Moon v. Guarantee Ins. Co., No. 66107

• Court: Supreme Court of Oklahoma
• Writing for the Court: ALMA WILSON; DOOLIN
• Citation: 1988 OK 85,764 P.2d 1331
• Docket Number: No. 66107
• Decision Date: 12 July 1988
• Parties: Emmett L. MOON, Plaintiff, v. GUARANTEE INSURANCE COMPANY, Defendant.

Page 1331

764 P.2d 1331 1988 OK 85 Emmett L. MOON, Plaintiff,
v.
GUARANTEE INSURANCE COMPANY, Defendant. No. 66107. Supreme Court of Oklahoma. July 12, 1988.
As Amended on Rehearing Oct. 11 1988.

Page 1332

Certified Questions of Law from the United States District Court for the Northern District of Oklahoma.

Insured lessee of rental vehicle brought action seeking uninsured motorist coverage under contract providing liability insurance to Insured. We answer the certified questions of law to this Court by the United States District Court for the Northern District of Oklahoma as follows:

1) Does 36 O.S. 1981 § 3636 mandate that an insurance company which insures a fleet of rental vehicles provide lessee an opportunity to purchase or reject uninsured motorist coverage? Yes.

2) Is a car rental agency and its employees "insurance agents" within the meaning of 36 O.S. 1981 § 1422(3) and 1423(A) when in the normal course of each car rental transaction they sell automobile insurance under a pre-arranged plan with the insurance company to their lessee-customers and solicit premiums from the lessee-customers? Yes.

3) If so, is the insurance company estopped to deny that car rental agency employees act as its agents? Yes.

4) If a car rental proprietor rejects uninsured motorist coverage pursuant to 36 O.S. 1981 § 3636(F) on a fleet of cars that he owns for the purpose of renting the vehicles to the general public, is that rejection binding upon his customers who ultimately operate the vehicle? No.

5) Is an insurance carrier estopped from asserting a written rejection of uninsured motorist coverage which is signed only by the rental agency proprietor as a bar to a claim for uninsured motorist coverage benefits by the ultimate insured? Yes.

CERTIFIED QUESTIONS ANSWERED.

Layon & Cronin, Tulsa by Thomas A. Layon, James R. Hicks, for plaintiff.

Williams, Clark, Baker & Earl, P.A., Tulsa by Roger R. Williams, Joseph F. Clark, Jr., for defendant.

ALMA WILSON, Justice:

The lessee of a rental vehicle brought an action in the United States District Court for the Northern District of Oklahoma seeking uninsured motorist coverage pursuant to a contract issued in the

Page 1333

course of the vehicle rental transaction. We answer the certified questions of law to this Court by the United States District Court for the Northern District of Oklahoma as follows:

1) Does 36 O.S. 1981 § 3636 mandate that an insurance company which insures a fleet of rental vehicles provide lessee an opportunity to purchase or reject uninsured motorist coverage? Yes.

2) Are car rental agency and its employees "insurance agents" within the meaning of 36 O.S. 1981 §§ 1422(3) and 1423(A) when in the normal course of each car rental transaction they sell automobile insurance under a pre-arranged plan with the insurance company to their lessee-customers and solicit premiums from the lessee-customers? Yes.

3) If so, is the insurance company estopped to deny that car rental agency employees act as its agents? Yes.

4) If a car rental proprietor rejects uninsured motorist coverage pursuant to 36 O.S. 1981 § 3636(F) on a fleet of cars that he owns for the purpose of renting the vehicles to the general public, is that rejection binding upon his customers who ultimately operate the vehicle? No.

5) Is an insurance carrier estopped from asserting a written rejection of uninsured motorist coverage which is signed only by the rental agency proprietor as a bar to a claim for uninsured motorist coverage benefits by the ultimate insured? Yes.

The facts giving rise to the federal court's certification of questions of law to this court are as follows. Guarantee Insurance Company entered into a "Business Auto Policy" insurance contract with Neal Wilderon Rental & Leasing d/b/a Thrifty Rent-A-Car of Bartlesville, Oklahoma. The effective dates of this contract of insurance covered the period from July 1, 1981, to July 1, 1982.

The schedule of coverages affirmatively included only:

1) Liability Insurance, defined by the policy as sums the insured must pay as damages because of bodily injury or property damage to which this insurance applies, caused by an accident and resulting from the ownership, maintenance or use of a covered auto.

2) Theft of a Covered Auto.

The schedule of coverages included by operation of law:

3) Uninsured Motorist Coverage for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles and hit-and-run motor vehicles because of bodily injury, sickness or disease, including death resulting therefrom. 36 O.S. 1981 § 3636.

We note that although the policy did not affirmatively provide any coverage in the event of physical personal injury to the driver of a covered auto, (whether by way of the negligence of another or because of an uninsured motorist), that the contract by statutory operation of law did provide uninsured motorist coverage. However, on August 10, 1981, Guarantee Insurance Company issued "General Change Endorsement E-110b", wherein Neil Wilderon executed a "Notice of Rejection of Uninsured Motorist Coverage". This unilateral rejection by endorsement purports to change the original coverage to preclusively bind all yet-to-be-known insureds from coverage under the policy's statutorily mandated provision for personal injury protection against uninsured motorists.

During the effective period of the subject policy, on August 29, 1981, Emmett L. Moon went to the office of Neil Wilderon d/b/a Thrifty Rent-A-Car in the City of Bartlesville, Oklahoma, for the purpose of renting a motor vehicle. An employee of that car rental business placed three X's on a preprinted rental form and instructed Mr. Moon to initial two of them and sign his full name in the third place. Mr. Moon did as instructed, was given the keys and took possession of the vehicle. Upon inquiry, Mr. Moon was advised that he was "fully insured". In pertinent part, the small-print rental form included the following insurance contract:

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(23) PERSONAL ACCIDENT BENEFICIARY (IF NONE STATED, PAY ESTATE)
                INSURANCE (PAI) BY
                INITIALS RENTER ACCEPTS
                OR DECLINES
                ACCIDENT INSURANCE AS ____________________ DECLINES____________
                DESCRIBED IN COPY OF RELATIONSHIP
                PROVISIONS OF POLICY,
                AVAILABLE FOR INSPECTION
                AT THE

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