STATE OF DELAWARE
RICHARD R. COOCH NEW CASTLE COUNTY COURTHOUSE
RESIDENT JUDGE 500 North King Street, Suite 10400
Wilmington, Delaware 19801-3733
David G. Culley, Esquire
Tybout Redfearn & Pell
750 Shipyard Drive, Ste. 400
P.O. Box 2092
Wilmington, Delaware 19899-2092
Attorney for Plaintiffs
Gary S. Nitsche, Esquire
Christopher W. Componovo, Esquire
Weik Nitsche Doughtery & Componovo
1300 North Grant Avenue, Suite 101
Wilmington, Delaware 19899
Attorney for Defendant Joyce O’Neal
Re: State Farm Mutual Automobile Insurance Company
and State Farm Fire and Casualty Company v.
Joyce O’Neal, as Administrator of the Estate of
Elizabeth A Reader, Ashley Reader, James Reader;
Joyce O’Neal, as Guardian of Samantha Malinowski;
and Richard D. Cutler.
C.A. No. 06C-09-218 RRC
Submitted: July 18, 2008
Decided: August 29, 2008
On Plaintiffs’ Motion for Summary Judgment.
This unusual case arises from a motor vehicle accident that occurred
at around midnight on Sunday, July 10, 2006, which accident resulted in the
death of Elizabeth Reader. Elizabeth Reader, under the influence of cocaine
and alcohol, was driving a van on Interstate 495. The van was owned by her
employer and insured by State Farm Mutual Automobile Insurance
Company and State Farm Fire and Casualty Company (“Plaintiffs” or “State
Farm”) and had been loaned to her to use. For reasons unknown, she pulled
over onto the shoulder of the highway, then exited the van (but did not
apparently put the van into park) and, as she walked behind the van, was
killed by the van when it rolled backwards and hit her. Her passenger,
Richard Cutler, ran around the van and attempted to enter the driver’s
compartment to try to stop the vehicle.
Plaintiffs have moved for summary judgment on their complaint for
declaratory judgment, requesting that the Court hold that Plaintiffs are not
required to provide insurance coverage under the “omnibus” provision for
the accident because 1) the use of the van to pick up Elizabeth Reader’s
possession had not been impliedly granted by Sandra Pitts, and 2) Elizabeth
Reader’s impaired state from her ingestion of alcohol and drugs disqualified
her from coverage under the policy.
The sole issue before the Court is whether, as a matter of law,
Elizabeth Reader’s use of the van at the time of the accident in a highly
intoxicated state constituted a “major deviation” from the permission given
to her by her employer.
The Court holds that Elizabeth Reader’s use of the van did constitute a
“major deviation” from the scope of permission, and that therefore Plaintiffs
are not obligated to provide coverage under the “omnibus provision”
contained in the policy insuring the van.
I. FACTUAL AND PROCEDURAL BACKGROUND 1
At the time of the accident Elizabeth Reader was employed by Sandra
Pitts as an independent contractor. Sandra Pitts owned two businesses, “Just
Inside Café” and “Hot Dawg Carts,” and she owned and operated a number
of vehicles in connection with the businesses, including a 1997 Chevrolet
Astro Van (“the van”). The van was insured by State Farm, and Sandra Pitts
was the named insured. The insurance policy contained an “omnibus”
provision, which provided the following:
Who Is an Insured
The facts set forth in this section relating to the scope of the use of the van are
essentially the facts proffered by Defendants.
When we refer to your car … insured means:
2. your spouse;
3. the relatives of the first person named in the Declarations;
4. any other person while using such a car if its use is within the scope of
consent of you or your spouse…
In May or June of 2006, Elizabeth Reader lost the use of her personal
vehicle, and subsequently Sandra Pitts offered use of the van to Elizabeth
Reader for the purpose of driving back and forth to work.
