Initial Permission Rule - II
Wow. Sorry that it has been so long since my last post. Lots of business and personal issues going on.
My last post began a discussion of New Jersey's initial permission rule. Following are some interesting factual patterns and how the courts have dealt with the insurance coverage issues.
Scenario 2- The owner of the car is in the hospital. He loans the car to his nephew so that the nephew can transport the owner's wife to the hospital and perform various errands. The owner gives the car keys to the nephew. There are no other specific instructions nor is there any discussion of whether the nephew can use the car for his own purposes. after several days of transporting the owner's wife around, the nephew picks up a friend and they go for coffee and a few drinks. they deicde to drive to New York for the weekend. Along the way they pick up 5 hitchikers (it must have been some party). At some point, the nephew's friend takes over the driving. As luck would have it, the friend collides with a truck on the New Jersey Turnpike. One passenger is killed, the others injured. The insurance carrier for the car denies coverage claiming that the driver was not using the car with the permission of the named insured (the owner).
Scenario 3 - Husband and wife planned to attend a concert. When they realize that the brakes on their vehicle are faulty, they go to the husband's mother's home to borrow a car owned by the husband's stepfather but used primarily by his mother. When they arrive, mother and stepfather are not home. Husband has key to the house and finds the car keys inside. Wife drives the car while husband, who has a suspended license, follows behind in their own car with the bad brakes.They go to husband's cousin's house to drop off their car and then to concert. After concert, husband drives because wife is too tired. Wife falls asleep in the back seat and is killed when husband loses control and has a one car accident. Insurance carrier denies coverage claimaing that husband had no reasonable belief that he was entitled to use the vehicle.
What did the Court rule? Scenario 2 was addressed by the New Jersey Supreme Court in Small v. Schunke, 42 NJ 407 (1964). The Court extended the intial permission rule to provide coverage for a subsequent operator given permission to use the vehicle by the original permitee. The court stated that there are only two questions to be answered to determine coverage under the initial permission rule: 1. Was there permission to use the car initially? and 2. Did the subsequent use, while possession was retained constitute theft or the like? If the answer to the first question is Yes and to the second question No, coverage must be provided.
Scenario 3 was addressed in the case of Rutgers Casualty Insurance v. Collins, 158 NJ 542 (1999). The insurance policy in question excluded liability coverage for any person "using the vehicle without a reasonable belief that the person is entitled to do so". The trial court, finding that the husband could not have had a reasonable belief that he had a right to use the vehicle due to his suspended license, ruled for the insurer. The case ultimately went to the Supreme Court which held that the reasonable belief clause does not govern the factual scenario. The wife's estate entitlement to coverage arises from the initial permission rule since the wife was the first user of the vehicle. If the wife had the initial permission of her in-laws to use the vehicle, whether express or implied, her permitting her husband to drive makes him a subsequent permittee requiring coverage regardless of the husband's reasonable belief in his right to use the car.
to be continued...
Good morning. Yesterday i was involved in an MVA where an out of state driver stopped suddenly on rt 46 to make an illegal left turn at the intersection. By the time i saw/reacted i only had time to slow down before i rear ended them.
I have been under the impression since i began driving that if you hit someone from behind, you're at fault, regardless of the other driver's actions. I was then told by a friend that my scenario is the only exception to that rule.
I would greatly appreciate it if you could shed some light on this situation for me.
Thanks
I would like to adress scenario #2. Initial permission was clearly given and the decision by the Court is correct.