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INSURANCE COVERAGE: District Court addresses temporary substitute and permission issues

INSURANCE COVERAGE: District Court Addresses Temporary Substitute And Permission Issues

In this declaratory judgment action, an insurer of certain listed autos sought a declaration that it did not owe a duty to defend or indemnify the owner or operator of an alleged temporary substitute vehicle involved in a two-vehicle collision.  The policy defined a temporary substitute to mean any auto “you do not own while used with the permission of its owner as a temporary substitute for an insured auto that has been withdrawn from normal use due to breakdown, repair, servicing, loss or destruction.”

The listed vehicles on the policy had been taken in for service, but the evidence was that neither had been withdrawn from normal use.  Instead, the evidence showed that the vehicles were operational.  One of the vehicles allegedly had a shimmy in one of the tires, but a car repair facility had stated that there was nothing to be concerned with and that the car was “okay”.

The court declines to grant summary judgment based on the vehicle involved not qualifying as a temporary substitute, however, because the record was “too muddled” to establish with certainty as to which of the vehicles was brought to a repair facility and when.

With regard to the issue of permission, the policy provided that any temporary substitute auto must be used “with the permission of its owner” in order to qualify as a covered auto under the policy.  The facts of the case involved an hourly driver.  The employer had gone into a restaurant and left the driver with the vehicle.  The driver then left the area of the restaurant and was involved in an accident.  There was evidence that the employer testified that he did not give the permission to drive the vehicle away from the restaurant.  The driver refused to testify, citing his Fifth Amendment privilege against self-incrimination.

In determining whether there was express or implied permission, the court concluded that neither existed in light of testimony that the employer explicitly told the driver to stay in the restaurant parking lot.  Accordingly, no duty to defend or indemnify existed.  Summary judgment was granted. 

Progressive Casualty Ins. Co. v. Monaco, 2017 WL 2873051 (D.Conn. 7/5/17).