Volunteer Firefighter Injured While Directing Traffic Away from Accident Scene Found Not Entitled to SUM Coverage Under His Fire Company's Business Auto Policy

SUM – BUSINESS AUTO – MEANING OF "YOU" – "OCCUPYING"
Gallaher v. Republic Franklin Ins. Co.
(4th Dept., decided 2/11/2010)

An insurance actuary of one of your readers' companies could probably tell me what the chances are of seeing two reported decisions on the issue of supplementary uninsured motorists (SUM) or underinsured motorists coverage for volunteer firefighters in the span of two weeks.  Matter of American Alternative Ins. Corp. v. Pelszynski out of Suffolk County Supreme was the first; here's the second.

Volunteer firefighter James Gallagher had ridden to the scene of a motor vehicle accident on his fire company's truck.  Upon arrival, he exited the truck and, at the time of the accident that led to his injuries, was directing traffic away from the original accident scene.  The relevant SUM endorsement defined an insured as "[y]ou, as the named insured" and "[a]ny other person while occupying . . . [a] motor vehicle insured for SUM under this policy." The SUM endorsement also defined "occupying" as "in, upon, entering into, or exiting from a motor vehicle."

Republic Franklin, the volunteer fire company's business auto insurer, denied SUM coverage to Gallagher, and he sued for that coverage, arguing alternatively that he qualified as an "insured" under the policy's SUM endorsement or that he was "occupying" the SUM-covered fire truck at the time of his accident.  Wayne County Supreme Court denied both parties' motions for summary judgment, and both parties appealed.

In REVERSING the order appealed from insofar as it had denied Republic Franklin's motion for summary judgment, the Appellate Division, Fourth Department, held that: (1) Gallagher was not a named insured under the policy because the "[y]ou" in the SUM endorsement referred only to the fire company and did not also refer to an employee of the company; and (2) Gallagher was not "occupying" the fire truck at the time of his accident because his conduct in directing traffic was unrelated to the truck and was not incidental to his exiting it:

Addressing first plaintiff's cross appeal, we conclude that the court properly determined that plaintiff is not a named insured under the policy. The named insured was the fire company, and thus "[y]ou" in the SUM endorsement referred only to the fire company and did not, as plaintiff contends, also refer to an employee of the company (see Buckner v Motor Veh. Acc. Indem. Corp., 66 NY2d 211, 214; Matter of Coregis Ins. Co. v Miceli, 295 AD2d 511). Addressing next defendant's appeal, we agree with defendant that the court erred in determining that there is an issue of fact whether plaintiff was covered under the policy as a person occupying the truck. At the time of the accident, plaintiff had exited the fire company's truck and was directing traffic away from the scene of a motor vehicle accident.  Plaintiff's conduct in directing traffic was "unrelated to the [truck]" and was not incidental to his exiting it (Matter of Travelers Ins. Co. [Youdas], 13 AD3d 1044, 1045). Thus, under the facts of this case, plaintiff was not "occupying" the truck within the meaning of that term in the policy (see Matter of Martinez, 295 AD2d 277, 278; Coregis Ins. Co., 295 AD2d at 511). 

Does this decision conflict with and, as it's from the Appellate Division, override the Pelszynski decision?  One could argue either way.  The holding in Pelszynski turned not on the meaning of "you" as used in the first part of the SUM endorsement's definition of "insured", but on subpart 2.(b) of that definition.  Moreover, "occupying" was not at issue in Pelczynski.  Read literally, however, the Fourth Department's statement that "'[y]ou' in the SUM endorsement referred only to the fire company and did not, as plaintiff contends, also refer to an employee of the company" could be construed to conflict with the holding in Pelszynski.

