The “Hell or Highwater Rule”

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The “Hell or Highwater Rule”

Permission

In Barry v. Tanner, 547 N.W.2d 730 (Neb. 1996), the Nebraska Supreme Court held:

Where initial permission to use an insured vehicle has been given by one having proper authority to give permission to the person operating it at the time of the accident, for purposes of liability coverage, such operation is with the express or implied permission of the named insured, even though specific or express terms of the permission given were violated.

Id. 547 N.W.2d at 733-34.

In Tanner, the vehicle driven by Tanner struck another vehicle driven by Mosher and, as a result of the force of the collision, Mosher’s vehicle struck Barry. Tanner was a self-employed auto body specialist who had been given the vehicle for some minor repair and paint work. Tanner used the vehicle to go out and get some dinner and was returning to his auto shop when the accident occurred. After obtaining a default judgment against Tanner, who was uninsured, Barry commenced a garnishment proceeding against the vehicle owner’s insurer on the theory that the defendant was a permissive user of the vehicle. The district court did not agree and dismissed the proceeding. On appeal, the Nebraska Supreme Court noted that it had previously adopted the “initial permission rule.” Such a rule “reflects the view that automobile liability insurance is for the benefit of the public as well as insureds.” 547 N.W.2d at 733. The court further noted that its interpretation of the rule is most analogous to the “hell or highwater rule,” which provides:

If the vehicle was originally entrusted by the named insured, or one having proper authority to give permission, to the person operating it at the time of the accident, then despite hell or high water, such operation is considered to be within the scope of the permission granted, regardless of how grossly the terms of the original bailment may have been violated.

547 N.W.2d at 733-34.  Accordingly, the court held that where a named insured gives permission to another to operate the insured vehicle, insurance coverage ought not depend on whether or not the operator is violating the conditions placed upon his use.

Jeanelle R. Lust

knudsenlaw.com

September 29th, 2008|Uncategorized|