Fisher v. United States Fidelity & Guaranty Co.

CATHELL, Judge. Joy D. Fisher, the appellant, appeals from the granting of a summary judgment in favor of appellees by the Circuit Court for Anne Arundel County (Williams, J.). Fisher alleges that: I. The circuit court improperly granted Hardin-Kight and USF & G’s motion for summary judgment because it failed to distinguish the significance of the unique language in this insurance policy’s omnibus clause. ³²⁴ A. Hardin-Kight’s pattern and practice of allowing its employees personal use of company vehicles created a material dispute of fact, thereby precluding summary judgment as to the meaning of the term “permission” as used in the omnibus clause of USF & G’s insurance policy. B. As a matter of law, the circuit court erred in its failure to distinguish the omnibus clause of HardinKight’s insurance policy with USF & G from that of the “standard” automobile insurance policy.

II

Hardin-Kight’s internal corporate decision to restrict the personal use of its company vehicles was irrelevant and immaterial to a determination that USF & G must defend Peglow. The insurance carrier voluntarily assumed the potential risk of loss when it contracted to insure a fleet of vehicles under a policy which contained the distinct omnibus clause at issue.

III

The lower court improperly granted the motion for summary judgment thereby denying Joy Fisher her right to have a jury, as trier of fact, construe the meaning of “permission” as set forth in the omnibus clause of USF & G’s insurance policy. Finding no error in the trial court’s granting of summary judgment, we shall affirm. We shall address only those facts necessary to our determination of the issues. An employee of Hardin-Kight’s had permission to drive a company vehicle home and to use it in the company’s business.

While at home, the employee (Peglow) responded to a personal emergency unrelated to his employer’s business, and enroute, using the employer’s vehicle, caused the accident that resulted in the injuries to Fisher. The company maintained a business vehicle policy with United States Fidelity & Guaranty Company (USF & G). Fisher organizes her brief into three issues with two subparagraphs, but there is really only one issue: whether the use by Peglow was permitted. ³²⁵ The key to determinating the correctness of the trial court’s ruling is the construction to be afforded the “omnibus” clause in the policy at issue. The clause provides in pertinent part: A. COVERAGE 1.

WHO IS AN INSURED b. Anyone else while using with your permission a covered “auto” you own, hire or borrow____ The operative words of the clause at issue are “while using with your permission.” USF & G contended below, and contends here, that the language provides coverage only when the vehicle is being used within the scope of the permission granted to the employee. Fisher apparently contends that as long as the employee had permission to take the vehicle home, the language of the coverage is not sufficiently specific to limit the employees’ use to the conditions imposed by the employer. She also argues that the conditions laid down for permitted use were waived.

We must first address the limitations of our construction of the policy language at issue. Construction The Court of Appeals in National Grange Mutual Insurance Company v. Pinkney, 284 Md. 694, 706 , 399 A.2d 877 (1979), opined: We point out that Maryland differs from some of the states ... which have adopted the “liberal” rule since there an insurance policy is to be most strongly construed against the insurer, which is not the rule in Maryland. Moreover as was pointed out in Weissberg Corp. v. N.Y. UW Insur., 260 Md. 417, 429 , 272 A.2d 366 (1971), citing Offutt v. Liberty Mut. Ins.

Co., 251 Md. 262, 270 , 247 A.2d 272 (1968), we may not make a new contract under guise of construction. ³²⁶ The liberal rule is also defined as the initial permission rule, which provides that: [I]f the vehicle was originally entrusted by the named insured, or one having proper authority to give permission, to the person operating it at the time of the accident, then despite hell or high water, such operation is considered to be within the scope of the permission granted, regardless of how grossly the terms of the original bailment may have been violated---- National Grange, 284 Md. at 698 , 399 A.2d 877 (citing 6C J.A. Appleman and J. Appleman, Insurance Law and Practice § 4367 (Buckley ed. 1979)). We find nothing in the enactments of the General Assembly relative to insurance to indicate that we are expected as a matter of public policy to follow the so-called “liberal” rule relative to interpretation of omnibus clauses. We find no mandate which obliges us to depart from either our prior opinions on the subject of omnibus clauses or the prior authorities in this State relative to the interpretation of insurance contracts. It should be specifically noted that although the clause in the contract now before the Court is similar to that before us in Insurance Co. of N. Amer. v. State Farm, supra, 281 Md. 381 [ 378 A.2d 1344 (1977)]; Goodwin v. Home Indemnity Co., supra, 255 Md. 364 [ 258 A.2d 220 (1969) ]; and Cohen v. Am.

