City of San Buenaventura v. Allianz Insurance

California Court of Appeal Sep 8, 1992 No. B060381Published

Before: Gilbert

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Holding. The court held that the City was not covered under the van owner's insurance policy because the police officers were neither permissive users of the vehicle nor legally responsible for the use of the vehicle under the policy terms.

Issues

Is the City a 'permissive user' of the van under the insurance policy?
Is the City 'legally responsible for the use' of the van under the insurance policy?
Did the police officers' failure to prevent a third party from driving constitute 'negligent entrustment' sufficient to trigger insurance coverage?

Disposition. affirmed

Quotations verified verbatim against the opinion

“Here the police did not use the van. They did not operate, maintain, load or unload it. Nor did the police have permission to use the van.”

“The failure of the police to exercise their powers as peace officers did not amount to an entrustment of the van to Lomelin.”

“The facts do not show a basis for coverage under the Allianz policy.”

[404]

Opinion

GILBERT, J.

Police from the City of San Buenaventura (City) arrest the driver of a van for driving under the influence. The police call the van’s owner, who authorizes the passenger to take the van. The police release the van to the passenger who drives away and gets in an accident, injuring a third party. The victim sues the City, claiming the police were negligent in allowing the passenger to drive the van.

Is the City covered under the van owner’s insurance policy? No. We affirm the trial court’s decision that the City is not covered and that neither the “permissive use” provision nor the “legally responsible for the use” provision of the policy applies.

Facts

The Allianz Insurance Company issued a “Business Auto Policy” to M.G. Poulos for his van. On January 29, 1982, Poulos loaned his van to Steven Rodriguez. Rodriguez was driving the van and Steven Lomelin was a passenger when the van was involved in an accident. The police arrested Rodriguez for driving while intoxicated.

Police officers telephoned Poulos to find out whether Rodriguez was driving the van with permission, and whether Poulos would approve of them turning the van over to Lomelin. Poulos told them that Rodriguez had his permission and that Lomelin could take the van. The police gave Lomelin a field sobriety test, and determined he was not under the influence of alcohol. They released the van to him. A short time later Lomelin was in an accident that caused serious injuries to Diane Bennett.

Bennett sued Poulos, Rodriguez, Lomelin, the City and the police officers. Poulos, Rodriguez and Lomelin settled. Bennett’s suit against the City was based on a theory of negligent entrustment. In the attachment to her judicial council form complaint she alleged the police officers negligently investigated and administered filed sobriety tests to Lomelin and negligently allowed Lomelin to take the van even though he was intoxicated, an unlicensed driver and subject to arrest because of a warrant from another county.

The City tendered the suit to Allianz for defense and indemnity, claiming coverage under clauses naming as “additional insureds” a permissive user and anyone liable for the conduct of an insured. Allianz rejected the tender, claiming it had no liability to the City under the policy.

City of San Buenaventura v. Allianz Insurance

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GILBERT, J.

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