A man was injured when his foot became entangled as he got out of his pickup truck. No other vehicle, person or object was involved in 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 benefits under the terms of his no-fault auto policy. After his insurer denied the claim, the man sued the carrier. A trial court subsequently ruled that the man's injuries resulted from a "motor vehicle accident," as that term was defined in his insurance policy, and found for the insured. The carrier appealed.
The man's policy required the insurer to pay personal injury protection benefits because of bodily injury: "1. resulting from a motor vehicle accident; and 2. sustained by a covered person." "'Covered person' is defined to include any person occupying the covered 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 addressed different liability provisions of motor vehicle insurance policies. It said the primary distinction was between those cases where the vehicle is only incidentally involved and provides the "mere situs" for an incident that could have occurred anywhere, and those cases where the injury-producing act involved the use of a vehicle as a vehicle.
"The inherent nature of a pickup truck is an instrument of conveyance, the use of which necessitates both mounting and dismounting," the appeals court said. "(The insured) was engaged in the process of exiting the truck when his foot got caught on a part of the truck itself. No intervening instrumentality disrupted the causal chain between the use of the vehicle as a vehicle and the injury resulting from that use."
The carrier argued that because the insured's mishap did not involve a collision or near-collision between the covered motor vehicle and another vehicle, person or object, it was not an accident for which benefits would be payable under the policy's personal injury protection coverage. The appeals court responded that "collision" was defined in the property damage portion of the policy, and that coverage under the liability portion of the policy was not limited to "collision."
Viewing the policy as a whole, the court said the term "motor vehicle accident" does not necessitate any physical impact, provided the facts demonstrate causation between the use of the vehicle and the accidental injury. Had the vehicle been moving, and had (the insured) been dragged along the ground because his foot was hung up on the door, the court said, there would have been no impact between the person and the vehicle, but clearly the injury would have been "produced" by the vehicle. Here, the pickup was stationary, but the court said the insured was still using it as a means of transportation.
The appeals court held that the insured's injury resulted in a "motor vehicle accident" within the meaning of his automobile policy. The trial court's judgment was affirmed.
Texas Farm Bureau Mutual Insurance Co. vs. Sturrock, 65 S.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 agent assignable?
In December 1996, the insured, a tobacco wholesaler, bought CGL and auto liability insurance from an insurance agent. Because of an agreement with a distributor, the insured required a large liability limit. To obtain it, the agent turned to a surplus-lines broker, which secured it from an insurer.
On Sept. 10, 1997, the insured's CFO reviewed the coverage with the agent. That same day, the agent instructed another agency employee to contact the surplus-lines broker to process the insured's request for hired and nonowned (HNO) automobile liability insurance. While the requested and assured effective date of the coverage later was disputed, all agreed that the carrier added the coverage to the auto policy effective Sept. 18.
Two days before the effective date of the HNO coverage, one of the insured's employees was involved in an auto accident while using his personal car on the insured's behalf. The insurer denied the subsequent claim on the basis that HNO coverage was not in effect on the date of the accident.
The insured retained a law firm to defend itself and its employee against the claims of the accident victims. The claimants, the insured, the employee and the employee's personal automobile insurer entered into a settlement agreement and covenant not to execute. In consideration of the settlement payment-the employee's auto insurance policy limits-the claim-ants agreed not to execute against the insured for any claims arising from the accident. The claimants also agreed to "not seek further execution of collection on any judgment in this matter" from the insured, the employee or the employee's insurer. Additionally, the parties agreed the defendants could be named as defendants in a prospective lawsuit to be brought by the claimants. The defendants also acknowledged their joint liability for the claimants' injuries and damages.
The defendants further agreed that the claimants could prosecute any action they deemed appropriate against the insurance agents and brokers involved in the attempted procurement of HNO auto liability insurance. The defendants agreed that any such action could be instituted in their names, as plaintiffs, and that they would cooperate as reasonably requested by the claimants, who would be entitled to any sums resulting from the resolution of the claims. The claimants agreed that any such action would be conducted at their sole expense and that they would indemnify and hold the defendants harmless for any associated expenses.
The claimants, with the exception of one accident victim, then sued the tobacco wholesaler and the employee for negligence and vicarious liability. They were awarded a $3,825,000 judgment against the wholesaler.
In the wholesaler's name, the claimants then sued the wholesaler's insurance agency. The basis of the tobacco wholesaler's complaint was that its CFO had asked the agent for HNO auto liability insurance and was subsequently assured by the agent that the coverage was effective Sept. 10, 1997. Relying on that assurance, the CFO had allowed employees to drive their own cars while conducting the wholesaler's business. The wholesaler specifically charged the agent with breach of contract (to purchase HNO auto coverage effective Sept. 10, 1997), negligence and breach of its duty of care.
The insurance agency moved for summary judgment on all claims. Among other things the agency argued that that the tobacco wholesaler's claims were not assignable. The trial court found that with respect to insurance agent-client relationships, negligence would be considered professional in nature and that under Arizona law a claim for professional negligence is not assignable to a third-party claimant. The court dismissed the tobacco wholesaler's claims.
The plaintiffs appealed. Among the issues they raised were whether professional-negligence claims or breach-of-contract claims against an insurance agent are assignable.
The appeals court remanded the case to the trial court to determine whether, based on their interaction, an implied contract existed between the agency and the tobacco wholesaler. If it did, then the appeals court said a claim based on the breach of that contract could be assigned to the claimants. However, if there existed only a contract implied in law, then, consistent with public policy, the tobacco wholesaler could not assign such a claim to the claimants. In summary, the agency won on the negligence claim, which was a tort claim, but the appeals court sent back to the trial court the breach of contract claim for a factual determination.
Premium Cigars International, Ltd. vs. Farmer-Butler-Leavitt Insurance 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 at drenau@thepoint.net.
