APPEAL FROM THE CIRCUIT COURT OF THE THIRD JUDICIAL CIRCUIT GRANT COUNTY, SOUTH DAKOTA HONORABLE RONALD K. ROEHR Judge.
The opinion of the court was delivered by: Zinter, Justice
[¶1.] Jozette Gertsema was injured while riding as a passenger on an all terrain vehicle (ATV) driven by her cousin Shane Gertsema. Calvin and Laci Hanson (Hansons) purchased the ATV for their daughter Brittany, and Hansons were the named insureds under a recreational vehicle insurance policy issued by State Farm Automobile Insurance Company. State Farm filed this action seeking a declaration that there was no coverage for medical payments or liability under the policy. Jozette claimed coverage, arguing that Shane was an insured under the policy's omnibus clause because Hansons' children, Brittany and Jacob, had given Shane permission to drive the ATV. The circuit court granted summary judgment in favor of State Farm. The circuit court found that there was no implied permission flowing from the Hansons through their children because Shane's operation of the ATV violated the Hansons' rules for its use. We conclude that there are disputed issues of material fact regarding implied permission. Therefore, we reverse and remand.
Facts and Procedural History
[¶2.] In reviewing this summary judgment, we restate the facts in a light most favorable to Jozette. In July 2005, Hansons purchased the ATV for their thirteen-year-old daughter, Brittany. State Farm subsequently issued a recreational vehicle insurance policy covering the ATV. The policy named Calvin and Laci as insureds and provided both medical payments and liability coverage. Liability coverage was provided for the "insureds," which included "any other person while using such vehicle if its use or operation [was] within the scope of consent of [the Hansons]." Medical payments coverage was also provided if the vehicle was being used by an insured.
[¶3.] In October 2005, Jacob, the Hansons' son, drove the ATV on a road from the Hanson farm to the Eli Hickman farm.*fn1 The record reflects that Eli Hickman, Alex Blue, Shane Gertsema, and Jozette Gertsema, friends of the Hansons' children, arrived at Hickman's residence where the ATV was parked. In Jacob's presence, but without asking for express permission, Alex began driving the ATV. Jacob indicated that he saw Alex "[tear] around a little bit." Jacob did not object to or stop Alex's use of the ATV.*fn2
[¶4.] After Alex finished riding, Shane and Jozette began using the ATV. Shane drove and Jozette was a passenger. Like Alex, neither had asked for express permission from Jacob or his parents. Shane, however, testified that earlier in the day, Brittany had twice given him permission to use the ATV. According to Shane, he first obtained permission from Brittany in person at a bowling alley. He indicated that the second permission from Brittany occurred by cell phone as he was driving to the Hickman farm.
[¶5.] During their ride, Shane and Jozette left Hickman's driveway and drove onto a road. Shortly thereafter, Shane returned to Hickman's house alone on the ATV with two flat tires. Shane indicated that he had lost control of the ATV and it rolled. Jozette was seriously injured.
[¶6.] Following the accident, Jozette sought medical payment benefits and contended that liability coverage was available under State Farm's policy. State Farm subsequently commenced this action and moved for summary judgment based upon affidavits and deposition testimony. Jozette resisted the motion, arguing that coverage was available because Shane was an insured under the policy. Jozette contended that Shane was an insured because he had implied permission, either from the Hansons or as a second permittee through Hansons' children, Jacob and Brittany. State Farm argued that any implied permission flowing from the Hansons was ineffective because Shane's use violated rules that Hansons had set for other children's use of the ATV. According to State Farm, "other kids had to have [Hansons'] permission to operate the ATV," and Hansons "were not okay with the ATV being used away from their house and without their knowledge." Jozette responded, arguing that summary judgment was inappropriate because there were disputed facts whether such rules existed, their scope, and whether they were enforced.
[¶7.] The circuit court found that Hansons provided no express permission and they had rules restricting use of the ATV by other children. According to the court: "The ATV was only supposed to be used only in the yard and driveway at home, not on the road, and when Laci or Calvin Hanson were home." The circuit court also found that if:
Brittany or Jacob did give Shane permission to drive the ATV, it would have been a material deviation from the rule that the ATV was only to be driven by friends if Laci and Calvin Hanson were present, and it would also be a material deviation from the rule against driving the ATV on the road.
Because the circuit court found that Shane's use materially violated these rules, it concluded that there was no implied permission triggering the omnibus clause of the policy.
[¶8.] There is no dispute that Hansons, the named insureds, did not give Shane express permission to use the ATV. Therefore, the issue is whether there are genuine issues of material fact regarding implied permission either from the Hansons, or more indirectly through Brittany and Jacob. Our standard of review is well established.
Summary judgment is authorized "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law." We will affirm only when there are no genuine issues of material fact and the legal questions have been correctly decided. All reasonable inferences drawn from the facts must be viewed in favor of the non-moving party. The burden is on the moving party to clearly show an absence of any genuine issue of material fact and an entitlement to judgment as a matter of law.
Estate of Trobaugh v. Farmers Ins. Exch., 2001 SD 37, ¶ 16, 623 NW2d 497, 501 (citations omitted). "When reviewing a grant of summary judgment, we are not bound by the trial court's factual findings, but, rather, must undertake an independent review of the record." Id. ¶ 17, 623 NW2d at 501.
[¶9.] The omnibus insured provision of State Farm's policy provided coverage for any driver who used the vehicle within the insureds' scope of consent. In accordance with SDCL 32-35-70, this provision extended coverage to noninsureds who used the vehicle with the implied permission of the named insureds.*fn3
In cases of implied permission, "the burden of proof [is on] the party attempting to show the driver had implied permission since the driver of the vehicle [is] a stranger to the policy." State Farm Mut. Auto. Ins. Co. v. Ragatz, 1997 SD 123, ¶ 16, 571 NW2d 155, 158. Therefore, in order to prevent summary judgment on this issue, Jozette*fn4 had the burden of identifying disputed issues of fact regarding implied permission.
Implied Permission from Hansons
[¶10.] To establish implied permission, there must be a "showing of a course of conduct or practice known to the owner and acquiesced in by him that would lead to an application of permission for a particular venture." Trobaugh, 2001 SD 37, ¶23, 623 NW2d at 502 (citing Western Cas. & Surety Co. ...