Universal Underwriters Ins. Co. v. Taylor, No. 19842

CourtSupreme Court of West Virginia
Writing for the CourtWORKMAN
Citation185 W.Va. 606,408 S.E.2d 358
PartiesUNIVERSAL UNDERWRITERS INSURANCE COMPANY, a Corporation and Insurer of Harry Green Chevrolet, Inc., a West Virginia Corporation, Plaintiff Below, Appellee, v. Carl TAYLOR, Defendant Below, Appellee, and Robert J. Beafore, as Administrator of the Estate of Robert F. Beafore, and Robert J. Beafore, In his Individual Capacity, Intervenor Below, Appellant.
Decision Date05 September 1991
Docket NumberNo. 19842

Page 358

408 S.E.2d 358
185 W.Va. 606
UNIVERSAL UNDERWRITERS INSURANCE COMPANY, a Corporation and
Insurer of Harry Green Chevrolet, Inc., a West
Virginia Corporation, Plaintiff Below, Appellee,
v.
Carl TAYLOR, Defendant Below, Appellee,
and
Robert J. Beafore, as Administrator of the Estate of Robert
F. Beafore, and Robert J. Beafore, In his
Individual Capacity, Intervenor Below, Appellant.
No. 19842.
Supreme Court of Appeals of
West Virginia.
Submitted May 14, 1991.
Decided July 26, 1991.
Rehearing Denied Sept. 5, 1991.

Page 359

[185 W.Va. 607] Syllabus by the Court

1. "A dealership's garage owner's policy, which defines an additional insured as any other person required by law to be an insured while using an automobile within the scope of the dealership's permission, covers a driver who has been permitted to use an automobile owned by the dealership. This is by virtue of the mandatory omnibus clause requirements of W.Va.Code, 17D-4-12(a), and W.Va.Code, 33-6-31(a)." Syl. Pt. 3, State Farm Mut. Automobile Ins. Co. v. Universal Underwriters Ins. Co., 181 W.Va. 609, 383 S.E.2d 791 (1989).

2. "Any provision in an insurance policy which attempts to contravene W.Va.Code, 33-6-31(a), is of no effect." Syl. Pt. 2, Burr v. Nationwide Mut. Ins. Co., 178 W.Va. 398, 359 S.E.2d 626 (1987).

3. "The mandatory omnibus requirements imposed by W.Va.Code, 33-6-31(a), indicate that the legislature has demonstrated a clear intent to afford coverage to anyone using a vehicle with the owner's permission as a means of giving greater protection to those who are involved in automobile accidents. The statute should be liberally construed to effect coverage." Syl. Pt. 3, Burr v. Nationwide, 178 W.Va. 398, 359 S.E.2d 626 (1987).

4. Based on our recognition that a liability insurance contract is for the benefit of the public as well as for the benefit of the named or additional insured, we hereby determine that the state motor vehicle omnibus clause, W.Va.Code § 33-6-31(a) (Supp.1991), requires an insurer to provide coverage when permission has been granted by the insured owner of the vehicle or its authorized agent to a driver who then causes injury or property damage during the permissive use. Given the remedial nature of the omnibus clause, insurance coverage is not affected by the fact that the driver's use of the vehicle may have exceeded or differed from the owner's or his agent's specifications. We hereby overrule our previous decision in Collins v. New York Casualty Co., 140 W.Va. 1, 82 S.E.2d 288 (1954) to the extent that Collins designated West Virginia as a "minor deviation" rule state.

Arden J. Curry II, Charleston, for appellee.

Ross Maruka, Rocco S. Fucillo, Fairmont, for appellant.

WORKMAN, Justice:

Robert J. Beafore, as administrator of the estate of Robert F. Beafore and as an individual, appeals from a final order of the Circuit Court of Marion County entered in favor of appellee Universal Underwriters Insurance Company ("Universal"). In the ruling at issue, the circuit court determined that the insurance policy issued by Universal to Harry Green Chevrolet, Inc. ("Harry Green") does not provide coverage to an individual who obtained permission to remove a vehicle from the dealership premises, failed to return the vehicle per the dealer's instructions, and subsequently was involved in an automobile accident while driving the dealership's vehicle. Our review of the omnibus clause set forth in W.Va.Code § 33-6-31(a) (Supp.1991) in conjunction with applicable case law compels us to conclude that the circuit court erred in determining that Universal did not have a duty to provide insurance coverage under these facts.

