Individual words and their placement in insurance policy forms are what we use to interpret coverage: to trigger it, to deny it, to negotiate it. Courts that are called upon to rule on whether there is coverage in a particular situation do this all the time. They review the arguments for and against coverage, consider the wording of the policy forms, and review past reasoning in order to determine not what the words say, but what they mean.

In some instances the results are different, depending upon the jurisdiction that is handling the case and the arguments that have been made for or against coverage. An example is how various courts interpret the word “occupying” for purposes of auto coverage.

Inflammatory Language

One interpretation of this word was handed down this fall by the U.S. Court of Appeals for the Sixth Circuit. The case involved a woman, Barbara Bennett, who was struck on the knee while walking along an Ohio roadway. After being hit by the car, she was thrown onto its hood. She sued State Farm Mutual Automobile Insurance Company, which insured the car, seeking a declaration that she was entitled to coverage under the State Farm policy covering the car that had struck her. She argued that being on the hood should be considered “occupying” the car and therefore should trigger coverage.

State Farm called that argument “ridiculous,” according to court records. The district court ruled in favor of the insurance company, and Bennett appealed.

The auto policy in question defined “occupying” as “in, on, entering or alighting from.” Although the district court ruled that she was not an occupant of the vehicle, on appeal the Sixth Circuit reversed that decision. The judge not only overturned the district court but also took the time to chastise the insurer for characterizing the Bennett attorney's argument that being on the hood constituted occupying the car as “ridiculous.”

The Sixth Circuit reasoned that the argument might not be accepted according to the word's plain English usage, but the policy and its definitions had to prevail. The policy defined “occupying” as “in, on, entering or alighting from,” and Bennett was “on” the car when she was on the hood.

In his ruling, the judge had the following to say when addressing the insurer's attorney, who tried characterizing Bennetts' argument as absurd. He wrote:

“There are good reasons not to call an opponent's argument 'ridiculous.'” That is precisely what State Farm calls Barbara Bennett's principal argument here. The reasons include civility; the near-certainty that overstatement will only push the reader away . . .and that, even where the record supports an extreme modifier, 'the better practice is usually to lay out the facts and let the court reach its own conclusions. But here the biggest reason is simpler: the argument that State Farm derides as ridiculous is instead correct.”

The judge went on to say that there was no reason to consider whether Bennett had any intrinsic relationship to the car. The policy was clear: being on a vehicle was included in the definition of occupying, and Bennett was on the car's hood. The district court was reversed.

A different result was reached in a Montana case, which was cited by the insurer in the Bennett appeal. In the case of Estate of Terry L. Richerson v. The Cincinnati Insurance Company, the Montana Supreme Court ruled that a person who is run over and dragged by a vehicle cannot be considered to be “occupying” that vehicle. In this accident, Richerson was a pedestrian, like Bennett, who was injured when he was backed over by a concrete truck, was caught in the truck's driveshaft, and was dragged a number of feet. He later died. Richerson's estate requested that Cincinnati provide medical payments under the policy carried on the truck.

The policy defined “occupying” as meaning “in, upon, getting in, on, out or off,” not exactly identical to the definition in Bennett, but close. This time the argument by the Estate was that Richerson, when he was caught in and transported by the truck, was “upon” it and, therefore, occupying it, which qualified him as an “insured” for coverage. Cincinnati countered that he did not meet the definition of insurance and was not entitled to coverage. This time the court sided with the insurer.

The 'Reasonable Connection' Test

In Montana the courts have applied the “reasonable connection” test to determine whether an injured person is an occupant of a vehicle or not. Under the test, the court stated, it must be determined that the claimant's activities at the time of injury “were so reasonably connected” to the insured auto that he can be said to be occupying it. The reasonable connection test, the court said, permits a broad review of the facts instead of concentrating on whether the injured person is physically on or upon the vehicle.

The supreme court reasoned that Richerson had no contact with or connection to the truck other than having been struck by it. He was not working with it, he was not entering it, he was not exiting it. The accident involved only incidental contact, which was insufficient to trigger coverage under the policy's definition of “occupying.” The court upheld the lower court's decision.

These situations, while similar, ended with vastly different rulings. While the Sixth Circuit focused on the definition of occupying within the policy, the Montana Supreme Court employed the reasonable connection test and ended with the opposite ruling. What a difference a court makes!

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What a Difference a Court Makes

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