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Farmers Insurance Exchange and Truck Insurance Exchange v. Wiglesworth11/17/1994
Plaintiffs, Farmers Insurance Exchange (Farmers) and Truck Insurance Exchange (Truck), appeal: (1) the summary judgment which held that defendant Richard L. Wiglesworth was entitled to insurance coverage under their policies as a permissive driver for claims asserted by defendant Eric Pierce arising out of an automobile accident; and (2) the judgment after trial that the Truck umbrella policy "dropped down" to provide "first dollar" coverage for all excess liability over the insurance limits actually paid by the Farmer's policy. We conclude that the issue of permissive use is governed by the insurance policy language and that the trial court incorrectly interpreted the law concerning that issue. We further conclude that the umbrella policy contains inconsistent and ambiguous provisions, must be interpreted against plaintiffs, and therefore provides "drop down" coverage if permissive use was involved. Consequently, we reverse in part, affirm in part, and remand for further consideration by the trial court.
During the relevant time period, Wiglesworth was living in Loveland, Colorado, with a friend's parents (Smiths) under a written contract which governed, in part, his conduct. The Smiths owned a pickup truck which was insured under a Farmers policy and a Truck umbrella policy. Wiglesworth had no automobile or other insurance coverage of his own.
The Smiths provided Wiglesworth with a set of keys to the pickup and permitted him to drive it back and forth to work without requesting further permission. He was required, however, to ask permission before taking the pickup anywhere other than to work, although permission to do so had never been denied when requested.
On the night of the accident, Wiglesworth was scheduled to work but instead took the pickup to Longmont to retrieve some personal items from the home of a former girlfriend. The record indicates that Wiglesworth never intended to go to work, that the Smiths were not home at the time he left with the pickup truck, and that he did not request permission to take the pickup to Longmont. When the Smiths learned that Wiglesworth was not at work, they called the police to report him missing with their vehicle and asserted that he might have stolen it.
While in Longmont, Wiglesworth participated in a drag race with a second vehicle. Eric J. Pierce, a passenger in this second vehicle, was injured when it collided with a third vehicle during the drag race. In an underlying suit, Pierce sued Wiglesworth and the other participants in the drag race. The suit resulted in a judgment against Wiglesworth for approximately $56,000.
Subsequently, Farmers and Truck brought the instant declaratory judgment action to determine whether, and to what extent, they were required to provide coverage to Wiglesworth under the Smiths' insurance policies. In ruling on cross-motions for summary judgment, the trial court held that it was undisputed that Wiglesworth had permission to take the pickup to work, and that, under the court's interpretation of Bukulmez v. Hertz Corp., 710 P.2d 1117 (Colo. App. 1985), rev'd in part on other grounds sub nom. Blue Cross v. Bukulmez, 736 P.2d 834 (Colo. 1987), Colorado utilized the "initial permission" test for determining permissive use. Hence, the trial court determined that, at the time of the accident, Wiglesworth was entitled to coverage.
The trial court further ruled that, because Wiglesworth was a "non-family member" permissive user under the policy, the available liability coverage was $25,000 as required by the Colorado Auto Accident Reparations Act.
In the trial on the remaining issues, the trial court determin
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