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HomeMy WebLinkAbout93-0186 Civil ERIE INSURANCE EXCHANGE, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA : v. : CIVIL ACTION - LAW : KATHY A. EDWARDS, DANNY LEE : EDWARDS, C.W. FRITZ COMPANy, : INC. and DONNA M. CHURCH, : Defendants : NO. 186 CIVIL 1993 IN RE: MOTIONS OF PLAINTIFF ERIE INSURANCE EXCHANGE AND DE~NDANT C.W. FRITZ COMPANY, INC., FOR POST-TRIAL RELIE~' BEFORE HOFFER and OLER, JJ. ORDER OF COURT AND NOW, this ~day of April, 1994, upon consideration of the motions of Plaintiff Erie Insurance Exchange and Defendant C.W. Fritz Company, Inc., for post-trial relief, the motions are DENIED for the reasons stated in the accompanying Opinion, and the Order of Court previously entered is made a final Order. BY THE COURT, Wesley Ole~ Jr.,- 3.' Harvey Freedenberg, Esq. Carol A. Steinour, Esq. 100 Pine Street P.O. Box 1166 Harrisburg, PA 17108-1166 Attorneys for Plaintiff Thomas J. Williams, Esq. William D. Powell, Esq. Ten East High Street Carlisle, PA 17013 Attorneys for Defendants Kathy A. Edwards and Danny Lee Edwards Pamela S. Parascandola, Esq. 2931 North Front Street Harrisburg, PA 17110 Attorney for Defendant C.W. Fritz Company, Inc. William A. Addams, Esq. 28 South Pitt Street P.O. Box 208 Carlisle, PA 17013 Attorney for Defendant Donna M. Church :rc ERIE INSURANCE EXCHANGE, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA v. : CIVIL ACTION - LAW : KATHY A. EDWARDS, DANNY LEE : EDWARDS, C.W. FRITZ COMPANY, : INC. and DONNA M. CHURCH, : Defendants : NO. 186 CIVIL 1993 IN RE: MOTIONS OF PLAINTIFF ERIE INSURANCE EXCHANGE AND DEFENDANT C.W. FRITZ COMPANY, INC., FOR POST-TRIAL RELIEF BEFORE HOFFER and OLER, JJ. OPINION and ORDER OF COURT Oler, J. This is a declaratory judgment action brought by an automobile insurance company to determine the absence of liability coverage, and a duty to defend, with respect to a certain accident involving one of its insureds. Following a two-day bench trial in December of 1993, the Court found against the insurance company. Post-trial motions were filed in opposition to the adjudication and have been briefed and argued before the Court en banc. For the reasons stated in this Opinion, the motions will be denied. Statement of Facts 1 On Saturday, April 22, 1989, at 11:30 p.m., one Danny Lee Edwards was driving a motor vehicle in the Borough of Carlisle, Cumberland County, Pennsylvania,2 when he hit a pedestrian.~ At the ~ N.T. Vol. I, at 69-70, Eric Ins. Exchange v. Edwards et al., 186 Civil 1993 (hereinafter N.T. Vol. , at __). 2 N.T. Vol. I, at 9. 3 N.T. Vol. I, at 9; Plaintiff's Exhibit 3, Erie Ins. Exchange v. Edwards et al. (hereinafter Plaintiff's Exhibit 3). No. 186 CIVIL 1993 time, he was visibly intoxicated4 and unfit to drive.5 Chemical tests of his blood following the accident yielded results of .14% and .15%, and he was charged by Carlisle police with driving under the influence.6 Mr. Edwards was an insured under his wife's automobile insurance policy, issued by Plaintiff Erie.7 He was driving a van owned by his employer, C.W. Fritz Company, Inc.,8 but was not engaged in company business at the time of the accident.9 The Erie automobile insurance policy sub judice provided for liability protection to Mr. Edwards in connection with such an accident, unless at the time (a) he was operating the vehicle without the permission of the owner and (b) he was operating the N.T. vol. I, at 10. N.T. Vol. II, at 29-30. N.T. Vol. I, at 14, 105. Mr. Edwards initially denied being involved in the accident, then admitted it. N.T. Vol. I, at 13. He may also have been charged with hit-and-run. See Plaintiff's Exhibit 3. 7 This policy was not made an exhibit at trial. However, no party appears to dispute that a copy of it is appended to Plaintiff's Complaint as Exhibit B. With respect to Mr. Edwards' being an insured under the policy, see definitions of "you, .... your" and "named Insured" on page 4 of the policy. Plaintiff's Complaint, Exhibit B, at 4. (hereinafter Plaintiff's Complaint, Exhibit B, at ~). 8 Plaintiff's Exhibit 3. 9 N.T. Vol. I, at 97. 2 No. 186 CIVIL 1993 vehicle without a reasonable belief that he had the permission of the owner.~° Plaintiff's position that the policy did not cover Mr. Edwards with respect to this accident was based upon the premise that he was not driving with the owner's permission and that he did not reasonably believe he had such permission. At the commencement of trial, the Court noted that an issue might exist as to the burden of proof.~ While inclining toward the belief that Plaintiff insurer bore the burden with respect to what appeared to be an exclusionary provision in the policy, the Court advised both sides to proceed as though they had the burden.