On the return trip, the Corolla was struck by another vehicle as Ms. Carroll pulled out of a gas station parking lot.

Ms. Carroll's three-year-old daughter, A.E., was seriously injured in the collision.

A.E., through her aunt, Brenda Crook, sought compensation for her injuries from an insurance policy issued to Ms. Navarro and James London II by Metropolitan Casualty Insurance Company that designated only Ms. Navarro and Mr. London as the named insureds.

In response, Metropolitan filed a complaint seeking a declaration that Ms. Carroll was not an “insured” under the policy and, therefore, that Metropolitan had no obligation to defend or indemnify any claims against Ms. Carroll arising out of the accident.

The trial court entered judgment in Metropolitan's favor, and Ms. Crook and Ms. Carroll appealed.

The Appellate Court's Decision

The appellate court affirmed.

In its decision, the appellate court explained that the Metropolitan policy was consistent with the requirement in Arizona law that all motor vehicle liability policies issued in Arizona “insure the person named in the policy as the insured and any other person, as insured, using the motor vehicle or motor vehicles with the express or implied permission of the named insured.”

The appellate court noted that Ms. Crook and Ms. Carroll did not contend that either of the named insureds had given Ms. Carroll express permission to drive the Corolla.

The appellate court then considered whether Ms. Carroll had implied permission to drive the Corolla. It explained that implied permission could be inferred where there was “a course of conduct or relationship between the parties indicative of mutual acquiescence or a lack of objection under circumstances signifying assent.” It then found “[n]o such course of conduct implying” that Ms. Carroll had received permission from the named insureds.

In particular, the appellate court found no evidence that Ms. Navarro or Mr. London knew who Ms. Carroll was before the accident, and Ms. Carroll did not know who owned or insured the Corolla. It added that there was no indication that Ms. Navarro or Mr. London knew or had reason to know that Ms. Martin had permitted or would permit other persons to drive the Corolla against Ms. Navarro's instructions such that a fact question regarding implied permission prevented summary judgment.

Therefore, the appellate court ruled, Ms. Carroll did not have implied permission to drive the Corolla.

Moreover, the appellate court rejected the contention that Ms. Martin had apparent authority to grant Ms. Carroll permission to drive the Corolla, reasoning that there was no evidence that Ms. Navarro or Mr. London – the persons capable of extending the benefits of the policy – ever knew of or communicated with Ms. Carroll prior to the accident.

Accordingly, the appellate court concluded, because the evidence established that Ms. Carroll was not a named insured, was not a relative of a named insured, and did not have express or implied permission from a named insured to drive the Corolla, the trial court had not erred in concluding as a matter of law that Ms. Carroll was not an “insured” under the policy.

The case is Metropolitan Casualty Ins. Co. v. Crook, No. 1 CA-CV 18-0363 (Ariz. Ct. App. April 23, 2019). Attorneys involved include: Peshkin & Kotalik, PC, Phoenix, By E.J. Kotalik, Jr., Counsel for Plaintiff/Appellee. Goldberg & Osborne LLP, Mesa, By Ryan Lamb, Counsel for Defendants/Appellants.