While this use of the vehicle was initially the sole intended purpose of
Elizabeth Reader’s use of the vehicle, there is evidence that Elizabeth
Reader used the van for personal purposes, and that Sandra Pitts, at least to
some extent, was aware of this personal use.
Samantha Malinowski stated at her deposition that when she was
present during conversations between Elizabeth Reader and Sandra Pitts,
Sandra Pitts “never once said that [the van was] only for work purposes.” 2
At her deposition, Ashley Reader, another daughter of Elizabeth Reader,
“testified that her understanding, gained from her mother, was that her
mother could use the van to go to work, go to the grocery store, and to visit
her children.” 3
James Reader, Elizabeth Reader’s son, said in his deposition that he
spoke with Sandra Pitts “about getting directions to a storage unit where the
back seats of the van were located so that the seats could be put in the
vehicle so that the Reader family could sit on them while going to the
Richard Cutler testified in his deposition that Elizabeth Reader “could
take the van to the grocery store and that it wasn’t just for her use to and
from work.” 5 He also testified that there were “several occasions where he
would go see [Elizabeth Reader] and she would drive it to the store,” and
that Richard Cutler knew that Samantha Malinowski had driven the vehicle. 6
In her deposition, Joyce O’Neal testified that Elizabeth Reader told
her in June, 2006 that she had to pay Sandra Pitts $600 “for a van.” 7
Melissa Wilson, Elizabeth Reader’s coworker, stated in her deposition
that Sandra Pitts had to know that Elizabeth Reader was using the van for
Def. Resp. to Pl. Mot. for Summ. J., at 2.
Id. at 3.
Id. at 2.
Id. at 4.
Id. at 3.
personal purposes because the employees and Sandra Pitts would talk about
their weekend activities, and that Sandra Pitts, knowing that Elizabeth.
Reader had no other means of transportation, had to be aware that Elizabeth
Reader was using the van for her personal weekend activities. Melissa
Wilson testified that, as far as Melissa Wilson knew, Elizabeth Reader’s
privileges were the same as Melissa Wilson’s; that it was their van for their
In the afternoon of July 9, 2006, Elizabeth Reader’s father evicted her
from his home in Elsmere, where she was then living, following a verbal
confrontation. Elizabeth Reader called Mr. Cutler and received permission to
stay in his apartment. Elizabeth Reader arrived in the van at Mr. Cutler’s
apartment at approximately 7:00 p.m., and joined Mr. Cutler in drinking
beer. Mr. Reader then smoked crack cocaine in a back room of Mr. Cutler’s
apartment. At approximately 11:00 p.m., Elizabeth Reader and Mr. Cutler
left his apartment in the van to retrieve some personal items from Elizabeth
Reader’s former residence. Elizabeth Reader was driving the van, and while
traveling southbound on Interstate 495, Elizabeth Reader pulled over onto
the shoulder of the freeway for an unknown reason. When the van came to a
stop Elizabeth Reader immediately exited the vehicle. At that time, Mr.
Cutler realized that the van was rolling backwards; he jumped out of the van
and ran around the vehicle to try to access the driver’s compartment in order
to stop it. The van eventually came to a stop, but not before striking and
killing Elizabeth Reader. A post-mortem test of Elizabeth Reader’s blood
demonstrated a blood alcohol level of .218 and the presence of cannaboids
(marijuana) and benzodiazepine cross-reactives (cocaine). Mr. Cutler’s
blood alcohol content was .268.
II. CONTENTIONS OF THE PARTIES
Plaintiffs contend that Elizabeth Reader’s use of the vehicle “for
purely personal reasons and while heavily intoxicated and after having
ingested illegal drugs was a major deviation from the scope of permission as
a matter of law.” 9 As a result, Plaintiffs argue, Plaintiffs are not obligated to
provide coverage under the omnibus provision in the van’s insurance policy.
In response, Defendant contends that summary judgment is
inappropriate because “there is a material dispute of fact as to whether the
scope of use of the van by Elizabeth Reader was limited by Sandra Pitts as
Id. at 4.
