Wiley v. United Farm Family Mut. Ins. Co.
Citation 2024 WL 335248 (Ind. Ct. App. 2024)
The owner of a vehicle granted permission to Howard to operate her vehicle, and he was involved in an accident with Wiley. At the time of the accident, Howard did not have a valid driver’s license. Howard sought insurance coverage from the owner’s insurer, United, for a personal injury claim by Wiley. United denied coverage to Howard, even though he had permission to drive, relying upon the policy exclusion that provides that no liability coverage was provided to any insured while “using a vehicle without a reasonable belief that the ‘insured’ is entitled to do so.” United contended that because Howard did not have a valid driver’s license, the exclusion applied.
Wiley eventually filed a lawsuit against Howard and obtained a judgment in the amount of $250,000.00. Wiley then filed a Motion for Proceedings Supplemental to attempt to collect on the judgment from United. United filed a complaint for declaratory judgment relying upon application of the exclusion as well as contending it did not receive timely notice of Wiley’s lawsuit against Howard.
The trial court entered a declaratory judgment in favor of United determining that no coverage was owed. On appeal, Wiley contended that because Howard had received permission to drive the car from its owner, it was reasonable for him to believe that he had a basis to operate the car. However, the Court of Appeals disagreed and affirmed the declaratory judgment. Relying upon Smith v. Cincinnati Ins. Co., 790 N.E.2d 460 (Ind. 2003) and Mroz v. Indiana Ins. Co., 796 N.E.2d 830 (Ind. Ct. App. 2003), the Court of Appeals found that those cases were similar in enforcing the exclusion at issue where the vehicle driver clearly did not have a reasonable belief to be operating the vehicle. In the Smith case, the driver was fifteen years old and only had a learner’s permit such that she could only drive when accompanied by a guardian or relative. Similarly, in Mroz, the driver was a seventeen-year-old son whose driver’s license was suspended.
This decision involved a common-sense application of the exclusion. Clearly, an individual with no driver’s license would not have a reasonable belief of the ability to operate a vehicle.
