The U.S. Court of Appeals for the Ninth Circuit, affirming a district court's decision, has ruled that an insured was "occupying" an insured vehicle while he was installing tire chains. The circuit court also ruled that the policyholder had not properly elected to reduce the policy's uninsured and underinsured ("UM/UIM") coverage limit.
The Case
Yelena Nikolaychuk asserted in the lawsuit she filed against National Casualty Company that Igor Nikolaychuk was installing tire chains on his work vehicle, which National Casualty insured, when he was struck and killed by an underinsured driver.
The U.S. District Court for the District of Oregon ruled that Mr. Nikolaychuk was "occupying" the vehicle when the accident occurred, and that RMI Transport LLC, the policyholder, had not properly elected to reduce the policy's UM/UIM coverage limit.
National Insurance appealed to the Ninth Circuit.
The Ninth Circuit's Decision
The Ninth Circuit affirmed.
In its decision, the circuit court first ruled that Mr. Nikolaychuk had been "occupying" the vehicle at the time of the accident.
The circuit court reasoned that the policy defined "occupancy" as "in, upon, getting in, on, out or off," and that applicable Oregon law defined "occupying" as "in or upon or entering into or alighting from."
According to the circuit court, a person was "upon" the insured car when a part of that person's body was above and rested on a portion of the car.
The Ninth Circuit found that Mr. Nikolaychuk met this test. It observed that, "[h]ands are body parts; tires form a portion of a car; and one's hands inevitably rest on a tire in the process of attaching chains to it."
The Ninth Circuit ruled, therefore, that it necessarily followed that Mr. Nikolaychuk was "upon" the vehicle when he was struck and killed and, therefore, that he was "occupying" the vehicle for purposes of the National Insurance policy.
The circuit court next found that a "vital omission" had thwarted RMI's attempt to reduce the policy's UM/UIM coverage limit.
To be valid, the circuit court explained, such an election "must" include specific formalities – including a "brief summary" comparing the price of UM/UIM coverage at the default coverage level to that of the lower level requested by the policyholder. The Ninth Circuit found that RMI's apparent desire to reduce its UM/UIM coverage did "not dispense with this requirement" and that, accordingly, no valid election had occurred in its absence.
The case is Nikolaychuk v. National Casualty Co., No. 18-36013 (9th Cir. Dec. 13, 2019).
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].