Opinion
No. 82-1240
Decided August 10, 1983.
Insurance — Marine liability policy — "Slight" or "minor deviation" rule applied to standard omnibus clause.
APPEAL from the Court of Appeals for Lucas County.
On June 25, 1980, a boat owned by Phil Brondes, Jr. (Brondes) was involved in a collision with a boat operated by Norman A. Peiffer and occupied by Connie J. Peiffer, Walter L. Scott, and Ida M. Scott (hereinafter the Peiffers and Scotts, respectively). The driver of Brondes' boat at the time of the accident was David B. Selz (Selz) who was operating Brondes' boat under the following circumstances.
Brondes had purchased the boat in 1979 and kept it in Toledo during the summer and Florida in the winter. During the winter which preceded the collision giving rise to this appeal, Brondes experienced some mechanical difficulty with his boat while in Florida. Brondes had the boat shipped from Florida to Brenner Marine in Toledo, Ohio, for the necessary repairs. Since Brondes was personally acquainted with Selz, the store manager and primary service manager of Brenner Marine, he directed Selz to make the boat operational for the upcoming summer boating season.
The repairs were completed on June 15, 1980 and the boat was placed in a berth at Brenner Marine where it remained until June 25, 1980. On the evening of the accident, Selz had agreed to take some friends water-skiing. They arrived at the marina between 7:00 and 7:30 p.m. Despite owning a boat similar to Brondes', Selz chose to use Brondes' boat instead of his own. At the time, Brondes was in the Bahamas. Selz made no attempt to contact Brondes and obtain permission to use the boat.
In Brondes' craft, Selz and his passengers travelled approximately five to six miles from the marina where they water-skied for about an hour. Around 9:15 p.m., Brondes' boat, being driven by Selz, collided with the pontoon boat occupied by the Scotts and Peiffers.
In effect at the time of the accident was a marine liability insurance policy issued by Frankenmuth Mutual Insurance Co. (Frankenmuth), appellee herein, to Brondes. The relevant portion of that policy stated:
"(B) Insured. The word `insured' includes (1) the Named Insured, (2) if residents of the Named Insured's household, his spouse, the relatives of either, and (3) under Coverage B, any person or organization legally responsible for the use of the insured property, providing such use is with the permission of the Named Insured."
Frankenmuth instituted this action in the Court of Common Pleas of Lucas County seeking a declaratory judgment to determine whether coverage existed for the accident under Frankenmuth's policy issued to Brondes. The complaint named as defendants Selz, Grange Mutual Insurance Co. which had issued a homeowner's policy to Selz, Brenner Marine and their insurer, Buckeye Union Insurance Co., the Scotts, and the Peiffers.
The trial court found that Selz had neither the express nor implied permission of Brondes to operate Brondes' boat at the time of the accident and that the insurance policy issued by Frankenmuth to Brondes did not extend coverage for claims arising from the collision. The trial court ruled further that Selz was not operating Brondes' boat within the scope of his employment and, as such, neither Brenner Marine nor its insurer was obligated to extend coverage to claims arising from the accident. The trial court also found that Grange Mutual Insurance Co. was obligated to extend coverage for the accident under the terms of Selz's homeowner's policy. The court of appeals affirmed and held that there was competent, credible evidence to support the trial court's conclusions. The Scotts appealed to this court.
The cause is now before this court upon the allowance of a motion to certify the record.
Messrs. Eastman Smith and Mr. M. Donald Carmin, for appellee.
Messrs. Spengler, Nathanson, Heyman, McCarthy Durfee, Mr. James R. Jeffery and Mr. Kenneth J. White, for appellants.
In Gulla v. Reynolds (1949), 151 Ohio St. 147 [39 O.O. 2], we held at paragraphs one and three of the syllabus:
"1. Under the provisions of an automobile insurance policy in which the coverage is extended to include a third person if the actual use of the automobile is with the permission of the named insured, such permission relates to the use to which the automobile is being put by such third person at the time of the accident."
"3. Under such provisions coverage is not afforded when the use made of the motor vehicle constitutes a complete departure from that for which permission was granted."
