Opinion
No. 4-659 / 03-1770
Filed December 8, 2004
Appeal from the Iowa District Court for Delaware County, Lawrence H. Fautsch and Alan Pearson, Judges.
The defendants appeal from the district court's declaratory judgment ruling determining there was no insurance coverage for a driver due to policy exclusions. AFFIRMED.
Mark H. Rettig of Day Rettig Peiffer Law Firm, P.C., Cedar Rapids, for Sherman appellants.
Kevin D. Ahrenholz and John R. Walker of Beecher, Field, Walker, Morris, Hoffman, Johnson, P.C., Waterloo, for Hansel and Smith appellants.
John B. Grier of Cartwright, Druker Ryden, Marshalltown, for appellee IMT Insurance.
Jack C. Paige of Elderkin Pirnie, P.L.C., Cedar Rapids, for appellee Depositors Insurance Co.
Heard by Huitink, P.J., Mahan, Miller, and Vaitheswaran, JJ., and Snell, S.J.
Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2003).
I. Background Facts Proceedings
This case arises out of a September 30, 2000, one-car automobile accident resulting in the deaths of Nathan Chopard, Michael Hansel, Zachary Sherman, and Kevin Smith. Nathan Chopard was the driver of the car. Neil Sherman, Zachary's father, was the owner of the car. Chopard and his parents were insured by Depositors Insurance Company. IMT Insurance insured the Shermans. Hansel's estate and Smith's estate sued Chopard's estate for wrongful death damages. Sherman's estate also sued Chopard's estate. IMT denied Chopard's estate's request to defend and indemnify it against the Hansel and Smith claims, citing the following policy exclusion:
We do not provide Liability Coverage for any "insured":
. . . .
8. Using a vehicle without a reasonable belief that that "insured" is entitled to do so. This Exclusion (A.8.) does not apply to a "family member" using "your covered auto" which is owned by you.
IMT claimed Chopard did not have a reasonable belief he had permission to drive Sherman's car. Depositors took the same position concerning defense of Sherman's lawsuit against Chopard's estate. Depositors cited the following policy provision that excluded liability coverage for persons
[u]sing a vehicle without a reasonable belief that that person is entitled to do so.
IMT and Depositors each filed declaratory judgment actions requesting the court declare that neither had obligations to defend or indemnify any of the parties in the various lawsuits against Chopard's estate. The two declaratory judgment actions were consolidated.
IMT and Depositors filed motions for summary judgment. The estates of Hansel, Smith, and Sherman filed "counter motions" for summary judgment. The trial court's initial ruling on the parties' motions for summary judgment recited the following undisputed facts:
During the evening of September 30, 2000, Zachary drove himself and two friends, Nathan Chopard and Cody Everett, to a party. They arrived at the rural party about midnight, approximately an hour and a half before the accident. Shortly after their arrival, Zachary either went to sleep or passed out in the back of his vehicle. Cody Everett, at some point, took Zachary's keys from the ignition.
. . . .
During the course of the evening it was [decided] that someone needed to go get more beer. At approximately 1:10 a.m. Cody Everett gave the keys to Zachary Sherman's vehicle to Nick Kirby. It was Cody's opinion that Nick was sober and able to drive. However, through a course of events unknown in the summary judgment record, the keys ended up with Nathan Chopard and Nathan sitting behind the wheel of Zachary's car. Cody Everett tried to intervene and stop Nathan from driving the vehicle. Nathan got out of the car, punched Cody in the face, re-entered the car and drove away. At the time Nathan was highly intoxicated. His blood alcohol count at the time of death was over .3.
. . . .
The record contains little direct evidence about Zachary Sherman's state of consciousness from the time he laid down in his back seat until the time of the accident. It is known that four young men were in the car for the beer run and one of them was in the back seat with Zachary. Zachary's body was upright after the passenger's arrival but how that came to be or what it may imply about his awareness is unknown. It is established that Zachary was not sober. At the time of the accident his blood alcohol count was .19.
The court denied the parties' motion for summary judgment, stating:
The Court finds there is a dispute of fact as to whether Nathan Chopard had a reasonable belief he possessed permission to use Zachary Sherman's car. As a result, the motions for summary judgment of Depositors Insurance Company and IMT Insurance are denied.
