State Farm Mut. Auto. Ins. Co. v. Estate of Carey

• Decision Date: 25 October 2012
• Docket Number: Docket No. Ken–10–679.
• Citation: 2012 ME 121,68 A.3d 1242
• Parties: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. ESTATE OF JAMES CAREY.
• Court: Maine Supreme Court

68 A.3d 1242

2012 ME 121

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

v.ESTATE OF JAMES CAREY.

Docket No. Ken–10–679.

Supreme Judicial Court of Maine.

Argued: Sept. 14, 2011.

Reargued: April 12, 2012.

Decided: Oct. 25, 2012.

Daniel G. Kagan, Esq. (orally), and Robert H. Furbish, Esq., Berman & Simmons, Lewiston, for appellant Estate of James Carey.

John J. Wall, III, Esq. (orally), Monaghan Leahy, LLP, Portland, for appellee State Farm Mutual Auto Insurance Company.

Bruce C. Gerrity, Esq., and Roy T. Pierce, Esq., Preti, Flaherty, Beliveau & Pachios, LLP, Augusta, for amici curiae American Insurance Association, Property Casualty Insurers Association of America, National Association of Mutual Insurance Companies, and Maine Association of Insurance Companies.

Richard L. O'Meara, Esq., Murray, Plumb & Murray, Portland, for amicus curiae Maine Trial Lawyers Association.

Panel: SAUFLEY, C.J., and LEVY, SILVER, MEAD, GORMAN, and JABAR, JJ.

Majority: SAUFLEY, C.J., and LEVY, MEAD, and GORMAN, JJ.

Concurring: SILVER, and JABAR, JJ.

LEVY, J.

[¶ 1] This appeal arises from a motor vehicle collision involving Roger T. Linton and James Carey that resulted in Carey's death. At the time of the collision, Linton was driving a truck owned by Jonathan Jennings, for whom Linton worked as an independent contractor. Jennings's insurer, State Farm Mutual Automobile Insurance Company, filed a declaratory judgment action against Carey's Estate and Linton to determine whether it was responsible for liability coverage and obligated to defend and indemnify Linton for claims arising from the collision. After a bench trial, the Superior Court (Kennebec County, Mills, J.) entered a judgment in favor of State Farm, concluding that Linton was not an insured covered by Jennings's policy because his use of the truck was not within the scope of Jennings's consent. We vacate the judgment, clarify the applicable burdens of the parties, and remand for further proceedings.

I. BACKGROUND

[¶ 2] The court found the following facts, which are supported by competent evidence in the trial record. See Sanseverino v. Gregor, 2011 ME 8, ¶ 2, 10 A.3d 735.

[¶ 3] Jennings owns a masonry company in Manchester. In 2006 and 2007, Linton was employed by Jennings's company, and in 2008, Linton worked with the company as an independent contractor. While Linton was an employee, he used company vehicles to drive between work and his home in Readfield. He also used company vehicles for his own landscaping jobs and for getting groceries, going fishing, and hauling hay. As an independent contractor, Linton's use of company vehicles was less frequent, and he did not use company vehicles outside the regular workday, except to occasionally haul hay and travel to and from work. During the period that he was an independent contractor, if Linton wanted to use a company vehicle he would typically make a specific request to Jennings. Jennings did not place any specific restrictions on Linton's use of company vehicles; however, Linton understood that there were limits on how he could use company vehicles and that Jennings would not have permitted him to use a company vehicle while drinking.

[¶ 4] In October 2008, Linton was working as an independent contractor for Jennings's company on a job in Kents Hill. The materials and equipment for the job had to be transported to and from the jobsite each day. Jennings's company is located farther from the jobsite than Linton's home, which was approximately eight miles from the jobsite.

[¶ 5] On October 7, Linton drove to the jobsite with a coworker in a heavily loaded twenty-foot-long company truck that neither had used before. The truck was cumbersome and not suited for personal use because of how it handled when it was loaded. Between 3:00 and 4:00 p.m., Jennings received a voicemail from Linton asking whether he could take the truck home after work. Sometime later, Jennings called Linton's coworker's phone and left a voicemail stating that it was fine for Linton to drive the truck home and back to the jobsite in the morning.¹

[¶ 6] Linton did not drive the truck home. Instead, he drove the truck to his girlfriend's workplace in Winthrop; then to a gas station in Manchester where he drank two sixteen-ounce beers; then to the parking lot of a tavern in Winthrop; and then to a pond in Hallowell where he met a friend. From there, he drove to the friend's house in Farmingdale and then drove the friend toward Chelsea to visit the friend's nephew. On the way to Chelsea, the truck collided with a vehicle driven by James Carey, who died as a result. The site of the collision was approximately twenty miles from the jobsite, twenty miles from Linton's home, and ten miles from the company. At the time of the collision, Linton had a blood alcohol content of .12%.²

[¶ 7] Jennings had an automobile insurance policy with State Farm covering the truck operated by Linton. The omnibus clause of the State Farm policy defines an “insured” to include “any other person while using [Jennings's] car if its use is within the scope of [Jennings's] consent.”

