The Supreme Court of Indiana had vacated a decision of the Court of Appeals in the case of Meridian Mutual Insurance v. Auto-Owners Insurance (659 N.E.2d 207), which involved a van that was used by 12 persons and was owned by Gail Riggins. The record showed that Riggins and the other passengers lived near Odon, Indiana, and all were employed by Thomson Consumer Electronics in Bloomington, Indiana. Riggins arranged to drive several co-workers back and forth to work, For this service, each of them paid her $17 per week (at the time involved here). Riggins used the money to cover her expenses, although she did not keep any records and didn't know if her receipts covered her expenses. She testified that she did not enter the arrangement as a means of making a profit. On days when she was not going into work, or was working a different shift, she allowed the others to use the van. Usually Larry Ramsey drove, deducting $5 from that week's contribution for each day he drove.
On the day of the accident, Ramsey was driving the van. He was killed, and eight passengers in the van were seriously injured. The driver of the other car also was killed.
Riggins had secured a policy from Auto-Owners covering the van, and Larry Ramsey had a policy issued by Meridian Mutual that protected him while driving vehicles owned by others with their permission. However, that policy excluded coverage while that vehicle was used to carry persons or property for a fee. The exclusion, though, stated it did not apply to "shared-expense car pools . . . " The policy did not define these phrases. Meridian denied liability on the grounds that its insured, Ramsey, was driving the van for a fee. The trial court disagreed and ruled that Ramsey's policy covered the accident. The Court of Appeals reversed the judgment and the action was appealed to the Indiana Supreme Court.
Riggins testified that she used the money for expenses in maintaining the van: gasoline, tires, upkeep, and insurance. She did not report any of those receipts as income for taxes and did not discuss the matter with her accountant.
On appeal, the higher court pointed out that it believed "shared-expense" meant a situation where the parties intend to share the burden of car pooling, in which non-driving participants would contribute money. The number of passengers varied from day to day, but Riggins averaged $187 weekly, and only $79 of this remained after deducting the cost of gas and depreciation. In addition, she paid for the upkeep (tires, brakes, oil, cleaning, regular maintenance, repairs, etc.). In this case, the insured commuted 80 miles per day, requiring up to two hours each day.
The court concluded that Riggins, Ramsey, and the other employees had been involved in a "shared-expense" car pool, and that since Ramsey's policy with Meridian did not exclude coverage for injuries arising out of a "shared-expense" car pool, the judgment entered in the trial court against Meridian Mutual was affirmed. The reversal by the Court of Appeals was vacated.
Meridian Mutual Insurance Co., Appellant v. Auto-Owners Insurance
Company et al.--No. 14S01-9605-CV-374--Supreme Court of Indiana--August
31, 1998--698 North Eastern Reporter 2d 770.