ALLSTATE INSURANCE COMPANY, A FOREIGN CORPORATION AUTHORIZED TO DO BUSINESS IN THE STATE OF FLORIDA, APPELLANT,
v.
JARRELL VAN JORDAN, APPELLEE

Fla. 3d DCA | 1972-09-12
No. 71-1279
Before CHARLES CARROLL, HEN-DRY and HAVERFIELD, JJ.
266 So. 2d 680 Florida District Court of Appeal, Third District (1972) Caution
Cited by 9 cases

AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.

Synopsis

Allstate Insurance appealed a declaratory judgment holding that it must provide coverage to Van Jordan, an employee of a service station who was driving the insured vehicle to deliver it to its owner after repairs. The court affirmed, holding that delivering a repaired vehicle does not constitute use of the automobile in the 'automobile business' under the policy's exclusion clause.


Holding

Delivery of an automobile by a service station operator after servicing does not constitute use of the vehicle in the 'automobile business' within the meaning of the policy exclusion. Therefore, Van Jordan, as a permissive driver, is covered under the omnibus insured clause and is not excluded by the 'used in automobile business' exclusionary provision.


Headnotes

[1] An automobile owner's insurance policy exclusion for use in the "automobile business" does not apply when an employee of a service station delivers the vehicle to its own…

[2] The "automobile business" exclusion in an insurance policy is narrowly construed to avoid excluding coverage for permissive drivers.

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Key Quotes

“It is our view that delivery of an automobile by a service station operator after servicing does not constitute use of the vehicle in the 'automobile business'.”

States the court's holding on the central issue of statutory interpretation regarding the scope of the exclusion clause.

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Facts & Procedural History

Mrs. Schumann owned an automobile insured by Allstate. She took the vehicle to a service station for repairs. After repairs were completed, Van Jordan…

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Opinion of the Court
HENDRY, Judge.

HENDRY, Judge.

This is an appeal from a declaratory judgment which determined that the third party plaintiff, Jarrell Van Jordan, was entitled to insurance coverage by the third party defendant, Allstate Insurance Company, as prayed for in his third party complaint. Allstate was ordered to reimburse Federated Mutual Implement & Hardware Insurance Company for the One Thousand, Two Hundred and Fifty Dollar part payment Federated made to the original plaintiff in the settlement of a personal injury action.

The action for personal injuries was brought by Ana Maria and Pedro Mendive against Van Jordan, the driver of an automobile owned by Mrs. C. J. Schumann. Allstate, Schumann’s insurer, and Federated, Van Jordan’s insurer, each contributed One Thousand, Two Hundred and Fifty Dollars and obtained a dismissal of the case. The insurers agreed that the issue between them concerning coverage would be preserved.

The dispute as to coverage arose out of the operation of the automobile and the construction of the provisions of Allstate’s policy covering Schumann. Mrs. Schumann took her automobile to a service station for repairs. After the repairs were made, Van Jordan, an employee of the service station, drove the vehicle for the purpose of delivering it to Schumann. While en route he collided with the Men-dive automobile.

The Mendives first brought suit against Schumann and Van Jordan. Allstate refused to defend Van Jordan. It maintained that its policy excluded coverage while the vehicle was being used in the automobile business. Allstate’s pertinent policy provisions are as follows:

"Definitions of words used under this Part”
íjí ^ ^ ^ ^
“3. Miscellaneous”
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“(c) ‘automobile business’ means the business of selling, repairing, servicing, storing or parking of automobiles; and”
jji ‡ ;jí jjt j{;
“Exclusions — what this Part of the policy does not coveP’
“2. an owned automobile while used in an automobile business, but this exclusion does not apply to the named insured, a resident of the same household as the named insured, a partnership in which such named insured or resident is a partner, or any partner, agent or employee of such resident or partnership;”
ífí ijí jfi >{i %

The sole point raised on appeal by Allstate is: whether an automobile voluntarily delivered to its owner by an employee of a service station after repairs were made to the vehicle was being used in the “automobile business” so as to come within the “automobile business” exclusion provision contained in the owner’s policy.

*682It is our view that delivery of an automobile by a service station operator after servicing does not constitute use of the vehicle in the “automobile business”. Cherot v. United States Fidelity and Guaranty Company, 264 F.2d 767, 71 A.L.R.2d 959 (10th Cir. 1959) and McCree v. Jenning, 55 Wash.2d 725, 349 P.2d 1071 (1960) were apparently the first cases to decide the proper construction of the exclusionary clause in a factual setting close to that of the instant case. Cases in Alabama, California, Louisiana, New Hampshire, New Jersey, Texas, Utah and Washington have construed the terms “used” or “while” in the exclusionary provision narrowly and therefore they have held that the permissive driver is covered under an omnibus insured clause and is not excluded under the “used in automobile business” exclusionary provisions. These cases represent the better view. Apparently, North Carolina and Virginia have reached contrary decisions.

Accordingly, the judgment appealed is affirmed.

Affirmed.


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Citator

Cited By

  • Schaffer v. Gov't Emps. Ins. Co., 280 So. 2d 504 (Fla. 2d DCA 1973)
    …xclusion effective in a case in which the driver was regularly, though only on a part-time basis, employed by a car rental firm and had an accident in the course of that employment. Apparently - Allstate Insurance Co. v. Van Jordan, Fla.App.3d 1972, 266 So. 2d 680, interpreted the older form of the exclusion, and we do not view it as contrary authority. Compare the cases cited in Annotation, 47 A.L.R. 556, with a later annotation, 71 A.L.R. 964, noting the change in wording of the exclusion. At the present ti…
  • Midwest Mut. Ins. Co. v. Fed. Ins. Co. OF NEW Jersey, 289 So. 2d 760 (Fla. 3d DCA 1974)
    …dition, it is pointed out that this court has held that a virtually identical exclusionary clause was not effective in a case where an automobile was being driven from one place to another. See Allstate Insurance Company v. Van Jordan, Fla.App.1972, 266 So. 2d 680. In Allstate, the owner of an automobile delivered it to a service station for repairs. After the repairs were completed, an employee of the service station drove the vehicle for the purpose of delivering it to the owner. While en route, he collided…
  • Allstate Ins. Co. v. Jarrell van Jordan, 273 So. 2d 765 (Fla. 1973)
    …Certiorari denied. 266 So. 2d 680. CARLTON, C. J, and ADKINS, BOYD, McCAIN and DEKLE, JJ, concur.…

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