Defendant All Sheen owned and operated a car wash in Blackwood, New Jersey. It employed the defendant Esteban Chavez, who was responsible for driving customer’s vehicles from the end of the automated wash track to the drying area. While Chavez was driving one of the customer’s vans into the drying area, he struck and severely injured Ivan Rivera, who ultimately died from his injuries. The issue in Drive New Jersey Insurance Co. v. Estate of Ivan Rivera, 2016 N.J. Super. Unpub. LEXIS 1823 (App. Div. August 3, 2016) was whether Chavez, an unlicensed driver, was considered a permissive user of the van’s owner and, hence, would be covered by the van’s automobile insurance company for this accident.
The van was owned by John Micklewright and his company Available Animal Control. The van was brought to the car wash by Micklewright’s employee, Stephen Heath. When Heath arrived at the car wash, he was required to surrender the vehicle to All Sheen’s employees. Micklewright’s van was insured by Drive New Jersey Insurance Co. (“DNJ”). DNJ took the position that it did not provide liability coverage to Chavez or All Sheen for the accident because Chavez was an unlicensed driver. At the time of the accident, he was driving with a suspended license.
The trial judge agreed with DNJ that Chavez would not be considered a permissive user and, hence, DNJ did not owe coverage for this accident. On appeal, All Sheen argued that the trial judge erred in concluding that Chavez was not a permissive user because Micklewright, through his employee, Heath, gave permission to All Sheen to drive the van to and from the car wash track.
New Jersey is clear that coverage is available to persons other than the named insured under a standard omnibus clause by adopting the broadest and most liberal approach, known as the “initial permission” rule. Under this rule, once a person is given initial permission to use a motor vehicle, “any subsequent use short of theft or the like while it remains in his possession, though not within the contemplation of the parties,” is considered to be a permissive use within the terms of a standard omnibus clause in an auto policy.
The Appellate Division found that All Sheen had initial permission from Micklewright’s employee to drive the van into the car wash and from the terminus to the drying area. The court held that this permission was not voided just because Chavez was unlicensed. His unlicensed use was not equivalent to “theft or the like.” All Sheen’s initial permission was not dependent upon whether the car wash hired drivers who were able “to proficiently perform the task.” The Appellate Division noted that the initial permission rule did contemplate situations in which the subsequent use of the car may be inconsistent and even frustrate the intentions and plans of the person granting permission.
As a result, the court ruled that Chavez did qualify as a permissive user at the time of the accident. Accordingly, DNJ did owe coverage to Chavez and All Sheen for this accident.
