State Farm asserted that Mr. Mizuno was not entitled to benefits under Ms. Wong’s UM policy because he “was not ‘occupying’ a ‘car’ at the time of the Accident, as those terms are defined in the Policy.” Mr. Mizuno conceded that “[a]t the moment he was struck, [he] was not physically in, on, entering, exiting, loading or unloading [Ms.] Wong’s car.”

Mr. Mizuno asserted, however, that he qualified for benefits under the chain-of-events test articulated by the Hawaii Supreme Court in Dawes v. First Insurance Co. of Hawai’i, Ltd., 883 P.2d 38 (Haw. 1994), because he had permission to use the vehicle and was struck by an uninsured motorist as he was returning to the vehicle after his errand. He posited that “[t]here was no break in the chain of events between his occupancy and his injury.”

For its part, State Farm contended that Mr. Mizuno, as a permissive user who was injured by an uninsured motorist in the course of running errands, was not entitled to UM benefits under the terms of its policy or under the chain-of-events test. State Farm argued that Mr. Mizuno had not been “occupying” the insured vehicle at the time of the accident.

The Ninth Circuit’s Decision

The circuit court explained that, in Dawes, an uninsured motorist had killed a passenger in a vehicle driven by a covered driver after the latter’s vehicle had become inoperable. The passenger was not in the vehicle when she was struck but, rather, had walked “for twenty to twenty-five minutes [along the highway] and . . . traveled approximately one mile from the insured vehicle” when she was struck.

The Hawaii Supreme Court held that the passenger’s estate was entitled to benefits under the UM policy. In determining whether the passenger was entitled to coverage, the court held that the “occupying” restriction was void and could not bar coverage. Rather, it said, the appropriate determination was whether there was “some connection with the insured vehicle.” The court emphasized that it would be anomalous if the passenger was denied UM coverage even though the driver, if injured under identical circumstances, would have received full benefits. The court adopted the following chain-of-events test for determining UM coverage:

For purposes of entitlement to UM benefits, (1) if a person was a passenger in an insured vehicle being operated by a named insured or a named insured’s family member, (2) during the chain of events resulting in injury to the person caused by an accident involving an uninsured motor vehicle, (3) then the person is a covered person at the time of his or her injury to the same extent as the named insured or the named insured’s family members would be entitled to receive UM benefits under the applicable UM policy.

(Internal quotation marks omitted.)

The Ninth Circuit pointed out that Dawes applied the chain-of-events test in determining that a passenger of an insured vehicle that was disabled, and who was accompanied by a family member of the named insured, had established sufficient connections to the insured vehicle to create coverage under a UM policy, and that an employee, using his employer’s truck to perform his work duties, did so as well. The Ninth Circuit noted, however, that Hawaii precedent did “not clearly address the circumstances of this case, where a permissive user was injured while returning to the insured vehicle after conducting an errand.”

The circuit court concluded that it could not readily discern whether the Hawaii Supreme Court would extend the chain-of-events test where the vehicle was not disabled as in Dawes and a covered family member of the named insured was not present, or the driver was not an employee of the insured performing work duties.

It then certified the following question to the Hawaii Supreme Court:

Under Hawaii law, is a permissive user of an insured vehicle, whose connection to the insured vehicle is permission to use the vehicle to run errands and drive to work, entitled to UM benefits under the chain-of-events test because he was injured by an uninsured motorist?

The case is State Farm Mutual Automobile Ins. Co. v. Mizuno, No. 17-15947 (9th Cir. Aug. 5, 2019). Attorneys involved include: Roy K. S. Chang and Harvey M. Demetrakopoulos, Shim & Chang, Honolulu, Hawai’i, for Defendant-Appellant. David R. Harada-Stone, Patricia Kehau Wall, and Richard B. Miller, Tom Petrus & Miller LLLC, Honolulu, Hawai’i, for Plaintiff-Appellee.

Insurance Coverage Law Center Comment

We will follow this case and discuss developments as warranted.