GOOFING OFF = NO INSURANCE COVERAGE
A case was recently decided in the Federal District Court for the Western District of Virginia that held that Progressive Insurance was not obligated to pay for damages caused when a front-seat passenger grabbed the steering wheel causing an accident. The case name is Progressive Gulf Insurance Company v. Reynolds.
The two young men in the vehicle admitted to goofing off, the driver swerving, and discussing go-karts. They disagreed about some important details, however, and thereafter the driver was cited for the resulting accident.
A Coca-Cola bottling plant was hit by the car as a result of the goofing off. The owner of the plant sued for damages and, as so frequently happens, the insurance company attempted to avoid paying, which is logical.
This case, as so frequently happens in the law, becomes much more complex as the layers are peeled back.
Progressive brought a request (a declaratory judgment action) to the Court to seek an order determining whether Progressive is obligated to pay for the damages caused by the car. Spoiler Alert: The Court determined it is not.
This case, it seems to me, may be an instance of an unlikely result coming from a failure to fully defend. The owner of the bottling plant did what it could to defend Progressive's attempt to avoid paying damages; the young men who were actually in the car, however, did not appear and defend and were in default. Therefore, the Court had rather limited deposition transcripts on which to base its decision and, based upon that record, came to the most reasonable conclusion.
However, when I see cases resolved on default judgments with a dearth of evidence, it gives me pause. The case turned on whether the passenger had permission to operate the vehicle - that seems to be the core of the issue. In many common car insurance policies, if a person operates an insured vehicle without permission, the insurance carrier can avoid paying for the damages caused thereby.
But, what does it mean to operate the vehicle?
The Court examined other cases in other states of passengers yanking on a wheel and causing an accident, generally resulting in the insurance company getting off the hook.
Apparently this happens a lot.
I get it, when I was a young driver, I had a friend yank up the emergency brake on my car while I was driving ~40 MPH - it easily could have caused an accident. But should the insurance carrier get out of paying because of the negligence of the driver and the passenger?
Is goofing around and pulling on the steering wheel operating the vehicle?
Perhaps a better argument would be that the passenger's actions constitute intentional interference with the driver's operation of the vehicle and therefore the driver was no longer operating the vehicle - I could stomach that. But was the passenger operating the vehicle? That doesn't pass the smell test to me.
In general, when the negligence of two people results in other types of damages, the two will be held jointly and severally liable for the damage - why is this case so different?
In the case of two drivers, each merely negligent, the insurance carrier(s) would be on the hook to pay for the drivers' negligence, jointly and severally (a complex term that doesn't really matter for the purposes of this article). If that were applied to the Reynolds case, then Progressive would be on the hook jointly and severally with the passenger.
Of course the insurance company would hate that result because, in most cases, a random person doesn't have $300,000 kicking around to cover damages. The insurance carrier would be the only one with pockets deep enough to go after.
What I am curious about is the next layer down - I do not believe this case would bar a damages claim against Reynolds, individually, however, it seems progressive is off the hook. But, because of the limited nature of this case, the record is unclear whether the underlying plaintiff is seeking damages against Reynolds.
We will see if the lack of record will result in bad case law in Virginia.