Progressive Cas. Ins. Co. v. Cameron

• Decision Date: 02 September 1986
• Docket Number: 14614-9-I and 14615-7-I,Nos. 14590-8-,s. 14590-8-
• Citation: 45 Wn.App. 272,724 P.2d 1096
• Parties: PROGRESSIVE CASUALTY INSURANCE COMPANY, Appellant, v. James CAMERON, Administrator of the Estate of Stephen Cameron, deceased; Thomas M. Ross; David Nelson; Steven E. Downs; State Farm Insurance Company; and Jeffrey Pringle, Respondents.
• Court: Washington Court of Appeals

Page 272

45 Wn.App. 272

724 P.2d 1096

PROGRESSIVE CASUALTY INSURANCE COMPANY, Appellant, v. James CAMERON, Administrator of the Estate of Stephen Cameron, deceased; Thomas M. Ross; David Nelson Steven E. Downs; State Farm Insurance Company; and Jeffrey Pringle Respondents.

Nos. 14590-8-I, 14614-9-I and 14615-7-I.

Court of Appeals of Washington Division 1.

Sept. 2, 1986.

Charles Eugene Peery, Susan Delanty Jones, Preston, Thorgrimson, Ellis & Holman, Seattle, Wash., for General Ins.

Mark R. Bucklin, Seattle, Wash., for Progressive Cas. Ins.

WEBSTER, Judge

Appellant Progressive Casualty Insurance Company (Progressive) brought this declaratory action to determine whether it would have to provide coverage for damages. This case arises out of an accident in which the son of Progressive's insured, A.E. Downs, was driving a van belonging to his father's business. A.E. Downs' company had insured the van with Progressive and with General Insurance Company of America (GICA), which became a third party defendant. Progressive, GICA, and Downs' daughter, also a defendant, appeal the trial court's findings of coverage and negligence.

This case involves three insurance policies. A.E. Downs was an owner and officer of A.E. Downs Company, A.E. Downs Cabinet Company, and Downs Millwork, Inc. The 1976 Ford Econoline Van was registered with A.E. Downs Company and insured under a policy with Progressive, also in the name of A.E. Downs Company. In addition to this commercial policy, A.E. Downs had a Progressive personal policy, under which the van was not insured. The van was, however, insured under another policy with GICA, under A.E. Downs Cabinet Company and Downs Millwork, Inc.

Although the van was registered with his company, A.E. Downs kept the van at his residence and used it for both recreation and business. He permitted his daughter, Brenda, and a family friend, Jeff Pringle, to use the van either in their work as his employees or for their own recreation. Whether, and to what extent, Downs' son, Steven, was permitted to drive the van was the subject of much dispute at trial.

Steven, who was at least 18 years old at the time of the accident, had moved out of his father's house a few weeks before March 11, 1979. On March 10, 1979, A.E. Downs and his wife, Barbara, had left town, leaving Brenda at home. According to Brenda, Steven and Jeff came over to the Downs' residence that day for dinner, and she gave them the keys to the van for the evening. She said she assumed that Jeff would be driving, since Steven was not permitted to drive the van. The testimony of one of Steven's housemates differed somewhat from Brenda's. He said that Brenda visited Jeff and Steven the afternoon of March 10 and offered them the keys to the van, saying she did not want them riding Jeff's motorcycle that night.

On the evening of March 10 there was a party at the house where Steven was staying. In the early morning hours of March 11, Steven took three friends in the van and headed for Crystal Mountain to go skiing. On the way, Steven drove off the road. The resulting accident killed one passenger and injured the other two.

At trial, A.E. Downs testified that he had made it clear Steven was not permitted to drive the van. However, he stated that if he had to choose between Steven driving a motorcycle or driving the van, he would permit Steven to drive the van. He said he was sure Brenda would have felt the same way.

Barbara Downs, Steven's mother, testified that Steven was permitted to drive the van "from time to time" for a "valid reason," but that he was not permitted to use the van for recreation. An employee of A.E. Downs testified that he understood Steven was not permitted to drive any of the company's automobiles.

The trial judge held that both GICA and Progressive must provide primary coverage to A.E. Downs; his daughter, Brenda Downs; his son, Steven Downs; and their friend, Jeffrey Pringle, "for actions in respect of use of the 1976 Ford Econoline Van on March 10 and 11, 1979." The court also made findings of negligence and proximate cause. Progressive, GICA, and Brenda Downs appeal, raising numerous issues.

