West v. Collins

• Decision Date: 30 October 1992
• Docket Number: No. 65883,65883
• Citation: 251 Kan. 657,840 P.2d 435
• Parties: Sylvia Jane WEST, Mother and Heir-at-Law of Robert Gust, Deceased, Appellant, v. Robert L. COLLINS, Defendant, and Hicks Brothers Chevrolet, Inc., Appellee.
• Court: Kansas Supreme Court

Page 435

840 P.2d 435

251 Kan. 657

Sylvia Jane WEST, Mother and Heir-at-Law of Robert Gust Deceased, Appellant, v. Robert L. COLLINS, Defendant and Hicks Brothers Chevrolet, Inc., Appellee.

No. 65883.

Supreme Court of Kansas.

Oct. 30, 1992.

Syllabus by the Court

1. In this state, the motor vehicle owner's liability insurance policy is required to cover the person named and any other person, as insured, using any such vehicle with the expressed or implied consent of such named insured, against loss from the liability imposed by law for damages arising out of the ownership, maintenance, or use of any such vehicle.

2. In this state, a motor vehicle dealer is required to carry vehicle liability insurance for the operation of any vehicle owned or being offered for sale by the dealer if being operated by the owner or seller, the seller's agent, servants, employees, prospective purchasers, or other persons.

3. Interpretation of a statute is a question of law, and it is the function of the court to interpret a statute to give it the effect intended by the legislature. It is a fundamental rule of statutory construction, to which all other rules are subordinate, that the intent of the legislature governs if that intent can be ascertained.

4. In determining legislative intent, courts are not limited to consideration of the language used in the statute, but may look to the historical background of the enactment, the circumstances attending its passage, the purpose to be accomplished, and the effect the statute may have under the various constructions suggested. In construing statutes, the legislative intention is to be determined from a general consideration of the entire act.

5. K.S.A. 40-3107(b) lists the required contents of a motor vehicle insurance policy, but does not create a relationship between the owner or driver and a third party. Further, the language in K.S.A. 40-3107(b) does not automatically impose liability on the owner/insured for an accident between the covered driver and a third party.

6. Generally speaking, the purpose of compulsory automobile liability insurance is to protect members of the general public injured on the highways through the operation of the covered motor vehicle by giving them security for the payment of their damages. The intent of the legislature in enacting a no-fault insurance act is to provide prompt compensation of specified benefits to insured victims of accidents, to prevent overcompensation for minor injuries, and to ease congestion in the court system by eliminating the need to prove fault in certain cases.

7. In this state, a motor vehicle dealer is liable for damages resulting from an accident involving one of its vehicles only if it negligently entrusts a vehicle to an incompetent driver. The relationship of dealer and permissive driver or prospective purchaser, standing alone, is not sufficient to create vicarious liability.

8. The liability of the owner of a vehicle involved in an accident while being driven by a permissive driver must be determined under tort theories such as negligent entrustment, and vicarious liability will not be imputed to a vehicle owner based solely on permissive use by a third party.

John Anderson, Jr., Overland Park, argued the cause and was on the briefs for appellant.

Benny J. Harding of Berman, DeLeve, Kuchan & Chapman, Overland Park, argued the cause, and Robert E. McRorey and David J. Weimer, of the same firm, were with him on the briefs for appellee Hicks Bros. Chevrolet, Inc.

ABBOTT, Justice:

This is an appeal by Sylvia Jane West, the mother and heir-at-law of Robert Gust, deceased, in a wrongful death action. The defendants are Robert L. Collins and Hicks Brothers Chevrolet, Inc. (Hicks Brothers). A car owned by Hicks Brothers and driven by Collins was involved in a one-vehicle accident, which resulted in the death of Gust, a passenger in the car.

The trial judge assessed 100 percent of the fault against Collins and 0 percent against Hicks Brothers. The deceased's mother appealed, and the Court of Appeals affirmed in an unpublished opinion, --- Kan.App. ----, 827 P.2d 84 (1992). We accepted review on the limited issue of vicarious or implied liability.

The defendant, Collins, was 19 years of age and in the market for a car. He arranged with his uncle, Bill Hicks, the owner of Hicks Brothers, to test drive a 1978 Pontiac Firebird Trans Am and to keep it for two days to show his parents. Collins' father did not have an opportunity to test drive the car, and Hicks subsequently granted Collins permission to keep the car longer than the two days to which he originally agreed. Collins next informed Hicks he would buy the car. The necessary paperwork to transfer title to Collins was not completed before the accident.