~2 Plaintiff presented its witnesses first.TM At trial, Plaintiff established that an employee handbook of C.W. Fritz Company, Inc., included these provisions: ALCOHOL/DRUGS ON THE JOB The use of any non-prescription drug, or alcoholic beverages during working hours or on ~0 The policy provided, in part, under "Non-Owned Autos We Insure," within a section headed "Autos We Insure," as follows: We insure for Liability Protection while you are using it, any auto or trailer not owned by you . Your operation or other use must be with [~ permission of the owner or you must reasonably believe you have permission .... Plaintiff's Complaint, Exhibit B, at 5 (bold in original). N.T. Vol. I, at 7. N.T. Vol. I, at 7. N.T. Vol. I, at 7-8. 3 No. 186 CIVIL 1993 Company premises at any time, is strictly prohibited. Any employee found to be under the influence of alcohol or illegally obtained drugs while on the job, or while operating a Company owned vehicle will be terminated. Due to insurance regulations no alcoholic beverages will be supplied by the Company for any Company sponsored function. COMPANY OWNED VEHICLES · .. Vehicles may only be used for transportation to work related duties. They are not to be used for personal errands .... ~4 Plaintiff also established that following the accident Mr. Edwards had told his employer that he should not have been driving the van at the time of the accident,~s had signed a statement for the employer's insurance company that he did not have permission to drive the van,~6 and had given deposition testimony that he understood as of the time of the accident that he was not to drive a Fritz vehicle while under the influence of alcohol.~7 Mr. Edwards, who was initially called as a witness for the Plaintiff,~8 testified that in speaking with his employer and his employer's insurance carrier following the accident he was Plaintiff's Exhibit 2, at 8-9. N.T. Vol. I, at 47. Plaintiff's Exhibit 3; N.T. Vol. II, at 109. N.T. Vol. II, at 14. N.T. Vol. I, at 67-113, Vol. II, at 3-19. 4 No. 186 CIVIL 1993 motivated in his remarks by a desire to retain his employment.~9 He also testified that his answers to the carrier and in deposition testimony with respect to his right to use the vehicle were based on the policy set forth in the handbook,2° as opposed to the company's actual practice.2~ With respect to the company's actual practice as to vehicles which it owned, and with respect to its entrustment of a vehicle to Mr. Edwards in particular, considerable evidence was presented. Mr. Edwards, as Plaintiff's witness, testified that he was employed as a plumber for the Fritz company from 1985 through 1989,22 that in 1989 he was given a Fritz Chevrolet van to drive home on the evenings and on weekends,23 that he was involved in an accident while using the van on the evening of April 22, 1989,24 and that he had been sued as a result of the accident.2s He stated that he was aware of the written policies of the employee handbook regarding alcohol and vehicles.26 N.T. Vol. II, at 51. N.T. Vol. II, at 50. N.T. Vol. II, at 50. N.T. Vol. I, at 67. N.T. Vol. I, at 68. N.T. Vol. I, at 69. N.T. Vol. I, at 69. N.T. Vol. I, at 71. 5 No. 186 CIVIL 1993 He testified that notwithstanding the provisions of the handbook he was told by his immediate supervisor and by the company vice-president that he should use his own judgment with regard to personal use of the vehicle entrusted to him.27 He stated that he was given to understand that such use was within his discretion.28 He said that when he drove on April 22 he did not believe he was intoxicated.29 When asked by Plaintiff's counsel whether he was aware that on occasion there was consumption of alcohol on company .... 30 and he stated that employees were in premises, he replied, Yes, fact getting drunk.3~ He testified that in 1988, prior to the accident in question, he himself had been charged with driving under the influence.32 This charge, according to his testimony, had resulted in his · 33 placement in an A R.D. program, a 30-day suspension of his license,34 and the presence of a Guardian Interlock device in his N.T. Vol. I, at 73-74. N.T. Vol. I, at 74. N.T. Vol. I, at 102. 30 N.T. Vol. I, at 80. N.T. Vol. I, at 80. N.T. Vol. I, at 88. N.T. Vol. I, at 88. N.T. Vol. I, at 90. 6 No. 186 CIVIL 1993 personal vehicle at the time of the 1989 accident.3s An attempt by his employer to prevent such consequences of the earlier incident by retaining an attorney for him had been unsuccessful.36 Mr. Edwards testified that at the time of the 1989 accident his wife's car had broken down in Carlisle.37 He stated that around 11:00 p.m. on that day he left home in the Fritz van with the intention of repairing the car;38 he chose the van for the ten- minute ride to Carlisle, he said, because his tools and equipment were kept in it39 and because operation of his personal vehicle might have been frustrated by the Interlock's detection of alcohol on his breath.4° If the repair proved a success, it was his plan to return home with his wife's car, leaving the van in town overnight, he said.4~ Allowing a company vehicle to remain in town overnight was a practice, according to his testimony, which he and others had engaged in "more than once.''42 35 N.T. Vol. I, at 89. 