The facts of Gulla are strikingly similar to the facts of the instant case. In Gulla, the plaintiff was injured when he was struck by a truck driven by Reynolds, the defendant, but owned by one Straus. The plaintiff sought a judgment against Straus' insurance company on the theory that the defendant was an insured under Straus' automobile liability insurance policy. The facts of Gulla reveal that Straus had given Reynolds express permission to use the truck to make a delivery approximately a block and a half away. Five hours later, and in a different part of the city, Reynolds struck and injured the plaintiff.
We refused to interpret the omnibus clause involved in Gulla to extend coverage to the plaintiff's claim arising from the accident because, at the time of the accident, Reynolds was not operating the vehicle within the scope of the permission initially granted by Straus. In so holding, the "slight" or "minor deviation" rule was adopted in Ohio. That is, where the use of the property deviates only slightly from the purpose for which permission was initially granted, the standard omnibus clause in a liability insurance policy will be interpreted to extend coverage. However, if the use represents a complete departure or gross deviation from the scope of permission, no coverage will be afforded.
See R.C. 4509.51(B).
Appellants request that we depart from the rule announced in Gulla in favor of a rule which would operate to extend coverage so long as the user had valid initial permission and continued possession of the property. This approach was rejected by this court in Gulla, where it was stated:
"The lower courts were correct in declining to follow the extreme, minority rule which obviously lends itself to gross abuse by an unscrupulous individual who, in violation of his express instructions, might retain possession of the automobile indefinitely and operate it over unlimited territory with the insurance still in effect. If such extreme unlimited coverage is to be afforded, it would seem that in fairness to all concerned it should be so stated in the policy." Id. at 154.
We believe our rejection of such a sweeping standard in Gulla is equally compelling today. Thus, we decline to depart from the rule of Gulla, and we reaffirm the principles set forth therein.
Turning to the facts of the present appeal, the record discloses that Selz and Brondes were close friends who had water-skied many times together. In addition, Brondes had offered Selz the use of his boat while Selz was vacationing in Florida but Selz did not take advantage of Brondes' offer. On no occasion prior to the accident did Selz ever operate Brondes' boat for recreational purposes without Brondes' presence. Brondes had, on one occasion, used Selz's boat without Selz's presence but with his express permission. Brondes testified that if the personnel at Brenner Marine determined that a test-drive was necessary to make Brondes' boat operational, they had his permission to do so.
The trial court found that Selz did not have permission to operate Brondes' boat at the time of the accident since the boat was then being used for recreational purposes, not for the purpose of a test-drive. Despite the fact that Selz had implied permission to take Brondes' boat for a test-drive upon completion of the repairs, the critical factual issue was whether Selz had permission to use the boat at the time of the accident.
Appellants challenge the trial court's finding that Selz did not have permission to use Brondes' boat at the time of the accident. In reviewing factual issues, an appellate court will not reverse the judgment of the trial court as being against the manifest weight of the evidence if the judgment is supported by some competent, credible evidence going to all essential elements of the case. C.E. Morris Co. v. Foley Construction Co. (1978), 54 Ohio St.2d 279 [8 O.O.3d 261]. In the case at bar, Selz testified that a test-drive would take approximately twenty to thirty minutes to complete and that the accident occurred well over an hour after having taken Brondes' boat out while they were actually water-skiing. Under these circumstances, the trial court's resolution of factual issues is more than adequately supported by the record and will not be disturbed.
Based on the foregoing record facts, it is clear that, in using Brondes' boat for recreational purposes, Selz had completely departed from the implied permission which Brondes had granted to Selz to test-drive the boat. As a consequence, we will not interpret the omnibus clause in the insurance policy issued by Frankenmuth to Brondes to extend coverage to claims arising out of the accident with Selz at the helm.
Accordingly, the judgment of the court of appeals is affirmed.
Judgment affirmed.
CELEBREZZE, C.J., W. BROWN, SWEENEY, LOCHER, HOLMES, C. BROWN and J.P. CELEBREZZE, JJ., concur.