Pl. Mot. for Summ. J., at 5.
Plaintiff[s] contend.” 10 Additionally, Defendant argues that the word “use”
in the policy is of significance, because it has a different meaning than the
word “operation.” Defendant asserts that “the use of the vehicle concerned is
the purpose for which its use is permitted. As long as that use has been
permitted, [Defendant argues] it is immaterial how the vehicle is
III. STANDARD OF REVIEW
Summary judgment is appropriate where “the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material fact
and that the moving party is entitled to a judgment as a matter of law.” 12
Although the moving party has the burden of demonstrating that no material
issues of fact are in dispute and it is entitled to judgment as a matter of law,
the facts must be viewed “in the light most favorable to the nonmoving
The Court must determine whether, as a matter of law, an employee’s
use of an automobile for personal reasons, while heavily intoxicated and
after having ingested illegal drugs, was a major deviation from the scope of
permission given by her employer, where the employer originally permitted
use the automobile for the purposes of traveling to and from work, but where
the employee’s use eventually extended to personal use, of which her
employer was to some extent apparently aware. Because the Court holds that
there was such major deviation, the Court holds that there is no coverage
under the omnibus provision.
The liability provision of the policy is governed by 21 Del. C. § 2902,
which states, in pertinent part:
Def. Resp. to Pl. Mot. for Summ. J., at 5.
Def. Supplemental Mem. of Law, at 3 (quoting Indemnity Ins. Co. of North
America v. Metropolitan Cas. Ins. Co. of New York, 166 A.2d 355, 358 (N.J. 1960)).
Super. Ct. Civ. R. 56(c).
Mason v. United Servs. Auto. Ass'n, 697 A.2d 388, 392 (Del. 1997) (“a party
moving for summary judgment concedes the absence of a factual issue and the truth of
the nonmoving party's allegations only for purposes of its own motion, and does not
waive its right to assert that there are disputed facts that preclude summary judgment in
favor of the other party”).
(b) Such owner’s policy of liability insurance shall:
(2) Insure the person named therein and any other person, as insured,
using any such motor vehicle or motor vehicles with the express or
implied permission of such named insured, against loss from the liability
imposed by law for damages arising out of the ownership, maintenance or
use of such motor vehicle or motor vehicles…
Delaware courts have adopted the “minor deviation” rule, 14 the
preferred rule when compared with the more restrictive rule, that no
deviation from the scope of permission is allowed (called the “strict” or
“conversion rule”), and the less restrictive rule, where once permission is
given, only action that constitutes theft or conversion will be outside of the
scope of permission (called the “liberal,” “initial permission,” or “hell or
high water” rule.) 15 Under the minor deviation rule, “there is no omnibus
coverage where there is a major or substantial departure or deviation or a
gross violation of the original permission, purpose, or instructions relating to
the use of the automobile.” 16 Where a major deviation occurs, “… it is
frequently said that the permission is no longer effective or is annulled,
because it would be presumed that the original insured would not have given
permission had the use for the deviation been requested.” 17
There is, in essence, a two-step analysis under the minor deviation
rule. First, the Court must determine the extent of the permission granted,
paying “particular attention to the relationship of the parties and the scope of
the initial permission.” 18 “Permission will usually be given a broader scope
in a family situation than in an employer-employee situation,” 19 and
“[o]rdinarily implied permission to an employee to use his employer’s
vehicle extends only to its use within the scope of the employment, and
permission to use the automobile for a given purpose does not imply
permission to use it for other purposes.” 20 Next, the Court must look to the
specific facts of the alleged deviation to determine whether the deviation
was “minor” or “major” in relation to the permission given. Relevant factors
include the distance and time of the deviation, and whether the deviation “is
one which could have been reasonably contemplated or foreseen, or whether
8 Blashfield Automobile Law and Practice § 321.8, at 102-103 (1987).
8 Couch on Ins. § 113:12 (3d ed. 2008).
7 Am. Jur. 2d Automobile Insurance § 236 (2008).
8 Blashfield Automobile Law and Practice § 321.8, at 100 (1987).
Id. at 100-101.
