Insurance--automobile--coverage--vehicle furnished to another
An insurance policy issued by plaintiff to Gouge's parents
did not provide liability coverage for an automobile accident
involving a vehicle owned by Dickens and driven by Gouge. The
dispositive issue was whether the vehicle was furnished for
Gouge's regular use within the meaning of an exclusion in
plaintiff's policy; the undisputed facts showed that the vehicle
was available to Gouge and used by Gouge on a daily basis for a
period of approximately 8 weeks after his vehicle had burned.
Although there was evidence that Gouge used the vehicle only with
permission of the owner and primarily for her benefit, these
allegations do not affect the availability of the vehicle to
Gouge and his frequent use of the vehicle. Restrictions placed
on the use of a vehicle may lead to a conclusion that the vehicle
has not been furnished for the regular use of the non-owner in a
particular case, but are not determinative.
Baucom, Claytor, Benton, Morgan & Wood, P.A., by Rex C. Morgan
and Kevin P. Branch, for plaintiff-appellee.
Smith, James, Rowlett & Cohen, L.L.P., by Norman B. Smith; and
Wayne W. Martin, for defendant-appellants Carolyn Walters and
Randy Walters.
Morris, York, Williams, Surles & Barringer, L.L.P., by Paul J.
Osowski, for defendant-appellee Shane Gouge.
GREENE, Judge.
Carolyn Walters and Randy Walters (collectively, Defendants)
appeal an order filed 10 January 2000, granting summary judgment in
favor of Nationwide Mutual Insurance Company (Plaintiff). The record shows that on 1 February 1996, Defendants were
involved in an automobile accident when Defendants' vehicle was
struck by a vehicle driven by Shane Gouge (Gouge). Susan Dickens
(Dickens) owned the vehicle driven by Gouge, and Dickens was a
passenger in the vehicle when the accident occurred. As a result
of the accident, Defendants filed a lawsuit against Gouge for
personal injuries. At the time of the accident, Dickens' vehicle
was covered under a North Carolina automobile liability insurance
policy with limits of $25,000.00 per person and $50,000.00 per
accident. Additionally, at the time of the accident, Gouge's
parents were insured by an automobile liability policy issued by
Plaintiff, and Gouge's father was insured individually by a second
automobile liability policy issued by Plaintiff. These policies
(the Nationwide policies) provided coverage for “any auto” driven
by a “family member” and the policies defined “family member” as “a
person related to you by blood, marriage or adoption who is a
resident of your household.”
(See footnote 1)
Part B(B) of both Nationwide
policies contained the following liability coverage exclusion:
1. Any vehicle, other than your covered
auto, which is:
a. owned by you; or
b. furnished for your regular use.
2. Any vehicle, other than your covered
auto, which is:
a. owned by any family member; or
b. furnished for the regular use of anyfamil
y member.
The Nationwide policies did not define the term “regular use.”
On 14 April 1999, Nationwide filed a declaratory judgment
action seeking a declaration that the Nationwide policies “do not
provide liability coverage in connection with the motor vehicle
accident of February 1, 1996.” The complaint alleged, in pertinent
part:
8. Prior to the accident . . . , on
November 24, 1995, . . . Gouge had been given
possession of the [vehicle] owned by . . .
Dickens for his regular use. From November
24, 1995 until February 1, 1996, . . . Gouge
had maintained possession of the [vehicle],
and it was furnished for his regular use by
the [vehicle's] owner, . . . Dickens.
. . . .
11. Under the [exclusions stated in Part
B(B) of the Nationwide policies], [P]laintiff
does not provide any liability coverage for
. . . Gouge or any other person in connection
with the accident set forth herein, because
the vehicle which he was driving, the 1994
Mazda Pickup truck owned by . . . Dickens, had
been furnished for his regular use since
November 24, 1995 up until the date of the
accident on February 1, 1996.
In an answer and counterclaim filed 5 May 1999, Defendants
alleged that prior to the 1 February 1996 accident, Gouge had been
“permitted to make certain limited use of [Dickens' vehicle] under
the supervision and control, and usually in the presence, of . . .
Dickens.” Defendants alleged: “Plaintiff wrongfully and without
basis has contended that [Dickens' vehicle] was furnished by . . .
Dickens for the regular use of . . . Gouge.” Defendants,
therefore, requested a declaratory judgment that the Nationwide
policies issued by Plaintiff “do provide liability coverage inconnection with the motor vehicle collision of February 1, 1996.”
