Seyfarth Synopsis: In a recent Eleventh Circuit opinion, the Court found that the insurance carrier was responsible, under Georgia law, for the harm caused by an intoxicated employee’s vehicle usage. Great American Alliance Ins. Co. v. Anderson, No. 15-12540 (11th Cir., February 8, 2017).
In this case, the Court explained, the appellant was involved in a car accident with an intoxicated driver who was driving a company vehicle with his employer’s permission. “After a jury found the driver liable and awarded the appellant one million dollars, the employer’s insurance company, the appellee, filed this suit for a declaration that the driver was not a permissive user – and thus not covered under the applicable insurance policies – because he broke internal company policies.”
The Court found that the Georgia Supreme Court has held that inquiries into permissive use should extend only to whether a vehicle is used for an approved purpose. Citing to Strickland v. Georgia Cas. & Sur. Co., 224 Ga. 487, 162 S.E.2d 421 (Ga. 1968). “A subsequent decision by the Georgia Court of Appeals, however, held that a company’s internal rules can govern the scope of permissive use, and that violations thereof can negate an individual’s status as an insured.” See Barfield v. Royal Ins. Co. of Am., 228 Ga. App. 841, 492 S.E.2d 688 (Ga. Ct. App. 1997). Because the District Court followed Barfield, and thereby narrowed the scope of permissive use beyond what was permitted by Strickland, The Court found that it erred, and reversed and remanded.
Strickland, the Eleventh Circuit found, holds that the only inquiry relevant to determining the scope of a generic permissive use clause is whether a vehicle is used for an approved purpose. See 224 Ga. at 492, 162 S.E.2d at 425. In that case the Georgia Supreme Court found that where a vehicle is used for an approved purpose, an employee’s violations of explicit company policies do not foreclose status as a permissive user. See id. at 492, 162 S.E.2d at 425. “We conclude that the “actual use” contemplated and intended by the policy refers only to the purpose to be served and not the operation of the vehicle.” The Court concluded that the purpose test set forth in Strickland controlled the inquiry into permissive use. Because the District Court extended its analysis further (to include Barfield), it was reversed.
This opinion, for Georgia employers especially, but for employers generally as well, raises important concerns about employee vehicle usage. Employer liability for employee vehicle usage can come from numerous circumstances, but most generally including injuries or accidents caused by employees acting within the scope of their employment.