
    Paul B. SIMMS, v. Jason BUTLER, Newton Moore, Illinois Institute of Technology, The Hartford Insurance Company, Alamo Rent-A-Car, Inc., GAB Business Services, Inc., State Farm Mutual Automobile Insurance Company, and XYZ Insurance Company.
    No. 96-CA-0978.
    Court of Appeal of Louisiana, Fourth Circuit.
    Dec. 27, 1996.
    Rehearing Denied Jan. 16, 1997.
    
      Donovan & Lawler, James F. Ryan, Me-tairie, for Defendant/Appellant, Allstate Insurance Company.
    Wayne William Yuspeh, A Professional Law Corporation, Metairie, for Plaintiff/Ap-pellee.
    Before BARRY and LOBRANO, JJ., and JAMES C. GULOTTA, J. Pro Tern.
   | JAMES C. GULOTTA, Judge Pro Tern.

Defendant, Allstate Insurance Company, appeals the trial court’s judgment finding coverage under Allstate’s policy and awarding plaintiff policy limits. We affirm.

FACTS

The stipulated and uncontested facts are as follows:

Defendant Newton Moore rented an automobile from Alamo Rent A Car on October 10, 1990. Pursuant to the rental agreement, Moore, as the only designated driver, received liability insurance coverage of $10,000 per person and a total limit qf $20,000 per accident. At the time of the rental, Moore was an employee of the Illinois Institute of Technology, which had a policy of business auto insurance through Hartford Fire Insurance Company.

Defendant Jason Butler, a student at the Institute and a resident of New Orleans, was assisting Moore in the recruitment of students to attend the Institute. Consistent with that purpose, Butler was driving the rental car with the permission of Moore; however, Butler was not a party to the rental agreement between Moore and Alamo and was not listed as an authorized driver in the rental agreement. On October 10, 1990 while driving to pickup Moore at his hotel, Butler was involved in an automobile accident. The rental car driven by Butler rear-ended plaintiffs vehicle causing plaintiffs injury. At the time of the accident Butler was living with and was a resident of his parents’ home.

laAHstate had issued a personal automobile insurance policy to Butler’s parents providing liability coverage for injury in the amount of $10,000 per person and $20,000 per accident. According to the terms of Jason Butler’s parents’ Allstate policy, Jason was an insured driver and was driving a nonowned automobile. Under the Allstate policy terms a non-owned auto used by a resident relative of the named insured is covered if that resident relative has the “owner’s” permission to drive the non-owned automobile.

The primary issue in this appeal is whether a liability insurer (Allstate) is liable for damages caused by its insured where the owner of a rented vehicle (Alamo) did not give the driver (the insured Butler) permission to drive the vehicle and where the renter (Moore) did not list Butler as an authorized, additional driver on the rental contract but did give Butler permission to use the vehicle.

In seeking to support its position that no coverage exists under its policy, Allstate claims that under the terms of the Alamo rental agreement, Alamo (owner) did not authorize Butler to drive the automobile. Accordingly, because Butler had no permission to drive a non-owned vehicle (under lüAllstate’s policy) no coverage of its insured, Butler, exists.

Allstate further points out that under the Alamo rental agreement Moore could have designated an additional driver and could have paid an additional charge if he wished to permit Butler to drive the rented automobile. Allstate argues since Moore did not avail himself of this provision in the rental agreement, then no additional renters were authorized to drive the vehicle.

Allstate further argues that because the Alamo vehicle was not an “insured auto” under the provisions of Allstate’s policy, (since the owner’s permission was not given) no coverage exists. Allstate relies on the following provision in then* policy:

Insured Autos
(4) A non-owned auto used by you or a resident relative with the owner’s permission. This auto must not be available or furnished for the regular use of an insured person.
We reject these contentions.

At the outset, it is clear that coverage exists or does not exist based on the policy provisions in the Allstate policy. But, Allstate is basing its contention on a reading together of the Allstate policy and the Alamo rental agreement. This claim is not between the plaintiff and Alamo, the rental agency. This suit is directed against the liability insurer of Butler. The contractual arrangements between Alamo and Moore have no import in a claim by plaintiff against Butler, the resident son of the named insured. No privity of contract exists between Simms and Alamo, Butler and Alamo or Moore and Simms.

