Wehland v. Nationwide Mutual Insurance Company

• Decision Date: 15 December 1971
• Docket Number: Civ. No. 18777.
• Citation: 336 F. Supp. 360
• Parties: Norman W. WEHLAND, Jr., a minor, by Norman W. Wehland, his father and next friend, to his own use and to the use of the Harleysville Mutual Insurance Company, a body corporate of Harleysville, Pennsylvania v. NATIONWIDE MUTUAL INSURANCE COMPANY, a body corporate.
• Court: U.S. District Court — District of Maryland

336 F. Supp. 360

Norman W. WEHLAND, Jr., a minor, by Norman W. Wehland, his father and next friend, to his own use and to the use of the Harleysville Mutual Insurance Company, a body corporate of Harleysville, Pennsylvania v. NATIONWIDE MUTUAL INSURANCE COMPANY, a body corporate.

Civ. No. 18777.

United States District Court, D. Maryland.

December 15, 1971.

David D. Patton, Balimore, Md., for plaintiff.

M. King Hill, Jr., and Michael A. Pretl, Baltimore, Md., for defendant.

FRANK A. KAUFMAN, District Judge.

Plaintiff, Wehland, a minor, by his father and next friend, suing for his own use and for the use of Harleysville Mutual Insurance Company (Harleysville), seeks damages from defendant, Nationwide Mutual Insurance Company (Nationwide), alleging that Harleysville discharged to certain third parties a liability of Wehland, which should have been paid by Nationwide. The facts in this case, in which diversity jurisdiction exists,¹ are not in dispute. Accordingly, the parties have filed cross-motions for summary judgment.

On July 21, 1969, Nationwide issued its automobile liability insurance policy to Grover Edwin Jones, a citizen of Maryland, covering as an owned automobile a 1955 Chevrolet sedan, the title to which was in the name of Grover Edwin Jones, but, which this Court concludes, was owned by his son, Bennie.² At or about the same time at which Nationwide issued its aforesaid policy to Jones, the father, it also issued to Bennie, as an operator, a JR-11 Certificate of Financial Responsibility.³

During the evening of January 29, 1965, Bennie gave the plaintiff (Wehland) permission to drive the Chevrolet, with Bennie as a passenger in the right front seat, and with other passengers in the car. At some point after Wehland began to drive the car, and for a reason not disclosed in the record, a Maryland State Police car, with its red dome light flashing and with its siren sounding, began pursuing the Chevrolet which Wehland was driving. In an apparent attempt to escape that pursuit and despite the alleged protestations of Bennie and of the other passengers and their alleged efforts physically to seize control of the Chevrolet, Wehland accelerated the speed of the Chevrolet as he approached an intersection which was controlled by an automobile traffic signal which was red for cars proceeding in the direction in which Wehland was moving. Wehland's flight came to a sudden, tragic end when he either failed to see or disregarded the red signal and the Chevrolet collided with a second automobile which came into the intersection from another direction. In the collision, Bennie and the driver of the second automobile were killed and the other occupants of the Chevrolet were injured, as was a passenger in the second car.

At the time of the accident, Wehland was insured under the JR-11 endorsement to an automobile liability insurance policy issued to his father by Harleysville. After Nationwide took the position that its policy did not afford coverage to Wehland, Harleysville, on behalf of its insured, Wehland, settled all outstanding claims arising from the accident.⁴

The question presented in this case is whether Nationwide's policy covers Wehland's operation of the Chevrolet. Because this Court's answer to that question is "no," it is not necessary for this Court to consider whether Nationwide's coverage, if the same existed, was primary or secondary to, or concurrent with, Harleysville's coverage.

Both the Nationwide and Harleysville policies were issued in Maryland. Accordingly, Maryland law applies in this case. Travelers Corp. v. Kaminski, 304 F.Supp. 481 (D.Md.1969); Mt. Beacon Ins. Co. v. Williams, 296 F.Supp. 1094 (D.Md.1969); Ohio Cas. Ins. Co. v. Pennsylvania Nat. Mut. Cas. Ins. Co., 238 F.Supp. 706 (D.Md.), aff'd per curiam, 352 F.2d 308 (4th Cir. 1965).