36 N.T. Vol. I, at 43-45 (testimony of another witness called by Plaintiff). N.T. Vol. I, at 92, 94, 97. N.T. Vol. I, at 97. N.T. Vol. I, at 101. N.T. Vol. I, at 102. N.T. Vol. I, at 98. N.T. Vol. I, at 99. 7 No. 186 CIVIL 1993 A second witness presented by Plaintiff, John R. Russell, formerly vice-president of C.W. Fritz Company, Inc.,43 testified that, notwithstanding the policy of the handbook against personal use of company vehicles by employees, "enforcement of that policy was very lax, and the company was very liberal in the use of the vehicles.''44 He testified further: If your car was tied up, your vehicle was tied up or something like that, they really didn't draw a fine line on that.4s Mr. Russell engaged in the following colloquy on cross- examination on the subject of drinking and operation of company vehicles: Q Mr. Edwards had a company van that he used and he took home and kept with him and everybody knew that. Right? A Yes, sir. Q And sometimes after work, somebody would bring a case of beer in, and everybody would sit around and drink a little and socialize; isn't that right? A That's correct .... Q And everybody else would drive home in their company vehicles? A That's right.46 N.T. Vol. I, at 15. N.T. Vol. I, at 26. N.T. Vol. I, at 26. N.T. Vol. I, at 23-24. 8 No. 186 CIVIL 1993 Mr. Russell was asked whether Fritz employees would sometimes go out to a bar after work. This colloquy ensued: A Yes, they would. Q Have a couple drinks. A Yes. Q And then drive the company cars. A Whatever vehicles that might be involved. Q And Mr. Edwards was part of that? A On occasion. Q And he would be driving a company van? A On occasion. Q Go to a bar with you and some other employees? A Yes. Q Have a couple drinks; is that right, sir? A That's correct. Q ... There was no prohibition about that, ... was there, sir? A No. No. 47 Plaintiff also called Robert K. Fritz, formerly a minority 48 shareholder in C.W. Fritz Company, Inc., a business owned 47 N.T. Vol. I, at 24-25. 48 N.T. Vol. I, at 33. 9 No. 186 CIVIL 1993 primarily by his father.49 Mr. Fritz testified, inter alia, that supervisors normally granted requests by nonmanagement employees to use company vehicles for personal purposes,so that where great distances were involved the employees would be expected to pay for gasoline,s~ that when the company attempted to stop drinking by employees on the premises it began getting reports that company vehicles were being seen at local drinking establishments,52 and that personal efforts by him to catch the drivers of such vehicles in the act failed,s3 He denied that there was any "fundamental" difference between actual company practice in regard to vehicles entrusted to employees and handbook policy,s4 With specific reference to the 1989 accident of Mr. Edwards while driving a company van on a personal errand after consuming alcohol, he testified that Mr. Edwards was not charged with unauthorized use,ss and indicated that he would not necessarily even have been dismissed had his blood alcohol level not been over the legal N.T. Vol. I, at 32. 50 N.T. Vol. I, at 37. N.T. Vol. I, at 37. N.T. Vol. I, at 38. N.T. Vol. I, at 39. N.T. Vol. I, at 58. N.T. Vol. I, at 66. 10 No. 186 CIVIL 1993 limit.56 On behalf of Defendant Danny Lee Edwards, Mr. Edwards himself testified that on April 22, 1989, he was living with his wife and two children in the vicinity of Carlisle,57 that his personal hand tools were kept in the van which the company entrusted to him,58 that he was the only person who used the van,TM and that he was at that time already under "A.R.D. probation" as a result of a prior driving under the influence arrest.68 He acknowledged, in retrospect, that he had a drinking problem in 1989.~ The chain of command above him, according to Mr. Edwards, was Jim Berry (immediate supervisor), Mr. Russell (vice-president), and Mr. Fritz (co-owner).62 He said that he was told by both Mr. Berry and Mr. Russell "that as far as my use of the vehicle, if I needed to use it, to use my own judgment; and that I would be able to use it for such items as errands that needed to be taken care of if I 56 N.T. Vol. I, at 65-66. In such an event, Mr. Fritz stated, "[W]e may have had some area for discussion." N.T. Vol. II, at 40. N.T. Vol. II, at 41. N.T. Vol. II, at 42. N.T. Vol. II, at 44. N.T. Vol. II, at 53-54. N.T. Vol. II, at 46-47. 