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Court Determines Employer’s Insurance Contract Covered Employee’s Drunk Driving Accident

Posted in Firm News

In a recent appellate decision, a court held that an employer’s insurance contract covered an accident that was caused by an employee of the company who was drinking and driving. The case illustrates important concepts regarding insurance coverage that are frequently implicated in New Mexico truck accidents.

The Facts of the Case

The plaintiff was injured when he was rear-ended by the defendant while waiting at a traffic light. After the accident, the defendant admitted to police that he had consumed several drinks and was under the influence of alcohol.

At the time of the collision, the defendant was driving a vehicle that was owned by his employer. The employer provided the vehicle to the defendant for the defendant’s use while at home as well as when the defendant was traveling for work. This accident took place on a work trip but not while the defendant was working.

The defendant’s employer had a strict set of rules and regulations regarding the local use of company vehicles; that said, there were not rules set forth for use of the vehicle when the defendant was traveling. There was, however, a broad prohibition that employees were not allowed to drink alcohol on the job or while operating company vehicles or machinery.

The plaintiff filed a personal injury lawsuit against the defendant, and was successful in obtaining a judgment of nearly $1.5 million. After the plaintiff was unable to recover the judgment from the defendant, he sought to hold the employer’s insurance company liable for the award amount. The insurance policy provided coverage for “permissive users” of company vehicles.

The insurance company claimed that it was not liable for the verdict against the defendant because, at the time of the collision, the defendant was not a “permissive user” as defined in the insurance policy. The insurance company argued that the employer’s policy prohibiting drinking while operating company machinery meant that when the defendant was drinking while using the vehicle, he was doing so without the company’s permission.

The Court’s Decision

The court rejected the insurance company’s argument and determined that it was liable for the damages award owed to the plaintiff. The court explained that when it comes to determining whether a driver is a permissive user, the focus of the inquiry should be on the use of the vehicle, and not on how the vehicle was operated. The court clarified that “when use has been permitted, it is immaterial how the vehicle was operated.”

Here, the court noted that the defendant was given “broad, almost unfettered” permission to use the vehicle while traveling for work. Thus, the fact that he was operating the vehicle while intoxicated did not revoke the general permission granted to him by his employer to use the vehicle.

Have You Been Injured in a New Mexico Truck Accident?

If you or a loved one has recently been injured in a New Mexico truck accident, you may be entitled to monetary compensation. The dedicated New Mexico injury lawyers at the Fine Law Firm have extensive experience representing injury victims in all types of New Mexico car accident claims, including those involving difficult insurance companies. To learn more, and to discuss your case with a dedicated New Mexico personal injury attorney, call 505-889-FINE today.

More Blog Posts:

New Mexico Train Accidents Are More Common than Most Motorists Realize, New Mexico Personal Injury Lawyer Blog, August 6, 2018.

Hydroplaning in New Mexico: What is it and How Does it Occur?, New Mexico Personal Injury Lawyer Blog, July 18, 2018.