Insurance Company Not Responsible for Damages Caused by Non-permissible Driver

In Partain v. Peaker, the Louisiana Court of Appeal, Second Circuit, repealed a trial court ruling on April 11 regarding insurance coverage on a rental car for a driver who didn’t have a valid driver’s license or permission from the rental car company to drive the vehicle. The repeal confirmed that when a driver is not given express or implied permission to drive a vehicle by the owner (the car rental company) then the driver’s insurance is not responsible to pay for damages, if so outlined by the insurance company’s terms and conditions.

The trial court had ruled that defendant Timothy Peaker, the driver of the rental vehicle who drove the car into the plaintiffs in 2006 in a parking lot, was covered by Safeway Insurance Co. Peaker, though, was not designated on the rental agreement as an additional driver. The vehicle was rented by Sarah Yocum from Enterprise Rent-A-Car.

Peaker argued that he was given implied permission by Enterprise to drive the vehicle; therefore, his insurance with Safeway should apply. The trial court agreed with these findings, but Safeway appealed.

The appeals court found that in a similar case, Sauer v. National Car Rental System Inc. in 2008 (Louisiana Court of Appeals, Fifth Circuit), the person driving the vehicle who was not listed on the rental agreement — and who crashed the vehicle — was given instructions by the rental car employee on how to operate the vehicle and physically drove the vehicle off the lot. The court in this case found that these elements gave the driver implied permission to operate the vehicle.

In Peaker’s case, however, Yocum drove the car off the lot and there was no evidence of interaction between Peaker and the rental car company or its employees; therefore no implied permission was given to Peaker to operate the vehicle.

As well, the court found that Peaker made conflicting statements, saying that he thought he had permission to drive the vehicle, even though when Yocum asked him to drive, Peaker said he didn’t think he should be driving since he lacked a valid driver’s license. There was also no evidence — as Peaker had claimed — that he paid for the rental or had used his insurance policy with Safeway to cover the rental.

“It is unfortunate that Peaker caused an accident resulting in injury to four people under circumstances precluding coverage by his insurance policy with Safeway,” the court opinion states. “However, Peaker clearly used this vehicle without the express or implied permission of the owner, Enterprise. Under the terms of the Safeway insurance policy, there is no insurance coverage to Peaker for this accident.”

Other pieces of the trial court ruling, which were not brought on appeal, remain the trial court’s jurisdiction, such as its finding that Peaker was 100% at fault for the accident. While all damage claims had been settled by the plaintiffs and their respective insurance carriers at the trial court, a joint motion and order to dismiss by Louisiana Farm Bureau Mutual Insurance Co. and Jennifer Partain was made after the date of Safeway’s appeal, and were therefore directed by the appeals court to re-file the motion with the trial court.

You can read the court’s full opinion here.

— By Joanne M. Tucker

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