No Coverage for Nonpermissive Operator's Intentional Collision
In Grinnell Mut. Reinsurance Co. v. Thompson, 2010 WL 537060 (N.D.), the Supreme Court of North Dakota examined whether an insurer was obligated to provide coverage or a defense under a named insured's policy with regard to the insured's wife's intentional collision with a semi-trailer at the time she was driving the insured's vehicle without his permission.
Shelly and Norman Thompson were married and lived together. Norman Thompson owned a Buick Regal, in which Shelly Thompson had no ownership interest. Grinnell issued an insurance policy to Norman that covered the Regal. Norman Thompson was listed in the policy as the “named insured.” The policy stated, in relevant part, “When this policy is certified as future proof of financial responsibility, this policy shall comply with the law to the extent required.”
Shelly drove the Buick without Norman's permission and collided with a semi-trailer owned by Foltz and driven by Foltz's employee, Johnson. Following the collision, Shelly told a highway patrol officer she wanted to commit suicide, but did not want to hurt anyone else. Responding to a doctor's questions, Shelly Thompson confirmed she wanted to kill herself and she tried to drive into the semi-trailer.
Foltz sued Norman and Shelly Thompson for damages arising out of the collision. Grinnell provided a defense for the Thompsons against Foltz's lawsuit, subject to its right to deny coverage or withdraw. Foltz and its insurance company, Continental Western, made a demand on Grinnell, claiming Grinnell was liable for the damages arising out of the collision. Grinnell sought a declaratory judgment that it was not obligated to provide coverage or a defense to the Thompsons with regard to the collision between the Buick and the semi-trailer, and that Foltz, FBF, Johnson, and Continental had no claim against Grinnell because of Norman Thompson's policy.
Foltz, FBF, and Continental filed a motion for partial summary judgment, asking the district court to declare that Grinnell was liable for any damage caused by Shelly's use of the motor vehicle, whether intentional or not, up to the minimum liability limits for property damage established by North Dakota law. Grinnell then filed its own motion for summary judgment.
The district court stated Norman Thompson was the named insured of Grinnell's policy and Shelly Thompson did not have permission to drive the Buick. The district court concluded Grinnell's policy did not comply with the requirements of North Dakota's Financial Responsibility Laws because it provided “coverage for auto accidents rather than for loss imposed by law.” The district court stated further, “[A] limitation to only provide coverage for damages that the insured becomes responsible for because of an auto accident is in conflict with the minimum requirements; the minimum requirement of providing coverage for loss from liability imposed by law will prevail.”
Thus, the court denied Grinnell's motion, concluding that Norman's policy with Grinnell provided broader coverage than was required for whom coverage was applicable, and the policy provided narrower coverage than required for liability imposed by law under the Financial Responsibility Laws. The district court also ordered Grinnell to defend Shelly Thompson against any actions arising out of the collision. Finally, the district court declared Foltz, FBF Leasing, Inc., Gary Johnson, or Continental Western Insurance Company had or could have claims against Grinnell arising out of the collision.
Grinnell appealed from the district court's judgment ordering Grinnell to provide coverage or indemnification to Shelly Thompson with regard to the collision. The Supreme Court of North Dakota reversed the district court's judgment, explaining that the Financial Responsibility Laws did not preclude Grinnell from excluding coverage for the intentional collision with the semi-trailer. Even though the policy provided greater coverage under some circumstances than what was required by law, Shelly Thompson did not have permission to drive the vehicle and the Financial Responsibility Laws did not set minimum levels of insurance coverage for nonpermissive operators
The court therefore reversed the district court's judgment and remanded to enter a judgment denying Foltz's, FBF's, and Continental's motion for partial summary judgment and granting Grinnell's motion for summary judgment.
Editor's Note: Most courts have interpreted their financial responsibility laws to cover intentional acts. However, a minority of jurisdictions have held for public policy reasons that insurers may exclude intentional acts despite financial responsibility laws requiring coverage for damages caused by accidents arising out of the ownership, maintenance, or use of a vehicle.