11 No. 186 CIVIL 1993 needed it.''~3 When questioned about employee drinking and driving, he engaged in the following exchange: Q Mr. Edwards, did you drink at work with other employees of the Fritz Company at the place of employment? A At the place of employment, yes. Q This would be after the work was over for the day? A Yes. Q Tell the Court about that. A Numerous times -- I can recall two or three times a week we would run out and pick up a case of beer and be four or five of us sitting around after work, and we'd drink. And a couple times a fellow would be sent off to get a second case of beer. And some fellows would stay for one or two, maybe three and they would leave, they had things to do. Others of us, we just sat there and socialized. Some nights never left the office until 9:30, 10:00 at night. Q Among those people that stayed there and drank beer with you, would that include Mr. Russell? A Yes, it did. Q And Mr. Berry? A Yes, it did. Q Were there times when you stopped somewhere to drink off the company premises with other employees of C.W. Fritz? ~3 N.T. Vol. II, at 49. 12 No. 186 CIVIL 1993 A There was times that we would leave from the office at 9 and 10:00 at night and go to a bar after that, yes. Q And what vehicle were you driving? A My company van. Q And what vehicle were they driving, vehicles? A Their company vehicles.64 With respect to his statements to a representative of his employer's insurance company following the accident, Mr. Edwards noted that he did not write the document that he signed,6s and he said that the document consisted of answers he gave to oral questions that specifically related to what the handbook said.~6 The questions are not recorded in the document.~7 James B. Berry also testified on behalf of Mr. Edwards.68 He stated that he worked for the Fritz Company from 1975 or 1976 until 1990,~9 and that Mr. Edwards was under his supervision.7° With respect to the extent of authorization for use of the van which was 64 N.T. Vol. II, at 54-55. He also testified that drinking on the premises stopped "for a while" in 1988 after a crackdown. N.T. Vol. II, at 66. N.T. Vol. II, at 74. N.T. Vol. II, at 73. N.T. Vol. II, at 77-91. N.T. Vol. II, at 90. 70 N.T. Vol. II, at 77. 13 No. 186 CIVIL 1993 entrusted to Mr. Edwards, he testified as follows: There was no verbal agreement of any special use of it. The company handbook stated, as you know, no personal use and things. The company was very lax on, as to how that was handled. Guys would borrow vehicles to haul things from time to time or if they were at home and their car was parked in they might take the truck and go to the store. Things of that nature. The handbook was distributed to everybody, and everybody signed for the handbook that they read the book and understood it. But there was never anything that said that you can just use it for whatever you wanted to use it. Nobody came out and stated that, but there were cases where the people used the vehicle and there was no reprimand - nobody was reprimanded for using the vehicle for a private-use type of situation. Q Were people like Mr. Edwards expected to use their judgment in the personal use of the company vehicle? A If they would use it, I would say so, yes .... Q Would he be permitted to run it for an errand, such as from his house to a parking lot to get his car repaired? A I would say so, yes.TM Mr. Berry testified that employee use of company vehicles for personal errands was a matter of common knowledge and that management was aware of the practice.TM On the subject of employee drinking and driving, he engaged in the following exchange: 7~ N.T. Vol. II, at 77-78. 72 N.T. Vol. II, at 79-80. 14 No. 186 CIVIL 1993 Q And the handbook also says that you can't have a drink ... and drive a company vehicle. You're aware of that in the company handbook? A That is correct. Q And as far as the actual practice, what was it? A Ever since I was employed at C.W. Fritz company, everybody drank. We worked hard. We worked late sometimes, and we'd drink some beers after work. It was just -- it was - we all did it. It's 15 years, approximately, that I was with the company that we drank. It curtailed after Mr. Edward[s'] accident, greatly. But before that it was pretty much free running. Q And the people that you're referring to would all have company vehicles or the bulk of them? A I'd say 80 percent.TM Notwithstanding his awareness that Mr. Edwards was driving the company van after drinking, and notwithstanding Mr. Edwards' use of the van for personal errands, Mr. Berry testified, he did not reprimand him.TM His position, according to Mr. Berry, carried with it the authority to issue reprimands to employees in Mr. Edwards' capacity.7s Two witnesses were called on behalf of C.W. Fritz Company, Inc., which was a named defendant in the present declaratory N.T. Vol. II, at 80. N.T. Vol. II, at 81-82. N.T. Vol. II, at 82. 