the deviation is alien or foreign to the original permitted objective or
Turning first to the initial permission granted, and looking at the facts
in the light most favorable to the Reader Defendants, it appears that
permission was given for work-related purposes, that is, for using the van to
travel to and from work. The initial permission was then impliedly expanded
as Sandra Pitts became aware to some degree that Elizabeth Reader had used
the van for some personal activities, such as a trip to the beach and various
errands. The result, is that the scope of permission evolved to include more
than strict “work-only” use. For the purposes of this motion for summary
judgment, the Court assumes that Elizabeth Reader’s use of the van for the
purpose of picking up her belongings was a “minor deviation” from the
scope of the permission granted by Sandra Pitts.
The Court next turns to the specific facts of the alleged deviation to
determine whether it constituted a “major” or “minor” deviation. Elizabeth
Reader was driving at around midnight with a blood alcohol level of .218, a
level that is more than twice the legal limit in Delaware, and she had smoked
crack cocaine right before driving the vehicle. Elizabeth Reader was using
the vehicle for purely personal reasons – to get some of her belongings from
her father’s house. Additionally, there is no allegation that Sandra Pitts was
aware that Elizabeth Reader had a history of drinking and driving or that she
was a user of crack cocaine. No facts in the record suggest that Sandra Pitts
could have foreseen Elizabeth Reader’s use of the vehicle while under the
influence of alcohol and cocaine before the accident.
Given these facts, the Court holds that Elizabeth Reader’s use
constituted a “major deviation” from the permission expressly and impliedly
given to her by Sandra Pitts. Assuming that Sandra Pitts was aware of some
ongoing personal use of the vehicle, it cannot be said that Elizabeth Reader’s
use of the vehicle on the night of the accident in such an impaired state
constituted merely a “minor” deviation from the scope of permission.
Furthermore, while there are apparently no Delaware cases on point
(the determination of the impact of the use of drugs of alcohol on the scope
of permission under an omnibus provision), the Court’s holding is supported
by decisions from other jurisdictions. For example, in Coronado v.
Employers National Insurance Company, the Texas Supreme Court held that
evidence of two prior incidents of using the vehicle for personal purposes
did not justify the inference that the employer impliedly granted the
American International Insurance Company v. Farm Family Cas. Ins. Co.,
1999 WL 1442000, at *5.
employee permission to use the vehicle for an eight hour drinking spree
wholly unrelated by time, place, or purpose from the objectives for which he
was granted use of the vehicle, and that such use was a major deviation from
the scope of permission. 22
Defendant argues that these cases are distinguishable, because in each
case there was a company policy prohibiting consuming alcohol while using
a company vehicle. 23 However, in Coronado, the employer was aware that
the employee had consumed alcohol and driven the company vehicle on at
least two prior occasions. While there is no evidence of an express policy
that Elizabeth Reader abstain from using illegal drugs and from becoming
intoxicated and driving, it is fair to assume that such use would not have
been permitted by Sandra Pitts, had Elizabeth Reader requested it.
Additionally, the Court is unconvinced by Defendant’s argument that
the word “use” instead of the word “operation” in the insurance policy is of
significance here. 24 The different meanings of these words was first
recognized by the Delaware Supreme Court in Allstate Ins. Co. v.
Nationwide Mut. Ins. Co. 25 Allstate involved an automobile accident where a
woman and her boyfriend, the driver of the vehicle, were returning home
from a trip to the beach. The boyfriend had attempted to pass another
vehicle, at which time the accident occurred. An individual in the other
vehicle sued the boyfriend for injuries she sustained in the accident.
The issue whether Allstate, under an omnibus provision in its
insurance policy covering the vehicle, had to provide coverage to the
boyfriend, despite the fact that the owner of the vehicle, the woman’s father,
Coronado v. Employers National Insurance Company, 596 S.W.2d 502 (Tex.
