Recently the United States 11th Circuit Court of Appeals held, in Great American Alliance Insurance Co. v. Anderson 847 F.3d. 1327 (11th Cir. 2017) that an employee did not go beyond the scope of the employer’s permissive use of a company vehicle when the employee operated the company vehicle while in an intoxicated state. This case was decided under Georgia law. Previously, the Georgia Supreme Court had held that no distinction existed between the terms “actual use” and “use” with respect to a permissive use situation. See e.g. Strickland v. Georgia Casualty and Surety Co. 224 Ga. 487, 489, 162 S.E. 2d 421, 423-424 (Georgia 1968). According to the Georgia Supreme Court, the term “use” had two meanings. The first meaning related to the operation of the vehicle while the second related to the purpose served by the vehicle. Id. at 489, 162, S.E. 2d at 423-424. Using that lens, the Georgia Supreme Court held in Strickland that a finding of permissive use under the policy only required permission for the purpose served by the vehicle, and that the operational aspects of the vehicle were unimportant to that determination. Id. at 492, 162 S.E. 2d at 425. The Georgia Supreme Court explained the reason for its prior pronouncements on scope of use in the following way:
The policy, among other things, insures against obligations arising from the negligence or unlawful operation of the described vehicle. Under Appellee’s contention if the named insured permitted the use of the vehicle, and at the same time prohibited its negligent or unlawful operation, it would defeat the very purpose of the policy. Therefore, the “actual use” of the vehicle within the meaning of the policy cannot reasonably relate to the particular manner of its operation. At most, it could relate only to whether or not permission to operate the vehicle had been given. And even this would have no application to the first permittee who had been given permission to use the vehicle for a particular purpose since authorization necessarily implies permission to operate the vehicle. Furthermore, the policy provides: “the purposes for which the automobile is to be used are “business and pleasure.” This indicates to us that the policy is concerned with the purpose to be served by the vehicle and not its operation. If the policy intended that “actual use” included the operation of the vehicle, it could have stated so plainly.
Id. at 489-490, 162 S.E. 2d at 424.
The Georgia Supreme Court has also found that even in scenarios where employees have been determined to violate express prohibitions of the employer regarding the operation of the vehicle, insurance companies could still be found obligated to insure the employee “where the use to which the [vehicle] was being put was within the scope of the initial permission, and the first permittee was riding in the [vehicle] or its operation by the second permittee was for his benefit or advantage.” Id. at 491-492, 162 S.E. 2d at 424.
The Georgia Court of Appeals, 20 years after the Strickland case was decided, broke from the Strickland decision when it found that a company’s internal rules could govern the scope of permissive use. See Barfield v. Royal Insurance Co. of America, 228 Ga.App.841, 492 S.E. 2d 688 (Georgia Court App. 1997).
The 11th Circuit Court of Appeals in Anderson found that the Strickland and Barfield decisions were irreconcilable because they were predicated upon mutually exclusive premises. On the one hand, the Georgia Supreme Court held that the only inquiry relevant to determining the scope of a generic permissive use clause was whether the vehicle was used for an approved purpose. Strickland 224 Ga. at 492, 162 S.E. 2d at 425. Thus, where a vehicle was used for an approved purpose, the employee’s violation of explicit company policies would not foreclose the employee’s status as a permissive user. Id. at 492, 162 S.E. 2d at 425. However, the Barfield court allowed an insurer to look beyond the express purpose identified by the Strickland court to look at the internal rules of the company to determine the scope of permissive use. Barfield, 228 Ga. App. at 843, 492 S.E. 2d at 690. To resolve this irreconcilable difference, the 11th Circuit Court of Appeals noted that the Strickland case had not been overruled, and therefore it governed the current case disposition.
Under a Strickland analysis, the Court’s inquiry should have been limited to whether the employer had approved the….purpose for which the employee was using the vehicle at the time of the accident.
Under the facts presented in Anderson, an employer, Looper Cabinet Company (LCC) hired an employee, Brian Hensley, to perform services related to cabinet installation. Over the years of his employment, LCC had permitted Hensley to drive its 2008 Chevrolet Silverado for both work and personal purposes. On one occasion, Hensley drank several beers before driving the vehicle. An accident occurred involving Hensley and the driver of another vehicle. For two decades, LCC’s internal policies had banned alcoholic beverages on company property and prohibited employees who are under the influence of alcohol from working in the shop on or off the clock.
Based upon Strickland, the Court in Anderson found that the phrase used in the employer’s insurance policy regarding “actual use,” was the functional equivalent of the term “use.” The Court then held that Hensley was a permissive user while intoxicated because the analysis was limited to whether LCC approved the purpose for which Hensley was using the vehicle at the time of the accident.