Home Assurance Co., supra, 255 Md. 334 [ 258 A.2d 225 (1969)], it is not identical to all of the omnibus clauses which have appeared in cases before us. We note specifically that all omnibus clauses do not contain the same language. Because these clauses are part of contracts, it follows that they must be interpreted pursuant to their terms on a contract by contract or case by case basis, and not by sweeping language saying that regardless of the exact provisions of the contract we shall interpret all similar, but not identical, contracts alike. Id., 284 Md. at 706 , 399 A.2d 877 (emphasis in original).

We thus hold that in Maryland, the “liberal” (or “initial permission” or the “hell or high water”) rule has been, and ³²⁷ remains, specifically rejected. See also Jennings v. Government Employees Insurance Company, 302 Md. 352, 360 , 488 A.2d 166 (1985). Additionally, it is clear that the Maryland law does not prohibit such omnibus clauses for public policy reasons. We said recently in Globe American Casualty Co. v. Chung, 76 Md.App. 524, 532 , 547 A.2d 654 (1988), that: “Insurance policies are contractual and the court interprets the provisions of the policy based on their plain meaning.” (Citation omitted.) See also Nat’l Indem.

Co. v. Continental Ins. Co., 61 Md.App. 575 , 487 A.2d 1191 (1985). The Court of Appeals in Winterwerp v. Allstate Ins. Co., 277 Md. 714 , 357 A.2d 350 (1976), was called upon to construe a non-owned automobile clause in an insurance policy.

The Court held: We noted there that absent an ambiguity, Maryland has not adopted the rule followed in many jurisdictions that an insurance policy is to be most strongly construed against the insurer. See also Ebert v. Millers Fire Ins. Co., 220 Md. 602, 611 , 155 A.2d 484 (1959). In Humphrey, [ 1 ] we also applied the rule that where the facts pertinent to the question of coverage are undisputed, the issue is one of construction in light of the language employed in the contract, the subject matter and the surrounding circumstances.

Here, then, since the facts are undisputed, construction of the clause presents a question of law for the court. Further we are not persuaded that the disputed language is ambiguous, since we find the clause neither uncertain in its general meaning nor subject to construction in alternate ways. As Judge Oppenheimer aptly stated for the Court in Humphrey, the fact “[t]hat a term cannot be precisely defined so as to make clear its application in all varying factual situations does not mean that it is ambiguous.” In light of our conclusion that the language in ³²⁸ controversy is not ambiguous, there is no basis for construing it strictly against the insurer. Id. 277 Md. at 717-18 , 357 A.2d 350 (citations omitted).

We hold that the language in Hardin-Kight’s policy is unambiguous. We now address the meaning of that unambiguous clause. A similar factual situation existed in our case of Washington Metro. Area Transit Auth. v. Bullock, 68 Md.App. 20 , 509 A.2d 1217 , cert. denied, 308 Md. 237 , 517 A.2d 1120 (1986).

In that case an employee of the Transit Authority (WMATA) had permission to use the company vehicle for specific company purposes. Contrary to the permission granted, he utilized the vehicle for personal reasons and struck pedestrians. In a declaratory judgment action WMATA, who was self-insured, alleged that because Bullock was using the vehicle for personal reasons, his use was non-permissive, and therefore, WMATA was not responsible for his conduct. Bullock and the pedestrians denied that Bullock’s use was nonpermissive and also alleged that because of waiver, laches, and estoppel, WMATA was precluded from denying that Bullock had permission.

Like the case sub judice, the employee in WMATA conceded that he was on a personal errand and was not acting within the scope of his employment at the time of the accident. Originally, adjusters had been permitted to use company cars for personal business as a part of their compensation. As a result of disputes arising out of changes in the company policy as to furnishing of company vehicles, a policy was agreed to amongst the adjusters and the company. Under this accepted policy the adjusters agreed “not to use the WMATA vehicle assigned to each of them for personal use.” Bullock, 68 Md.App. at 26 , 509 A.2d 1217 .

Bullock knew of the agreement, never denied it, and never complained about it. Like the instant case, there was some evidence that the personal use restriction was not strictly adhered to. Judge Wilner stated for this Court: ³²⁹ To this point, it has not been regarded as against public policy in this State for an insurer to disclaim or deny coverage when an insured vehicle is being used by someone other than the “named insured” without the permission or beyond the scope of the permission of the “named insured.” As the Court pointed out in National Grange Mut. Ins. v. Pinkney, 284 Md. 694 , 399 A.2d 877 (1979), coverage of persons other than the named insured (or members of his household) arises only from what is generally referred to as an “omnibus clause” in an insurance policy, and “there is no provision in any Maryland statute to which we have been referred, or which we have found in our research, which requires an omnibus clause to appear in any motor vehicle liability insurance policy.” Id., at 704-05 , 399 A.2d 877 .