15 No. 186 CIVIL 1993 judgment action.TM Mr. Fritz, testifying in rebuttal,77 denied that drinking occurred on the premises, or that company vans were reported at bars, following the termination of Mr. Russell's employment with the company about ten or eleven months prior to the 1989 accident.TM He also testified that his conversation following the accident with Mr. Edwards was very short, "five minutes tops.-79 Susan J. Feliciano testified that she was employed by P.M.A. Insurance Company in May of 1989,80 that in the course of her employment she investigated the accident involving Mr. Edwards,8~ that she obtained a written statement from Mr. Edwards,82 and that the purpose of obtaining the statement "was to find out what happened the night of the accident from him.-83 She said that Mr. Edwards did most of the talking during the interview, and that she wrote his words down one sentence at a time, confirmed the 76 N.T. Vol. II, at 92-113. The other named defendants are Kathy and Danny Lee Edwards, and Donna M. Church, the injured pedestrian. Ms. Church presented no witnesses N.T Vol. II, at 91. ' ' N.T. Vol. II, at 91. N.T. Vol. II, at 92. N.T. Vol. II, at 94. N.T. Vol. II, at 96. N.T. Vol. II, at 96. N.T. Vol. II, at 96. N.T. Vol. II, at 96. 16 No. 186 CIVIL 1993 sentence, and then went on to the next sentence.84 She testified that the handbook was discussed -briefly,.Ss but said that Mr. Edwards never made "any distinction ... as to whether [his statement] was being given based upon an understanding of the handbook or any other understanding..86 On cross-examination, Ms. Feliciano agreed that "coverage issues were in [her] mind" when she interviewed Mr. Edwards,87 and that these related to whether his use of the vehicle was permissive.88 With regard to the handbook, this exchange occurred: Q ... Did you ask him what the policy of the Fritz Company was with regard to the personal use of company vehicles? A I don't know - we discussed the handbook. I don't know if I recall specifically asking him the words you used. Q Well, what do you specifically recall asking him regarding the use of the vehicles if you asked him anything? ' A I asked him if he was aware of the handbook, and what it contained regarding the use of company vehicles.89 Questions on cross-examination of Ms. Feliciano as to the N.T. Vol. II, at 100. N.T. Vol. II, at 102. N.T. Vol. II, at 104. N.T. Vol. II, at 109. N.T. Vol. II, at 109. N.T. Vol. II, at 107. 17 No. 186 CIVIL 1993 interest of her employer in the accident in question were strenuously objected to by counsel for C.W. Fritz Company, Inc., who had called her.9° The Court, observing that it did not "know how P.M.A. even fits into this case," and noting the relevance of evidence as to possible motive or bias on the part of the witness by virtue of her employer's interest, permitted elicitation of testimony that P.M.A., as insurer of C.W. Fritz Company, Inc., would be the primary carrier for this accident, that it was denying coverage, and that she so informed Mr. Edwards after conducting the interview.9~ ' At the conclusion of the trial, the Court issued this Order: AND NOW, this 16th day of December, 1993, upon consideration of the Plaintiff's complaint for declaratory judgment, and following a non-jury trial, the Court finds that Danny Lee Edwards was driving with the permission of the owner and reasonably believed that he had the permission of the owner92 at the time of the accident on April 22, 1989. Accordingly, the Court finds against Plaintiff, Erie Insurance Exchange, and DECLARES that coverage under the policy for Mr. Edwards with respect to the accident is not excluded by the policy's provision respecting non-owned vehicles driven without the permission of the owner and without a 90 N.T. Vol. II, at N.T. Vol. I, at 109. 9~ N.T. Vol. II, at 109-12. The questions were also supported as to relevancy by the fact that an issue as to when Mr. Edwards became aware that insurance coverage was being denied was earlier raised by Plaintiff's counsel. N.T. Vol. II, at 68-69. 92 Counsel for C.W. Fritz Company, Inc., had requested specific findings on these points. N.T. Vol. II, at 113. 