O'Neill v. Long

Summary

The Oklahoma Supreme Court held that Oklahoma's Compulsory Insurance Law requires omnibus liability coverage up to the statutory minimum when the named insured has granted express or implied permission to use the insured vehicle, even if the permittee exceeds the scope of that permission. Coverage above the statutory minimum is governed by the insurance policy and freedom-of-contract principles, and a material deviation from the permitted use defeats such coverage. The court affirmed in part, reversed in part, vacated the Court of Civil Appeals' opinion, and remanded with instructions.

Holdings

1. Once the named insured gives express or implied permission to use an insured vehicle, Oklahoma's Compulsory Insurance Law requires liability coverage to continue even when the permittee exceeds the scope of the named insured's consent, barring criminal theft.
2. The compulsory omnibus coverage required by Oklahoma law extends to the statutory minimum limits only: $10,000 per person, $20,000 per accident, and $10,000 for property damage.
3. Coverage above the statutory minimum is governed by the policy and the minor-deviation rule; a material deviation from the scope of permission defeats noncompulsory omnibus coverage.
4. The creditors' failure to timely contest State Farm's answer in the second garnishment did not conclusively establish State Farm's obligation concerning Long because the second garnishment did not address State Farm's obligation to indemnify Long.

Questions Presented

1. Whether Oklahoma's Compulsory Insurance Law requires omnibus liability coverage when a permittee allows another person to use the insured vehicle contrary to the named insured's instructions.
2. Whether the statutory compulsory coverage extends only to the statutory minimum limits or also requires coverage up to the policy limits.
3. Whether Kevin Cole was an insured under State Farm's noncompulsory omnibus provision when he allowed Long to drive the vehicle in violation of the named insured's express instructions.
4. Whether the third garnishment was barred because the creditors failed to timely contest State Farm's answer in an earlier garnishment.

Disposition

reversed_and_remanded