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MARYLAND CASUALTY CO. v. STATE FARM MUT. AUTO.2/22/1994
This is an insurance coverage case. Maryland Casualty Company, as insurance carrier for Jamie Caudle, brought this declaratory judgment action against State Farm Mutual to determine the coverage available to Caudle, the driver in a motor vehicle accident which occurred in a car owned by State Farm's named insured, Melvin Brown. State Farm admitted that it had issued an automobile liability policy to Melvin Brown, but denied that any coverage was available to Jamie Caudle since he was not a permissive user of the vehicle under the terms and conditions of the policy. The Special Master ruled that coverage existed because the use of the insured vehicle was within the scope of consent given by Melvin Brown. State Farm appeals. We affirm.
The vehicle in question was a pickup truck titled and registered to Melvin Brown, although it had been paid for by his fifteen year old son, Willie Brown, with the proceeds of a settlement from a personal injury claim. Brown had given his son permission to use the car for any normal purpose but had explicitly told him not to let anyone else drive it. One evening when Willie Brown was driving around with friends, he allowed Jamie Caudle to drive the truck. Jamie hit a tree and injured his two passengers.
State Farm denied coverage under the terms of its policy
This omnibus clause is similar though not identical to S.C. Code Ann. § 38-77-30(6) (Law. Co-op. 1989). Under that Code Section,
"Insured" means the named insured and, while
resident of the same household, the spouse of
any named insured and relatives of either,
while in a motor vehicle or otherwise, and any
person who uses with the consent, expressed or
implied, of the named insured the motor
vehicle to which the coverage applies . . . .
(emphasis added).
The trial judge found that the "use" that was being made of the pickup at the time of the accident was authorized by Melvin Brown and, thus, Caudle was an insured under the State Farm policy. He reasoned that the language of Section 38-77-30(6) merely provides a minimum scope of coverage which an insurer must provide, but the parties to an insurance contract could agree to a more expansive coverage than is provided by the statute. Relying on State Farm Mut. Auto. Ins. Co. v. Allstate Ins. Co., 255 S.C. 392, 179 S.E.2d 203 (1971), the judge construed the omnibus language in the State Farm policy to extend coverage to anyone using the vehicle for a permitted purpose, even if his actual operation of the vehicle was expressly prohibited.
Thus, the question before us is whether a distinction may be drawn between the "operation" and "use" of a vehicle under the language of the State Farm policy. In resolving this issue, we must first determine if the language of the State Farm policy affords broader omnibus coverage than required by S.C. Code Ann. § 38-77-30 (6). If not, there is no coverage. The cases establishing this principle are Dearybury v. New Hampshire Ins. Co., 255 S.C. 398, 179 S.E.2d 206 (1971); State Farm Mutual Auto Ins. Co. v. Allstate Ins. Co., 255 S.C. 392, 179 S.E.2d 203 (1971); and Southern Farm Bur. Cas. Ins. Co. v. Hartford Accident and Indemnity Co., 255 S.C. 427, 179 S.E.2d 454 (1971).
State Farm cites State Farm v. Allstate, supra, for the
In State Farm v. Allstate, supra, the South Carolina Supreme Court addressed whether or not omnibus coverage existed for losses resulting from an accident where the son of the named insured permitted his friend to drive the insured automobile despite the named insured's express prohibition from doing so. The Court, in discussing whether a distinction could be drawn under the statute between "operation" and "use
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