United Fire & Casualty Co. v. Tharp

• Citation: 46 S.W.3d 99
• Court: Court of Appeal of Missouri (US)
• Decision Date: 27 April 2001
• Parties: (Mo.App. S.D. 2001) United Fire & Casualty Company, Plaintiff/Appellant v. Michelle Tharp, Shanna Tharp, Lloyda Tharp, Vicki Tharp, Darrin Tharp, Sylvia Vaughan, Michael Bland, Dennis Hyman, Michael Tharp, and Robert Tharp, Defendants/Respondents. 23606 0

46 S.W.3d 099 (Mo.App. S.D. 2001)

United Fire & Casualty Company, Plaintiff/Appellant v. Michelle Tharp, Shanna Tharp, Lloyda Tharp, Vicki Tharp, Darrin Tharp, Sylvia Vaughan, Michael Bland, Dennis Hyman, Michael Tharp, and Robert Tharp, Defendants/Respondents.

23606

Missouri Court of Appeals Southern District

04/27/2001

Appeal From: Circuit Court of Greene County, Hon. Don E. Burrell, Jr.

Counsel for Appellant: Laurel Stevenson and John G. Schultz

Counsel for Respondent: Daniel T. Ramsdell, Charles K. Willoughby, John M. Henderson, Jr., James E. Corbett, Randy P. Scheer, Benjamin A. Joplin, Erik Martin Belk and Tad K. Morlan

Opinion Summary: None

Parrish, P.J., and Montgomery, J., concur.

Kenneth W. Shrum

The issue presented by this appeal is whether Dennis Hyman ("Hyman") had liability insurance coverage for claims arising from an accident that occurred while he was driving his employer's van. Specifically, did Hyman become a non-permissive driver and lose coverage which otherwise existed because at the time of the accident, he was violating his employer's rules against (1) transporting non-company passengers, and (2) alcohol usage? The trial court, in entering summary judgment against United Fire & Casualty Company ("United"), found there was coverage. United appeals. We affirm.

JURISDICTIONAL ISSUE

Initially, we consider whether indispensable parties exist whose absence from this case deprived the trial court and now this court of jurisdiction. This issue arose after companies insuring Sylvia Vaughan's and Lloyda Tharp's vehicles sought to intervene after the case reached this court. Although the insurers' requests to intervene were denied, see Aetna Life Ins. Co. v. Litteer, 621 S.W.2d 376, 379[1] (Mo.App. 1981), they were allowed to address issues via amicus curiae briefs. All parties to the appeal filed amended briefs on whether Vaughan's and Tharp's insurers were indispensable parties. The focus of their arguments is Automobile Club Inter-Insurance v. Nygren, 975 S.W.2d 235 (Mo.App. 1998). There we found that Old Republic Insurance Company was an indispensable party without whose presence the trial court could not proceed under the Declaratory Judgment Act. Id. at 240. However, the situation in Nygren was wholly different from the one here, in that, the plaintiff there (although a complete stranger to the Old Republic policy) asked the trial court to declare which insurer's coverage was primary and to decide the extent of Old Republic's policy. The trial court acceded to the request; thus, the court purported to affect Old Republic's contract rights when it was not a party. Id. at 239. That is not this case. United did not ask the court to declare, nor did the court purport to decide, anything regarding the policies issued by Vaughan's or Tharp's insurers. Nygren should not be read to suggest anything about indispensable parties beyond its facts. Neither Vaughan's nor Tharp's insurer were indispensable parties; consequently, their absence from the case did not deprive the trial court of jurisdiction.

STANDARD OF REVIEW

"Summary judgment is designed to permit the trial court to enter judgment, without delay, where the moving party has demonstrated, on the basis of facts as to which there is no genuine dispute, a right to judgment as a matter of law." ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376[7] (Mo.banc 1993). The propriety of summary judgment is purely an issue of law which we review de novo on the record submitted and the law. Id. at 376[6].

"'When reviewing the entry of summary judgment, we view the evidentiary record in the light most favorable to the party against whom summary judgment was granted, determine if any genuine issue of fact exists which would require a trial, and determine if the judgment is correct as a matter of law.'"

Judy v. Arkansas Log Homes Inc., 923 S.W.2d 409, 414[5] (Mo.App. 1996) (quoting State ex rel. Conway v. Villa, 847 S.W.2d 881, 886[6] (Mo.App. 1993)). A genuine issue of fact exists where the record contains competent evidence that two plausible but contradictory accounts of essential facts exist. ITT Commercial Fin. Corp., 854 S.W.2d at 382.

