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Government Employees Insurance Company v. Steven Meringolo


February 22, 2011


On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-3144-07.

Per curiam.


Argued January 19, 2011 - Decided

Before Judges Wefing, Baxter and Koblitz.

These three appeals, which were argued back to back, and which we consolidate for purposes of disposition, all raise the identical issue, namely, whether defendant Rosangela Castro had implied permission from the vehicle's regular operator, defendant Vanessa Fernandez, to drive the vehicle on the night in question, thereby obligating Fernandez's auto insurance carrier to provide coverage. The motion judged answered that question in the negative. We agree, and affirm.


On the night of October 7, 2006, a group of friends, defendant Vanessa Fernandez, defendant Rosangela Castro, Siobhan Quinonas,*fn1 Jessica Borerro and Maritza Quiros, made plans to go together to 88 Keys, a bar in Woodbridge. Fernandez drove a 2001 Ford Focus, belonging to her mother Marisol Fernandez,*fn2 and insured by defendant Government Employees Insurance Company (GEICO). Castro's brother, Danny, and Vanessa had a child together, and therefore Castro was the aunt of Vanessa's child.

Once the five women arrived at the bar, Vanessa asked Castro to hold her keys because Castro was the only one of the five carrying a purse that night. Vanessa simply said, "[h]ere. Put the keys in the bag." Two of the other women put their wallets in Castro's purse as well. Castro understood that it was Vanessa's intention to drive the five of them back home and that "[n]o one else was going to drive; there wasn't another designated driver[.] . . . [J]ust Vanessa."

After entering the bar, the group separated and Castro and Quinonas went downstairs to dance. Castro, who was a few weeks shy of her twenty-second birthday, admitted to consuming five drinks of Hennessey and Coke and two bottles of Corona between approximately 11:00 p.m. and shortly after 1:00 a.m. While Castro was working on her fifth Hennessey and Coke, Quinonas received a telephone call from two of her male friends, who were at a nearby Applebee's and wanted to join the women at 88 Keys, but did not know how to get there. Quinonas and Castro agreed to drive over to Applebee's so that their friends could follow them back to 88 Keys in their car. Neither Quinonas nor Castro told any of the other three women that they were planning to leave the bar to drive to Applebee's. When asked at her deposition whether she made any effort to find Vanessa before leaving the bar, Castro answered that she and Quinonas looked for Vanessa "real fast," and when they were unable to find her, they left. Castro commented "we just went around, but we didn't see her, so we wasn't [sic] going to kill ourselves to look for her."

The two men followed Quinonas and Castro, who was driving Vanessa's 2001 Ford Focus, back to 88 Keys. Castro parked the car near the building, but was immediately approached by a bouncer who told her that she had parked in a "VIP spot" and would have to move the car. According to the testimony Castro later provided at her deposition, she put the car in reverse, but then, "[it] like hit [her]" and she "blacked out." She had a vague recollection that "the car flew back" at a high rate of speed. The Ford Focus struck and injured two pedestrians, plaintiffs Steven Meringolo and Isabel Cunha, and then struck the Escalade being driven by Quinonas's two friends. The car came to rest after Castro crashed into a window of 88 Keys.

In the meantime, Vanessa had become concerned about Castro because she had not seen her for approximately twenty minutes. Vanessa decided to go outside and "look for her." Vanessa testified that the first time she was aware Castro took her car was when she saw Castro driving the car into the parking lot of 88 Keys with Quinonas seated in the passenger seat.

Two days later, Castro gave a taped statement to a GEICO claims investigator during which she was asked whether she "ha[d] permission to drive the vehicle." She answered "No, I didn't." When asked why she drove the vehicle, Castro responded, "I was going to pick up a friend and I was going to be right back. I was going to take a few minutes so that is why I took it." Castro was also questioned during her deposition at considerable length on the subject of whether she had permission from Vanessa to drive the car on the night in question. Castro admitted that she had not asked Vanessa's permission to drive the car over to Applebee's, but drove Vanessa's car nonetheless because she "figured [Vanessa] would just say yes if I would have asked her." When asked why she had the "impression" that Vanessa would have said yes, Castro responded, "[b]ecause I used the car before." She explained that she had not asked Vanessa for permission because she "didn't see her. She wasn't around me."

Castro was asked whether she had ever driven Vanessa's car prior to that night. She responded that in the past "year or two [years]," she had used the car "[t]wo or three times," but only with Vanessa's express permission. On one occasion, she asked Vanessa if she could borrow her car to go to the Shop-Rite to buy food "for the house," and on another occasion Vanessa had allowed Castro to use her car to drive Castro's grandmother home. On each of those two occasions, Castro asked Vanessa for permission and Vanessa said yes. Castro also admitted that Vanessa had never told her she was free to use her car whenever she wished.