Progressive Commercial Policy

The trial court found that both Progressive policies were "ambiguous as to the designation of who are insureds and the named insured and the coverage to be provided for the 1976 Ford Econoline Van," and therefore construed both policies in favor of coverage. However, although ambiguous provisions in an insurance contract are to be construed in favor of the insured, the court "cannot modify clear and unambiguous language in an insurance policy or revise the insurance contract under the theory of construing it." Britton v. Safeco Ins. Co. of Am., 104 Wash.2d 518, 528, 707 P.2d 125 (1985). The language of an insurance contract is to be interpreted as it would be understood by the average person purchasing insurance. Shotwell v. Transamerica Title Ins. Co., 91 Wash.2d 161, 168, 588 P.2d 208 (1978).

The definition of "named insured" was spelled out clearly in the Progressive commercial policy.

"[N]amed insured" means the individual named in item 1 of the declarations and also includes his spouse, if a resident of the same household;

Item 1 of the Declarations listed A.E. Downs Company (Cabinet shop) as the named insured. "Persons Insured" were defined under the policy as follows:

With respect to the owned automobile,

(1) the named insured,

(2) any other person using such automobile with the permission of the named insured, provided his actual operation or (if he is not operating) his other actual use thereof is within the scope of such permission, and

(3) any other person or organization, but only with respect to his or its liability because of acts or omissions of an insured under (a)(1) or (2) above;

Brenda Downs was not "a named insured" under the policy ¹; yet she was a "person insured" because she drove the van with the permission of A.E. Downs, the owner and president of the named insured. She is covered for her use of the van as long as her use remains within the scope of that permission.

As Brenda was not a named insured, her permission alone would be insufficient to make Steven a "person insured" under the policy. To determine whether Steven is covered, the issue is whether Steven drove with the permission of his father, the president of the named insured. Permission may be either implied or express. Safeco Ins. Co. of Am., Inc. v. Pac. Indem. Co., 66 Wash.2d 38, 43, 401 P.2d 205 (1965). When an insured gives permission to someone to drive an automobile, and that person in turn gives permission to someone else, the insured's permission to the second permittee may be implied if the insured should have anticipated that, " 'in view of the scope and nature of the permission granted (even if less than unfettered dominion), and because of the permittee's relationship to another, the permittee will allow that other to use the car' ". Safeco Ins. Co. of Am., Inc. v. Pac. Indem. Co., supra at 45, 401 P.2d 205 (quoting State Farm Mutual Auto Ins. Co. v. Williamson, 331 F.2d 517, 520 (9th Cir.1964)); Grange Ins. Ass'n v. Ochoa, 39 Wash.App. 90, 94, 691 P.2d 248 (1984). Although Barbara, Brenda, and A.E. Downs testified that A.E. Downs did not want Steven to drive the van and that everyone, including Brenda, knew that; there was testimony by A.E. Downs to support the trial court's finding that A.E. Downs would expect Brenda to lend Steven the van if Steven would otherwise ride a motorcycle.

However, even if Steven had his father's implied permission to drive the van, his use of the van at the time of the accident must have been within the scope of his father's permission in order for this court to find coverage under the policy. Grange Ins. Ass'n v. Ochoa, supra at 95, 691 P.2d 248. The scope of permission may be held to extend beyond the owner's express or implied permission, but the permittee's use must be within the spirit, if not the letter, of that permission. Rocky Mtn. Fire & Casualty Co. v. Goetz, 30 Wash.App. 185, 192, 633 P.2d 109 (1981). When the use constitutes more than an immaterial or permissible deviation from the owner's permission, coverage will not be found. Eshelman v. Grange Ins. Ass'n, 74 Wash.2d 65, 69, 442 P.2d 964 (1968). Even if A.E. Downs' implied permission extended to Steven's use of the van, rather than a motorcycle, for a night on the town, it is difficult to see how a skiing trip to Crystal Mountain early the next morning would be within the scope of that permission. This is especially true since Steven Downs took three passengers on his skiing trip; it is doubtful that he would have taken Jeff Pringle's motorcycle on such a trip if the van had not been available. There was no evidence that A.E. Downs should have anticipated that his son would take the van on a skiing trip if he were permitted to use it on the night of the party. The trial court erred in finding coverage for Steven under this policy.

Brenda Downs and Jeff Pringle both had permission to use the van recreationally. They are covered as "persons insured" for their use of the van, so long as their use remains within the scope of A.E. Downs' permission. The trial court's finding that Brenda had her father's permission to lend the van to Steven if Steven threatened to ride a motorcycle supports the conclusion that Brenda is covered for her March 10 entrustment of the van. However, no evidence or allegations of facts were presented that if Jeff Pringle negligently entrusted the van to Steven, he was acting within the scope of his permission. Since Jeff owned the motorcycle Steven threatened to ride, A.E. Downs presumably would not expect him to entrust the van to Steven to prevent Steven from riding that motorcycle. The trial court erred in finding coverage for Jeff. The overwhelming weight of the evidence showed that Pringle knew Steven was not permitted to drive the van.

Progressive...