Darner Motor Sales (Darner) sued Universal Underwriters Ins. Co. after being sued for a discrepancy in insurance coverage from one of Darner’s renters.
The parol evidence rule sometimes allows the introduction of outside evidence to interpret agreements.
Darner Motor Sales (Darner) bought insurance from Universal Underwriters Ins. Co. (Universal). The rental policy provided coverage for Darner’s renters for up to $15,000 for one injury and up to $30,000 for one accident. Darner was covered up to $100,000 for one injury and $300,000 for one accident. Darner’s renters form mistakenly stated that renters were covered for the higher amounts. When one of Darner’s renters, Crawford, caused an accident and was subsequently sued, Universal stated that Crawford’s coverage was limited to the lower coverage amounts. Crawford sued Darner and Darner sued Universal. The trial court granted judgment to Universal and the appellate court affirmed.
Whether the parol evidence rule allows the introduction of outside evidence to interpret agreements?
Yes. The judgments of the lower courts are reversed. Darner could succeed against Universal because the parties agreed that Darner’s renters would be covered up to the higher amounts.
(Holohan, C.J.) This judgment undermines contract law because it does not show what terms customers should follow or what terms customers are permitted to ignore.
The parol evidence rule sometimes allows the introduction of outside evidence to interpret agreements.