9/25/2016. Ownership, Maintenance or Use. Ownership, Maintenance or Use

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1 Using an Automobile So As To Trigger Automobile Liability Insurance: The Consequences of Undefined Terms and Broad Judicial Interpretation September 30, 2016 William J. Robinson, Esq. Senior Claim Attorney, National General Insurance Introduction and Overview Goals for Today Farm Bureau Mut. Ins. Co, Inc. v. Evans (1981) - Going away party for Evans in an open field -bonfires and rain Rose parks his station wagon with back facing fire; tailgate open, with back seat facing the fire Three people in back seat; Ehinger lit an M-80 and threw it toward the bonfire It landed in a glass of beer held by Evans, exploding Suit filed. Farm Bureau insured the Rose vehicle; Farmers insured Ehinger. Both policies provided coverage for bodily injury arising out of the ownership, maintenance or use of the vehicle. 1

2 Farm Bureau Mut. Ins. Co, Inc. v. Evans (1981) [continued] Trial Court: the car was being used, so coverage under both policies Appeals Court: Reversed. Use of a vehicle requires the finding of some causal connection between the use of the vehicle and the injury The fact that the M-80 was lit inside the vehicle because it was raining is so remote that it does not furnish the necessary causal connection. Relevant North Carolina Personal Auto Policy [PAP] Provisions: Part A: Insured as used in this part means: 1. You [the named insured] or any family member for the ownership, maintenance or use of any auto or trailer. 2. Any person using your covered auto. Part C: The owner s or operator s liability for these damages must arise out of the ownership, maintenance or use of the uninsured motor vehicle. Typical Commercial Auto Policy Insuring Agreement: We will pay all sums an insured legally must pay as damages because of bodily injury or property damage to which this insurance applies, caused by an accident and resulting from the ownership, maintenance or use of a covered auto. 2

3 N.C. Gen. Stat. Ann : shall insure the person named herein and any other person, as insured, using any such motor vehicle or motor vehicles with the express or implied permission of such named insured, or any other persons in lawful possession, against loss from the liability imposed by law for damaged arising out of the ownership maintenance or use of such motor vehicle or motor vehicles Such rights are statutory and are written into every automobile liability policy as a matter of law up to the minimum financial responsibility limits. Nationwide Mut. Ins. Co. v. Chantos, 293 N.C. 431 (1977) Reliance Insurance Co. v. Walker, 33 N.C. App. 15 (1977) The gun rack case Arising out of the ownership, maintenance or use of the owned automobile Definitions: use including loading and unloading What s one of the uses of the truck? To transport guns. Therefore, there s coverage. State Capital Ins. Co. v. Nationwide Mut. Ins. Co., 350 S.E. 2d 66 (1986) Another gun rack case Gun discharged, injuring passenger as he was exiting Gun rack means causal connection for auto policy Concurrent coverage under homeowner s policy 3

4 Nationwide Mut. Ins. Co. v. Davis, 118 N.C. App. 494 (1995) Minor child pedestrian, exited vehicle, crossed street, struck Auto policy: causal connection between the use of the vehicle and the injuries Homeowner s policy: use of the van was not the sole proximate cause as there was negligent supervision. Maring v. Hartford Cas. Ins. Co., 126 N.C. App. 201, 205 (1997) The traffic officer case Hartford Fire Ins. Co. v. Pierce, 127 N.C. App. 123, 123, 489 S.E.2d 179, 179 (1997) The drunk employee gun case Integon National Insurance Co. v. Ward ex rel. Perry, 184 N.C.App. 532 (2007) The repair shop case 4

5 Deliberately thrown objects: no coverage Providence Washington Ins. Co. v. Locklear, 115 NC App. 490 (1994) bicyclist hit by beer can; no coverage Nationwide Mut. Ins. Co. v. Webb, 132 N.C. App. 524, 512 S.E.2d 764 (1999) bicyclist hit by soda can; no coverage Drive by shootings: no coverage Wall v. Nationwide Mut. Ins. Co., 62 N.C. App. 127 (1983) Liability policy Integon Specialty Ins. Co. v. Austin, 151 N.C. App. 593 (2002) Uninsured motorist policy Floyd v. Integon Gen. Ins. Corp., 152 N.C. App. 445 (2002) Under these circumstances and our courts' liberal construction of the term use, we conclude as a matter of law that Mr. McNeill was using the GMC truck at the time of the accident even though the GMC was not struck nor was it being driven or otherwise operated at the time of the accident. Integon Nat. Ins. Co. v. Helping Hands Specialized Transp., Inc., 758 S.E.2d 27 (N.C. Ct. App. 2014) - the wheelchair case application of the logic contained in Davis and Ward leads to the inference that the use of the insured van included moving Ms. Smith into her residence as a part of the transport service. Since we are unable to draw any meaningful distinction between the Davis and Ward facts and the facts of the instant case, and even though we might believe that the extension of coverage in those cases goes beyond the common-sense application of the principles of a causal connection, we are bound to follow them and hold that there is a sufficient causal connection between the van's use and Ms. Smith's injury requiring Integon's policy to provide coverage. 5

6 Questions? 6