City of San Buenaventura v. Allianz Insurance

Police from the City of San Buenaventura (City) arrest the driver of a van for driving under the influence. The police call the van’s owner, who authorizes the passenger to take the van. The police release the van to the passenger who drives away and gets in an accident, injuring a third party. The victim sues the City, claiming the police were negligent in allowing the passenger to drive the van.

Is the City covered under the van owner’s insurance policy? No. We affirm the trial court’s decision that the City is not covered and that neither the “permissive use” provision nor the “legally responsible for the use” provision of the policy applies.

Facts

The Allianz Insurance Company issued a “Business Auto Policy” to M.G. Poulos for his van. On January 29, 1982, Poulos loaned his van to Steven Rodriguez. Rodriguez was driving the van and Steven Lomelin was a passenger when the van was involved in an accident. The police arrested Rodriguez for driving while intoxicated.

Police officers telephoned Poulos to find out whether Rodriguez was driving the van with permission, and whether Poulos would approve of them turning the van over to Lomelin. Poulos told them that…