18 No. 186 CIVIL 1993 reasonable belief in such permission.93 Motions for post-trial relief were filed on behalf of Plaintiff Erie Insurance Exchange and Defendant C.W. Fritz Company, Inc. In its brief on the post-trial motion, Plaintiff Erie argues that the Court's decision was "not adequately supported by the evidence"94 and, further, that the Court committed reversible error "in finding that Erie had the burden of proof-;9s the latter issue, however, does not appear in its post-trial motion. In its brief, Defendant Fritz argues that the Court "failed to properly apply the law, which requires mutual consent in order to find permission, to the clear and convincing evidence,', and committed reversible error "in permitting irrelevant and prejudicial testimony as to the liability coverage of Defendant C.W. Fritz.,,~ Statement of Law Several rules of court and principles of law are of assistance in resolving the motions for post-trial relief at issue herein. First, the doctrine of waiver applies to issues briefed but not 93 The date of the Order is erroneously stated therein as December 16, 1993. It was issued at the conclusion of the trial on December 17, 1993. , 94 Brief of Plaintiff Erie Insurance Exchange in Support of Post-trial Motions, at 9. 95 Brief of Plaintiff Erie Insurance Exchange in Support of Post-trial Motions, at 21. 96 Brief of Defendant, C.W. Fritz Company, Inc. in Support of Motion For Post-trial Relief, at 17. 19 No. 186 CIVIL 1993 raised in a post-trial motion, as well as issues raised but not briefed. Pa. R.C.P. 227.1(b)(2); C.C.R.C. 210-7; see 1 Goodrich Amram 2d ~227.1(b):5 (1991). Second, when "findings of fact [by a trial judge] are clearly or manifestly erroneous or were arbitrarily made or if the record indicates that the trial judge failed to comprehend and understand the evidence, such findings of fact may be overruled." Williams v. H.E. Stoudt & Son, Inc., 404 Pa. 377, 379, 172 A.2d 278, 279 (1961). On the other hand, it has been said that "the findings of a trial judge sitting without a jury carry the same weight as a jury verdict." Denby v. North Side Carpet Cleaning Co., 257 Pa. Super. 73, 79, 390 A.2d 252, 253 (1978). Third, "lilt is ... well established ... that the weight and credibility to be accorded evidence is up to the factfinder to determine." Collincini v. Honeywell, Inc., 411 Pa. Super. 166, 172-73, 601 A.2d 292, 295 (1991), appeal denied, 530 Pa. 651, 608 A.2d 27 (1992), cert. denied, U.S.. , 113 S. Ct. 199, 121L. Ed. 2d 141 (1992). In addition, a "trier of fact, while passing upon the credibility of witnesses, is free to believe all, part, or none of the evidence." Hill v. Reynolds, 384 Pa. Super. 34, 45, 557 A.2d 759, 765 (1989); see Miller v. C.P. Centers, Inc., 334 Pa. Super. 623, 483 A.2d 912 (1984). Fourth, in the context of insurance law, questions regarding permission to drive another's vehicle and one's reasonable belief 20 No. 186 CIVIL 1993 in such permission are generally matters for the trier of fact. See, e.g., State Farm Mutual Automobile Insurance Co. v. Moore, 375 Pa. Super. 470, 544 A.2d 1017 (1988) (issue of unlicensed driver's reasonable belief in permission to drive held to be jury question), appeal denied, 521 Pa. 622, 557 A.2d 725 (1989). Fifth, "'[i]t is a cardinal principle of insurance law that a policy or contract of insurance is to be construed liberally in favor of the insured and strictly against the insurer.'" Romanski v. Prudential Property and Casualty Co., 356 Pa. Super. 243, 250, 514 A.2d 592, 596 (1986), quoting Knauber v. Continental Insurance Companies, 291 Pa. Super. 57, 59, 435 A.2d 217, 218 (1981). Where a policy provision relates to the extension of coverage, a "broad and liberal view is to be taken of coverage, whereas if the clause in question is one of exclusion and exception, designed to limit protection, a strict interpretation is in order." Chicago Insurance Co. v. Security Insurance Company of Hartford, 111 N.J. Super. 291, 268 A.2d 296, 298 (1970). The rule of construction in favor of the insured and against the insurer has been applied to clauses in automobile insurance policies premising coverage upon one's entitlement to drive another's vehicle. State Farm Mutual Automobile Insurance Co. v. Moore, 375 Pa. Super. 470, 544 A.2d 1017 (1988), appeal denied, 521 Pa. 622, 557 A.2d 725 (1989). Sixth, in this context permission to drive one's vehicle may 21 No. 186 CIVIL 1993 be express or implied. Aetna Casualty & Surety Co. v. Nationwide Mutual Insurance Co., 734 F. Supp. 204 (W.D. Pa. 1989). "The necessary permission may be in the form of express or implied affirmative consent or it may result by implication from the relationship of the parties or a course of conduct in which the parties have mutually acquiesced.,. Snyder v. Carlson, 135 Pa. Super. 390, 392, 5 A.2d 588, 589 (1939). "The word 'permission' has a negative rather than an affirmative implication; that is, a permitted act may be one not specifically prohibited as contrasted to an act affirmatively and specifically authorized." Brower v. Employers' Liability Assurance Co., 318 Pa. 440, 446, 177 A. 826, 829 (1935). Slight deviations from the terms of permission as expressly granted will not defeat coverage. Freshkorn v. Marietta, 345 Pa. 416, 29 A.2d 15 (1942); see Miller v. U.S.F. & G. Co., 28 D. & C.3d 389 (Adams Co. 1983). In the area of implied permission, a "crucial factor" is the existence of a connection between the vehicle owner and the permittee. Insurance Co. of North America v. State Farm Mutual Insurance Co., 266 Pa. Super. 