Supr. 1979) (holding that evidence of two prior incidents of using the vehicle for personal
purposes did not justify the inference that the employer impliedly granted the employee
permission to use the vehicle for an eight hour drinking spree wholly unrelated by time,
place, or purpose from the objectives for which he was granted use of the vehicle). See
also, Mid-Continent Casualty Company v. Everett, 340 F.2d 65 (10th Cir. 1965) (holding
that a bus operator who was driving in the opposite direction from the normal route and
two and a half hours behind schedule, without passengers, and while intoxicated, was not
a permissive user at the time of the accident); Tull v. Chubb Group of Insurance
Companies, 146 S.W.3d 689 (Tex App. 2004) (holding that there was no omnibus
coverage where an employee used her employer’s vehicle, while in an intoxicated
condition, to drive with her boyfriend to visit friends).
Def. Supplemental Mem. of Law, at 4.
The Court notes that this argument was raised by Defendants for the first time
in Defendant’s “Supplemental Memorandum of Law” rather than in their initial Response
to Plaintiff’s Motion for Summary Judgment.
Allstate Ins. Co. v. Nationwide Mut. Ins. Co., 273 A.2d 261 (Del. 1970).
though allowing his daughter to borrow the car for the beach trip, had
specifically forbade anyone but his daughter from driving the vehicle. The
omnibus provision provided coverage to “[a]ny other person with respect to
the owned automobile provided the actual use thereof is with permission of
the named insured.” 26
The Court, in noting the “strong legislative policy insuring financial
protection for innocent victims of automobile accidents,” construed the
provision broadly, and held that “actual use” meant “purpose,” i.e., the trip
to the beach, while “operation” meant physically driving and/or
manipulating the vehicle (emphasis added). 27 The Court stated that “[t]he
use of the vehicle concerned is the purpose for which its use is permitted. As
long as that use has been permitted, it is immaterial how the vehicle is
operated.” 28 Thus, the Court reasoned, because the father had permitted the
vehicle to be used for the purpose of going to the beach, the boyfriend’s
“use” was still within the scope of the permission granted.
Allstate is distinguishable from the present case. First, Allstate
involved the interpretation of an omnibus provision where the original
permittee allowed a third party to drive the vehicle; in the instant case, the
driver was the permittee. Second, there was no use of cocaine or
consumption of alcohol by the driver in Allstate. Third, the individual
seeking coverage in Allstate was an “innocent” passenger in another vehicle,
and not the apparent cause of the accident, as is the case here. Therefore, the
policy considerations present in Allstate that mitigated in favor of a broad
construction of the policy favoring the innocent victim in that case are not
present in the instant case.
Whether to take a more restrictive approach in interpreting an
omnibus provision or a more liberal approach “depends on balancing the
various social policies of the jurisdiction.” 29 “In general, the purpose [of
mandating omnibus coverage] is to increase the number of injured parties
who can recover from insurance policies, rather than denying the injured
party the ability to recover from available insurance because the permissive
driver is otherwise uninsured.” 30 “The public policy of the ‘omnibus’ clause
is to protect the public for loss caused by [a] negligent, permissive driver”
(emphasis added). 31 Indeed, “courts applying [the minor deviation rule]
Id. at 263.
8 Couch on Ins. § 111:16 (3d ed. 2008).
Id. at § 111:2.
Id. at § 111:7.
modify the strict rule to the extent that protection will be afforded the bailee
if the use made by him or her is not a gross violation of the terms of the
bailment.” 32 In this case, the ingestion of the alcohol and illegal drugs was a
gross violation of the terms of the bailment, and broad construction of the
omnibus provision is not warranted under the particular facts of this case.
For the foregoing reasons, Plaintiffs’ Motion Summary Judgment is
IT IS SO ORDERED.
Very truly yours,
Id. at § 113:10.