (1963), neither of which, however, involved the question of coverage vel non of a second permittee. Mitnick involved essentially the same omnibus clause as in this case. The named insured owner kept the car for the use of his granddaughter and her mother and the granddaughter regularly kept the key and did all the driving. At issue in then case was whether coverage under the omnibus clause extended to the granddaughter (first permittee) in circumstances where the accident occurred while she was a passenger in the car as it was being driven by another person with her permission. There was no evidence that the owner 'knew of Harrison's (second permittee) driving the car, or had consented to it; on the contrary, the only testimony on the point was that he had instructed his granddaughter to let nobody but herself drive it.'

The violation of this prohibition, however, was apparently not urged by the...