What Constitutes "Use" of a Motor Vehicle?

Barry P. Goldberg sometimes has to analyze circumstances that may or may not be covered both to obtain insurance coverage for his clients and to effectively access insurance coverage from the adverse party. One area of controversy involves what constitutes "use" of a motor vehicle? Certainly, in the normal circumstance of driving a vehicle there is no question that it constitutes "use" of that motor vehicle. But, what happens when someone is removing an injured person from a motor vehicle? That was the controversial question recently decided by the 9th Circuit by reversing the District Court in Encompass Ins. Co. v. Coast National Ins. Co. (Aug. 13, 2014). I am particularly proud of the attorneys from Pollak, Vida & Fisher who litigated the case. Not only am I "of counsel" to that firm, but I started my practice with them almost 30 years ago.

The facts which gave rise to the decision are somewhat unique. Van Horn was a passenger in a car driven by Watson. Watson lost control of his vehicle and crashed into a light pole. A second car, which was not involved in the crash, stopped at the scene of the accident to render aid. Torti, a passenger in the second car and physically removed her from Watson's car. Van Horn suffered severe spinal injuries after the car accident, and became a paraplegic. Van Horn sued Torti in alleging that Torti caused Van Horn's injuries when she removed Van Horn from Watson's car. Torti was insured and defended by Encompass Insurance Company.

Torti also tendered her defense to two additional insurance companies — Mid-Century and Coast National. Mid-Century had also issued a car insurance policy to Torti covering "damages for which an insured person is legally liable because of bodily injury to any person . . . arising out of the . . . use of a private passenger car . . . ." The policy covered Torti's "use" of "any other private passenger car" — if such "use" was "with the permission of the owner." Thus, if Torti "used" Watson's car with Watson's permission when she removed Van Horn from Watson's car, the Mid-Century policy covered Torti.

Coast National had issued a car insurance policy toWatson, the driver of the car that crashed. The Coast National policy covered liability for personal injuries "for which any 'insured' becomes legally responsible because of an accident." The policy insured not only Watson, but also "[a]ny person using '[Watson's] covered auto' with [Watson's] permission." Thus, if Torti "used" Watson's car with Watson's permission when she removed Van Horn from Watson's car, the Coast National policy also covered Torti. Both Mid-Century and Coast National rejected Torti's tender, refusing to accept any responsibility for her legal defense. Encompass continued to bear sole responsibility for Torti's defense, and ultimately settled Van Horn's claims against Torti for $4 million. After settling Van Horn's lawsuit against Torti, Encompass brought suit against Mid-Century and Coast National seeking contribution for the expenses Encompass incurred in its defense and indemnification of Torti.

The District Court entered judgment in favor of Mid-Century and Coast National reasoning that Torti did not "use" Watson's car when she removed Van Horn from that car. The 9th Circuit panel reversed and held that unloading an injured passenger from a motor vehicle constituted "use" of that motor vehicle under California law. Specifically, the panel held that as used in the insurance policies at issue, the term "use" was defined by California Insurance Code § 11580.06(g). The panel further held that as defined by California Insurance Code § 11580.06(g), "use" of an automobile included unloading that automobile, and therefore, the car in this case was "used" when the injured passenger was removed.

The lesson in this case has many layers. First of all, an experienced personal injury lawyer should recognize all the possible sources of recovery. Second, an experienced insurance coverage lawyer is a huge advantage on both obtaining coverage for an insured an in accessing insurance for an injured plaintiff. Third, is best to have an experienced personal injury lawyer with an insurance coverage background.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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