Later on in the deposition, when Castro was asked why she and Quinonas had taken a "lap around the bar to look for Vanessa" before they left for Applebee's, Castro responded, "[t]o ask if I could go pick -- use her car to go pick them up." She was then asked:

Q. And then after taking the lap around the bar, you felt that you could use the car because on the two to three prior occasions in the year before the day of the accident when you had asked her to use the vehicle, she let you use the vehicle?

A. Yes.

Vanessa was also deposed. She was asked how many times she had given Castro permission to drive her car prior to October 6, 2006, and answered "less than five times." However, when she was asked to describe those incidents, she was only able to recall two instances, once when Castro drove Castro's grandmother home and once when Castro drove to the Shop-Rite. When asked to describe the next instance in which she had given Castro permission to use her vehicle, Vanessa revised her prior answer by stating, "I honestly think that was it." The questioner followed up, asking, "[s]o, to the best of your recollection, prior to the date of the accident, Ms. Castro had only had permission to use your vehicle on two occasions?" Vanessa answered "Yeah."

According to Vanessa, when she and the others entered 88 Keys that night, they all knew she was "going to be the designated driver" and that she "would not be drinking." According to Vanessa, "[t]hey knew I was driving home. They knew I didn't want to drink. They had their own options whether they wanted to drink or not." Vanessa was also asked whether she had ever told Castro before the night of the accident that Castro could "use [her] car without asking." Vanessa responded, "I never told her that," and never "indicated in any way that if she wanted to use the car, it was okay for her to get the keys."

Vanessa emphasized that on the night of the accident, she had not said anything or done anything "to give [Castro] the impression that it was okay for her to use the car that evening." She added that if Castro had asked to borrow the car, she "would have told her no. . . . Because she was at the bar all night."

A day or so after the accident, Vanessa and her mother went to the Woodbridge police station to file a complaint against Castro for using the car without permission.

Meringolo and Cunha filed personal injury actions against Castro, as the driver of the vehicle, Marisol Fernandez, as the owner, and the bar. Ultimately, all claims against Marisol Fernandez were dismissed. On June 28, 2007, GEICO filed a separate declaratory judgment action seeking a determination of whether Castro was a permissive user of Marisol Fernandez's vehicle at the time of the accident. The policy GEICO issued to Marisol Fernandez insured her and her relatives, or "[a]ny other person using the auto with [the owner's] permission. The actual use must be within the scope of that permission." Approximately seven months later, Liberty Mutual, which was the underinsured/uninsured motorist carrier for Meringolo, was permitted to intervene in the declaratory judgment action.

At the close of discovery, Meringolo and GEICO filed motions for summary judgment on the issue of whether Castro was a permissive user of the vehicle at the time of the accident. During oral argument on November 20, 2009, all parties advised the judge they were in agreement that there were no material facts in dispute and they were "looking for the court to make a decision . . . on the permissive use issue" as a matter of law. Judge Cleary granted the motions of Meringolo and GEICO for summary judgment, finding Castro was not a permissive user at the time of the accident. The judge reasoned:

. . . Castro did not have explicit permission . . . from either [Vanessa or Marisol] Fernandez to use the vehicle, . . . nor implicit permission.

So, in order for Castro to be covered under Fernandez' . . . vehicle policy, it must be shown that she had implied permission for transportation purposes.

Implied permission, and here, the plaintiff claims that Castro was merely a bailee of the keys while they were in her purse, and similar to a bailee under a theory of conversion she would not have been permitted to commit an unauthorized act of dominion over the bailee's property inconsistent with her right of [sic] that property.

Cunha argues that there was . . . permissive use. . . . Cunha states that all [that] is required is that the individual has received permission to use a motor vehicle on one instance, and thereafter, . . . other instances could be considered a permissive use.

I find that that is not the law in this case, and that should not be the law in this case.

The fact that there was permission on other occasions does not mean that there was permission on this occasion.

[An]other . . . argument[] of Cunha is that they had a friendship, that they were related somehow, certainly I find that that does not establish implicit permission.

I find that Castro did not have permission to use the vehicle. She was not . . . and she did not have implied or any type of permission to use the vehicle.

Castro, Cunha and Liberty Mutual have each appealed. Castro's appeal is docketed under A-2746-09, Cunha's under A-2817-09, and Liberty Mutual's under A-2831-09. Before filing her appeal, Cunha reached a settlement with Castro in the amount of the policy limits of Fernandez's policy with GEICO, agreeing that she would forego her right to execute the judgment against Castro's personal assets if the order granting summary judgment in GEICO's favor were to be upheld on appeal. Stated differently, the settlement between Cunha and Castro would only be effective if the proceeds of the GEICO insurance policy were to become available. In light of that agreement, Castro assigned to Cunha her right to prosecute the appeal in A-2746-09.

