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INTEGON NAT. INS. CO. v. WELCOME CORP.

June 15, 1999

INTEGON NATIONAL INSURANCE COMPANY AND BANKERS AND SHIPPERS INSURANCE COMPANY, PLAINTIFFS,
v.
THE WELCOME CORPORATION T/A THRIFTY CAR RENTAL; ILLINOIS INSURANCE EXCHANGE, INC.; AND CLASSIC SYNDICATE, INC., DEFENDANTS.



The opinion of the court was delivered by: Barrington D. Parker, District Judge.

MEMORANDUM AND ORDER

Plaintiff Integon National Insurance Company and Bankers and Shippers Insurance Company ("Integon") move pursuant to Fed.R.Civ.P.Rule 56 for summary judgment against Defendant The Welcome Corporation T/A Thrifty Car Rental ("Thrifty") declaring that Thrifty is primarily liable to defend an action pending in the Supreme Court of the State of New York, County of Westchester.*fn1 Thrifty cross-moves for summary judgment against Integon for a declaration that Integon is primarily liable to defend the state action. For the reasons stated below, Integon's motion is denied, and Thrifty's motion is granted.

BACKGROUND

On January 1, 1996, Scott Freeman rented a vehicle from Thrifty pursuant to a written Rental Agreement, which provided that Freeman would lease the car for one week. Freeman drove the vehicle to Westchester County. While working on a construction job, Freeman lent the car to Frank Dibello. Integon claims the business relationship between Freeman and Dibello resulted in Dibello's use of the car. During Dibello's operation of the rental vehicle, Dibello allegedly caused a motor vehicle accident which is the subject of the underlying state court action.

The Rental Agreement identified and limited use of the vehicle to "Authorized Renters." Paragraph One, entitled "The Drivers-Who May Drive?" stated:

  The Car may be driven only by an Authorized Renter.
  An Authorized Renter is (i) Me; (ii) My spouse; or
  (iii) a person who has appeared at the time of the
  rental and has signed this Rental Agreement. All
  authorized Renters warrant that they are at least 21
  years of age and have a valid drivers license and
  fulfill other qualifications.

Paragraph Three addressed "Prohibited Uses of the Car." It stated:

A. The Car may not be used:

6. BY ANYONE OTHER THAN AN AUTHORIZED RENTER;

  B. ANY PROHIBITED USE OF THE CAR VIOLATES THE RENTAL
    AGREEMENT AND VOIDS OR DEPRIVES ME OF ALL BENEFITS,
    PROTECTION AND OPTIONAL COVERAGES, IF ANY, TO WHICH
    I WOULD HAVE OTHERWISE BEEN ENTITLED UNDER THIS
    RENTAL AGREEMENT.

Emphasis Supplied.

The Rental Agreement stated, "ADD.[ITIONAL] RENTER: NONE AUTHORIZED." Freeman expressly declined a Physical Damage Waiver, Passenger Protection & Personal Effects Coverage, and Supplemental Liability Insurance. Immediately preceding Freeman's signature on the Rental Agreement was the following statement:

  By signature below, You acknowledge that You have
  read and agree to the terms and conditions both
  printed and written, including Physical Damage
  Waiver, that appear on this rental statement and on
  the separate rental jacket. . . .

Immediately following Freeman's signature appeared a signature line for any "Additional Authorized ...


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