Bullock, 68 Md.App. at 30 , 509 A.2d 1217 (footnote omitted). In our discussion of National Grange , we discussed the Court of Appeals’ opinion, saying: The National Grange Court observed that the Court had previously rejected the “liberal” rule and saw no public policy reason to change that view. In the end, it took an almost unique approach, rejecting all three rules and opting instead to construe, on a case-by-case basis, the particular wording of the omnibus clause at issue---- Bullock, 68 Md.App. at 32 , 509 A.2d 1217 . We held in Bullock at 36, 509 A.2d 1217 : It follows that (1) an insurer, including a self-insurer, may exclude coverage for non-permissive use, (2) an employer, as the owner of the vehicle and the named insured, as self-insurer or under a policy, may permit an employee to use the vehicle generally but expressly forbid him from using it for personal errands, and (3) if, in violation of that limitation, the employee indeed uses the vehicle for a personal errand, the use may be regarded as non-permissive, thereby excluding it from coverage under a standard-type of omnibus clause.

We also addressed in Bullock at 36, 509 A.2d 1217 the employee’s assertion that he had “some sort of ‘implied’ ³³⁰ permission to use the car for personal errands ... based on ... ‘long continued non-enforcement’ of the restriction____” We said: The fact that some of the adjustors ... use the vehicles ... for other, more clearly personal uses, does not render the company policy void or ineffective____ We thus have uncontroverted evidence of a clear company policy forbidding personal use, and, as noted in Bond v. Pennsylvania Nat’l Mut., 289 Md. 379, 385 , 424 A.2d 765 (1981) “you cannot imply something in the face of an express statement to the contrary.” Id. 68 Md.App. at 38 , 509 A.2d 1217 . In Bullock , we were, in part, relying on the Court of Appeals’ decision in National Grange . The policy at issue in National Grange concerned an omnibus permission clause somewhat different from the clause in the instant USF & G policy; it added the clause “provided his actual operation [was] within the scope of such permission____” Bullock, 68 Md.App. at 31 , 509 A.2d 1217 (bracket in original). Appellant argues in the instant case that the omission of this qualifying language in the USF & G policy somehow negates the primary coverage language “while using with your permission.” In other words, Fisher contends that the absence of the extra qualifying language removes the personal use from the restrictions placed upon it by the employer.

Fisher also argues that the absence of that qualifying language makes the clause ambiguous, and that the resulting ambiguity was for the trier of fact to determine and thus was a jury question. As we have said, we disagree with her contention. The language in the policy at issue is not ambiguous. The Court of Appeals in Bond v. Pennsylvania Nat’l Mut.

Casualty Ins. Co., 289 Md. 379, 384 , 424 A.2d 765 (1981), stated: “Insurance policies, being contractual, are construed as other contracts.” (Citation omitted.) See National Grange, 284 Md. at 694 , 399 A.2d 877 . The clause in the business policy at issue provides coverage for an employee “while using with your permission a covered ‘auto.’ ” It means what it says. If ³³¹ the employee was using the automobile within the scope of the permission, that is, with actual permission, coverage is afforded; otherwise, it is not.

As we perceive it, “within the scope of the permission” and “with actual permission” are but other forms of saying “with permission.” The words “with permission” include the alleged qualifiers urged on us by appellant. The absence of the qualifiers, as we see it, does not expand coverage, nor does it make unambiguous language ambiguous. Our examination of the meaning of the words used in the policy, as compared with the language appellant asserts should be included, leads us to the same conclusion — if the words “actual permission,” “actual use,” “within the scope,” etc., were included, they would be duplicative, not expansive nor limiting. Definitions The Random House Dictionary of the English Language 1573-74 (unabridged ed. 1983) defines “use” as: “[T]o employ for some purpose; put into service ... to avail oneself of; apply to one’s own purposes ... the act of ... putting into service____” Black’s Law Dictionary 1541 (6th ed. 1990), states the legal definition of “use,” as a noun, as: “That enjoyment of property which consists in its employment, occupation, exercise or practice.” That dictionary defines “permission” as “the act of permitting; formal or express allowance or consent.... liberty or license granted to do something.” Black’s Law Dictionary 1541 (6th ed. 1990), defines “use,” as a verb, as: “To make use of; to convert to one’s service; to employ; to avail oneself of; to utilize.... ” It defines “permission” as a “license to do a thing; an authority