Allstate’s argument may have merit were this a suit by the plaintiff directed against the rental agency. In that case, the issue of the rental agency’s | .¡permission or authorization to drive would be germane to coverage. However, this is a suit between the plaintiff and Allstate, Butler’s insurer. The question here is whether Moore, the renter of the vehicle, who had control and dominion over the automobile, gave his permission, express or implied, to Butler. In the instant case, Moore, in a suit against Allstate, but not against Alamo, stands in the place of the owner, Alamo. Defendants’ contentions seeking exoneration from liability are misdirected.

We conclude the trial judge properly found that Allstate’s liability coverage extends to the driver, Jason Butler. Our holding is consistent with the statutory scheme of the omnibus clause as provided in La. R.S. 32:900(B)(2).

It is clear that the purpose of the clause in the Allstate policy which comports with the statute, is to protect the named insured and the public generally. It is designed to extend liability insurance coverage to persons, other than the insured, who have the insured’s permission to use the vehicle. Permission may be express or implied. In the instant case if indeed no express permission was given, certainly implied permission was authorized.

In a time honored case of Parks v. Hall, 189 La. 849, 181 So. 191 (1938), and in subsequent consistent jurisprudence, the Louisiana Supreme Court has repeatedly construed the word “permission” in the omnibus clause in |5its broadest possible sense. “Permission” is given a wide and liberal meaning in determining coverage. See Norton v. Lewis, 623 So.2d 874, 875 (La.1993).

The two cases cited by Allstate are distinguishable from the instant matter. In ASWE Corp. v. Sawyer, 619 So.2d 172 (La. App. 3rd Cir.l993) the rental company brought suit against the driver’s automobile liability insurer to recover for damages to its rental car. The driver was not a party to the rental agreement and did not have the owner’s permission. The court found there was no coverage under the driver’s policy because of an exclusionary provision found in the policy. The court then added dicta which indicated there would be no- coverage because the driver’s policy required permission from the owner. It is important to note that in ASWE the court was concerned with a rental company trying to recoup damages to its vehicle, while in the instant matter plaintiff is seeking damages for injuries suffered by him and caused by the insured under a personal liability policy. In this part of the cause, unlike ASWE, the rental agency is neither a plaintiff nor a defendant. The rental agency is not involved in this appeal.

In the second case relied upon by Allstate, Veillon v. Urban, IV, 614 So.2d 238 (La.App. 3rd Cir.1993), the plaintiff sued the rental company and its automobile insurer. The rental agreement in that case specifically prohibited anyone other than the lessee from driving the rental car. The plaintiff was injured when someone other than the lessee was driving the car. In Veillon suit was directed against the rental company’s auto insurer based on the rental company not giving its permission. Again, in the instant matter the suit is not against the rental company and its insurer but rather the driver of the vehicle (Butler) and his insurer (Allstate).

IsAccordingly, we find no error in the trial court’s determination that liability coverage exists on the part of Allstate Insurance Company.

Turning now to other issues in the instant case, Allstate claims, alternatively, that if coverage is found to exist on its part, that coverage should be secondary to primary coverage provided by Hartford Fire Insurance. According to Allstate, Hartford is the liability insurer of Illinois Institute of Technology. Because Moore and Butler were working on behalf of the Institute at the time of the accident, Allstate claims that liability attaches to the Institute’s employees’ negligence and the damages caused by that negligence. Allstate points out that this is a business auto coverage policy covering employees and that Butler, at the time of the accident, was an employee of the Institute. Allstate further claims the Hartford policy provides that coverage is primary for any liability assumed under the policy where an employee rents or leases an auto in connection with the insured’s business.

An examination of the Hartford policy clearly states that coverage is provided for the actions of the Institute’s employees. It was stipulated in the record that Moore was indeed an employee; however no stipulation was made that Butler was an employee of the institute, Hartford’s insured. It was stipulated that Butler was a student of the' Institute. Because no evidence appears in the record showing that indeed Butler was an employee, it is difficult |7to find that Hartford’s policy covering the Institute’s employees somehow covers Butler.

Under these circumstances, having concluded that Hartford’s policy is not applicable and the trial judge properly found coverage on the part of Allstate, we affirm the judgment of the trial court.

AFFIRMED.

BARRY, J., dissents with reasons.

| xBARRY, Judge,

dissenting with reasons.

The majority holds that an unauthorized driver of a rental car is covered under that driver’s liability policy issued by Allstate. The policy protects an insured person in connection with the use of an insured auto, which is defined in pertinent part as a non-owned vehicle used with the owner’s permission.

