Darner Motor Sales v. Universal Underwriters Ins. Co.

Darner Motor Sales, Inc. (Darner) (plaintiff) sold and rented cars. Darner bought insurance from Universal Underwriters Insurance Company (Universal) (defendant) through Universal’s agent, John Doxsee (defendant). Darner’s first Universal policy covered Darner’s rental vehicles, including liability coverage. Under the rental policy, Darner’s renters were covered up to $15,000 for one injury and up to $30,000 for one accident. The policy also provided liability coverage for Darner up to $100,000 for any one injury and up to $300,000 for one accident. However, Darner mistakenly thought the higher $100,000/$300,000 limits applied to the renters too, and Darner’s rental forms incorrectly stated that renters were covered for these higher amounts. A few years later, Darner bought an umbrella policy from Universal and renewed the rental policy. The new rental policy documents, however, provided the $15,000/$30,000 liability coverage limits only. Darner asked Doxsee about this, and Doxsee told Darner that, if needed, the umbrella policy would raise the limits to the $100,000/$300,000 level. Darner believed that Doxsee meant the umbrella policy would cover both Darner’s renters and Darner at the higher levels. Based on the conversation with Doxsee, Darner did not read the umbrella policy. Later, Darner rented a car to Dwayne Crawford using a rental agreement listing the $100,000/$300,000 limits. Crawford caused an accident and was sued. Universal said that Crawford’s coverage was limited to the rental policy’s $15,000/$30,000 amounts because the umbrella policy excluded renters from the definition of “insured.” Crawford sued Darner, and Darner sued Universal and Doxsee. The trial court granted summary judgment for Universal and Doxsee, and the appellate court affirmed. Darner appealed.