Injury from stepping out of parked pickup found to be a'motor vehicle accident'
A man was injured when his foot became entangled as he got out ofhis pickup truck. No other vehicle, person or object was involvedin the incident. The pickup was stopped and turned off at the time,and no part of the man's body struck the pickup.

The man filed a claim for personal injury protection benefitsunder the terms of his no-fault auto policy. After his insurerdenied the claim, the man sued the carrier. A trial courtsubsequently ruled that the man's injuries resulted from a “motorvehicle accident,” as that term was defined in his insurancepolicy, and found for the insured. The carrier appealed.

The man's policy required the insurer to pay personal injuryprotection benefits because of bodily injury: “1. resulting from amotor vehicle accident; and 2. sustained by a covered person.”“'Covered person' is defined to include any person occupying thecovered auto.” “'Occupying' means in, upon, getting in, on, out(of) or off” the vehicle, according to the policy.

The appeals court discussed several state cases that addresseddifferent liability provisions of motor vehicle insurance policies.It said the primary distinction was between those cases where thevehicle is only incidentally involved and provides the “mere situs”for an incident that could have occurred anywhere, and those caseswhere the injury-producing act involved the use of a vehicle as avehicle.

“The inherent nature of a pickup truck is an instrument ofconveyance, the use of which necessitates both mounting anddismounting,” the appeals court said. “(The insured) was engaged inthe process of exiting the truck when his foot got caught on a partof the truck itself. No intervening instrumentality disrupted thecausal chain between the use of the vehicle as a vehicle and theinjury resulting from that use.”

The carrier argued that because the insured's mishap did notinvolve a collision or near-collision between the covered motorvehicle and another vehicle, person or object, it was not anaccident for which benefits would be payable under the policy'spersonal injury protection coverage. The appeals court respondedthat “collision” was defined in the property damage portion of thepolicy, and that coverage under the liability portion of the policywas not limited to “collision.”

Viewing the policy as a whole, the court said the term “motorvehicle accident” does not necessitate any physical impact,provided the facts demonstrate causation between the use of thevehicle and the accidental injury. Had the vehicle been moving, andhad (the insured) been dragged along the ground because his footwas hung up on the door, the court said, there would have been noimpact between the person and the vehicle, but clearly the injurywould have been “produced” by the vehicle. Here, the pickup wasstationary, but the court said the insured was still using it as ameans of transportation.

The appeals court held that the insured's injury resulted in a“motor vehicle accident” within the meaning of his automobilepolicy. The trial court's judgment was affirmed.

Texas Farm Bureau Mutual Insurance Co. vs. Sturrock, 65S.W.3d 763 (Tex.App. Dist.9 12/06/2001) 65 S.W.3d 763,2001.TX.0007665 (www.versuslaw.com).

When is a claim against an agentassignable?

In December 1996, the insured, a tobacco wholesaler, bought CGLand auto liability insurance from an insurance agent. Because of anagreement with a distributor, the insured required a largeliability limit. To obtain it, the agent turned to a surplus-linesbroker, which secured it from an insurer.

On Sept. 10, 1997, the insured's CFO reviewed the coverage withthe agent. That same day, the agent instructed another agencyemployee to contact the surplus-lines broker to process theinsured's request for hired and nonowned (HNO) automobile liabilityinsurance. While the requested and assured effective date of thecoverage later was disputed, all agreed that the carrier added thecoverage to the auto policy effective Sept. 18.

Two days before the effective date of the HNO coverage, one ofthe insured's employees was involved in an auto accident whileusing his personal car on the insured's behalf. The insurer deniedthe subsequent claim on the basis that HNO coverage was not ineffect on the date of the accident.

The insured retained a law firm to defend itself and itsemployee against the claims of the accident victims. The claimants,the insured, the employee and the employee's personal automobileinsurer entered into a settlement agreement and covenant not toexecute. In consideration of the settlement payment-the employee'sauto insurance policy limits-the claim-ants agreed not to executeagainst the insured for any claims arising from the accident. Theclaimants also agreed to “not seek further execution of collectionon any judgment in this matter” from the insured, the employee orthe employee's insurer. Additionally, the parties agreed thedefendants could be named as defendants in a prospective lawsuit tobe brought by the claimants. The defendants also acknowledged theirjoint liability for the claimants' injuries and damages.

The defendants further agreed that the claimants could prosecuteany action they deemed appropriate against the insurance agents andbrokers involved in the attempted procurement of HNO auto liabilityinsurance. The defendants agreed that any such action could beinstituted in their names, as plaintiffs, and that they wouldcooperate as reasonably requested by the claimants, who would beentitled to any sums resulting from the resolution of the claims.The claimants agreed that any such action would be conducted attheir sole expense and that they would indemnify and hold thedefendants harmless for any associated expenses.

The claimants, with the exception of one accident victim, thensued the tobacco wholesaler and the employee for negligence andvicarious liability. They were awarded a $3,825,000 judgmentagainst the wholesaler.

In the wholesaler's name, the claimants then sued thewholesaler's insurance agency. The basis of the tobaccowholesaler's complaint was that its CFO had asked the agent for HNOauto liability insurance and was subsequently assured by the agentthat the coverage was effective Sept. 10, 1997. Relying on thatassurance, the CFO had allowed employees to drive their own carswhile conducting the wholesaler's business. The wholesalerspecifically charged the agent with breach of contract (to purchaseHNO auto coverage effective Sept. 10, 1997), negligence and breachof its duty of care.

The insurance agency moved for summary judgment on all claims.Among other things the agency argued that that the tobaccowholesaler's claims were not assignable. The trial court found thatwith respect to insurance agent-client relationships, negligencewould be considered professional in nature and that under Arizonalaw a claim for professional negligence is not assignable to athird-party claimant. The court dismissed the tobacco wholesaler'sclaims.

The plaintiffs appealed. Among the issues they raised werewhether professional-negligence claims or breach-of-contract claimsagainst an insurance agent are assignable.

The appeals court remanded the case to the trial court todetermine whether, based on their interaction, an implied contractexisted between the agency and the tobacco wholesaler. If it did,then the appeals court said a claim based on the breach of thatcontract could be assigned to the claimants. However, if thereexisted only a contract implied in law, then, consistent withpublic policy, the tobacco wholesaler could not assign such a claimto the claimants. In summary, the agency won on the negligenceclaim, which was a tort claim, but the appeals court sent back tothe trial court the breach of contract claim for a factualdetermination.

Premium Cigars International, Ltd. vs. Farmer-Butler-LeavittInsurance Agency, No. 1 CA-CV 03-0310 (Ariz. App.Div.1 08/19/2004)2004. AZ. 0000298 (www.versuslaw.com).

Readers can get in touch with Don Renau via e-mail [email protected].