Permissive Operator Cannot Bestow Owner’s Permission to Another Operator (PA)

On June 26, 2017, the Superior Court of Pennsylvania affirmed an order granting summary judgment to State Farm Mutual Automobile Insurance Company (“State Farm”) in State Farm v. Fuller et al. in a declaratory judgment action it filed against Paul Fuller (“Fuller”), Mark Czyzyk, Michele Czyzyk and Rose Nealon (“Nealon”).  The underlying lawsuit was filed by Nealon against Fuller and the Czyzyks after Nealon was involved in a car accident with Fuller when she was a passenger in the car with him.  Nealon alleged that Fuller was under the influence of drugs and alcohol at the time of the accident and that the Czyzyks negligently entrusted him with their vehicle.

The trial court granted State Farm’s summary judgment motion on the basis that Fuller was driving the car without permission and that the vehicle was only insured under Michele Czyzyk.  Nealon appealed on several issues, one of them being that jurisdiction is improper because State Farm was seeking an invalid advisory opinion from the court with its declaratory judgment action.  The Superior Court, upon review, disagreed with Nealon and found that because Nealon sought indemnification and there was a possibility that State Farm would have to provide a defense in an action that its policy was applicable to the litigation and that is was not a mere advisory opinion being sought but an adjudication of a controversy.

Nealon also raised the issue that the Czyzyks knowingly entrusted the car to Fuller.  The record indicated that only Michele Czyzyk was the car’s owner and the named insured on State Farm’s policy.  She gave permission to her brother, Mark Czyzyk, to run short errands with the car.  There was no evidence that she gave her brother permission to lend the car out to other people, including Fuller.  Under the State Farm policy, Fuller would be covered if he was a permissive user of the vehicle.  Permission requires a showing on behalf of the named insured/owner that warrants a connection and consent to the use.  Here the court found that the record was devoid of an issue of fact as to whether Michele Czyzyk permitted Fuller to use the car.  It did find that she did permit her brother to use the car for errands but did not permit him to lend the car out then.  Because of this, the court affirmed the summary judgment motion in favor of State Farm.

This case demonstrates the importance of fully assessing coverage issues in tandem with conventional defense litigation.  By analyzing the consequences of coverage, one can possibly limit potential risk and exposure on a claim.  In addition, a final declaratory judgment and order from a court can provide clarity on an issue and allow a clearer analysis of a lawsuit and potential liability since now one will know the extent to which a policy will apply to the instant action.

This analysis is not unexpected.  In New York, there have been literally thousands of instances where the police would pull over a rental car, and find that the driver is not the person who actually rented the car.  Under such circumstances, the operator is “unauthorized” (by Enterprise, for example) to use the car — and is then subject to arrest.  The point is, only the owner/lessee has the ability bestow permission to an operator.  That permission does not “pass through” to additional operators.  Thanks to Peter Cardwell for his contribution to this post.  Please email Brian Gibbons with any questions.