The majority interprets “owner’s permission” with reference to the omnibus provisions of the Louisiana Motor Vehicle Safety Responsibility Law, La. R.S. 32:851 et seq., relying upon the interpretation and underlying purpose of La. R.S. 32:900 (B)(2). In doing so, the majority does not distinguish between coverage under an operator’s policy, La. R.S. 32:900 (C), and the omnibus coverage mandated in La. R.S. 32:900(B)(2).

La. R.S. 32:900 provides in pertinent part:
A. A “Motor Vehicle Liability Policy” as said term is used in this Chapter, shall mean an owner’s or an operator’s policy of liability insurance, certified as^provided in R.S. 32:898 or 32:900 as proof of financial responsibility, and issued except as otherwise provided in R.S. 32:899, by an insurance carrier duly authorized to transact business in this state, to or for the benefit of the person named therein as insured.
B. Such owner’s policy of liability insurance: ...
(2) Shall insure the person named therein and any other person, as insured, using any such motor vehicle or motor vehicles with the express or implied permission of such named insured against loss from the liability imposed by law for damages arising out of the ownership, maintenance, or use of such motor vehicle or motor vehicles..., subject to limits [as enumerated in this Section]....
(C) Such operator’s policy of liability insurance shall insure the person named as insured therein against loss from the liability imposed upon him by law for damages arising out of the use by him of any motor vehicle not owned by him, within the same territorial limits and subject to the same limits of liability as are set forth above with respect to an owner’s policy of liability insurance.

An omnibus clause expands the term “insured” to include as an insured any other person using the vehicle with the permission or consent of the named insured. Hearty v. Hams, 574 So.2d 1234, 1238 (La.1991); Mercadel v. Tran, 92-0798 (La. App. 4th Cir. 3/29/94), 635 So.2d 438, 440. The omnibus provision of the Louisiana Motor Vehicle Safety Responsibility Law is § 900 (B), not § 900 (C). See Hearty v. Harris, 574 So.2d at 1240 n. 19, stating: “We add that unlike La. R.S. 32:900(B), which requires omnibus coverage in ‘owner’s’ policies, La. R.S. 32:900(0, dealing with ‘operator’s’ policies, does not refer to or require omnibus coverage.”

Therefore, although the interpretation of “permission” under omnibus coverage might be persuasive, I think the majority errs by equating Allstate’s provision for a non-owned vehicle with omnibus coverage under an owner’s liability policy.

Analogy to the omnibus provision does not necessarily support the majority’s Igconclusion.

“Permission” in an omnibus clause is broadly construed to further the policy of compensating and protecting innocent accident victims. Norton v. Lewis, 623 So.2d 874, 875 (La.1993). For instance, courts have repeatedly applied the “initial permission” rule:

Once permission, whether express or implied, to use a motor vehicle is established it is given a wide and liberal meaning in determining coverage. So long as the initial use of the vehicle is with the consent, express or implied, of the insured, any subsequent changes in the character or scope of the use do not require additional specific consent of the insured; coverage will be precluded only where the deviation from the use consented to amounts to theft or other conduct displaying utter disregard for the return or safekeeping of the vehicle.

Id.

“Permission” is not so broad as to “second permittees”, where permission given to one person does not necessarily give that person authority to allow another to drive. The rule as to second permittees seems more analogous to this case than does the initial permission rule.

To have coverage under the omnibus clause, the driver of the vehicle must have the permission of the named insured. ... Permission of the named insured may be implied, depending on the facts and circumstances of the particular case. The question of implied permission is determined by whether it was reasonably foreseeable that the first permittee would allow someone else to drive the automobile.
... Where the named insured gives permission to another to use the car as his own, the possibility that the permittee might allow another to drive the car is clearly foreseeable. ... Thus, .. .the courts have generally determined the issue of implied permission (at least in cases where there is no specific prohibition by the named insured against letting others drive the vehicle) by inquiring whether it was reasonably foreseeable that the first permittee would allow others to operate the automobile. ...
Where there is a restriction by the named insured against the first permittee allowing others to drive, implied permission generally is not found to exist....

_|⅜Perkins v. McDow, 615 So.2d 312, 315-16 (La.1993). Perkins held that when the named insured gives general and regular use of an automobile to an adult child living in the household, the use of that automobile by the permittee of the child is reasonably foreseeable and deemed to be with the permission of the named insured. Id. at 317.

The non-owned vehicle provision of the Allstate policy requires the owner’s permission. Because Alamo is the owner of the car, the rental agreement between Alamo and Moore is relevant to the scope of Moore’s permitted use under that agreement, and relevant to whether it was reasonably foreseeable that Moore would allow another person to drive. Moore was the only authorized driver.