On appeal, although the arguments advanced by Cunha and Liberty Mutual are worded differently, their arguments are substantively the same: 1) the trial court erred when it concluded that Castro did not have permission from Vanessa Fernandez to drive the vehicle on the night in question; 2) under the "initial permission" rule, Castro was entitled to liability insurance coverage under the GEICO policy; 3) because Castro's prior use of the vehicle was "not so remote in time or surrounding circumstances" as "to preclude [her] use of the car at the time of the accident from being reasonably related to the earlier permission," the judge erred when she found otherwise; and 4) the grant of summary to GEICO violates clear public policy in this State that supports the extension of auto insurance coverage.

GEICO and Meringolo, in contrast, urge us to affirm the grant of summary judgment to GEICO, arguing that neither Castro's use of the vehicle on two occasions during the prior year, nor the familial relationship between Castro and Vanessa's daughter, or the two factors in combination, established implied permission for Castro to operate the vehicle on the night in question, especially in light of her intoxicated condition.*fn3


The reported opinions addressing an insurer's argument that a vehicle was being operated without the permission of the owner, and the insurer therefore had no obligation to provide coverage, have applied two different analytical principles: the initial permission rule and the doctrine of implied permission. Both arguments are advanced by Castro.

However, before addressing those two doctrines, we note that the ultimate question of whether GEICO is obligated to provide coverage is not affected by the fact that Marisol Fernandez, the owner of the car, had not given Castro permission to use the car on the night in question. A driver who receives permission to operate the vehicle from another permissive user is covered by the auto insurance policy of the owner even though the owner of the vehicle was unaware that the initial permittee had allowed another person to operate the vehicle. Odolecki v. Hartford Accident & Indem. Co., 55 N.J. 542, 547 (1970) (holding that where a mother gave her son the use of her car for the summer and told him not to lend the car to anyone else, and the son lent the car to a friend who then became involved in an accident, the mother's auto insurance company was obligated to provide coverage because the initial permittee, the son, had authorized his friend to drive the car).

The only exception to the Odolecki rule is where the third party's later conduct amounts to a "theft or the like" of the vehicle. Id. at 550. Thus, users who receive permission from another permissive user are covered. Ibid. We therefore turn to the central issue raised by this appeal, namely, whether Castro had the permission of Vanessa to operate the car on the night in question.

Under the initial permission rule, if there is a break in the continuous use of the vehicle, the claim by the driver that he or she had initial permission to use the vehicle and was therefore authorized to use it on the later occasion, must fail. French v. Hernandez, 184 N.J. 144, 153 (2005). Here, because there was a break in time of approximately one year between the last time Vanessa gave Castro permission to use the car, and the night in question, the obvious, and extensive, break in time makes Castro's reliance on the initial permission rule unavailing.

We therefore turn to an analysis of the implied permission rule to determine whether application of that doctrine to the facts presented would require GEICO to provide coverage. Castro relies on the following facts: 1) Vanessa gave her possession of the keys; 2) Vanessa never told her she could not use the vehicle; and 3) she had operated the vehicle on several prior occasions.

Implied permission "may arise from 'a course of conduct or relationship between the parties in which there is mutual acquiescence or lack of objection signifying consent.'" Id. at 154 (quoting State Farm Mut. Auto. Ins. Co. v. Zurich Am. Ins. Co., 62 N.J. 155, 167 (1973)). A party may establish implied permission through circumstantial evidence; and the fact-finder should "consider the surrounding circumstances in deciding whether the use of a vehicle was not contrary to the intent of its owner [or regular user]." Ibid. (citing Zurich, supra, 62 N.J. at 168).

One important consideration is the relationship between the parties. Ibid. (citing Zurich, supra, 62 N.J. at 167). A finding of implied permission is "more likely" when the parties are friends or have an employer/employee relationship. Ibid. (citing Zurich, supra, 62 N.J. at 179-80, Weintraub, C.J., concurring in part).

Another significant consideration is a pattern of permitted use. Ibid. Patterns of past permitted use "may give rise to an inference that the owner [or regular user] gave his consent to use on a subsequent occasion." Ibid. "Ultimately, the resolution of the issue will be fact-sensitive and depend on the totality of the circumstances." Ibid.

Castro argues the relationship between her and Vanessa, and the pattern of use, supports the conclusion that she, Castro, had implied permission to use Vanessa's car on the night in question. She also maintains that the trial court did not give proper weight to the "significant familial relationship" and the "longstanding friendship" between Vanessa and herself. As French and Zurich require, we turn to an evaluation of the totality of the circumstances.

As to the relationship between the parties, Vanessa and Castro have been friendly since high school, and Vanessa's daughter is Castro's niece. While the trial judge correctly recognized that that relationship was important, she also observed, correctly, that such a relationship is not dispositive. Ibid. (observing that a family relationship is an important consideration, but by far not the only factor to be considered).