The Nationwide policy provided personal injury and property damage coverage for the policyholder, namely, Grover Edwin Jones, any resident of his household, and any person or organization legally responsible for the use of the automobile described in the policy, in this case the Chevrolet, "provided such use and actual operation was with the permission of the Policyholder or his spouse if such a resident." Wehland was not the policyholder, nor was he a resident of the same household as the policyholder, Jones. Nor did Wehland operate the Chevrolet with the effective permission of the policyholder or his spouse.⁵

In construing policies substantially similar to the policy Nationwide issued to Grover Edwin Jones, that is, a policy which provides for coverage of a permittee if he is granted permission to operate a covered car by the policyholder or his spouse, the Court of Appeals of Maryland has held that permission by any such policyholder or his spouse is ineffective unless that policyholder or his spouse is the owner of the car, or is someone entitled to the possession and use of the car, such as, for example, a lessee. In other words, the Court of Appeals of Maryland has held that no one can grant permission unless he has the legal power and right to grant or to withhold permission. Keystone Ins. Co. v. Fidelity & Cas. Co. of New York, 256 Md. 423, 260 A.2d 275 (1970); Unsatisfied Claim & Judgment Fund v. United States Fidelity & Guaranty, 256 Md. 412, 260 A.2d 279 (1969); Selected Risks Ins. Co. v. Miller, 227 Md. 174, 175 A.2d 584 (1961).

In the Keystone case, the car in question was purchased by a minor and titled in the name of the mother of the minor. A JR-11 endorsement had been issued to cover that minor son. Judge Smith, writing for the Court of Appeals of Maryland and citing Mills v. Judd, 256 Md. 144, 259 A.2d 267 (1969), concluded (256 Md. at 431, 260 A.2d at 279) that "the presence of the JR-11 in no way changes the situation here."^5a Judge Smith also wrote in the Unsatisfied case as follows (256 Md. at 422, 260 A.2d at 284):

The only difference between this case and the cases generally holding that consent by one who is not a named insured, even though he is the owner, is not sufficient to create the coverage, is that here the son lived in the home of the named insured and the father had co-signed the note. In the other cases, the same factors of insurance in the name of the named insured and tags in the name of the named insured would have been present. The fact that the son lived in the household of his parents, and that the father had co-signed a note would not effect sufficient change to grant to the father such right of control over the vehicle as to be able to deny the use of the vehicle to the son who was the actual owner. Accordingly, we hold that as a matter of law there was not sufficient evidence adduced to warrant submission to the jury of an issue as to whether the father had such an interest in the vehicle that he was entitled to the right of possession and control of it. Therefore, Judge Watts was entirely correct in granting the motion for judgment n. o. v. on the strength of the holding of this Court in Selected Risks v. Miller, supra, now buttressed by our holding today in Keystone Ins. Co. v. Fidelity & Cas. Co., supra.⁶

In Keystone, Judge Smith discussed Melvin v. American Auto. Ins. Co., 232 Md. 476, 194 A.2d 269 (1963), and noted (256 Md. at 430, 260 A.2d at 278):

* * * In Melvin coverage was held to exist under the omnibus clause because the son there involved was an "insured" within the terms of the policy as a resident of the same household; he was in the car at the time of the accident, although not operating it; and the car was on his mission at the time. Judge (later Chief Judge) Henderson there said for the Court:

"Here the test is use rather than permission." Id. at 480 of 232 Md. at 272 of 194 A.2d. Emphasis supplied by Judge Smith.

In Melvin, the American Automobile Insurance Company policy stated that "the named insured and any resident of the same household," as well as "any other person using such automobile, provided the actual use thereof is with the permission of the named insured" was an insured under the policy; and, in addition, provided (at 478, 194 A.2d at 271):

(c) Any other person or organization legally responsible for the use of (1) an automobile or trailer not owned or hired by such person or organization, or (2) a temporary substitute automobile, provided the actual use thereof is by a person who is an insured under (a) or (b) above with respect to such automobile or trailer. * * *." Emphasis supplied by Judge Henderson.

After so noting, Judge Henderson wrote (at 478, 194 A.2d at 271):

It is conceded that Barry Brotman was an insured, as a resident of the household of the named insured under (a) (1). He could probably qualify under (a) (2), as a person actually using the owned automobile with the permission of the named insured, although we need not so decide. The question is, however, whether Alan was covered, and the appellant contends that he is, under (c) (1), as a person legally responsible for the use of an automobile, not owned or hired by such person, because he fulfills the condition that "the actual use thereof is by a person who is an insured under (a) or (b)." The contention is that the actual use at the time of the accident was by and for the benefit of Barry, an insured under (a) (1). The appellee on the other hand, argues that the "actual use" was by Alan, and not by Barry, because Alan was actually operating the car at the time of the accident.

In Melvin, the car was owned by Barry's father, and was operated by Alan W. Melvin. Barry drove the car to a party. Returning from the party, Barry arranged with Alan for the latter to drive because Barry was tired. Barry travelled in the car as a passenger with Alan at the wheel. In the ensuing accident which occurred while Alan was driving, Barry was killed.

Judge Henderson held (at 480, 194 A. 2d at 272) that "the actual use was by Barry, a person insured, and that this fact extended the coverage to Alan, under the...