Truck Driven by Employee a Temporary Insured Car under Employer's Policy
In Mears v. Stanley, 2008 WL 5159011 (La.App. 3 Cir) , Mark Mears appealed the trial court's dismissal of his claims via summary judgment against the defendants-appellees, Louisiana Escort and Permit Service and its insurer, State Farm.
Mears had agreed to ride with his friend, Mark Stanley, an employee of Louisiana Escort and Permit Service, to escort an 18-wheel tractor trailer rig carrying an oversized load from Texas to Ohio . Mears was to help with travel expenses, and in turn, Stanley was to pay Mears for his help after the job was completed.
Mears and Stanley traveled in a vehicle owned and insured by Louisiana Escort. As Mears and Stanley began their escort, southeast Texas and southwest Louisiana evacuated ahead of the imminent strike of Hurricane Rita. After traveling sixty or seventy miles in about a day-and-a-half, the truck driver whose load Mears and Stanley were escorting decided to abandon the load. He parked his rig on the side of the roadway, called someone to advise he had abandoned the load, and left.
When Stanley contacted the company's owner about the situation, the owner instructed him to attend to his personal business, including evacuating and taking refuge from the storm. Stanley and Mears then made their way to a hunting camp and rode out the hurricane in the Louisiana Escort truck.
After the storm subsided, Mears and Stanley believed their vehicle had insufficient gasoline to make the trip back to Lake Charles , where they had begun their journey. Because gasoline was not available for purchase because of the hurricane, they drove to the home of Stanley 's father.
Once there, Stanley visited with his family for about an hour-and-a-half while Mears slept in the Louisiana Escort vehicle. Stanley then woke Mears and told him they would use a 1999 Ford pickup truck belonging to Stanley's father, which had a full tank of gas, to complete their trip to Lake Charles . Stanley and Mears left in the pickup and headed to Lake Charles to allow Mears to check on possible hurricane damage to his home.
During the trip to Lake Charles , Mears was injured in a head-on collision between the truck and another vehicle. Mears filed suit against Stanley, Louisiana Escort, and State Farm. The trial court granted Louisiana Escort's and State Farm's motions for summary judgment, concluding that Stanley was not in the course and scope of his employment at the time of the accident, thereby precluding coverage under State Farm's policy.
On appeal, Mears alleged the trial court erred in finding Stanley 's employment mission was complete when he arrived at his father's house. Mears further assigned as error the finding of no coverage by State Farm if Louisiana Escort was dismissed from the litigation, and argued the pickup was a temporary substitute for the Louisiana Escort vehicle.
The trial court and the parties treated the two issues as separate motions for summary judgment. First, the trial court considered the issue of whether Stanley was in the course and scope of his employment at the time of the accident and found that his employment mission ended when he and Mears reached the home of Stanley 's father. Thus, it granted summary judgment in favor of Louisiana Escort. Because the trial court viewed that factual finding as dispositive of the course and scope issue, it did not address the second motion and assumed the finding that Stanley was outside the course and scope of his employment precluded coverage under State Farm's policy.
The appeals court also examined the two motions separately. First, it determined that the course and scope issue was not dispositive of whether State Farm's policy provided coverage and the Louisiana Escort Company vehicle Stanley drove was covered under the employer's policy, regardless of whether he was acting in the course and scope of his employment at the time of the accident and whether he deviated from his business purpose while using the vehicle. Louisiana Escort had granted Stanley initial permission to use the vehicle, and nothing in the policy limited coverage to business use.
Second, it examined whether State Farm afforded coverage for the pickup involved in the accident. The court explained that the trial court had erroneously assumed that State Farm's policy in favor of Louisiana Escort automatically precluded coverage for this accident because of the finding that Stanley was outside the course and scope of his employment. The court asserted that whether State Farm provided coverage depended on the policy language itself and whether the vehicle involved in the accident could be considered a temporary substitute for the Louisiana Escort vehicle.
The court explained that State Farm's policy defined an insured to include any permissive user of a vehicle owned by Louisiana Escort, and nothing in the policy limited coverage to situations where the operator was in the course and scope of his employment. Further, nothing in the record indicated Stanley was limited to using the Louisiana Escort vehicle solely for business purposes. Thus, even if Stanley was not in the course and scope of his employment, and even if he deviated from his business purpose while using the Louisiana Escort vehicle, the vehicle remained insured under State Farm's policy at all times.
Having established that the Louisiana Escort vehicle was at all times insured, the court looked at whether the vehicle owned by Stanley 's father was a “temporary substitute car” as defined by the policy. The court explained that the Business Named Insured Endorsement defined an insured as anyone using “a temporary substitute car if its use is with the express or implied permission” of the named insured, and the policy further defined a “temporary substitute car” as one replacing an insured vehicle for a short time, whose use is with the express or implied permission of the owner when the insured vehicle is “out of use because of breakdown, repair, servicing, damage or loss.”
According to the court, Louisiana law required every insurance company writing automobile liability coverage in the State of Louisiana to provide coverage for temporary substitute vehicles as defined by each policy, and that coverage is primary under the statute. Therefore, if the vehicle owned by Stanley 's father was a temporary substitute as defined by the policy, State Farm provided primary coverage for this accident and summary judgment in State Farm's favor was improper.
The court determined that all three factors contributing to the definition of a temporary substitute vehicle were met, as the pickup replaced the Louisiana Escort vehicle for a short time with the permission of its owner while the Louisiana Escort vehicle was out of use due to its servicing. Therefore the pick up was a temporary substitute vehicle under the State Farm policy and summary judgment in favor of State Farm was improper.