State Farm Mutual Automobile Co. v. Colby

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At issue in this case was whether the omnibus clause in a automobile insurance policy provided coverage to a permittee to whom the insured owner loans the car when that first permittee was subject to a negligent entrustment claim for loaning the car to a second permittee. A vehicle owner gave her car keys to defendant, who in turned passed them to another driver. The driver was involved in a fatal, single-car accident and the driver's estate sued defendant for negligent entrustment. Defendant sought coverage under the vehicle owner's automobile insurance policy. Defendant appealed the trial court's order granting summary judgment in favor of the insurer and finding that, as a matter of law, defendant did not qualify for coverage under the policy. Upon review of the trial court record, the Supreme Court concluded that defendant’s entrustment of the vehicle to the driver constituted "use" under the omnibus clause of the policy and that the undisputed evidence supported the conclusion that the insured did not consent to defendant's allowing the driver to drive the car, but that a material issue of fact existed with respect to whether defendant entrusted the car keys to driver reasonably believing that driver would not drive the car. Accordingly, the Court reversed and remanded the case for further proceedings. View "State Farm Mutual Automobile Co. v. Colby" on Justia Law