Permission to Use
Trumps Prohibition on Operation
Missouri public policy requires that insurance coverage be extended to those using a vehicle with the owner’s express or implied permission. Numerous issues concerning the scope of permission can arise and are often litigated.
Just this summer, the Supreme Court of Missouri had the opportunity to address such a case in Griffitts v. Old Republic Ins. Co.
The Griffitts litigation spanned nearly a decade and has touched upon numerous issues relevant to insurance litigation including a carrier’s ability to intervene in the underlying liability litigation. The most recent appellate decision involving the Griffitts litigation has now further clarified the scope of permissive use.
Griffitts v. Old Republic Ins. Co.
550 S.W.3d 474 (Mo. banc 2018)
Griffitts stems from a March 2009 motor vehicle collision in which Griffitts was rear-ended by Campbell. At the time of the collision, Campbell was operating a vehicle owned by his employer, after hours, and while intoxicated.
Prior to the collision, Campbell had been given permission to use the company truck to commute between his home in Tennessee and a job site in Springfield. His employer was aware that Campbell had no other transportation while in Springfield or at other job sites, that he regularly used the truck to get meals and run errands while at job sites, and never punished Campbell for such use. In addition, other employees also indicated that they would use company vehicles in similar ways and some would use the vehicles for any manner in which they would use their own vehicle.
Campbell’s employer did not have any express rule or policy concerning what an employer could use a company vehicle for while traveling to, staying near, or working at an out of town job site. Instead, the employer only had rules prohibiting the use of alcohol “while on [employer’s] property…or operating [employer’s] equipment and vehicles.”
Based on him being intoxicated at the time of the collision, he admitted violating the above rule and was terminated from is employment.
Griffitts Files Suits
Griffitts initially filed suit against Campbell and his employer arguing that the employer was liable under a theory of respondeat superior.
However, a finding was made by the federal court that Campbell was not in the course and scope of his employment and summary judgment was entered for the employer.
Griffitts then filed suit in Greene County against just Campbell. This suit ultimately resulted in a $1.475 million judgment against Campbell.
Following the judgment becoming final, Griffitts filed an equitable garnishment action to collect the unsatisfied portion of the judgment.
The central issue in the equitable garnishment action was whether Campbell was a permissive user under the omnibus clause of the Old Republic Policy issued to Campbell’s employer.
This clause provided that coverage was available to “anyone else while using with [employer’s] permission a covered auto [employer] owns, hires or borrows.” The equitable garnishment court was tasked with determining whether Campbell’s use of the vehicle at the time of the collision was within the scope of permission given by his employer.
The equitable garnishment court ruled that Campbell’s use of the vehicle was not with the permission of the employer and thus not covered. In doing so, the court construed the employer’s rules concerning alcohol use as rules of authorization or permission. Since Campbell violated these rules at the time of the collision, he was not operating the vehicle with permission.
Missouri Supreme Court Reverses
The Supreme Court of Missouri rejected the equitable garnishment court’s characterization of the Company rules concerning alcohol as rules of permission and reversed that court’s coverage determination. The Court noted that omnibus clauses are intended to extend coverage by enlarging the number of potential insured individuals. The focus of such clause is on the use of the vehicle and not in the particular manner of the operation of the vehicle.
In applying these principles, the Court noted that Campbell had almost unfettered permission to use the vehicle when traveling to, staying near, or working at out of town job sites. The employer’s restrictions concerning alcohol use did not change this broad permission to use the vehicle. Rather, these rules were restrictions on the manner in which the vehicle could be operated.
As such, Campbell’s intoxication and violation of his employer’s rules of operation, was not sufficient to take his use out of the omnibus clause.