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In reluctantly affirming a trial judge's ruling that an employee was covered under his employer's insurance policy for an accident he got into while using his own vehicle for a company errand, the Pennsylvania Superior Court said it was constrained by its own precedent to disregard an analysis of whether the vehicle was "'borrowed'" by the employer and therefore excluded from coverage.

In a nonprecedential March 3 opinion in Olson v. State Auto Property and Casualty Insurance, a three-judge appeals panel upheld a Beaver County trial court's ruling that Michael Sayre, a defendant in a motor vehicle accident case brought by plaintiffs Donna and Dennis Olson, was covered under his employer International Titanium Corp.'s policy with State Auto Property and Casualty Insurance Co.

Donna Olson alleged she was injured in an auto accident with Sayre while Sayre was using his own vehicle to pick up mail for International, where he worked as general manager, according to the opinion by Judge Judith Ference Olson.

Both Olson and Sayre argued that, because Sayre was using his own vehicle in the course of his employment, Sayre should be covered under International's policy and then-Beaver County Court of Common Pleas Judge Deborah Kunselman (now a Superior Court judge) agreed.

Olson, joined by Judges Jacqueline Shogan and Kate Ford Elliott, said the question of whether Sayre was covered under International's policy hinged on whether Sayre's vehicle was "'borrowed'" by International under the policy terms.

Olson pointed to Section II(A)(1) of the State Auto policy, which states that, in addition to the policyholder, "insureds" include "anyone else while using with your permission a covered 'auto' you own, hire or borrow except: … 2) Your employee if the covered 'auto' is owned by that employee or a member of his or her household."

The policy does not define "borrow," but Merriam-Webster defines "borrow" to mean "'to receive with the implied or expressed intention of returning the same or an equivalent'" and Black's Law Dictionary defines it as "'tak[ing] something for temporary use,'" Olson said.

Olson said the record reflects that Sayre often used his work vehicle to run company errands.

"Notably, Sayre also testified that, when he performed such duties, he would submit 'receipts for gas and some repairs to his vehicle' and would, in turn, be 'reimbursed by [International],'" Olson noted. "When considering these facts, it is relatively clear that, at the time of the accident, International temporarily utilized Sayre's vehicle with the implied intention of returning it."

Olson said that, under similar circumstances, courts in Iowa, New Jersey and California have all reached the conclusion that an employee's vehicle was "borrowed" for the purposes of determining coverage.

"Notwithstanding legal precedents applying the common definition of 'borrow,' the trial court held that 'Sayre's automobile was not a borrowed vehicle at the time of the accident,'" Olson said of Kunselman's ruling. "In reaching this conclusion, the court apparently rejected the notion that an employee can 'borrow' his own vehicle. We note, however, that this determination is at odds with the aforementioned case law applying the definition of 'borrow' to similar facts. Indeed, the fact that International reimbursed Sayre for gas and vehicle repairs strongly suggests that International 'borrowed' Sayre's vehicle when he used it for company errands."

Regardless, however, Olson said the panel was bound to affirm Kunselman's opinion by another Superior Court panel's 1996 ruling in Bamber v. Lumbermens Mutual Casualty.

In that case, the panel examined a policy that was nearly identical to the one at issue in Sayre's case, Olson said. But the Bamber court, in finding that a U.S. Chamber of Commerce employee was entitled to coverage under his employer's policy, relied entirely on the provision that defined covered "nonowned 'autos'" as "only those 'autos' you do not own, lease, hire, rent or borrow that are used in connection with your business. This includes 'autos' owned by your employees or partners or members of their households but only while used in your business or your personal affairs."

The Bamber court failed to engage in any analysis of whether the employee's vehicle was owned, leased or borrowed by the employer, Olson said. If it had, it may have concluded that the employee was not covered under the policy.

"Pursuant to Bamber, an employee using his or her own vehicle during the course and scope of employment is using a 'covered auto' and is an 'insured,'" Olson said. "We have serious misgivings about Bamber's interpretation of the Chamber's policy and its application thereof."

Nevertheless, Olson conceded that the panel in Sayre was bound by the Bamber decision until the Superior Court decides to grant en banc review of the issue.

Counsel for State Auto and International, Eric Anderson of Meyer, Darragh, Buckler, Bebenek & Eck, in Pittsburgh, said in an email, "It is apparent form a reading of the Superior Court's opinion that the panel agreed with the position I argued in the trial court, but to which the trial court disagreed. However, as you notice from the Superior Court's opinion, it decided that it could not overrule another panel's prior decision even though it felt that the prior panel's decision may be erroneous. The Superior Court subtly suggested that the appellant, State Auto, file a petition for reargument before the Superior Court en banc, which has been done."

Counsel for Sayre, Robert O'Connell of Robb Leonard Mulvihill in Pittsburgh, and counsel for the Olsons, Kenneth Fawcett of Bowers Fawcett & Hurst in Ambridge, could not be reached for comment.