On the evening of the accident, Collins drove two friends, Gust and Todd Ginger, in the Trans Am to a party at a friend's house. Collins and Ginger became intoxicated and have no recollection of what happened after leaving the party. According to the first officer on the scene, as well as photographs and diagrams of the accident scene, the Trans Am was traveling at a high rate of speed when it spun out of control, struck a pole, and came to rest against another vehicle in a private parking lot. Collins, Gust, and Ginger were injured and taken immediately to a hospital. Gust died shortly after arrival at the hospital.

A wrongful death action was filed against Collins and Hicks Brothers. Collins was covered by his parents' liability policy, which provided secondary insurance. Hicks Brothers' liability insurance carrier had primary coverage. Hicks Brothers' insurance carrier apparently is insolvent. Collins' parents' insurance carrier paid its policy limits, and that sum was divided on an unequal basis between the plaintiff in this case and the other passenger in the car.

A covenant not to execute was given to Collins, his parents, and their insurance carrier. That covenant is not in the record, and its terms are disputed by the parties to this appeal. It is not an issue on appeal.

The case went to trial. The trial court held that the relationship between Hicks Brothers and Collins was a bailment, not an agency relationship, and that Hicks Brothers had not negligently entrusted the Trans Am to Collins. The trial court found damages of $342,490.70 and found Collins 100 percent at fault.

Analysis

West argues that the Kansas Automobile Injury Reparations Act (KAIRA), K.S.A. 40-3101 et seq. (also referred to as the no-fault insurance act), which requires vehicle liability insurance, implies that the car owner is liable or creates a vicarious liability. Therefore, according to West, in order to find Hicks Brothers, the dealership that owned the vehicle, liable for the tortious acts of Collins, a permissive driver, it is not necessary to find that Hicks Brothers also committed a tort. She contends the public policy of this state mandates holding the owner liable for the negligent acts of a permissive driver. West does not limit her argument to car dealers and prospective buyers. She includes all owners and permissive drivers.

Hicks Brothers contends West is trying to convert the issue from one of liability to one of insurance coverage. The dealership also suggests this court will be overstepping its judicial role if strict liability is imposed upon a vehicle owner for the acts of a permissive driver.

The purpose of KAIRA is found at K.S.A. 40-3102, which states: "The purpose of this act is to provide a means of compensating persons promptly for accidental bodily injury arising out of the ownership, operation, maintenance or use of motor vehicles in lieu of liability for damages to the extent provided herein."

KAIRA requires every vehicle owner who operates his or her vehicle upon highways and public property to carry vehicle liability insurance, unless the owner falls within one of the exemptions in K.S.A.1991 Supp. 40-3104. (Hicks Brothers does not fall within one of the exemptions.) Even nonresident owners of vehicles are required to carry liability insurance if operating their vehicles in Kansas. K.S.A. 40-3106. The owner's liability insurance policy is required to cover "the person named and any other person, as insured, using any such vehicle with the expressed or implied consent of such named insured, against loss from the liability imposed by law for damages arising out of the ownership, maintenance or use of any such vehicle." K.S.A. 40-3107(b).

The trial court disposed of West's arguments by finding the statutes and cases cited "ineffective to impose liability in a case such as this, where the auto dealer has committed no underlying tort." In affirming the trial court, the Court of Appeals concluded:

"K.S.A. 40-3107(b) lists the required contents of an insurance policy but does not create a relationship between the owner or driver and a third party. Further, the language in K.S.A. 40-3107(b) does not automatically impose liability on the owner/insured for an accident between the covered driver and a third party. Liability of the owner/insured must still be determined under tort theories such as negligent entrustment."

West contends the decisions of the lower courts are contrary to the language of KAIRA. She maintains that because KAIRA charges the owner, not the driver of the vehicle with these obligations, liability insurance "follows the vehicle." She suggests that if liability insurance follows the vehicle, then liability follows the vehicle, making the owner liable for any tortious act in which the owner's vehicle is involved, regardless of who was driving, at least to the extent of the required insurance. Otherwise, West claims, the law would not require the owner to insure permissive drivers. She also points out that a motor vehicle dealer will not be licensed in this state unless the dealer carries vehicle liability insurance "for the operation of any vehicle by prospective...