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Nationwide Mutual Insurance Co. v. Continental Casualty Co.5/8/1991
This appeal arises from a declaratory judgment in favor of an insurer and its business insured regarding coverage under an automobile liability insurance policy for a company car that was involved in a single vehicle accident.
Halperin Distributing Corporation (Halperin) (appellee) is a wholesale food distributor in the Baltimore-Washington metropolitan area. The company employs a force of sales representatives to sell its products to area food stores, including Giant Food Stores. To this end, Halperin allowed each sales representative the use of a company car on a continuing basis for business purposes.
Kathy Zinn worked for Halperin as a sales representative. As such, she had the use of a company car for business purposes. At the invitation of a Giant Food Store deli manager, a customer on Zinn's route, Zinn and several of her guests attended a pool party at the home of another Giant Food Store employee on June 15, 1986. As Zinn and her guests -- Debra Lizzio (appellant), Steven Sprehe, and Richard Thiess -- were driving home from the pool party in Zinn's company car, they were involved in a single vehicle accident. The three passengers filed individual suits against Zinn and Halperin in the Circuit Court for Prince George's County, which the court consolidated. The car was insured under a business automobile policy with Continental Casualty Company (appellee) at the time of the accident.
Continental denied coverage because it and its insured, Halperin, took the position that Zinn was not driving the car for business purposes when the accident occurred. Continental sought a declaratory judgment that Zinn was not an insured under the policy and that it therefore had no obligation to defend her in the tort action or to indemnify her for any judgments which the court might enter against her in that suit.
Nationwide Mutual Insurance Company (Nationwide) (appellant), Lizzio's insurer, filed an intervenor's answer to the complaint for declaratory relief while the declaratory judgment action was pending. The court permitted intervention. Nationwide then sought a declaration that Zinn was an insured under the Continental policy or, alternatively, that Lizzio was entitled to benefits under the Continental policy's uninsured motorist and personal injury protection provisions even if the policy did not provide liability coverage for Zinn. The circuit court stayed the consolidated tort actions pending the outcome of the declaratory judgment action.
On June 27 and 28, 1989, the Circuit Court for Prince George's County (the Hon. Joseph S. Casula, presiding) held a hearing on the declaratory judgment action. The primary issue at trial was whether Zinn had Halperin's permission to use the company car at the time of the accident. On January 22, 1990, the circuit court held that Zinn was a non-permissive user of the Halperin vehicle and, therefore, that the Continental policy did not provide coverage for the accident. The court also held that Continental had no duty to defend or indemnify Zinn against any of her passengers' claims. Further, Continental had no legal obligation to pay the passengers (the tort plaintiffs) any money under the policy that it had issued to Halperin.
Lizzio, joined by Thiess and Sprehe, subsequently filed a motion to alter or amend the decision, which the court denied on May 16, 1990. On May 17, 1990, the court granted Halperin's motion for summary judgment that it had filed in the consolidated tort suit. Nationwide appeals to us from these rulings and asks us whether:
I. The trial court was clearly erroneous when it found that Zinn was a "non-permissive" user of the Halperin vehicle.
II.
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