The declaratory judgment case proceeded to a jury trial. The jury answered the following special interrogatory in the affirmative:
Have the Plaintiff Insurance companies proved by a preponderance of the evidence that Nathan Chopard did not have a reasonable belief that he had permission to use the vehicle he was driving at the time of the accident?
Defendants filed motions for judgment notwithstanding the resulting verdict and for new trial. The district court denied the motions. The court concluded IMT and Depositors did not have duty to defend or indemnify Chopard's estate. The estates of Hansel, Smith, and Sherman appeal.
II. Standard of Review
A declaratory judgment is reviewed as any other judgment. Smith v. Bertram, 603 N.W.2d 568, 570 (Iowa 1999). Where, as here, the case was tried at law, our review is to correct errors at law. Iowa R. App. P. 6.4; Grinnell Mut. Reins. Co. v. Recker, 561 N.W.2d 63, 68 (Iowa 1997). We are bound by the findings of fact in the district court if those findings are supported by substantial evidence. Iowa R. App. P. 6.14(1)( a).
III. Exception to Exclusion: Use of Vehicle
The appellants claim the district court should have determined as a matter of law that IMT was required to provide a defense and indemnify Chopard's estate based on the policy language which states the exclusion in question "does not apply to a `family member' using `your covered auto' which is owned by you." They claim Zachary was using Sherman's car as a passenger at the time of the accident, and therefore, the exclusion does not apply. See Lee v. Grinnell Mut. Reins. Co., 646 N.W.2d 403, 409 (Iowa 2002) (citing Van Zwol v. Branon, 440 N.W.2d 589, 593 (Iowa 1989)) (noting the meaning of the term "use" is broader than the meaning of the term "operation").
Even if we were to find Zachary was using the car as a passenger at the time of the accident, and the exclusion did not apply to Zachary's estate, we determine the district court did not err in failing to find for the estates of Hansel and Smith as a matter of law. The IMT policy was purchased by Zachary's father and Zachary was a family member under the terms of the policy. The Hansel and Smith estates claims were against Chopard's estate and not against Zachary's estate. Chopard was not a family member under the IMT policy, and therefore, the exception to the exclusion did not apply to his estate. We conclude the district court did not err in failing to find as a matter of law for the estates of Hansel and Smith on this issue.
IV. Exception to Exclusion: Reasonable Belief
The appellant estates claim the district court should have ruled, as a matter of law, that the insurance companies failed to prove Chopard was driving Sherman's car without a reasonable belief that he was entitled to do so. They assert the insurance companies presented no evidence to show what Chopard reasonably believed at the time he drove the car. They point out that Zachary was in the car, and they state the insurance companies were unable to prove Zachary did not give his permission to Chopard to drive the car. Appellants contend this issue should not have been submitted to the jury because the issue rests only on speculation and conjecture.
"Because of the adhesive nature of insurance policies, their provisions are construed in the light most favorable to the insured." Iowa Comprehensive Petroleum Underground Storage Tank Fund Bd. v. Federated Mut. Ins. Co., 596 N.W.2d 546, 550 (Iowa 1999). Exclusions in an insurance policy are strictly construed against the insurer. Kalell v. Mutual Fire Auto. Ins. Co., 471 N.W.2d 865, 867 (Iowa 1991); Hickman v. IASD Health Servs. Corp., 572 N.W.2d 165, 167 (Iowa Ct.App. 1997). The insurer bears the burden of proving the applicability of an exclusion. Farm City Ins. Co. v. Gilmore, 539 N.W.2d 154, 157 (Iowa 1995).
The supreme court has previously considered this exclusionary clause and determined it meant "coverage is excluded when a person is using a vehicle without a reasonable belief that he or she had permission of the owner or apparent owner to do so." Id. Evidence on this issue may be either express or implied by the circumstances. See Grinnell Mut. Reins. Co. v. State Farm Mut. Auto. Ins. Co., 558 N.W.2d 176, 182 (Iowa 1997).
In Farm City, 539 N.W.2d at 156, Brian Osweiler customarily drove a car owned by his brother, Gary Osweiler, with Gary's knowledge and consent. One evening, Brian asked Bradden Tuma to drive the car. Farm City, 539 N.W.2d at 156. Tuma, who did not have a driver's license, lost control of the vehicle and several people were injured. Id. In considering whether Tuma was driving the car with a reasonable belief that he was entitled to do so, the supreme court looked at the facts in the case and concluded:
Although Tuma knew he did not have a driver's license and his actions violated traffic laws, he also believed he not only was driving with the permission of the apparent owner of the vehicle, but was doing so at the specific request of Brian. The actual owner of the vehicle, Gary, never instructed Tuma not to drive the vehicle nor instructed Brian not to allow others to drive the vehicle. We find there is sufficient evidence to support the court's finding. Construing the exclusion strictly against the insurer, we hold that Tuma had a reasonable belief that he was entitled to use the vehicle.