On 20 August 1999, Gouge gave deposition testimony regarding
his use of Dickens' vehicle at the time of the accident. Gouge
testified that he began using Dickens' vehicle sometime around
Thanksgiving of 1995, because Gouge's vehicle had “burned” and he
had returned a second vehicle that he had been leasing to the
lessor. When asked how often he drove Dickens' vehicle after
Thanksgiving of 1995, Gouge responded: “I drove it pretty much on
a daily basis. I drove it driving [Dickens] back and forth to
work, drove her kids to school, and then I pretty much drove it on
a day to day basis, to the best that I can remember, every day.”
After Thanksgiving of 1995, Gouge kept the vehicle at his house.
Dickens told Gouge he could “drive the [vehicle] pretty much as
[he] needed to but that she had to have a way back and forth to
work because that was her only vehicle.” Gouge, therefore, “had to
make sure that [he] was available to [Dickens] at all times when
she needed the [vehicle].” Additionally, Gouge was not permitted
to take the vehicle “four[-]wheeling” and Dickens would not have
“permitted [him] to take another girl out in that [vehicle].” The
vehicle, however, “was available to [him] for [his] use for
anything that [he] needed to do other than four-wheeling, unless
[Dickens] needed the vehicle.” Gouge could not recall any
occasions from Thanksgiving of 1995 until the day of the accident
when Dickens needed to take possession of the vehicle; however,
Dickens was with Gouge “at least 50 percent of the time” when he
was driving the vehicle. Gouge also did not recall driving any
vehicles other than Dickens' vehicle from Thanksgiving of 1995until the date of the accident. Gouge testified he did not have to
ask for Dickens' permission to use the vehicle, and it was his
responsibility to put gasoline in the vehicle. Gouge stated he did
not intend to use the vehicle for as long a period of time as he
did.
On 27 September 1999, Plaintiff filed a motion for summary
judgment on the ground “there are no genuine issues of material
fact and . . . [P]laintiff is entitled to Declaratory Judgment in
its favor as a matter of law.”
In an affidavit filed 21 December 1999, Dickens made the
following statements:
6. For the purpose of taking me to
work, transporting the children, and being
with me on weekends, I permitted . . . Gouge
to use my . . . [vehicle] beginning sometime
in the late fall of 1995. . . .
7. . . . Gouge did not have
unrestricted use of my . . . [vehicle], and
his use of it was primarily for the benefit of
my son and me.
8. I did place certain restrictions on
. . . Gouge's use of the [vehicle]. For
example, he was forbidden to take it four[-]
wheeling, something that . . . Gouge very much
enjoyed doing and certainly would have done
with the [vehicle] if I had not forbidden it.
. . .
9. . . . [Gouge] had a clear
understanding that he could not use my
[vehicle] for the purpose of going out with
another woman. . . .
10. Also it was the understanding by
. . . Gouge and me that he could use my
[vehicle] only in a limited geographical area.
By no means was he free to take road trips or
travel outside of Catawba and Burke Counties
with this vehicle unless I accompanied
him. . . .
. . . .
12. The [vehicle] clearly was not for
. . . Gouge's personal use. He was not
allowed to do whatever he pleased to do with
it; and he and I both clearly understood that
I could decide at any time that he would have
no further access to this vehicle. I clearly
had control of the vehicle the entire time.
13. . . . Gouge was required by me to
check with me to see if I had any
transportation needs, before he was allowed to
use the vehicle for any purpose unrelated to
the needs of my son and me. . . . Gouge's uses
of the vehicle, when it was not for the
purpose of benefitting my son and me, were
occasional and infrequent.
. . . .
15. . . . Gouge and I had a strict
understanding that his use of my [vehicle] was
temporary and only for a brief and limited
period of time. . . . It was initially my
intention and belief that . . . Gouge's use of
my [vehicle] would only last for a few days,
although, in fact, the period during which he
used the vehicle stretched out longer than
either of us had intended.
. . . .
17. . . . Gouge's use of the vehicle was
not intended to be as a substitute vehicle for
him, and the vehicle was not furnished for his
regular use.
In an order filed 10 January 2000, the trial court granted
summary judgment in favor of Plaintiff on the ground “there are no
genuine issues of material fact, and Plaintiff is entitled to
Declaratory Judgment in its favor as a matter of law.” The trial
court, therefore, ordered “that Plaintiff's policies of automobile
liability insurance as referenced in the Complaint provide no
liability coverage in connection with the accident of February 1,
1996.”
