A road map for countering denial of general damages due to Proposition 213 and establishing coverage for a permissive user
From: Plaintiff Magazine (2022 September)
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Most plaintiffs’ attorneys have encountered the frustrating situation in which a client has been injured through another’s negligence, yet is not permitted recovery of general damages due to California Civil Code section 3333.4, more widely known as Proposition 213. Proposition 213 can, in certain circumstances, prevent an injured person from recovering non-economic losses if she or he was the driver of the vehicle and cannot establish financial responsibility which, in most cases, means does not have auto-liability insurance. This article will outline how an attorney may be able to sidestep Proposition 213 by establishing that the client was a “permissive user” at the time of the incident.
The vehicle’s policy language is your springboard
In order to help your client recover general damages, it is essential to request and thoroughly review the language of the vehicle’s policy. Subject to certain exceptions, automobile liability insurance policies must cover permissive users of insured vehicles “to the same extent that insurance is afforded to the named insured, provided the use is by the named insured or with his or her permission, express or implied, and within the scope of that permission.” (Ins. Code, § 11580.1, subd. (b)(4).)
Was permission explicit or implied?
Given the importance of establishing permission, a Plaintiff’s attorney must be well versed in the various ways permissive use can apply. The word “permission” in a policy clause, appearing without definition, must be deemed to include express or implied permission. (Hardware Mut. Casualty Co. v. Home Indem. Co., 241 Cal.App.2d 303.)
Express permission is relatively straightforward. Generally, express permission merely entails an owner intentionally providing use of their insured vehicle to another individual. Establishing implied permission is slightly more complicated but generally feasible.
When determining the existence of permissive use, insurance carriers generally do not directly ask if permission was provided. Their line of questioning is slightly vague and includes inquiries regarding the relationship of your client to the insured, the circumstances surrounding the use, and how your client received access to the vehicle.
Where the issue of implied permissive use of a vehicle is involved, the existing relationship between the owner and the operator is of paramount importance. “Weaker direct evidence will support a finding of permissive use, including both family relationships and principal/agent relationships.” (Elkinton v. California State Automobile Assoc. (1959) 173 Cal.App.2d 338.)
Implied permission to uninsured third parties
Implied permission to a third party has been found where the circumstances permit a finding the third party’s use “was or should have been within the contemplation of the owner.” (Sandoval v. Mercury Ins. Group, 229 Cal.App.3d 1, 278.)
For instance, Jane rents a convertible from a rental car company. Due to an inadvertent lapse in payment of her own insurance, she is uninsured at the time she rents the vehicle. Her husband John accompanied her to the rental facility and helped select the car. While at the facility, the couple loudly discussed the details of their upcoming trip. At this point, Jane will likely be considered a permissive user because she had express permission to operate the vehicle.
During the trip, Jane permits an uninsured John to drive. The couple is rear-ended and John is seriously injured. An insurance company would likely attempt to deny coverage to John. However, the circumstances surrounding John’s use were within the contemplation of the rental company. The couple are related, came in together, selected the vehicle together and discussed their plans for use of the vehicle. Thus, provided the rental vehicle’s insurance policy does not exclude permissive use, John will likely be considered a third-party permissive user and entitled to recover non-economic damages.
The use must be within the owner’s scope of permission
“Permissive use” will not apply if under all of the circumstances presented, the use substantially exceeded restrictions set by the owner as to “time, purpose, or area.” (Henrietta v. Evans, 10 Cal.2d 526, 75 P.2d 1051, 1938 Cal. 228).
For example, a father permits his uninsured daughter to drive his car to school once per week. The routine pattern of father permitting daughter to use the vehicle for this specific purpose along with the familial relationship strongly implies permission is present in this instance.
Rather than driving the insured vehicle to school one day, the daughter uses the automobile to go on a non-school-related road trip from Los Angeles to San Diego for a weekend. The trip was unrelated to school purposes, it was for a longer duration than permitted by her father and the distance from Los Angeles to San Diego exceeded the distance between her home and school. Based on all of the circumstances, she substantially violated the restrictions set by her father prior to the incident in San Diego and thus would likely be denied recovery of general damages if she was injured.
Exceptions to finding permissive use
Although insurance policies are permitted to contain provisions excluding coverage to permissive users, this language must be “clear, positive, uncontradicted, and of such a nature that it cannot rationally be disbelieved,” otherwise, the issue would be a question for the jury. (Blank v. Coffin (1942) 20 Cal.2d 457.)
Generally, persons specifically excluded by name are not covered under the policy. (Ins. Code, § 11580.1, subd. (d).) The language within the policy terms must “specify limitations or exclusions.” (Veh. Code, § 16056.) Section 11580.1 has repeatedly been interpreted to contain the exhaustive list of exclusions permissible in an automobile policy. (California State Auto. Assn. Inter-Ins. Bureau v. Gong (1984) 162 Cal.App.3d 518, 528.) Additionally, “exclusions and exceptions contained within a policy must be construed strictly against the insurer.” (Phelps v. Allstate Ins. Co. (1980) 106 Cal.App.3d 752, 758-759.)
Consequently, a well-informed attorney can successfully circumvent the restrictions placed by Proposition 213 and collect the non-economic damages an injured party is entitled to. A skilled attorney who analyzes the insured vehicle’s policy can determine if an exception to the general rule affording coverage to uninsured permissive users applies. Once any exceptions to “permissive use” are ruled out, the existence of permission can be demonstrated either through explicit or implicit authorization. Implicit permission can easily be established by examining the circumstances surrounding the operator’s access to the automobile. Provided the uninsured motorist was driving within the scope of the vehicle owner’s permission, any objections to coverage based on Proposition 213 are rendered useless.