## Facts

- State Farm issued an automobile liability policy to Robert E. and JoAnn Ahrens covering, among other vehicles, the family Volkswagen.
- On the night of July 4–5, 1973, the Ahrens’ 14-year-old daughter Deborah, who was unlicensed, took the Volkswagen keys from their customary location without her parents’ knowledge and drove with her friend Helen Curtis to meet other teenagers.
- After the group met and used fireworks, Deborah began driving the passengers home in the Volkswagen.
- Joseph Wallace, also unlicensed, asked to drive; Deborah agreed and allowed Wallace to operate the Volkswagen.
- While Wallace was driving, an accident occurred in which Curtis was injured; her father incurred substantial medical expenses and sought coverage under the Ahrens’ State Farm policy.
- State Farm denied that Wallace was covered, and Curtis filed a diversity declaratory judgment action seeking a ruling that Wallace qualified as an “insured” under the policy’s omnibus clause.
- The jury returned a verdict for Curtis, and the district court entered declaratory judgment finding coverage for Wallace; State Farm appealed.

## Issues

1. Whether a driver who received permission only from an unlicensed minor daughter, acting without the named insureds’ knowledge, qualifies as an “insured” under an omnibus clause requiring that the vehicle’s “operation and actual use” be with the permission of the named insured and within the scope of that permission.
2. Whether the jury’s coverage verdict could stand given jury instructions identifying the parents as the only “named insureds” and treating them as not having given Wallace permission to drive.

## Decision

- The Tenth Circuit reversed the declaratory judgment for Curtis and remanded.
- Wallace was not an “insured” under the policy because the requisite permission of the named insureds for the operation and actual use of the vehicle was absent.
- Given the policy language and the established lack of named-insured permission, the jury’s verdict finding coverage lacked a legally sufficient basis.

## Legal Principles

- When an omnibus clause covers “any other person while using” the insured vehicle only if “the operation and the actual use” are “with the permission of the named insured” and “within the scope of such permission,” permission must be traceable to the named insured.
- A sub-permittee’s coverage fails where (a) the named insureds did not permit that driver to operate the vehicle and (b) the initial user’s possession and use were outside any permission granted by the named insureds.
- A verdict finding omnibus-clause coverage cannot stand where jury instructions and the record establish the absence of named-insured permission required by the policy’s plain terms.

## Conclusion

The court held that the policy’s omnibus clause required permission from the named insureds for both the vehicle’s operation and use; because the parents neither authorized their unlicensed daughter’s late-night use nor gave Wallace permission to drive, Wallace was not covered as an insured under the liability policy.


Curtis v. State Farm Mut. Auto. Ins. Co., 591 F.2d 572 (10th Cir. 1979)