American Mutual Fire Insurance v. Passmore

Ness, Justice:

This is a declaratory judgment action to determine liability insurance coverage between appellant, American Mutual Fire Ins. Co. and other corporate insurers. The trial judge concluded appellant provided coverage for a collision between vehicles driven by the girl friend of Lonnie Reed and James Passmore on May 21, 1977. We disagree and reverse.

In late March or early April of 1977, Helen Whitehead agreed to sell her 1970 Chevrolet Nova to Lonnie Reed for a down payment of $150.00, and assumption of the existing indebtedness, provided Reed obtain liability insurance. Reed was…