Managers and the Legal Environment 7th Edition by David Madsen, Constance Bagley

Exercise 6

Shortly after hiring Corte Adams, Goodyear Tires transferred him from his home near Houston to Bryan, Texas, to work on commercial trucks. After the transfer, Adams continued to live in Houston and commuted two hours each way to work. Although Adams owned his own car, Goodyear allowed him to use a company-owned pickup truck to commute to and from work. Once or twice a week, Adams either picked up tires at the Houston shop on his way to work and delivered them to Bryan, or he dropped off tires from Bryan at the Houston shop on the way home. With his boss's knowledge, Adams also used the Goodyear truck during working hours to run some personal errands.
After Adams left work in the company truck on a Friday, he delivered tires to the Houston shop at 7 p.m.; stopped for Chinese takeout; and then drove to his father's house, which was about ten miles from his home, where he ate dinner, drank a few beers, and fell asleep. At 1 a.m., he woke up and drove the truck to a store to buy cigarettes for his father. On the way back to his father's house, Adams fell asleep at the wheel and hit another car, severely injuring himself and the other driver. After the driver sued Adams and Goodyear, Goodyear's insurance company Travelers Indemnity Company refused to cover Adams or to defend or indemnify him in the lawsuit. Adams then sued Travelers and Goodyear. Travelers argued that Adams was not an "insured" under its policy with Goodyear because he did not have permission to use the truck when the accident occurred. Did Adams have implied permission to use the truck? Is Goodyear (and therefore Travelers) liable for damages arising out of the accident? If so, on what basis? [ Adams v. Travelers Indemnity of Connecticut, 465 F.3d 156 (5th Cir. 2006).]