United States Fidelity and Guaranty Co. v. Drinkard

• Decision Date: 08 June 1966
• Docket Number: Civ. A. No. 65-C-67-A.
• Citation: 254 F. Supp. 867
• Court: U.S. District Court — Western District of Virginia
• Parties: UNITED STATES FIDELITY AND GUARANTY COMPANY, Plaintiff, v. Dan DRINKARD, Jr., Administrator of the Estate of Dan Drinkard, III, Deceased, J. Nelson Ingoldsby, Administrator of the Estate of Carole Perkins, Deceased, and Billy Roy Simpson, Defendants, and New York Underwriters Insurance Company, Intervener.

254 F. Supp. 867

UNITED STATES FIDELITY AND GUARANTY COMPANY, Plaintiff, v. Dan DRINKARD, Jr., Administrator of the Estate of Dan Drinkard, III, Deceased,

J. Nelson Ingoldsby, Administrator of the Estate of Carole Perkins, Deceased, and

Billy Roy Simpson, Defendants, and

New York Underwriters Insurance Company, Intervener.

Civ. A. No. 65-C-67-A.

United States District Court W. D. Virginia, Abingdon Division.

June 8, 1966.

Donald T. Stant, Stant & Roberts, Bristol, Va., for U. S. Fidelity & Guaranty Co.

George M. Warren, Jr., Bristol, Va., for Dan Drinkard, Jr., and J. Nelson Ingoldsby.

H. Emory Widener, Jr., Widener, Widener & Frackelton, Bristol, Va., for Billy Roy Simpson.

Andrew P. Miller, Penn, Stuart & Miller, Abingdon, Va., for New York Underwriters Ins. Co.

OPINION

DALTON, Chief Judge.

On April 16, 1965, in Sullivan County, Tennessee, Dan Drinkard, III and Carole Perkins, both college students, were killed in an automobile accident while riding as passengers in an automobile driven by Dennis Malone. Suit was instituted and is now pending in the Corporation Court of Bristol, Virginia by the Administrator of the estate of each of the deceased persons against Malone, Ron A. Henard, Kathy Henard, his daughter, and Billy Roy Simpson. The alleged basis of Simpson's liability, and that of the two Henards, is that on the night of the accident Simpson was following the Malone car in a Mustang automobile, owned by Henard and furnished by him to his daughter for her regular and unrestricted use, which Kathy Henard had loaned to Simpson to drive.

This action was brought seeking a declaratory judgment to determine whether Henard's insuror, United States Fidelity and Guaranty Company (hereinafter referred to as "USF&G"), is obligated to appear and defend Simpson in the State court and to pay any judgment that may be rendered against him in that action.

The evidence is clear that on the night of the fatal accident Simpson had been riding around with a friend of his in another automobile which had run out of gas. He therefore called Kathy Henard, his girl friend, and requested permission to borrow her Mustang. Kathy knew that Simpson's license to drive had been taken away by the Municipal Court in Bristol, Virginia, and told him that it would be better if he got a licensed driver to operate the vehicle, "but if he didn't to be sure and be careful." From the depositions taken, the court is convinced that on the night of the accident, Kathy Henard had given Billy Roy Simpson permission to drive her Mustang automobile.

Ron A. Henard, Kathy's father, was and is president and sole stockholder of Henard Enterprises, Incorporated, which operates the Ford agency in Bristol. Sometime prior to the accident, Mr. Henard had ordered the Mustang automobile in question for his daughter and had given it to her for her own use. Title, however, remained in Henard Enterprises and the car was operated with dealer's tags on it. At the time she received the vehicle, Kathy had a learner's driving permit which required her to have a licensed driver in the car when she was operating it. Mr. Henard testified that he, himself, laid down no restrictions with respect to Kathy's use of the Mustang.

There are two questions presented for decision in this declaratory judgment proceeding:

(1) does the garage liability insurance policy issued by USF&G to Henard Enterprises, Incorporated obligate that insurer to appear and defend Billy Roy Simpson and to pay any judgment which may be rendered against him in the pending state actions? If so,

(2) what is the extent of the coverage afforded Simpson under said policy?

The policy in question provides under PART I — LIABILITY that USF&G is obligated to pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury or property damage caused by "(b) the ownership, maintenance or use of any automobile owned by the Named Insured while furnished for the use of * * * (ii) any other person or organization to...