State Farm Mut. Ins. v. AMCO Ins. Co.

• Decision Date: 23 January 2001
• Docket Number: No. A-99-1463.,A-99-1463.
• Citation: 621 N.W.2d 553,9 Neb.App. 872
• Parties: STATE FARM MUTUAL INSURANCE COMPANIES, Appellee and Cross-Appellant, v. AMCO INSURANCE COMPANY, Appellant and Cross-Appellee, and Robert J. Hitz III, Appellee.
• Court: Nebraska Court of Appeals

621 N.W.2d 553

9 Neb.App. 872

STATE FARM MUTUAL INSURANCE COMPANIES, Appellee and Cross-Appellant, v. AMCO INSURANCE COMPANY, Appellant and Cross-Appellee, and Robert J. Hitz III, Appellee.

No. A-99-1463.

Court of Appeals of Nebraska.

January 23, 2001.

Dean J. Sitzmann and Fred B. Campbell, Jr., of Wolfe, Snowden, Hurd, Luers & Ahl, Lincoln, for appellant AMCO Insurance Company.

Stephanie Frazier Stacy, of Baylor, Evnen, Curtiss, Grimit & Witt, Lincoln, for appellee State Farm Mutual Insurance Companies.

Robert B. Creager, of Anderson, Creager and Wittstruck, P.C., Lincoln, for appellee Robert J. Hitz III.

HANNON, SIEVERS, and MOORE, Judges.

SIEVERS, Judge.

While parking a 1990 Oldsmobile Cutlass automobile owned by Sue Bordovsky, Robert J. Hitz III (B.J.) collided with a Gas `N Shop convenience store causing damage to the Cutlass, the building, an automated teller machine (ATM), and a patron inside the store. B.J. and Sue were insured by different insurance companies. In the resulting declaratory judgment action to determine coverage, both insurance companies alleged that B.J. did not have permission to drive Sue's Cutlass and that therefore neither had a duty to provide coverage. The parties stipulated that Sue's coverage, AMCO Insurance Company (AMCO), would be primary coverage and that the coverage of B.J.'s carrier, State Farm Mutual Insurance Companies (State Farm), would be excess coverage, unless the court found that B.J. did not have permission to drive Sue's Cutlass, whereupon neither insurance company would have to provide coverage. The trial court found that Sue's 16-year-old son, Kyle Bordovsky, gave B.J. implied permission to use Sue's Cutlass. Consequently, AMCO was ordered to provide primary coverage, and State Farm was ordered to provide excess coverage. AMCO appeals, and State Farm joins in the appeal. See Neb. Ct. R. of Prac. 1C (rev.2000).

I. FACTUAL BACKGROUND

On the night of January 17, 1998, Kyle borrowed Sue's Cutlass with her express permission. Kyle drove around with B.J., his 16-year-old friend, and two other passengers, eventually stopping at a Gas `N Shop convenience store in Wahoo, Nebraska. Kyle parked the car in a stall at the store and left the car running while he went inside to use the restroom. While Kyle was inside the store, B.J. moved behind the wheel from the front passenger seat and drove the Cutlass around the parking lot to see if another friend's car was there. While returning the car into a parking stall, B.J. collided with the Gas `N Shop building and crashed through a store window, causing an ATM machine inside the store to strike and injure a store patron. As a result of the collision, Gas `N Shop claimed its store was damaged, Sue claimed her Cutlass was damaged, the bank claimed its ATM was damaged, and the store patron claimed she suffered various personal injuries.

At the time of the accident, B.J. and Kyle, friends since the eighth grade, each had a driver's license. B.J.'s mother had a State Farm automobile insurance policy which covered B.J. While the State Farm policy provides liability insurance to insureds while operating "`non-owned''" cars, the policy provides that a nonowned car does not include a car "`which is not in the lawful possession of the person operating it.'" Sue had an automobile policy from AMCO which covered Kyle. The AMCO policy extended coverage to anyone using Sue's car with a "`reasonable belief'" that he or she was entitled to use the car.

State Farm sought declaratory relief to determine its coverage for the various claims arising from B.J.'s collision. Despite wording differences in each policy's omnibus coverage clauses as detailed above, the parties stipulated that if the trial court found that B.J. drove the Cutlass without Sue's or Kyle's express or implied permission, then neither State Farm nor AMCO had a duty to provide coverage or defend B.J. The only issue before the trial court was whether B.J. had express or implied permission from Sue or Kyle to drive Sue's Cutlass at the Gas `N Shop convenience store on January 17, 1998.