FACTS AND PROCEDURAL BACKGROUND

The pleadings and other documents before us reveal the following. On May 18, 1995, Hyman was working for Sunshine Lighting Co. ("Employer") installing light fixtures at an Osco drugstore in Springfield. While working there, Hyman met Angela Monday ("Angela"), an Osco employee. When their workday ended, Hyman, Angela, Jeff Waller (Hyman's employment supervisor), and Angela's friend left the store together. At that point, the four people were in a vehicle driven by Angela's friend. They first drove to a liquor store where Hyman bought a half-pint bottle of whiskey. After driving around "for a while," Angela's friend returned them to the store. Hyman and Angela got into a service van owned by Employer, and the foursome parted company.

Hyman and Angela then left in the van, with Hyman driving, and went to a party, arriving at approximately 8:00 p.m. and departing sometime between 10:00 and 10:30 p.m. Upon leaving, Hyman was again driving Employer's van, and Angela was a passenger. Their destination was a restaurant located "not too far from" the Osco store where they were "going to get something to eat." While en route to the restaurant, the van driven by Hyman collided with a vehicle driven by Michael Bland resulting in the death of Robert Tharp, Bland's passenger.

Robert Tharp's family members sued Michael Bland and others for Tharp's wrongful death. Later, Employer and Hyman were joined as defendants in that litigation, and Bland filed a third-party petition against Hyman. Thereon, Employer's insurer, United, filed this declaratory judgment suit seeking a determination it owed no duty to defend or indemnify Hyman because Hyman allegedly did not have permission to use Employer's vehicle at the time of the accident.

The omnibus clause in United's policy is found under the heading, "Who Is An Insured." Section II A. thereof provides that insureds are: "a. You for any covered 'auto;' b. Anyone else while using with your permission a covered 'auto' you own, hire or borrow . . . ."

It is undisputed Employer allowed its out-of-town employees, including Hyman, to drive company vehicles after work-hours to obtain meals.¹ Herb Mendelson, president of Employer, specifically testified he understood Hyman would be using the van involved in this accident to go to dinner after working hours and could go at whatever time he chose. Even so, United claims Hyman, at the time of the accident, did not have Employer's permission to use the van within the meaning of the policy because (a) Hyman allowed a non-employee (Angela) in the van as a passenger in direct contravention of a company employment manual, and (b) Hyman drove Employer's van after drinking whiskey despite a policy "posted in 1995" that "prohibited [employees] from drinking while engaged in the work of the company."

Some of the Respondents filed motions for summary judgment.² The trial court sustained those motions, declaring, inter alia, Hyman's transporting of Angela related to "operation" of the van and not its "use." The court concluded "[b]ecause Mr. Hyman was permitted to use the van at the time of the collision, [United] is obligated to extend coverage to Mr. Hyman under the omnibus clause of the policy and under Section 303.190 RSMo." United's appeal to this court followed.

DISCUSSION AND DECISION

POINT I: DID VIOLATION OF "NO PASSENGER" RULE ANNUL COVERAGE?

In its first point, United claims that although Hyman had permission to use Employer's van to get a meal, his additional use of the van to transport Angela was a prohibited "use" per company rules. Continuing, United argues since Hyman was engaged in a nonpermissive use at the time of the accident, i.e., transporting Angela, the omnibus clause of its policy did not extend coverage to Hyman for this accident.

To support this argument, United cites Weathers v. Royal Indem. Co. 577 S.W.2d 623 (Mo.banc 1979):

"Recent cases have distinguished between using or actual use and operation of a vehicle. Use is said to involve its employment for some purpose or object of the user. Operation of the vehicle, on the other hand, is said to involve the driver's direction and control of its mechanism for the purpose of propelling it as a vehicle."

Id. at 627. From this, United argues "[w]hether . . . Hyman had Angela . . . as a passenger has nothing do with the 'driver's direction and control of its mechanism for the purpose of propelling it as a vehicle.'" (Emphasis by United.) Relying on the definitions in Weathers, United asserts the court misapplied the law and erred when it found Employer's "no-passenger" rule "was a restriction on operation instead of use." United insists this mistaken finding led to reversible error because it was the premise for the court's conclusion that United was "obligated to extend coverage to Mr. Hyman under the omnibus clause of the policy and under Section 303.190 RSMo."

At the time of this accident, Hyman was operating the van and, except for the questions raised by transporting Angela and drinking alcohol, was acting within the scope of the permitted use, i.e., going to get a meal. United does not contend otherwise.³ The essence of United's argument is that, once Hyman made concurrent uses of Employer's van, one permissive use (going for a meal) and one non-permissive (transporting Angela), the non-permissive use trumped the permissive one. Thus, according to United's argument, the permissive use was thrust beyond the scope of the omnibus protection. We do not agree.

United fails to support such proposition with on-point authority and ignores case law which, if not directly on-point, is instructive.⁴ In this regard, we first consider Rainwater v. Wallace, 169 S.W.2d 450 (Mo.App. 1943), affirmed at 351 Mo....