Melvin v. American Automobile Insurance

Henderson, J., delivered the opinion of the Court. State Farm Mutual Automobile Insurance Company (State Farm), issued an automobiL liability insurance policy to Ed ⁴⁷⁷ win W. Melvin, with an endorsement known to the trade as “JR-11” covering his son, Alan W. Melvin. The policy contained a “use of other cars” clause, as well as “excess coverage” clause. On March 10, 1957, Alan had an accident while driving an automobile owned by Harry Brotman in which Barry Brotman, Harry’s son, was killed and another passenger, Martin Keenan, was injured.

Harry Brotman had an automobile liability insurance policy with American Automobile Insurance Company (American), containing what is known as a “family omnibus” clause. State Farm settled various suits for the death, the personal injuries and property damage due to the accident, and brought this action for reimbursement against American. The case was heard by the trial court, without a jury, on a stipulation of facts. The appeal is from a judgment for the defendant.

The accident occurred on March 10, 1957, shortly after midnight. Barry Brotman had been home on leave from the United States Army. He had been in the Army for about two years, and had been ordered overseas. On March 9, 1957, he had reported to Fort Dix, New Jersey, but had been told to return home to await further orders.

He resided with his father, Harry Brotman, in Baltimore County. On the evening of March 9 he obtained permission from his father to use Harry’s car. No restrictions were placed on its use, nor was anything said about who should drive it. It was also stipulated that Barry had had general permission to use the car whenever he was home on leave.

Barry drove to a party on Augusta Avenue in Baltimore. He left the party with three other young men and went to a diner to eat. They decided to visit another boy, a mutual friend, who lived on Cape St. Clair Road in Anne Arundel County. Barry said he was tired, as he had been to Fort Dix and back that same day, and either asked or told Alan W. Melvin to drive.

The boy they went to visit was not at home, and they were on their way back to Baltimore when the car went off the road and struck a tree, while Alan was driving. The only question in the case concerns the proper construction of the “family omnibus” clause in American’s policy. It is conceded that if the driver, Alan Melvin, is covered, then American’s policy is the primary insurance, the amount paid ⁴⁷⁸ in settlement of the claims is fair, and State Farm is entitled to reimbursement of the total amount paid. The appellee contends, and the court found, however, that coverage did not extend to Alan, as a second “permittee” of the use of the Brotman automobile.

The policy, in part 1- — -Liability, under the subheading “persons insured,” read as follows: “The following are insureds under part I: (a) with respect to the owned automobile, (1) the named insured and any resident of the same household, (2) any other person using such automobile, provided the actual use thereof is with the permission of the named insured; (b) With respect to a non-owned automobile, (1) the named insured, (2) any relative, but only with respect to an automobile not owned by such relative; (c) Any other person or organization legally responsible for the use of (1) an automobile or trailer not owned or hired by such person or organization, or (2) a temporary substitute automobile, provided the actual use thereof is by a person who is an insured under (a) or (b) above with respect to such automobile or trailer. * * *.” (Italics supplied). It is conceded that Barry Brotman was an insured, as a resident of the household of the named insured under (a) (1). He could probably qualify under (a) (2), as a person actually using the owned automobile with the permission of the named insured, although we need not so decide. The question is, however, whether Alan was covered, and the appellant contends that he is, under (c) (1), as a person legally responsible for the use of an automobile, not owned or hired by such person, because he fulfills the condition that “the actual use thereof is by a person who is an insured under (a) or (b).” The contention is that the actual use at the time of the accident was by and for the benefit of Barry, an insured under (a) (1).

The appellee on the other hand, argues that the “actual use” was by Alan, and not by Barry, because Alan was actually operating the car at the time of the accident. We see no reason to limit the meaning of the words “actual use” to the operation of a vehicle, where the operator is the agent or servant of another and subject to his immediate and ⁴⁷⁹ present direction and control. There appears to be no case that has construed the words in the context of this policy, but there are cases in which the word “use” has been so construed. In Casualty Co. v. Mitnick, 180 Md. 604, 607 , Chief Judge Bond,