In its recent decision in Great American Alliance Ins. Co. v. Anderson, 2017 U.S. App. LEXIS 2277 (11th Cir. Feb. 8, 2017), the United States Court of Appeals for the Eleventh Circuit, applying Georgia law, had occasion to consider whether an employee’s violation of company policy regarding operation of a vehicle while impaired eliminated his status as an insured permissive user under the employer’s commercial auto policy.
Great American’s insured, Looper Cabinet Co. (“LLC”), allowed its employee, Brian Hensley, to drive a pickup truck for work and personal reasons, including transportation to and from a lake house owned by Mr. Hensley’s father. At issue was Mr. Hensley’s right to insured status for an accident that happened while he was driving from the lake house while under the influence. LLC had a company policy in effect stating that an impaired employee was not allowed to drive.
Great American denied coverage to Mr. Hensley for the underlying suit on the basis that he had exceeded the scope of the permissive use granted by LLC by driving while under the influence. The United States District Court for the Southern District of Georgia granted summary judgment in favor of Great American, concluding that the decision by a Georgia state appellate court in Barfield v. Royal Ins. Co. of Am., 492 S.E.2d 688 (Ga. Ct. App. 1997) stood for the proposition that by violating LLC’s internal policies, Hensley exceeded the scope of his permitted use of the vehicle, and thus negating his right to insured status.
On appeal, the Eleventh Circuit observed that the decision in Barfield conflicted with a 1968 decision by the Georgia Supreme Court in Strickland v. Georgia Cas.& Sur. Co., 162 S.E.2d 421 (Ga. 1968), in which the Court held that a finding of permissive use under an auto policy “only required permission for the purpose served by the vehicle and that the operational aspects were unimportant.” In other words, an employee’s violation of express company rules is not a relevant coverage consideration so long as the individual was operating the vehicle for the original use or purpose intended.
The Eleventh Circuit observed that the Barfield decision did not reference Strickland and could not be reconciled with it either. Concluding that Strickland had not been overruled, the Eleventh Circuit held that Strickland, not Barfield, represented Georgia controlling law on the issue and that as such, the lower court erred in holding in Great American’s favor. Citing to evidence in the record that Brian Hensley was operating the vehicle for a permitted use at the time of the accident, even if in violation of the company alcohol, the court held that Hensley was an insured for the purpose of the underlying action.