At trial, Kyle testified that since turning 16, he occasionally drove Sue's Cutlass after obtaining her permission. Sue apparently established several rules for Kyle's use of her Cutlass. "I cannot drive around fast, no horseplay. And I was not allowed to let anybody else drive the vehicle except for me," Kyle testified. Further, he testified that "every time I take [Sue's] vehicle she always says, `Do not let anyone drive it. Don't horse around with it. Just drive it like a normal manner.'" In addition, Sue's testimony reiterated that the rule was always that Kyle was to be the only driver. Sue also testified that Kyle was not to have "too many children" in the vehicle and that he was to "drive responsibly." Kyle testified that these have been the rules since he received his license in July 1997.

Sue admitted that she expressly gave Kyle permission to take the car on the evening of the collision "to rent a movie and drive the streets for a little while and then return back home." B.J., who was at Kyle's house at the time, overheard Sue tell Kyle, "`Yes, you can take the car[.]'" B.J. testified that when Kyle asked Sue, "`Can we take the car?'" she replied that "we could take the car." B.J.'s testimony was that he believed he had permission at the time of the crash to drive the Cutlass because he had driven Sue's Cutlass or Kyle's father's Nissan Maxima on other occasions and "[b]ecause it was a mutual thing that Kyle would take my car, and I would take his.... We just take each other's cars." B.J. conceded that he had not planned on driving the Cutlass and that he did not believe Sue was giving him permission to drive the Cutlass that night when Kyle asked to borrow the car. Although Sue understood that both Kyle and B.J. were leaving together in her car, both Sue and Kyle testified that Sue did not expressly give B.J. permission to drive the Cutlass that evening.

Kyle testified that he left the car running when he parked at the Gas `N Shop that evening, "because I was only going to be inside for a few minutes." Neither B.J. nor Kyle said anything to each other about moving the Cutlass before Kyle left for the restroom. No permission was asked or given.

Sue did not know that B.J. had been driving her Cutlass until she went to the scene of the accident, whereupon B.J. admitted that he caused the accident and apologized for wrecking the car. Sue said she told police officers at the scene that her Cutlass had been stolen, after learning that Kyle had not caused the accident, because B.J. "had no permission to ever drive the vehicle." However, Sue admitted that she did not ensure that a criminal complaint was lodged. Officer Alan O'Sullivan, who interviewed Sue at the scene, testified that Sue did not "indicate" that the Cutlass was a stolen vehicle. Although O'Sullivan testified that he learned that "it was all right that [B.J.] drive the car" from several male and female "high school friends" at the scene, he could not remember any names of these friends.

Both Sue and Kyle testified that neither had ever given B.J. permission to drive Sue's Cutlass. Additionally, Kyle testified that he had never heard Sue give B.J. such permission. Kyle opined that had B.J. asked permission on January 17 to drive Sue's Cutlass, Kyle would not have granted permission, "[b]ecause one of the rules [sic] I was not allowed to let anyone else drive the vehicle except for me." Similarly, Sue opined that she would not have given B.J. permission to use her Cutlass on the night of B.J.'s accident, or at any time prior to that night.

B.J. said he had operated Sue's Cutlass twice before his collision. In the fall of 1997, B.J. backed Sue's Cutlass "a short distance" out of her garage to get her lawnmower out so that he would not scratch the car with the lawnmower. B.J. testified that Sue expressly asked him to move her car and mow the yard. On another occasion, Kyle, who was mowing grass near the school parking lot, asked B.J. for a cigarette from the Cutlass, which was parked in another area of the lot. Without asking for permission, B.J. drove Sue's Cutlass approximately 100 yards in the parking lot to the area where Kyle was mowing to deliver the cigarette.

Over relevancy objections from State Farm, there was testimony about B.J.'s use of Kyle's father's Maxima. At the time of the accident, Kyle was living with his father, whose Maxima was "shared between me and my dad." Kyle's parents were divorced at the time of B.J.'s collision, had separate residences, and did not share vehicles. Kyle's father's cars were not insured under Sue's policy. Moreover, Kyle's father's rules for use of the Maxima differed from those set by Sue for use of the Cutlass. As for the Maxima, Kyle testified that he "had a little less rules than my mom's car [sic].... [I]f I was driving around and someone else wanted to drive, it was okay. I could give them permission to drive my father's car." Kyle testified that after B.J. received his driver's license, he "allowed" B.J. to drive his father's Maxima "two or three times."

Kyle testified that he allowed B.J. to take his father's Maxima on several occasions in the fall of 1997. On one occasion, Kyle and B.J. were at a football game in Ashland, Nebraska, when Kyle gave B.J. permission to drive the Maxima to a gas station "to get a pop," who then allowed his girl friend to drive. According to Kyle, on another occasion, while at school, B.J. "drove [the Maxima] from the parking lot around back to the back of the shop" after Kyle had requested him to do so, so that Kyle could change the oil. Although Kyle testified that B.J. drove the Maxima another time, again driving it "around to the back of the shop," he could not recall when this took place. Kyle testified that he never told B.J. that he could take the Maxima anywhere he wanted and that B.J. never took the Maxima without...