Uninsured / Underinsured Coverage

Attorneys handling uninsured / underinsured claims will find this article from the Claims Journal interesting.  The law discussed in the article is Missouri law but Texas law is similar and the results would probably be the same in Texas.  The article is titled, UIM Endorsement Doesn’t Cover Worker Injured While Not Occupying Employer’s Truck.

On October 6, 2016 the U. S. District Court for the Western District of Kentucky, applying Missouri law, granted a summary judgment for Travelers Property & Casualty Company of America, after holding that the injured plaintiff was not insured by Travelers because at the time of the accident he was not occupying the vehicle that struck him.  The decision is titled Spiller v. Travelers Property Casualty Company of America.

The facts were straightforward.  Plaintiff was employed by a repaving contractor and was responsible for caulking  along a 12 mile stretch of a four lane highway.  While plaintiff was working on the roadway, he was followed by a truck with a flashing arrow, warning traffic approaching from the rear to move to the left lane because there was construction work in the right lane.  After several hours of work one day, the arrow board attached to the truck was struck from behind by another vehicle driven by one Paul Owens.  The force of the collision caused the truck following plaintiff to strike and injure him.

Plaintiff settled his claim against Owens’s auto insurer for its policy limits of $100,000.  He then presented an underinsured motorist claim to Travelers, the insurer of his employer’s truck.  Travelers rejected the claim, alleging that plaintiff was not an insured under the UIM endorsement of the Travelers policy.  Plaintiff sued.  Whether or not the plaintiff qualified as an insured under the UIM coverage of the Travelers policy was the sole issue of the case.

The Missouri Underinsured Motorist Coverage endorsement of the Travelers policy provided that travelers “will pay all sums the ‘insured’ is legally entitled to recover as compensatory damages from the owner or driver of an ‘underinsured motor vehicle’.  The damages must result from ‘bodily injury’ sustained by the ‘insured’ caused by an ‘accident’.”

The underinsured motorist endorsement also provided that anyone “occupying” a covered auto qualified as an insured, and “occupying” was defined by the policy as “in, upon, getting in, on, out or off.”  The parties agreed that plaintiff would be considered an insured under the Travelers UIM endorsement only if, at the time of the accident, he was occupying the truck that had been following him as he worked on the roadway.  Plaintiff contended that, even though he was five feet to a car length away from the truck, he still was “upon” the truck at the time of the accident, so he was then “occupying” it and therefore qualified an insured under the policy covering the truck.

In granting the Travelers summary judgment motion on coverage, the court noted that Missouri courts had consistently held that the policy words used to define the term “occupying” are not ambiguous and should be applied as they are commonly used and understood.  The Court found that Missouri law had generally distilled the cases construing the definition of “occupying” into two categories, in the first of which the reason the claimant left the vehicle in question and his activities after so doing are directly related to the insured vehicle itself.  This category normally includes situations where a vehicle has malfunctioned or sustained damage and the claimant is trying to repair the damage, prevent further damage, or is giving or receiving information about the damage.  Because the injuries in this category of cases result directly from the operation of the vehicle, courts have liberally construed the policy “occupancy” provision and find there is UIM coverage for the claimant.

The second category of cases construing the term “occupancy” includes cases where the vehicle is the means of transportation to the point where the claimant leaves it, but the reason for his leaving it is unrelated to the vehicle itself.  Courts in these cases are more rigid in requiring a claimant to prove he fits within one of the definitions of the term “occupancy.”

The court discussed the facts and holdings of four Missouri cases it found helpful in addressing the parties’ arguments over what constituted “occupying” in this case within the meaning of the Missouri UIM endorsement.  One such case noted that no cases in the second of the two categories discussed above have held that the “upon” requirement is met where the claimant was not in contact with the vehicle, or at least in close proximity to it, immediately before the accident.

The Missouri Court of Appeals on the occupancy issue, have articulated a four-part test to determine if an individual is occupying an insured vehicle: (1) There must be a causal connection between the injury and the use of the vehicle; (2) the claimant must be in reasonably close geographic proximity to the vehicle; (3) the claimant must be vehicle oriented rather than highway or sidewalk oriented at the time of the accident; and (4) the claimant must also be engaged in a transaction essential to the use of the vehicle.

Starting first with the two categories of cases actually recognized as authoritative by the Missouri courts, the court said that the facts did not clearly fit into the first category (nor did they satisfy the elements of the four-part test), thereby imposing upon plaintiff the more rigid and literal requirement of occupancy.  At the time of the accident, as stated above, plaintiff was five feet to a car length away from the front of the insured vehicle, and was not getting in or out of it.  He was last inside the truck about five minutes before the collision.  Nor was plaintiff engaged in activity “directly related to the insured vehicle itself.”  He was not involved in a situation where the vehicle had malfunctioned and he was attempting to repair it.  Nor was plaintiff returning to the truck to retrieve a tool or equipment at the time of the collision.  The closest he got to that was by using the flashing arrow light pulled behind the truck, but he was not using the truck itself at the time of the accident.  The activity plaintiff was engaged in at the time of the accident was not essential to the use of the truck, nor was it even vehicle-oriented.

The court noted, finally, that the fact that the plaintiff was struck by insured vehicle does not render him an occupant of it.  The word “upon” simply cannot be stretched that far.  To do so would mean anyone struck by a vehicle would be an occupant regardless of his or her status.

Based on this reasoning, the court found that plaintiff was not occupying the truck at the time of the accident and therefore was not covered under the UIM provision of his employer’s truck insurance policy.  Travelers’s motion for summary judgment was granted.