On November 22, 1986, Carl Taylor entered the premises of Harry Green in Clarksburg, West Virginia, for the ostensible

Page 360

[185 W.Va. 608] purpose of purchasing an automobile. Mr. Taylor requested permission from a salesperson to take a black 1986 camero to the residence of a friend to ask if she approved of the vehicle prior to his purchase of it. The salesperson gave Mr. Taylor permission to take the vehicle at approximately 12:20 p.m., but informed Mr. Taylor that the vehicle was to be returned no later than 1:00 p.m. that same day.

When Mr. Taylor failed to return the vehicle to Harry Green at the appointed hour, Harry Green notified the West Virginia State Police between 3:00 p.m. and 3:30 p.m. that Mr. Taylor had stolen the camero. On December 7, 1986, sixteen days after Mr. Taylor had initially driven away from Harry Green in the dealership's vehicle, Mr. Taylor was involved in an automobile accident which resulted in the death of Robert F. Beafore.

On August 2, 1988, Robert J. Beafore brought suit against Mr. Taylor and Harry Green in the Circuit Court of Marion County, West Virginia, as administrator of the estate of Robert F. Beafore. That civil action was predicated on two counts of negligence: (1) Mr. Taylor was negligent in causing the death of Robert F. Beafore; and (2) Harry Green was negligent in allowing Mr. Taylor to steal its vehicle. Harry Green ultimately settled the negligence claim filed against it for the sum of $250,000 and Robert J. Beafore proceeded to trial against Mr. Taylor.

At the time Mr. Taylor stole the vehicle from Harry Green, the dealership was insured by a policy issued by Universal. Universal filed a declaratory judgment action in the Circuit Court of Marion County, West Virginia, against Mr. Taylor to resolve whether it owed coverage to Mr. Taylor under the policy. On January 18, 1990, the circuit court entered an order in favor of Universal, finding that the insurance policy Universal issued to Harry Green did not provide coverage to an individual who stole a vehicle from its insured. It is the circuit court's decision in the declaratory judgment action regarding lack of coverage that forms the basis for this appeal.

The sole question on appeal is whether Universal has a duty to provide coverage to Mr. Taylor under the policy which it issued to Harry Green. Appellant urges this Court to find coverage pursuant to the mandatory omnibus clause adopted by this state in 1967. The omnibus clause requires that all motor vehicle insurance policies

shall contain a provision insuring the named insured and any other person, except a bailee for hire and any persons specifically excluded by any restrictive endorsement attached to the policy, responsible for the use of or using the motor vehicle with the consent, expressed or implied, of the named insured or his spouse against liability for death or bodily injury sustained, or loss or damage occasioned within the coverage of the policy or contract as a result of negligence in the operation or use of such vehicle by the named insured or by such person: Provided, That in any such automobile liability insurance policy or contract, or endorsement thereto, if coverage resulting from the use of a non-owned automobile is conditioned upon the consent of the owner of such motor vehicle, the word 'owner' shall be construed to include the custodian of such non-owned motor vehicles.

W.Va.Code § 33-6-31(a) (Supp.1991).

The purpose of an omnibus clause in an automobile insurance policy, as this Court recognized in syllabus point 1 of State Farm Mutual Automobile Insurance Co. v. Allstate Insurance Co., 154 W.Va. 448, 175 S.E.2d 478 (1970), is "to extend coverage, in proper circumstances, to any person using the insured vehicle, and to afford greater protection to the public generally...." Consistent with that purpose, we have recognized that the omnibus clause "is remedial in nature and must be construed liberally so as to provide insurance coverage where possible." Burr v. Nationwide Mut. Ins. Co., 178 W.Va. 398, 359 S.E.2d 626, 632 (1987); see generally 7 Am.Jur.2d Automobile Insurance § 248 (1980) (recognizing liberalizing purpose of omnibus clause as protecting "any person injured ... by giving him a cause of action against the insurer for injuries deemed by

Page 361

[185 W.Va. 609] law to have been caused by the operation of the car").

Universal contends that, notwithstanding the state motor vehicle omnibus clause, the policy definition of an insured excepts Mr. Taylor from any category of individuals to which it owes coverage. The policy definition upon which Universal relies to support its position defines an insured with respect to an auto hazard 1 as "[a]ny other person or organization required by law to be an INSURED while using an AUTO covered by this Coverage Part within the scope of YOUR permission." Universal maintains that Mr. Taylor's use of the vehicle at the time of the accident was outside the scope of the insured's permission based on his failure to return the vehicle by 1:00 p.m. on the same date on which he test-drove it, as the salesperson had directed. Relying solely on the policy language which conditions coverage on permission, appellee argues that coverage is precluded.

