Warner Trucking, Inc. v. Carolina Cas. Ins. Co., 20S03-9603-CV-212

• Decision Date: 07 October 1997
• Docket Number: No. 20S03-9603-CV-212,20S03-9603-CV-212
• Citation: 686 N.E.2d 102
• Parties: WARNER TRUCKING, INC., Defendant-Appellant, v. CAROLINA CASUALTY INSURANCE COMPANY, Plaintiff-Appellant, v. Carl C. HALL, Jr. and Sheri Hall, Plaintiff-Appellee.
• Court: Indiana Supreme Court

Page 102

686 N.E.2d 102

WARNER TRUCKING, INC., Defendant-Appellant, v. CAROLINA CASUALTY INSURANCE COMPANY, Plaintiff-Appellant, v. Carl C. HALL, Jr. and Sheri Hall, Plaintiff-Appellee.

No. 20S03-9603-CV-212.

Supreme Court of Indiana.

Oct. 7, 1997.

Timothy W. Woods, Wendell G. Davis, Jr., Jones, Obenchain, Ford, Pankow, Lewis & Woods, South Bend, for Appellant.

Robert W. Miller, Miller & Miller, Elkhart, for Plaintiff-Appellee.

DICKSON, Justice.

This motor vehicle collision case involves a trial court's denial of summary judgment motions filed by the defendant trucking company and its insurance carrier.

The plaintiffs-appellees, Carl and Sheri Hall, were injured when their automobile collided with a truck owned by the defendant-appellant Warner Trucking, Inc., and driven by its employee, Carl Manuel. The Halls brought an action for damages against Warner Trucking and its driver. The Halls alleged vicarious liability against the trucking company on grounds that the driver was working within the scope of his employment when the accident occurred. Warner Trucking's liability insurance carrier, Carolina Casualty Insurance Company, brought a separate action for declaratory judgment to establish that it had no obligation under its insurance contract with Warner Trucking to defend or provide coverage for the claims seeking to impose personal liability upon the employee-driver.

Warner Trucking and Carolina Casualty each sought summary judgment. The trial court consolidated the two actions and, in a thorough opinion, denied both motions for summary judgment, but later authorized Warner Trucking and Carolina Casualty to take an interlocutory appeal. The Court of Appeals accepted the appeal and held that both summary judgment motions should have been granted. Warner Trucking, Inc. v. Hall, 653 N.E.2d 1057 (Ind.Ct.App.1995). We granted transfer.

While the party losing in the trial court must persuade us that the trial court's decision was erroneous, we face the same issues as did the trial court and analyze them in the same way. Ambassador Fin. Servs. v. Indiana Nat'l Bank, 605 N.E.2d 746, 751 (Ind.1992). Summary judgment is appropriate only if the designated evidentiary matter shows the absence of any genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Ind.Trial Rule 56(C). A party opposing summary judgment is not required to come forward with contrary evidence until the moving party demonstrates the absence of a genuine issue of material fact. Kennedy v. Murphy, 659 N.E.2d 506, 508 (Ind.1995). On appellate review, we construe the pleadings, affidavits, and designated materials in a light most favorable to the non-movant. Heck v. Robey, 659 N.E.2d 498, 500 (Ind.1995). When there are material disputed facts, or if undisputed facts give rise to conflicting reasonable inferences that affect the outcome, they must be resolved in favor of the non-movant. Mullin v. South Bend, 639 N.E.2d 278, 281 (Ind.1994); Cowe v. Forum Group, Inc., 575 N.E.2d 630, 633 (Ind.1991). We give careful scrutiny to assure that the losing party is not improperly prevented from having its day in court. Landmark Health Care Assoc. v. Bradbury, 671 N.E.2d 113, 116 (Ind.1996).

1. Warner Trucking's Motion for Summary Judgment

Warner Trucking contends that it is entitled to summary judgment because its driver was not acting within the scope of his employment when the accident occurred due to his violation of a company rule.

Lou Warner, the company president, stated in her deposition that Warner Trucking had a rule that its drivers "were to consume no alcoholic beverages and get in one of my trucks" and that this rule was made known "to every employee as they were hired through the orientation process." Record at 196. In her affidavit in support of summary judgment, she declared, "Warner Trucking had a strict rule that no driver was allowed to drive a company vehicle if the driver had consumed any alcoholic beverage that day regardless of the quantity consumed." Record at 101. The driver in the present case was scheduled to deliver a truckload of recreational vehicles early in the morning of June 15, 1990. After Warner Trucking's office had closed on June 14, 1990, the driver and his family attended a cookout at a fellow employee's residence. The driver consumed two shots of hard liquor and drank beer throughout the evening. He then left the cookout with his family in their private automobile and drove to the employer's business premises. The driver told his wife that he was going to sleep in the truck. His wife left to drop their children off at home and, upon returning, found that her husband had unhooked the cab/tractor from the semi-trailer and driven away. While driving the tractor, the employee collided with the Halls' vehicle. Warner Trucking contends that the violation of the no-drinking rule establishes that the driver was not authorized to drive at the time of the accident and thus was outside the scope of employment. We disagree.