Framed-Issue Hearing Ordered on Whether SUM Claimant's Injuries Arose from a Motor Vehicle Accident and While Claimant Was Occupying His Vehicle

AUTO – SUM – ACCIDENT – OCCUPYING – EVIDENCE SUFFICIENT TO WARRANT FRAMED-ISSUE HEARING
Matter of American Protection Ins. Co. v. DeFalco
(2nd Dept., decided 4/28/2009)

Claimant, a Suffolk County police officer, was injured while placing a motorist under arrest.  He settled his personal injury claim against the motorist and made this SUM claim under his own personal auto policy to American Protection, which commenced this special proceeding to stay the arbitration of that SUM claim and sought a framed hearing on whether claimant's injuries arose from: (1) an accident; (2) the "use and operation" of the underinsured motor vehicle; and (3) while claimant was "occupying" his patrol car.

Although he claimed in an affidavit that his injuries occurred when he was exiting his vehicle as it was struck by the motorist's vehicle, this description contrasted with claimant's prior statement, recorded in a "Suffolk County Police Department Injured Employee Report," in which he stated that he was injured "while attempting to subdue and place a violently struggling suspect under arrest."

In REVERSING the motion court's denial of American Protection's petition and remitting that matter back to Nassau Supreme for a framed-issue hearing, the Second Department held:

SUM benefits are not recoverable if the injuries were intentionally caused and not the result of an accident (see State Farm Mut. Auto. Ins. Co. v Langan, 55 AD3d 281; Met Life Auto & Home v Kalendarev, 54 AD3d 830; Matter of Allstate Ins. Co. v Massre, 14 AD3d 610, 611). It is also clear that DeFalco would not be entitled to SUM benefits under the American policy if he was not "occupying" a vehicle when he was injured. Thus, the occurrence of an accident and the "occupation" of a vehicle are conditions precedent to SUM coverage herein.

"The party seeking a stay of arbitration has the burden of showing the existence of sufficient evidentiary facts to establish a preliminary issue which would justify the stay" (Matter of Liberty Mut. Ins. Co. v Morgan, 11 AD3d 615, 616; see Matter of Eagle Ins. Co. v Viera, 236 AD2d 612). Here, American submitted documentary evidence which indicated that DeFalco's injuries did not arise from the "use or operation" of a vehicle. Although DeFalco submitted an affidavit in opposition to the petition, wherein he claimed that his injuries occurred when he was exiting his vehicle as it was struck by the Bell vehicle, this description contrasted with his prior statement, recorded in a "Suffolk County Police Department Injured Employee Report," in which he stated that he was injured "while attempting to subdue and place a violently struggling suspect [Bell] under arrest." At the very least, the two explanations of how DeFalco incurred his injuries raise a question as to his credibility, and thus a framed-issue hearing on the issue of coverage is warranted (see Matter of Eagle Ins. Co. v Lucia, 33 AD3d 552; Matter of Travelers Prop. Cas. Co. v Landau, 27 AD3d 477).

Similarly, American submitted documentary evidence which indicated that the collision could have been the result of an intentional act on Bell's part. Although this same evidence may be consistent with a conclusion that the collision was accidental, under all of the circumstances presented, American met its burden of tendering evidence sufficient to warrant a framed-issue hearing with respect to this issue as well (see Matter of Country-Wide Ins. Co. [Law], 97 AD2d 699).

Get In, Get Out, Move the Empties About, Yo-Ho, Yo-Ho, Yo-Ho

SUM – "OCCUPYING" – "UPON" – BEING "VEHICLE-ORIENTED"
Rosado v. Hartford Fire Ins. Co.
(Sup. Ct., Kings Co., decided 8/18/2008)

Remember that great list of prepositions they taught in grammar school? Okay, maybe circa 60's-70's grammar school. When they still had prepositions. And grammar.

about	behind	from	on	toward
above	below	in	on top of	under
across	beneath	in front of	onto	underneath
after	beside	inside	out of	until
against	between	instead of	outside	up
along	by	into	over	upon
among	down	like	past	with
around	during	near	since	within
at	except	of	through	without
before	for	off	to

Mrs. Swillinger made us memorize that list. And Seton Poems. Anyone out there remember Seton Poems? I think that I shall never see, a poem as lovely as a tree. --Joyce Kilmer. We parochial schooled third-grade boys in Swilly's class liked reciting that one aloud in class not because we were budding arborists (pun intended), but because of last word in the fourth line. Heh.