Issues of coverage involving application of an omnibus clause are resolved pursuant to one of three judicially-created tests. See Annotation, Automobile Liability Insurance: Permission or Consent to Employee's Use of Car Within Meaning of Omnibus Coverage Clause, 5 A.L.R.2d 600, 626-43 (1949 and Later Case Service 1985) (recognizing three theories for interpreting omnibus clauses: (1) the strict or conversion rule which requires use precisely within scope of permission granted, (2) the "minor deviation" rule, and (3) the liberal or "initial permission" rule); see also 6C J. Appleman,...

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25 practice notes
  • Mitchell v. Broudnax, 25539
    • United States
    • Supreme Court of West Virginia
    • July 16, 1999
    ...requirements are void and ineffective as against public policy. See Syllabus Point 2, Universal Underwriters Ins. Co. v. Taylor, 185 W.Va. 606, 408 S.E.2d 358 (1991); Syllabus Point 2, Johnson v. Continental Casualty Co., 157 W.Va. 572, 201 S.E.2d 292 (1973). As to uninsured motorist covera......
  • Adkins v. Meador, No. 23371
    • United States
    • Supreme Court of West Virginia
    • July 15, 1997
    ...requirements are void and ineffective as against public policy. See Syllabus Point 2, Universal Underwriters Ins. Co. v. Taylor, 185 W.Va. 606, 408 S.E.2d 358 (1991); Syllabus Point 1, Bell v. State Farm Mut. Auto. Ins. Co., 157 W.Va. 623, 207 S.E.2d 147 (1974); Syllabus Point 2, Johnson v.......
  • Keefer v. Ferrell, No. 33310.
    • United States
    • Supreme Court of West Virginia
    • November 8, 2007
    ...requirements are void and ineffective as against public policy. See Syllabus Point 2, Universal Underwriters Ins. Co. v. Taylor, 185 W.Va. 606, 408 S.E.2d 358 (1991); Syllabus Point 1, Bell v. State Farm Mut. Auto. Ins. Co., 157 W.Va. 623, 207 S.E.2d 147 (1974); Syllabus Point 2, Johnson v.......
  • Canal Ins. Co. v. Dupont, Civil Action No. 5:13–cv–24764.
    • United States
    • United States District Courts. 4th Circuit. Southern District of West Virginia
    • September 11, 2014
    ...was in possession of the keys and had the vehicle at his home.” ( Id. at 11.) Mr. Foley cites Universal Underwriters Ins. v. Taylor, 185 W.Va. 606, 408 S.E.2d 358 (1991) for support that Mr. Dupont was driving with the implied consent of Williams Transport because of the initial permission ......
  • Request a trial to view additional results
25 cases
  • Mitchell v. Broudnax, 25539
    • United States
    • Supreme Court of West Virginia
    • July 16, 1999
    ...requirements are void and ineffective as against public policy. See Syllabus Point 2, Universal Underwriters Ins. Co. v. Taylor, 185 W.Va. 606, 408 S.E.2d 358 (1991); Syllabus Point 2, Johnson v. Continental Casualty Co., 157 W.Va. 572, 201 S.E.2d 292 (1973). As to uninsured motorist covera......
  • Adkins v. Meador, No. 23371
    • United States
    • Supreme Court of West Virginia
    • July 15, 1997
    ...requirements are void and ineffective as against public policy. See Syllabus Point 2, Universal Underwriters Ins. Co. v. Taylor, 185 W.Va. 606, 408 S.E.2d 358 (1991); Syllabus Point 1, Bell v. State Farm Mut. Auto. Ins. Co., 157 W.Va. 623, 207 S.E.2d 147 (1974); Syllabus Point 2, Johnson v.......
  • Keefer v. Ferrell, No. 33310.
    • United States
    • Supreme Court of West Virginia
    • November 8, 2007
    ...requirements are void and ineffective as against public policy. See Syllabus Point 2, Universal Underwriters Ins. Co. v. Taylor, 185 W.Va. 606, 408 S.E.2d 358 (1991); Syllabus Point 1, Bell v. State Farm Mut. Auto. Ins. Co., 157 W.Va. 623, 207 S.E.2d 147 (1974); Syllabus Point 2, Johnson v.......
  • Canal Ins. Co. v. Dupont, Civil Action No. 5:13–cv–24764.
    • United States
    • United States District Courts. 4th Circuit. Southern District of West Virginia
    • September 11, 2014
    ...was in possession of the keys and had the vehicle at his home.” ( Id. at 11.) Mr. Foley cites Universal Underwriters Ins. v. Taylor, 185 W.Va. 606, 408 S.E.2d 358 (1991) for support that Mr. Dupont was driving with the implied consent of Williams Transport because of the initial permission ......
  • Request a trial to view additional results

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