[¶ 8] In June 2009, State Farm filed a complaint against Carey's estate and Linton seeking a declaratory judgment that Jennings's liability policy with State Farm did not cover Linton, and that State Farm had no duty to defend or indemnify Linton for claims arising from the collision. After a bench trial in August 2010, the court found that Jennings gave Linton implied consent either to drive the truck home and back to work, based on the voicemail messages exchanged on October 7, 2008, or to use the truck for personal errands or hauling hay, based on their previous course of conduct. The court concluded that under either view, Linton's use of the truck for social activities significantly exceeded the time, distance, and purpose of any uses that Jennings had ever permitted. Because Linton's use of the company truck was more than a minor deviation from the scope of Jennings's consent, the court concluded that Linton was not an additional insured under Jennings's policy. The court entered a judgment in favor of State Farm and this appeal followed.

II. LEGAL ANALYSIS

[¶ 9] The Estate asserts that the court erred in several respects. We consider here whether the court erred in its application of the minor deviation rule in determining that Linton's use of the truck exceeded the scope of Jennings's consent. We conclude that we must reconsider how the minor deviation rule is best applied, so as to account for the change in public policy that occurred when the Legislature adopted the policy of universal financial responsibility for vehicles registered in Maine.³See29–A M.R.S. §§ 1601– 1612 (2011).

[¶ 10] To determine the applicability of an omnibus clause of an insurance policy, a court must determine the scope of the named insured's consent and whether a driver's use of a vehicle was within that scope. See Taylor v. U.S. Fid. & Guar. Co., 519 A.2d 182, 183–84 (Me.1986) (reviewing the scope of consent to determine coverage). The scope of consent may be determined from evidence of express or implied permission. See id. at 183 (noting that without evidence of express permission, the scope of permitted use may be implied); see also 6C John Alan Appleman & Jean Appleman, Insurance Law and Practice § 4365 (1979) (noting that express permission is “not essential” for protection and “permission may be implied for such use under the facts and circumstances of the case”).

[¶ 11] We have historically applied the minor deviation rule to determine whether the use of a vehicle was within the scope of consent. We first addressed the rule, without identifying it as such, in Johnson v. American Automobile Insurance Co., 131 Me. 288, 293, 161 A. 496 (1932). In Johnson, an employee was told to drive the employer's car to the employee's home to wash and polish it, and to return the car a few hours later that morning. Id. at 290, 161 A. 496. Instead of returning the car, the employee drove it several miles in the opposite direction; along the way, the employee crashed the car into a telephone pole, injuring a passenger. Id. at 289–90, 161 A. 496. On appeal, we addressed the following question: “Was the automobile, at the time of the accident, being operated, within the scope of the ‘extended coverage’ clause in the liability policy, ‘with the consent of such named Assured,’ (i.e., the consent of the owner of the automobile)?” Id. at 289, 161 A. 496. We determined that the employer's instruction to the employee “was simply consent that the car be used, within reasonable and incidental limits, for that purpose” and because the trial court found that the employee's use when the accident occurred was not within the employer's consent, there was no coverage. Id. at 293, 161 A. 496.

[¶ 12] In Savage v. American Mutual Liability Insurance Co., we confirmed Johnson's adoption of the rule “permitting minor deviations”:

In Johnson there was a substantial deviation from the permitted use both as to purpose and place of operation. We find nothing in Johnson which would deny coverage where the actual use is primarily for the purpose for which permission was given and there are no more than minor deviations as to time and place of operation. Under such circumstances the risk of accident is not appreciably increased and permission would undoubtedlyhave been given for such use if it had been sought. Under such a rule the insurer entrusts to the insured the extension of policy coverage but full effect is given to the restrictions imposed by the insured when he permits the use of the insured vehicle by another. In these days when reduced premiums are being offered to those who maintain a low level of accident liability, the ability of an insured owner to impose effective restrictions on permitted use by another becomes important to the insured as well as to the insurer.

158 Me. 259, 263–64, 182 A.2d 669 (1962).

[¶ 13] The minor deviation...