197, 200, 403 A.2d 611, 612. Even an explicit direction of an owner not to use a vehicle has been found in certain circumstances not to be dispositive of the issue of a driver's reasonable belief in the existence of permission. See, e.g., General Accident Ins. Co. v. Eyer, 40 Cumberland L.J. 450, 7 D. & C.4th 566 (1990) (Hess, J.). 22 No. 186 CIVIL 1993 Seventh, there is a recognition in Pennsylvania that liability coverage in automobile insurance policies protects not only the insured parties but the general public as well. Thus, the Motor Vehicle Responsibility Law contains a provision that "[i]nsurance benefits may not be denied solely because the driver of the insured motor vehicle is determined to be under the influence of drugs or intoxicating beverages at the time of the accident for which benefits are sought.-97 Contractual attempts to exclude liability coverage based on a driver's intoxication have met judicial resistance on public policy grounds. See, e.g., Donegal Mutual Insurance Co. v. Long, 387 Pa. Super. 574, 564 A.2d 937 (1989) (exclusion of liability coverage for intoxicated lessee of lessor's insured vehicle held contrary to public policy), aff'd on other grounds, 528 Pa. 295, 597 A.2d 1124 (1991).9a Eighth, "[u]nder Pennsylvania law, an insurer must bear the burden of proof that an exclusion applies." Keystone Automated Equipment Co., Inc. v. Reliance Insurance Co., 369 Pa. Super. 472, 477, 535 A.2d 648, 650, appeal denied, 519 Pa. 654, 546 A.2d 59 (1988). Clauses in automobile insurance policies which predicate 97 Act of March 27, 1986 P.L. 71, ~1 75 Pa. C.S ~1724(a) (1993 Supp.). ' ' · 98 Cf. Chicago Ins. Co. v. Security Ins. Co. of Hartford, 111 N.J. Super. 291, 268 A.2d 296 (1970) (rule of broad construction of omnibus clauses in automobile insurance policies to effect protection of innocent victims); State Farm Mutual Automobile Ins. Co. v. Allstate Ins. Co., 154 W. Va. 448, 175 S.E.2d 478 (1970). 23 No. 186 CIVIL 1993 liability coverage upon consent or reasonable belief in consent of an owner to the operation of a vehicle are sometimes referred to as exclusionary. See, e.g., Miller v. U.S.F. & G. Co., 28 D. & C.3d 389 (1983). In addition, in the case of an employee's operation of a vehicle entrusted to him by his employer a presumption has been applied that the employee was acting rightfully rather than wrongfully at the time and place of an accident. Cherry v. Mitosky, 353 Pa. 401, 45 A.2d 23 (1946) (presumption of permissive use held not overcome). On the other hand, some cases have imposed the burden of proof in permissive use cases upon a plaintiff claiming the existence of coverage. See, e.g., Volk v. Cacchione, 395 Pa. 636, 150 A.2d 849 (1959). Ninth, in insurance law "It]he duty to defend is a distinct obligation, separate and apart from the insurer's duty to provide coverage .... [T]he obligation to defend arises whenever the complaint filed by the injured party may potentially come within the coverage of the policy." Britamco Underwriters, Inc. v. Weiner, Pa. Super. , , 636 A.2d 649, 651 (1994). Finally, "[t]he modern system of [e]vidence rests upon two axioms: ... (1) n]one but facts having rational probative value are admissible ... [and (2) a]ll facts having rational probative value are admissible, unless some specific rule forbids." 1 Wigmore, Evidence §~9-10, at 289-93 (3d ed. 1940). A fact having rational probative value is one which "reasonably tend[s] to prove or 24 No. 186 CIVIL 1993 disprove a fact in issue or a fact relevant to the issue .... - Jenkins, Pennsylvania Trial Evidence Handbook ~4.1, at 71-72 (1974). Stated concisely, "[e]vidence which tends to establish some fact material to the case, or which tends to make a fact at issue more or less probable, is relevant." Commonwealth v. Scott, 480 Pa. 50, 54, 389 A.2d 79, 82 (1978), appeal after remand, 496 Pa. 188, 436 A.2d 607 (1981); see Packel & Poulin, Pennsylvania Evidence ~401 (1987). A "witness may be cross-examined about matters that tend to impeach or reflect on his credibility... Id., ~611.2, at 465. "It is always the right of a party against whom a witness is called to show by cross-examination that the witness has an interest direct or collateral in the outcome of the trial." Jenkins, Pennsylvania Trial Evidence ~17.4 (1988 Supp.), citing Commonwealth v. Ervin, 262 Pa. Super. 322, 396 A.2d 776 (1978). "Employment by an insurance carrier is a factor indicating interest .... - Id., citing McGowan v. Devonshire Hall Apts., 278 Pa. Super. 