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Champlain Casualty Co. v. Agency Rent-A-Car Inc.6/12/1998
On Appeal from Washington Superior Court
Alan W. Cheever, J.
Plaintiff Champlain Casualty Company of Vermont appeals a Washington Superior Court order granting summary judgment to defendant Agency Rent-A-Car, in a dispute over liability for damages caused by the lessee of one of Agency's vehicles. Champlain is the lessee's insurer under a comprehensive automobile liability policy. The trial court held that Agency's self-insurance obligation, created to comply with Vermont's Motor Vehicle Financial Responsibility Law, 23 V.S.A. Sections 800-810, does not constitute "other collectible insurance" and consequently, Champlain is responsible for providing primary liability coverage. Champlain appeals. We affirm, but on grounds different from those employed by the trial court.
The facts of this case are largely undisputed. On November 9, 1993, Alex Roberts of Stowe, Vermont, rented a car from Agency and signed a rental contract. While driving the rented car, Roberts collided with a vehicle driven by Patricia Alley. Roberts died as a result of injuries he suffered in the crash. Alley was injured, and she and her husband later filed suit against Roberts and his estate.
The parties in the underlying suit looked to both Champlain and Agency to defend and indemnify. This led to the litigation before us, in which Champlain sought a declaratory judgment that Agency was obligated to defend and pay any claim against Roberts estate. Agency responded that Champlain had the duty to defend and indemnify.
Champlain's responsibility is based on a comprehensive automobile liability insurance policy it issued to Roberts. The policy covered Roberts operation of a non-owned automobile, but stated that:
If there is other applicable similar insurance we will pay only our share of the loss. Our share is the proportion that our limit of liability bears to the total of all applicable limits. However, any insurance we provide with respect to a vehicle you do not own shall be excess over any other collectible insurance.
Agency's responsibility is based on Vermont's financial responsibility law. No owner of an automobile may permit the operation of the vehicle upon the highways of the state without having in effect an automobile liability policy or bond, in the amount specified in the statute and covering persons killed or injured in an accident and property damage. See 23 V.S.A. Section 800(a). In lieu thereof, the owner may file self-insurance in the amount of $100,000. See id. Section 801(c). The Commissioner of Motor Vehicles may issue a self-insurance certificate to a person when the Commissioner is satisfied that the person has at least $100,000.00 of unencumbered net worth. Id. The statute goes on to provide:
A certificate of self-insurance obtained by a self-insurer shall insure every person operating a motor vehicle, owned by said self-insurer, with his express or implied permission, against loss within statutory limits from the liability imposed by law upon such person arising out of the operation of said motor vehicle and shall be for the benefit of any person suffering personal injuries or property damage arising out of the use of such motor vehicle with such express or implied permission.
Id.
Agency obtained a certificate of self-insurance from the Commissioner of Motor Vehicles. Agency does not offer insurance to those who rent cars from it. In fact, the rental agreement entered into between Roberts and Agency required that Roberts have his own liability insurance covering his operation of Agency's vehicle. The rental agreement provided that Robert's "valid and collectible liability and personal inj
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