Farm City, 539 N.W.2d at 158.
The issue of implied consent to drive someone else's car is generally a fact question. See Grinnell Mut., 558 N.W.2d at 182; Farm City, 539 N.W.2d at 159. Likewise, the question of whether Chopard reasonably believed he had permission to drive Sherman's car was an issue of fact. We accordingly consider whether there is sufficient evidence to support the jury's finding. See Farm City, 539 N.W.2d at 158.
We find there was substantial evidence in the record to support the jury's finding that Chopard did not have a reasonable belief he had permission to drive Sherman's car. Neil Sherman, the owner of the vehicle, did not give Chopard permission to drive the car. Zachary was specifically told no one else was supposed to drive the car. Everett testified he did not hear Zachary give Chopard or anyone else permission to drive the car. Everett attempted to stop Chopard from driving the car. Chopard then punched Everett and got in the car. There was no evidence Zachary woke up, although there was evidence he was in a sitting position when the car left. Chopard had a high blood alcohol level, which likely affected his ability to reason. We conclude the district court did not err in failing to find for appellants as a matter of law.
Everett testified as follows:
Q. And by this point, Zach was sitting up behind the driver's seat? A. Yes.
Q. So at some point he woke up and sat up? A. Well, you don't really have to wake up to sit up.
. . . .
Q. You have no evidence to indicate he ever awoke? A. No.
V. Jury Instructions
Appellants contend the district court erred by improperly instructing the jury. The jury was instructed:
In this case the burden of proof is on IMT Insurance Company and Depositors Insurance Company to establish that Nathan Chopard was operating the vehicle without a reasonable belief that he had permission to do so from the owner or apparent owner of the vehicle. "Reasonable belief" means what a reasonable person would believe under the circumstances. An apparent owner of a vehicle is either: (a) a person whom a reasonable person would consider to be the actual owner of a vehicle; or, (b) a person whom a reasonable person would believe has the consent of the actual owner to grant permission to others to operate a vehicle.
Appellants assert that Zachary clearly would be considered the apparent owner of the vehicle and that submitting this issue to the jury would only confuse the jury. Appellants claim they were prejudiced by the submission of the issue of apparent ownership to the jury.
The insurance companies claim appellants failed to preserve error on this issue by objecting to the instruction. The record includes a lengthy discussion by the parties concerning this jury instruction. Counsel for the Hansel and Smith estates agreed to the instruction, but wanted to add a new subsection, so the definition of apparent owner would include (c) "one in lawful possession." The district court rejected the language regarding lawful possession, and it was not included in the instruction. Counsel then objected to "that portion of the instruction which we believe should be included with respect to one who is in lawful possession." At the end of the discussion of jury instructions, counsel renewed "the previous objection that we've made with regard to definition of one who is the apparent owner." Counsel for the Sherman estate joined in the objection.
Issues regarding jury instructions should be preserved by a specific objection. Boham v. City of Sioux City, 567 N.W.2d 431, 437 (Iowa 1997); see also Iowa R. Civ. P. 1.924 (noting an objection to jury instruction should specify "the matter objected to and on what grounds"). The objection should be sufficiently specific to alert the trial court to the basis of the complaint. Lynch v. Saddler, 656 N.W.2d 104, 110-11 (Iowa 2003). Unless a specific objection is made, an issue may not be raised on appeal. Iowa R. Civ. P. 1.924. A party may not amplify or change the grounds for objecting to a jury instruction. Sievers v. Iowa Mut. Ins. Co., 581 N.W.2d 633, 638 (Iowa 1998).
We conclude the appellants' objections to the jury instruction before the district court are not the same objections they are now raising on appeal. We conclude appellants have failed to preserve error as to the issues they now seek to raise on appeal. We do not consider issues raised for the first time on appeal. Meier v. Senecaut, 641 N.W.2d 532, 537 (Iowa 2002).
We affirm the decision of the district court.