In any event, back to our regularly scheduled program.

Jesus Rosado was hit and injured by a box truck while making beer deliveries for his employer. Countrywide paid the $25,000 policy limit for the box truck and Rosado made an SUM claim under his employer's auto policy with Hartford, which defined an "insured" to include "any other person occupying * * * a motor vehicle insured for SUM under this policy." The policy's SUM endorsement defined "occupying" as "in, upon, entering into, or exiting from a motor vehicle." Lots of prepositions.

In lieu of demanding arbitration, Rosado and his wife brought this action for SUM benefits. In his deposition, Rosado described the beer delivery truck and testified that, in the course of making deliveries in and out of establishments on the day of the accident, he was leaning his upper body slightly into one of the truck's 12 side bays to make room for empty beer cases that he had brought back to the truck on a handtruck when the box truck hit him, pushing him approximately 10-12 feet before pinning him against the side of his delivery truck.

Hartford moved for summary judgment dismiss the complaint based on its contention that Rosado was not "occupying" the insured delivery truck and, therefore, did not qualify as an "insured" for SUM coverage. Hartford argued that Rosado's momentary contact with the insured delivery truck for the purpose of depositing empty beer cases into one of its bays could not be construed as his being either “in, upon, entering into, or exiting from a motor vehicle” when the subject accident occurred. Rosado cross-moved for summary judgment and for a declaration deeming Hartford to have consented to the $25,000 settlement.

In denying summary judgment to both parties, Kings County Supreme Court Justice Larry Martin held that questions of fact existed with respect to whether Rosado was "occupying" the subject vehicle at the time of his accident:

In the seminal case construing the parameters of the term "occupying" as it is used in SUM endorsements, Matter of Rice v Allstate Ins. Co., 32 NY2d 6, 11 [1973], the Court of Appeals held that “[t]he status of passenger is not lost even though he [or she] is not in physical contact with [the vehicle in question], provided there has been no severance of connection with it, his [or her] departure is brief and he [or she] is still vehicle-oriented with the same vehicle.” In addition, the term "occupying" in this context "has long received a liberal interpretation" (Matter of Travelers Ins. Co. [Youdas], 13 AD3d 1044, 1045 [2004]; see also Rowell v Utica Mutual Ins. Co., 77 NY2d 636, 639 [1991][noting that “[t]he term [“occupying”] has received a liberal interpretation because of the expansive definition in the [controlling] statute [Insurance Law § 3420 (f)(3)] and in standard policy endorsements”]). However, it has been recognized that “[m]ore than a mere intent to occupy a vehicle is required to alter the status of pedestrian to one ‘occupying’ [the subject vehicle]; and this is particularly so where there has been no previous passenger-oriented status (Matter of Rice, 32 NY2d at 11).

* * * * *

[W]here the facts support an interpretation that a sufficient unbroken nexus existed at the time of the accident between the alleged occupant and the subject vehicle and the injured party remained ostensibly "vehicle-oriented" when said accident occurred, courts consistently have determined that the party could be construed as “occupying” the subject vehicle for purposes of SUM coverage[.]

* * * * *

In addition, although the majority of the case law cited to by the parties and relied upon by the court concerns instances where the question of occupation of the subject vehicle revolves around that portion of the definition of “occupying” which refers to the “entering into, or exiting” from the vehicle, the court notes that said definition also encompasses situations where the injured party could be said to be found “upon” the vehicle in question. There is a dearth of case law addressing this aspect of the definition. However, this court is bound to address the issue as it is required to interpret contracts, such as the one at bar, so as to give meaning to all of their terms[.]