Contrary to Warner Trucking's argument, the existence of a rule prohibiting behavior is not solely determinative. An employer is vicariously liable for the wrongful acts of employees committed within the scope of employment. Stropes by Taylor v. Heritage House Childrens Center of Shelbyville, Inc., 547 N.E.2d 244, 247 (Ind.1989). The critical inquiry is not whether an employee violates his employer's rules, but whether the employee is in the service of the employer. Even though an employee violates the employer's rules, orders, or instructions, or engages in expressly forbidden actions, an employer may be held accountable for the wrongful act if the employee was acting within the scope of employment. See Eagle Motor Lines, Inc. v. Galloway, 426 N.E.2d 1322, 1325 n. 3 (Ind.Ct.App.1981); Mock v. Polley, 116 Ind.App. 580, 586-87, 66 N.E.2d 78, 81 (1946); The Pittsburgh, Cincinnati and St. Louis Ry. Co. v. Kirk, 102 Ind. 399, 402, 1 N.E. 849, 852 (1885). Acts done "on the employee's own initiative, with no intention to perform it as part of or incident to the service for which he is employed" are not "in the service of the employer" and are thus outside the scope of employment. Stropes, 547 N.E.2d at 247 (citations omitted). However, an employee's wrongful act may still fall within the scope of his employment if "his purpose was, to an appreciable extent, to further his employer's business, even if the act was predominantly motivated by an intention to benefit the employee himself" or if the employee's act "originated in activities so closely associated with the employment relationship as to fall within its scope." Id. Warner Trucking's vicarious liability for the acts of its driver therefore does not depend upon the driver's permission to drive, but rather upon the relationship of the driver's activities to the business of Warner Trucking.

Reviewing only the evidence specifically designated to the trial court, ¹ we find that the deposition of Warner Trucking's president raises a genuine issue of material fact as to this issue. ² Specifically, the deposition established that the president gave a cash advance to the driver the night of the accident and that the "cash advance is money for [the driver] to use to pay for fuel...." Record at 164. The deposition also established that employees usually fueled at "Yoder Oil" and that the accident occurred on the route from Warner Trucking's place of business to Yoder Oil. The designated materials show that it was not "unusual for a truck driver to take a tractor to be gassed up on the day before he was going to make a run if that run was going to be early in the morning" or "for drivers to sleep in the tractors," even if the employee lived in town. Record at 149, 155. Additionally, there were two official sets of keys to all semi-tractors: the employees kept one set of keys, the president kept the other.

Applying our standard favoring the party opposing summary judgment, we find that the deposition raises a genuine issue of material fact regarding whether the employee-driver acted within the scope of his employment. The trial court did not err in denying Warner Trucking's motion for summary judgment.

2. Carolina Casualty's Motion for Summary Judgment

In its declaratory judgment action, Carolina Casualty does not question its contractual obligation to provide coverage for Warner Trucking, but seeks to establish that its insurance policy provides no coverage for liability that may be personally imposed upon the driver of the Warner Trucking vehicle involved in the accident. ³ Carolina Casualty contends that its summary judgment motion should have been granted because the policy provides no coverage for the personal liability of employees driving a company vehicle without permission. Carolina Casualty's claim of no coverage is based not upon the issue of scope of employment, but rather upon its contention that the employee drove contrary to Warner Trucking's express rule denying permission to drivers who had been drinking.

It is undisputed that the Carolina Casualty "Commercial Transportation Policy" issued to Warner Trucking contains the following provision in "Part III--Liability Insurance":

D. WHO IS INSURED.

1. You [Warner Trucking Company] are an insured for any covered truck.

2. Anyone else is an insured while using with your permission a covered truck you own, hire or borrow except someone using a covered truck while he or she is working in a business of selling, servicing, repairing or parking trucks or automobiles.

3. Anyone liable for the conduct of an insured described above is an insured described above but only to the extent of that liability.

Record at 84 (emphasis added). Carolina Casualty contends that, as a matter of law, the Halls' claim that Warner Trucking's driver had implied permission cannot satisfy the definition of insured under D(2) where the vehicle was used contrary to Warner Trucking's...