To some, insurance coverage is an opaque, impenetrable soup of jargon and abstract argument that never produces a clear “right” answer. But every now and then, a case comes along that is an easy call. Such is Ison v. Southern Farm Bureau Casualty Co., 2006 WL 73818 (Ark. App. January 11, 2006).
In the case, a 15-year-old boy learned his girlfriend was pregnant, took an overdose of his medicine for attention-deficit disorder, his stepmother’s antidepressants, and some nonprescription medicine; took the keys to his father’s pickup; slashed the tires to the family’s other vehicle; stole his father’s truck and drove it to another family member’s house, where he stole some guns; led police on a high-speed chase; and finally crossed the median into the opposing lane of traffic, hitting and killing two people. The estate of one of the victims sued the boy’s mother, who was divorced from the boy’s father and living in a separate household. Her auto insurers brought a declaratory action seeking a ruling they had no obligation to defend or indemnify the mother, and she presented some unique coverage arguments.
Her coverage theory was that under Arkansas’s “initial permission” rule the son was a permissive user of his father’s vehicle, her insurance policy followed him to the vehicle and the accident was therefore covered. A big problem with this argument was that the son was not listed on her policy and had no driver’s license, had never driven his father’s vehicle, and therefore had no actual or even implied permission to use his father’s pickup.
In all auto insurance policies, there is some provision for coverage to apply to permissive users of a car under certain circumstances. Arkansas uses the most liberal interpretation of the scope of permissive use, often referred to as the “Hell or High Water” rule, meaning coverage will apply to subsequent use after initial permission unless theft or conversion occurs. (A more moderate interpretation of the scope of permissive use called the “minor deviation” rule is used in some states, and others use a “strict” or “conversion” rule that disallows coverage with any deviation from the scope of permission. Oregon’s rule is between the minor deviation and the initial permission rule).
In this case, the son not only lacked permission, but the policy contained exclusions for felonious actions and leading police on a chase. The mother, in a very unusual argument, claimed these exclusions should not apply to their son because the exclusions did not expressly extend to permissive users, as opposed to named insureds. This reading of the policy would provide a permissive user with greater coverage than the named insured. The court rejected all the mother’s arguments and affirmed the trial court’s decision for the insurers.