The dispositive issue is whether the pleadings, affidavits,
and deposition testimony raise a genuine issue of material fact
regarding whether Dickens' vehicle was furnished for Gouge's
“regular use” within the meaning of the Nationwide policies.
Automobile liability policies that provide coverage for non-
owned autos are intended “'to provide coverage to a driver without
additional premiums, for the occasional or infrequent driving of an
automobile other than his own.'” Whaley v. Great American Ins.
Co., 259 N.C. 545, 552, 131 S.E.2d 491, 496 (1963) (citations
omitted). Policies that include coverage for non-owned autos,
therefore, often exclude from coverage vehicles “'furnished for the
regular use of the insured.'” Id. (citations omitted). When a
liability policy does not define the term “regular use,” no
“absolute definition” can be established and a determination of
coverage under the policy must be based on the facts and
circumstances of the case. Id. at 552, 131 S.E.2d at 496-97. The
determination of whether a vehicle has been furnished for “regular
use” must be based on the “availability” of the vehicle for use by
the non-owner and “the frequency of its use” by the non-owner.
(See footnote 2)
Id. at 554, 131 S.E.2d at 498; Nationwide Mut. Ins. Co. v. Bullock,
21 N.C. App. 208, 210, 203 S.E.2d 650, 652 (1974). The fact that
the use of a vehicle by the non-owner requires the permission of
the owner or is for the “principal purpose” of assisting the owner
“affects neither the availability nor frequency of the use of th[e]
. . . vehicle” by the non-owner. Bullock, 21 N.C. App. at 210-11,
203 S.E.2d at 652.
Where the language of an insurance policy is clear and
unambiguous, “the court's only duty is to determine the legal
effect of the language used and to enforce the agreement as
written.” Cone Mills Corp. v. Allstate Ins. Co., 114 N.C. App.
684, 687, 443 S.E.2d 357, 359 (1994), disc. review improvidently
allowed, 340 N.C. 353, 457 S.E.2d 300 (1995). Additionally, when
the facts are undisputed, construction and application of the
policy provisions to the undisputed facts is a question of law.
Id. at 686, 443 S.E.2d at 359.
In this case, the undisputed facts show: Gouge began using
Dickens' vehicle “on a daily basis” sometime around Thanksgiving of
1995; Gouge kept the vehicle at his house, and he could not recall
driving any vehicles other than Dickens' vehicle from Thanksgiving
of 1995 until the time of the accident; Gouge used the vehicle todrive Dickens to work and to drive Dickens' children to school;
Gouge was required to make the vehicle available to Dickens “at all
times when she needed the [vehicle],” but Gouge could not recall
any times when Dickens needed to take possession of the vehicle for
her use; Gouge was responsible for putting gasoline in the vehicle;
and Gouge was restricted from using the vehicle for four-wheeling,
taking women other than Dickens on dates, and taking the vehicle
“outside of Catawba and Burke Counties . . . unless [Dickens]
accompanied him.” These undisputed facts show the vehicle was
available to Gouge and used by Gouge on a daily basis for a period
of approximately 8 weeks. Although Defendants presented evidence
in Dickens' affidavit that Gouge used the vehicle only with the
permission of Dickens and primarily for the benefit of Dickens,
these allegations do not affect the availability of the vehicle to
Gouge and his frequent use of the vehicle. See Bullock, 21 N.C.
App at 210-11, 203 S.E.2d at 652. The undisputed facts, therefore,
show Gouge had “regular use” of the vehicle within the meaning of
the Nationwide policies at the time the 1 February 1996 accident
occurred; thus, Gouge's use of the vehicle falls within the
coverage exclusions of Part B(B) of the Nationwide policies. See
id. at 209-210, 203 S.E.2d at 651-52 (defendant made “regular use”
of vehicle where: defendant used the vehicle to transport its
owner to medical appointments and to run errands for owner;
defendant used the vehicle to drive herself to and from work;
defendant usually received permission from the owner to use the
vehicle for trips made for defendant's personal benefit; defendantkept the vehicle at her residence; and defendant paid for gasoline
and oil for the vehicle). Accordingly, the trial court properly
granted summary judgment in favor of Plaintiff. See N.C.G.S. § 1A-
1, Rule 56(e) (1999).
Affirmed.
Judges HORTON and TYSON concur.
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