In the instant case, the court finds that a triable issue of fact exists as to whether plaintiff was sufficiently “vehicle-oriented” at the time of his accident such that he could be construed to have been "upon" the vehicle when said accident occurred. * * * * * Given the liberal interpretation generally afforded to the term “occupying,” the drastic nature of the remedy of summary judgment and the requirement that this court view the evidence proffered in the light most favorable to the non-movant, the court cannot determine, as a matter of law, that plaintiff was not occupying the subject vehicle at the time of his accident. Rather, given his prior occupancy in the vehicle, his intent to return to same and his arguably vehicle-oriented activity in opening and shutting the truck bays and loading and unloading same at the time of his accident, operations which by their very nature could be deemed intrinsic to the operation of a delivery truck, the court finds that questions of fact exist with respect to plaintiff's so-called “occupant” status which constrains the court from granting summary judgment to either party.

The court also found that Insurance Law § 3420(d) did not apply because Hartford had not denied coverage based on an exclusion, but on Rosado's lack of inclusion or qualification as an "insured". The court also denied that part of plaintiffs' cross motion which sought an order deeming Hartford to have consented to their underlying settlement with Countrywide:

[T]he provision governing such settlements unequivocally refers to an “insured” under the subject SUM endorsement. As questions of fact currently exist as to whether the plaintiff should be afforded the status of an insured under the SUM endorsement and the subject settlement provision contained therein, it would be premature for this court to determine that said provision currently applies to the tender by the third party tortfeasor’s insurer of $25,000 in settlement of plaintiffs' personal injury claim or Hartford Co.’s consent, or lack thereof, to same.

No UM Coverage for Claimant Not "Occupying" Employer's 70-Foot Tractor Trailer

UM – HIT-AND-RUN – "OCCUPYING" – "VEHICLE-ORIENTED"
Faragon v. American Home Assur. Co.
(3rd Dept., decided 6/5/2008)

Plaintiff was injured in a hit-and-run accident while instructing a customer in the use of a 50-55 foot-long boom lift that he had off-loaded from his employer's 70-foot tractor trailer. American insured the tractor trailer, and Nationwide was the plaintiff's personal auto insurer. American denied UM coverage benefits to the plaintiff on the ground that he was not "occupying" the tractor trailer, as the commercial auto policy required, at the time of the accident. Nationwide contended that plaintiff was covered by American, and that its coverage was thus secondary.

American's policy provided UM coverage for individuals "occupying" a covered vehicle. The term "occupying" was further defined in American's policy consistent with 11 NYCRR 60-2.3(f) and Insurance Law § 3420(f)(3) to include "in, upon, entering into, or exiting from a motor vehicle."

Supreme Court found that plaintiff was occupying the tractor trailer at the time of the accident and granted UM coverage under American's policy. The Third Department REVERSED, holding:

Interpreting the term "occupying" has resulted in differing tests in various jurisdictions (citations omitted). However, in New York "the term has long received a liberal interpretation and, thus, 'the status of passenger is not lost even though [an individual] is not in physical contact with [the vehicle], provided there has been no severance of connection with it, his [or her] departure is brief and he [or she] is still vehicle-oriented with the same vehicle'" (citations omitted).

Here, plaintiff was off-loading a 44,000 pound, 50-to-55 foot-long boom lift from a 70-foot tractor-trailer. The procedure involved many steps, including setting out safety cones, unchaining the boom lift, folding out and inserting pins in the jib, inspecting the basket, lowering the trailer, backing the machine off the trailer, and securing and extending axle shifts. Plaintiff had completed these steps, which he testified at his deposition typically took 20 to 30 minutes. He further testified that, after removing and readying the boom lift, he next trains the person renting it on the proper operation of the equipment, a procedure he estimated to take 30 to 35 minutes. He recalled during his testimony that, in the current situation, he had been training the person who was going to operate the equipment for 10 to 15 minutes when the accident occurred. Although the tractor-trailer reportedly remained running during the entire time and plaintiff's affidavit sets forth a more condensed time frame than his deposition for his activities at the site, it is inescapable that he was no longer vehicle-oriented. His absence from the vehicle was not intended to be brief and, at the time of the accident, he was engaged in instructing the lessee about the operation of the delivered equipment. Under such circumstances, he was no longer "occupying" his employer's vehicle[.]

Judgment for American declaring that Nationwide, not American, owed UM coverage to plaintiff.