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Jaquez v. National Continental Insurance Company

November 26, 2003


On certification to the Superior Court, Appellate Division, whose opinion is reported at 356 N.J. Super. 260 (2002).


The issue in this appeal is whether the driver of insured's automobile was a "permissive user" for purposes of coverage under the insured's automobile liability policy.

On March 17, 1999, Erica Rochester was visiting her boyfriend's sister, Mildred, when Mildred's son, Carlos Ribot, asked if she had any cigarettes. Rochester told Ribot that he could get her cigarettes from her car, parked in front of Mildred's home, and handed him the keys. Rochester testified that the only reason she gave Ribot her car keys was so that he could retrieve the cigarettes. Ribot, however, decided to drive the vehicle and was involved in an accident with another car driven and owned by Edgar Loperena. Jacqueline Jaquez was a passenger in that vehicle. Meanwhile, Rochester realized her car was gone and called the police to report it stolen.

At the time of the accident, National Continental Insurance Company (National) insured the vehicle driven by Loperena, and State Farm Indemnity Company (State Farm) insured Rochester's vehicle. Loperena and Jaquez instituted separate actions against Ribot, Rochester, and National. Following consolidation, State Farm denied coverage on the ground that Rochester had not given Ribot permission to use the car. Loperena and Jaquez then sought uninsured motorist coverage from National. National settled those claims and filed a third-party complaint against State Farm.

Both National and State Farm moved for summary judgment. The court granted State Farm's motion, holding that no reasonable fact-finder could conclude that Rochester had granted Ribot permission to use the car on the record presented. The Appellate Division, in a reported opinion, reversed, concluding that, under the circumstances, Ribot would be considered a non-permissive user only if facts could establish that he subsequently engaged in an act amounting to theft or the like.

The Supreme Court granted State Farm's petition for certification.

HELD: The Court discerns no basis on which a reasonable trier of fact could find that Ribot's conduct amounted to permissive use.

1. Every owner of an automobile registered in New Jersey is required to maintain liability insurance coverage. When evaluating omnibus liability clauses of the kind at issue here, courts traditionally apply the "initial-permission rule," which provides that "if a person is given permission to use a motor vehicle in the first instance, any subsequent use short of theft or the like while it remains in his possession, though not within the contemplation of the parties, is a permissive use within the terms of a standard omnibus clause in an automobile liability insurance policy." Matits v. Nationwide Mut. Ins. Co., 33 N.J. 488, 496-497 (1960). The initial-permission rule has been

broadly construed, though it "does not extend to every use of a car." Cynthia M. Craig & Daniel J. Pomeroy, New Jersey Auto Insurance Law § 6:3-5 at 137. Application of the rule first requires a determination that the insured or owner had given initial permission to the non-insured to use the vehicle. The permission can be either express or implied. If such permission is found, the question then becomes whether the subsequent use, while permission was retained, constitute "theft or the like." If so, then the insured's initial consent is deemed vitiated and there is no coverage. (Pp. 6-10)

2. The trial court properly granted summary judgment in favor of State Farm based on that court's correct observation that the only permission granted was for Ribot to retrieve the cigarettes from the car and no permissive use of the vehicle can be implicated from that. Rochester did not permit Ribot, either expressly or impliedly, to "use" or "employ" the car at all; she merely gave him limited license to enter the parked vehicle to recover an item believed to be stored inside. Under the totality of the circumstances, there is a distinction to be drawn between permission to retrieve an item from the vehicle and permission to use the car itself. Although the Court bases its decision on the first prong of the initial-permission rule, it takes the opportunity to express its current position on the Court's earlier application of the second prong in Motor Club Fire & Casualty Co. v. New Jersey Manufacturers Insurance Co., 73 N.J. 425, cert denied, 434 U.S. 923, 98 S. Ct. 402, 54 L. Ed. 281 (1977). In Motor Club, in which Justices Clifford and Mountain dissented, the majority concluded that a mentally incompetent passenger's forceful taking of the driver's seat and causing the vehicle to crash into a building did not constitute "theft or the like" and did not vitiate the insured's consent to his use of the car (as a passenger). In short, the Court agrees with Justice Clifford's dissent therein and no longer considers the majority's analysis to be controlling authority of the Court. National's reliance on Motor Club and other cases, including the "loading and unloading" cases, is misplaced. Other than expressing disapproval of Motor Club, the Court's decision today does not signal a retreat from the traditional operation of the initial-permission rule. (Pp. 10-18)

The judgment of the Appellate Division is REVERSED and the matter is REMANDED to the trial court for reinstatement of its prior disposition.


The opinion of the court was delivered by: Justice Verniero

Argued October 20, 2003

This is an insurance coverage case. As more fully set forth below, the insured drove her car to the home of her boyfriend's sister. When the insured reached that destination she locked the car after parking it on the street in front of the residence. Once inside the house, she gave her car keys to her boyfriend's nephew to retrieve a pack of cigarettes that she kept in the vehicle. Without the insured's knowledge, the nephew then drove the car and was involved in an accident. The question presented is whether, under those circumstances, a reasonable fact-finder could conclude that the nephew was the car's "permissive user" for purposes of coverage under the insured's liability policy. We hold that the answer to that question is no.


These are the undisputed facts, derived largely from the deposition testimony and certification of the insured, Erica Rochester. On March 17, 1999, Rochester drove her automobile to the Newark home of her boyfriend's sister, Mildred (whose last name is not in the record). Prior to that date, Rochester had visited Mildred's house about three times a month. In this case, while inside the residence, Rochester and Mildred conversed for a few minutes, and Rochester also said hello to Carlos Ribot, Mildred's son.

At some juncture Ribot asked Rochester for a cigarette. According to Rochester, she usually kept her cigarettes in her pocket or in the console of her car. Rochester testified at her deposition that her conversation with Ribot consisted of the following: "He asked me, 'Erica, do you have a cigarette?' I said, 'No. They're in the car.' I said, 'If you want to, here's the keys. You can get them out of the car.' He said, 'Okay, I'll be right back.'" That testimony is consistent with Rochester's certification in which she states:

At no time prior to my giving Mr. Ribot the keys to my car did he ever ask my permission to drive my car. Based upon my discussion with Mr. Ribot, the only understanding that I had at the time was that I was giving him the keys to my car so that he could get the cigarettes ...

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