229, 420 A.2d 514 (1980). Although references to insurance have a potential for prejudice in certain cases, "it now appears to be well accepted that references to insurance may be admissible when relevant for some purpose." Packel & Poulin, Pennsylvania Evidence §411, at 206-07 (1987). The most commonly occurring situation is cross-examination or the offering of evidence 25 No. 186 CIVIL 1993 to prove bias, interest, or corrupt motive of a witness, usually an insurance investigator. In Fleischman v. Reading, [388 Pa. 183, 130 A.2d 429 (1957),] a similar result was reached even though the insurance investigator did not ~estify. In that case, defendant attempted to impeach plaintiff during cross-examination by offering plaintiff's signed statement. Plaintiff admitted that he had signed the statement but offered, apparently as part of his explanation for its inconsistence with his testimony, that the statement had been taken by an insurance investigator. The Supreme Court held that this testimony was admissible. Id., at 207. "In cases where insurance coverage is relevant and where the evidence is not offered against a defendant charged with negligence or a related ground for liability, the rule [restricting references to insurance] should not be applicable at al/." Id. (emphasis added). Application of Law to Facts A number of factors militate against granting the motions for post-trial relief filed by Plaintiff Erie Insurance Exchange and Defendant C.W. Fritz Company. Inc. First, on the issues of permissive use and reasonable belief in permissive use of the Fritz vehicle by Defendant Danny Lee Edwards, the evidence, although not entirely favorable to any side, tended to show an entrustment of a vehicle to an employee who was already in a court-ordered program as a result of a driving under the influence charge, in circumstances including an instruction that he use his own judgment with respect to its personal use and a history of disregard of handbook policy proscribing personal use of a company vehicle and 26 No. 186 CIVIL 1993 drinking. In light of the foregoing principles of law and the facts as recited above in detail, it is not believed that the Court's findings that Mr. Edwards was driving with the permission of the owner and with a reasonable belief in such permission were beyond the purview of the authority of the trier-of-fact, nor is it believed that the conclusion that the insurance policy in question provided liability coverage as to the accident was unwarranted as a matter of law. Second, the contention of Plaintiff Erie that the Court committed reversible error in placing the burden of proof upon Plaintiff has been waived and is, in any event, factually incorrect; the contention was not contained in Plaintiff's motion for post-trial relief, and at trial the parties were advised to proceed as if each had the burden of proof. In addition, although it may be debatable upon which party the burden of proof properly lies in such cases, this was not a case which was resolved by the fact-finder on the basis of the burden of proof or on whose behalf a given witness testified. Third, the contention of Defendant C.W. Fritz that the Court committed reversible error in permitting testimony on cross- examination of an insurance company's investigator as to her company's interest in the accident is similarly unavailing. The testimony was relevant to the investigator's own interest, not only as a witness at trial but also as the reporter of the interview of 27 No. 186 CIVIL 1993 Mr. Edwards. In this non-jury trial in which a recovery against Mr. Edwards by the party injured in the accident was not at issue, it is not believed that the information objected to should have been excluded on grounds of undue prejudice. For these reasons, the following Order will be entered: QRDER OF COURT AND NOW, this Z~day of April, 1994, upon consideration of the motions of Plaintiff Erie Insurance Exchange and Defendant C.W. Fritz Company, Inc., for post-trial relief, the motions are DENIED for the reasons stated in the accompanying Opinion, and the Order of Court previously entered is made a final Order. BY THE COURT, ~.s/ J. Wesley Oler, Jr. Wesley Oler, Jr., J. Harvey Freedenberg, Esq. Carol A. Steinour, Esq. 100 Pine Street P.O. Box 1166 Harrisburg, PA 17108-1166 Attorneys for Plaintiff Thomas j. Williams, Esq. William D. Powell, Esq. Ten East High Street Carlisle, PA 17013 Attorneys for Defendants Kathy A. Edwards and Danny Lee Edwards Pamela S. Parascandola, Esq. 2931 North Front Street Harrisburg, PA 17110 Attorney for Defendant C.W. Fritz Company, Inc. 28 No. 186 CIVIL 1993 William A. Addams, Esq. 28 South Pitt Street P.O. Box 208 Carlisle, PA 17013 Attorney for Defendant Donna M. Church 29