Unquestionably, the relationship between the two women did not, standing alone, establish implied permission for Castro to use Vanessa's vehicle on the night of the accident. As Castro herself acknowledged, on the two prior occasions over the course of the preceding year that she had used Vanessa's car, she did not use the car until after she asked for, and obtained, permission from Vanessa to do so. Thus, neither the family relationship nor the friendship of the two women authorized Castro to drive the car whenever she wanted.

Turning to the other factors identified by French and Zurich, we do not consider the pattern of prior use to be sufficient to establish implied permission for Castro to use the car on the night in question. As we have noted, on one of the two occasions in the prior year when Castro used Vanessa's car, she used it drive to the grocery store to purchase food "for the house" and on the other occasion she used the car "to drive her grandmother home." We agree with Judge Cleary that these two prior incidents were so isolated in time and so specific as to their purpose as to negate a finding of a pattern of use.

Moreover, there are numerous additional facts in the record that support Judge Cleary's conclusion that Castro did not have implied permission to use the car on the night in question. Those facts included: Castro's admission to a GEICO representative on October 9, 2006 that she did not have permission to drive the car; the fact that Vanessa had never told Castro she could use the car whenever she wished; Castro's admission that on the two prior occasions that she had been able to use Vanessa's car, she had recognized that she needed to ask for, and obtain, Vanessa's express permission; Castro's own understanding that the reason she had been given the keys by Vanessa that night was because Vanessa herself did not have a purse; and Castro's admission that "[t]here was no other reason that [Vanessa] gave [her] the keys," other than "because [Castro] had the purse and nobody else did."

However, of all the facts in the record, the single fact that most graphically demonstrates that Castro did not have Vanessa's implied permission to drive the car is the fact that before leaving 88 Keys to drive to Applebee's in Vanessa's car, Castro searched for Vanessa "[t]o ask if [she] could . . . use [Vanessa's] car to go pick them, [the friends], up." As that portion of Castro's deposition demonstrates, she knew she did not have permission to use Vanessa's car to go to Applebee's and realized that she needed to ask Vanessa's permission. When she was unable to find Vanessa, she simply took matters into her own hands and decided to use the car keys that Vanessa had asked her to hold. The fact that Castro realized she needed to obtain Vanessa's express permission before using the car unequivocally demonstrates that Castro did not have Vanessa's implied permission to use the car.

Therefore, neither the relationship of the two women, nor the pattern of use, nor Castro's temporary possession of the keys, support a finding of implied permission. Rather, prior isolated uses, the possession of the keys merely for safekeeping, the designation of Vanessa as the driver, Castro's admission that she knew she did not have permission, her actions of searching for Vanessa to obtain permission, and the amount of alcohol consumed by Castro, all demonstrate the absence of implied permission.

Moreover, when a court considers the surrounding circumstances, it must determine whether the use of the vehicle was contrary to the intent of its owner. Ibid. Here, the fact that Castro was drinking heavily on the night in question made Castro's use of the car contrary to the intent of Marisol, the owner, and Vanessa, the designated driver that night. We thus conclude Judge Cleary correctly determined that Castro did not have implied permission to use the vehicle on the night of the accident.

Castro's reliance upon the decision in Odolecki is misplaced. In Odolecki, the Court held that even though the mother limited the scope of the permission granted to her son, the insurance policy covered the third party who was driving the car with the son's permission. Odolecki, supra, 55 N.J. at 550. Thus, with the grant of permission to her son to use the car, the mother's liability insurance carrier was obligated to provide coverage for the injuries caused by the son's friend's use of the car because the son had granted his friend express permission. Ibid. In Odolecki, the issue was whether the mother's limitation on her son's permission negated insurance coverage for the subsequent user who drove the car with the son's permission. Ibid. Once the mother gave her keys to her son, the scope of use the mother imposed was irrelevant for purposes of the coverage analysis. Ibid.

Here, in contrast, Castro was not granted permission, either by Vanessa or by Vanessa's mother to use the car. Rather, she was merely holding the keys as a bailee. The fact that Castro was in voluntary possession of the keys, under the circumstances, does not imply permission. Thus, a critical difference exists between the present matter and Odolecki, for there, unlike here, the son's friend was given express permission to use the car. Odolecki, therefore, does not support Castro's position.

Nor are we persuaded by Castro's argument that the long-recognized "expansive view of finding coverage so as to compensate victims of automobile accidents," demands a contrary result. While it is true that the Supreme Court has recognized the strong public interest in maintaining liability insurance coverage for the protection of innocent victims such as Cunha, id. at 152, judges must refrain from stretching an insurance policy "beyond all reason to fit a set of facts that fall beyond the reach of the omnibus clause." French, supra, 184 N.J. at 152. Requiring GEICO to provide coverage for the injuries sustained by Cunha would be an unwarranted and improper application of the law governing insurance coverage.


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