APPEAL FROM THE UNITED STATES COURT FOR THE DISTRICT OF THE VIRGIN ISLANDS
Before Gibbons, Garth and Higginbotham, Circuit Judges.
This appeal arises out of a suit on an insurance policy. The district court denied the plaintiff's motion for summary judgment and granted the defendant's cross-motion for summary judgment, holding that the plaintiff was excluded from the policy's coverage. We reverse.
On July 4, 1975, Preferred Rentals, Inc. ("Preferred"), a St. Croix, V.I. car rental agency insured by the defendant Continental Insurance Co. ("Continental"), rented a car to Marion Edwards ("rentee"). Two days later, on July 6, Edwards met Clement Richardson and the plaintiff Norman Buntin in a Christiansted bar. The three then decided to drive to Frederiksted. Edwards asked Buntin to drive his rented car, since Edwards was unfamiliar with the Virgin Islands practice of driving on the left-hand side of the road. While en route Buntin collided with an oncoming car. Edwards was killed and Richardson was seriously injured.
In April, 1976, actions were filed against Buntin by Richardson and by Edwards's estate. Buntin notified Continental, the insurer of the rental car, and tendered to it the defense of the two actions. Continental disclaimed coverage and declined to defend Buntin, on the ground that Buntin was not an insured under the policy.
Both cases against Buntin were consolidated and, after proceeding to trial, judgment was entered in favor of Richardson and Edwards's estate, and against Buntin, in the amounts of $26,500 (plus interest and attorneys' fees) and $165,000 (plus interest and attorneys' fees) respectively. After the entry of these judgments, several settlement attempts were transmitted to Continental. However, Continental continued to disclaim coverage and to deny any liability on its part. Buntin eventually brought this action against Continental, alleging a breach of Continental's obligations under the insurance policy.
The district court held that, by its terms, an endorsement to the policy excluded Buntin from coverage. Since there was no material factual dispute, the district court on September 27, 1977 denied Buntin's motion for summary judgment and granted Continental's cross-motion for summary judgment. This appeal followed.
This dispute essentially involves two provisions of Preferred's insurance policy with Continental. The policy at issue is a standard automobile liability insurance policy. Paragraph III of the policy, entitled "Definition of Insured", provides in relevant part:
With respect to the insurance for bodily injury liability and for property damage liability the unqualified word "insured" includes the named insured and, if the named insured is an individual, his spouse if a resident of the same household, and also includes any person while using the automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or such spouse or with the permission of either. . . .
This clause is known as the "omnibus clause" and is standard in automobile liability insurance policies. The "named insured" ...