Plaintiff Simms argues that Allstate must provide coverage to Butler (its insured) “for damages arising out of the use by him of any motor vehicle not owned by him. ” La. R.S. 32:900 (C). Very few cases cite § 900 (C) (six cite § 900 (C) in majority or dissenting-opinions), and none prohibit the insurer from requiring the owner’s permission as a condition to coverage of a non-owned vehicle. For example, Martin v. Willis, 584 So.2d 1192 (La.App. 2d Cir.1991), writ den. 590 So.2d 589 (La.1992), considered whether there was coverage where the named insured was driving a non-owned car with the owner’s permission under § 900 (C). Because the policy excluded coverage for damages while driving a car owned by or furnished for the regular use of the insured or a resident member of the family, and the car was owned by the insured’s son who was a resident of the household, Martin upheld the exclusion.

The ease is significant because the court did not strike the non-owned vehicle provision, although it required the owner’s permission.

Hearty v. Harris, 574 So.2d at 1240 indicates that the operator of a vehicle is not necessarily required to purchase coverage under § 900 (C).

IsProof of financial responsibility is required of operators [as opposed to owners] only if a judgment against them arising out of a previous accident is unsatisfied or if they have been convicted of violating one of certain named offenses. [La. R.S. 32:871 et seq.] Thus, unless an insured operator has by previous conduct brought himself within the purview of the LMVSRL [Louisiana Motor, Vehicle Safety Responsibility Law], he is not required to carry liability insurance, nor does any voluntary “automobile liability policy” which he may choose to purchase have to contain particular provisions required by La. R.S. 32:900.

Thus, § 900 (C) does not mandate unrestricted coverage to an insured while driving a non-owned vehicle without the owner’s permission.

I respectfully dissent. 
      
      . The Allstate automobile policy provides, in pertinent parts:
      
        Insured Persons — (2) While using a non-owned auto: (a) you, (b) any resident relative using a four wheel private passenger auto or utility auto.
      
        Insured Autos — (4) A non-owned auto used by you or a resident relative with the owner’s permission. This auto must not be available or furnished for the regular use of an insured person.
     
      
      . Simms settled with all defendants, reserving his rights against Allstate.
     
      
      . Allstate relies upon the following provision of Alamo's rental agreement which describes "authorized drivers” as: "Unless otherwise defined by state law, I am the authorized driver, and an additional driver is authorized only if I pay an additional charge and that person is a licensed driver over 21 years old. I am responsible for any losses or damages caused by any additional driver, where permitted.”
     
      
      .LSA R.S. 32:900(B)(2) provides in pertinent parts:
      Such owner's policy of liability insurance:
      (2) Shall insure the person named therein and any other person, as insured, using any such motor vehicle or motor vehicles with the express or implied permission of such named insured against loss from the liability imposed by law for damages arising out of the ownership, maintenance, or use of such motor vehicle or motor vehicles within the United States of America or Dominion of Canada, subject to limits....
     
      
      . See Mercadel v. Tran, 92-0798 (La.App. 4th Cir. 3/29/94), 635 So.2d 438; Williams v. Forbes, 94-640 (La.App. 5th Cir. 1/18/95), 650 So.2d 337.
     
      
      . The Hartford Fire Insurance Company’s policy provides in pertinent part:
      Business Auto Coverage Form — Commercial Auto
      Section IV.B.5. Other Insurance ....(a) For any covered "auto" you don’t own, the insurance provided by this Coverage Form is excess over any other collectible insurance ... (b) Regardless of the provisions of paragraph a. above, this Coverage Form's Liability Coverage is primary for any liábility assumed under an "insured contract.”
      Section V. Definitions ... (E) "Insured contract” means:.... 6.That part of any contract or agreement entered into, as part of your business, by you or any of your employees pertaining to the rental or lease of any "auto."
     
      
      . The pertinent provision of the Allstate policy only insures a non-owned auto if the insured uses it with the owner’s permission. The policy
      protects an insured person from claims for accidents arising out of the ownership, maintenance or use, loading or unloading of an insured auto.
      "Insured Persons” includes:
      (2) While using a non-owned auto: (a) you, (b) any resident relative using a four wheel private passenger auto or utility auto.
      "Insured Autos” includes:
      (4) A non-owned auto used by you or a resident relative with the owner's permission.... [Emphasis added.]
     