General Accident Insurance Co. of America v. Margerum
1988 Pa. Super. LEXIS 2042, 375 Pa. Super. 361, 544 A.2d 512 (1988)
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Rule of Law:
An individual's use of a vehicle while intoxicated, in direct violation of the owner's express and specific prohibition against such use, constitutes a substantial deviation from the scope of permissive use, thereby precluding coverage under the owner's omnibus insurance clause.
Facts:
- Peter Hricko, owner of a roofing company, hired David Margerum as a laborer.
- Concerned about Margerum's commute, Hricko allowed him to use a company van with express restrictions: solely for commuting, no personal use, and no drinking and driving.
- On January 22, 1982, Margerum asked to leave work early for his sister's wedding. Hricko agreed but specifically reiterated that Margerum was not to take the van to the reception and was not to drink and drive.
- After the wedding reception, Margerum returned to his parents' home around 12:30 a.m.
- Margerum then took the company van and began driving to his fiancée's residence, intending to spend the night there before commuting to work the next morning.
- While driving to his fiancée's house under the influence of alcohol, Margerum struck and killed a pedestrian.
Procedural Posture:
- The estate of a deceased pedestrian brought a suit against David Margerum.
- Margerum's employer's insurer, General Accident, denied coverage for Margerum.
- General Accident filed a declaratory judgment action in a state trial court against Margerum to determine its obligation to provide coverage.
- Following a non-jury trial, the trial court found that Margerum's deviation was not substantial and ruled that General Accident was required to provide coverage.
- General Accident, as appellant, appealed the trial court's judgment to the Superior Court of Pennsylvania.
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Issue:
Does an employee's use of a company vehicle while intoxicated, in direct violation of an express prohibition from the employer, constitute a substantial deviation from the scope of permissive use, thus precluding coverage under the employer's automobile insurance policy?
Opinions:
Majority - Beck, J.
Yes. An employee's use of a company vehicle while intoxicated, contrary to an express and specific prohibition from the employer, constitutes a substantial deviation from the permission granted. The court applied the rule from Freshkorn v. Marietta, which states that coverage extends to a permissive user if their deviation is 'slight and inconsequential,' but not if it is 'substantial.' While the court found that the geographical deviation of driving to the fiancée's house for commuting purposes was not itself substantial, it held that the trial court erred by ignoring the violation of an express restriction. Hricko’s specific and reiterated prohibition against drinking and driving was not an inconsequential condition. Violating this express safety-related restriction was, in itself, a substantial deviation that removed Margerum's actions from the scope of permissive use, thus voiding his status as an 'insured' under the policy.
Analysis:
This decision refines the 'substantial deviation' rule in the context of permissive use under an insurance policy. It clarifies that a deviation need not be merely geographical or related to the purpose of the trip. The court establishes that violating a specific, express prohibition, particularly a serious one concerning safety like 'no drinking and driving,' can independently constitute a substantial deviation. This precedent provides insurers a stronger basis to deny coverage when a driver explicitly violates a core condition set by the vehicle's owner, even if the trip's general purpose aligns with the initial permission.
