You are Not “In, On or Open” a Vehicle When You are Blocks Away
When a woman on a tour of the United States left the tour bus, checked into her hotel, walked into the shopping center of the town and was injured when struck by an automobile attempted to collect UIM benefits from the tour bus insurance policy in Sandrine Mounier, et al. v. RLI Corporation, et al., No. CV-19-01778-PHX-GMS, United States District Court For The District Of Arizona (January 17, 2020).
BACKGROUND
Defendant Four Season Travel, L.L.C. (“Defendant Four Season”), a California company, is in the business of hiring out buses and drivers to clients for a variety of services, including tours. Sandrine and Gustave Mounier (“Plaintiffs”), French residents, purchased a tour of the Western United States through Geo Tours USA (“Geo Tours”). Geo Tours hired Defendant Four Season to provide the tour bus and bus driver for the tour.
On November 10, 2015 the tour bus arrived in Page, Arizona and dropped the passengers, including Plaintiffs, off at their hotel. After the passengers deboarded, the bus driver parked and locked the tour bus in the hotel parking lot. Plaintiffs proceeded to check into their hotel and explore the shopping district in town. On their way back to the hotel to get ready for dinner, Plaintiffs crossed a crosswalk. While in the crosswalk, Ms. Mounier was hit by non-party Albert Henry’s car and fell on her wrist. The accident was .3 miles away from the hotel and occurred about two hours after Plaintiffs had deboarded the tour bus. Ms. Mounier was taken to a nearby hospital and then transported to Utah for further treatment. Plaintiffs were unable to finish the tour, and upon her return to France Ms. Mounier underwent surgery to treat her injuries.
Plaintiffs recovered the limits of Mr. Henry’s insurance policy and then notified Geo Tours and Defendant Four Season of their claims. Defendant Four Season turned the claim over to Defendant RLI who had issued a business auto policy including a California underinsured motorist coverage endorsement (the “Policy”) to Defendant Four Season. The Policy provided that Defendant RLI “will pay all sums the ‘insured’ is legally entitled to recover as compensatory damages from the owner or driver of an ‘uninsured vehicle.’” The Policy defines an “insured” as “[a]nyone ‘occupying’ a covered ‘auto.’” Defendant RLI denied Plaintiffs’ claim because it found that Plaintiffs did not qualify as “insured” under the Policy.
Plaintiffs sued RLI alleging breach of contract and insurance bad faith.
DISCUSSION
The Policy defines “occupying” as “in, upon, getting, on, out or off.” It is undisputed that, at the time of the accident, Plaintiffs were 0.3 miles away from the tour bus and were not getting in, on, out, or off the bus. Thus, the Plaintiffs’ coverage determination hinges on whether Plaintiffs were “upon” the tour bus because of multiple court decisions that that have stretched the language to include people close to the vehicle.
Under California law, to be “upon” a vehicle, an individual must be performing some act necessarily related to the vehicle and be in its immediate proximity at the time of the accident. Under Arizona law, an individual is “upon” a vehicle when the individual’s activities at the time of the accident are in such close proximity to the car and so related to its operation and use that they are an integral part of one’s occupancy and use of the car.
The Court found no conflict since both states require insureds to be near the insured vehicle and to be engaged in some activity closely related to the use of the vehicle. Thus, a choice of law analysis for the breach of contract claim is not necessary. Moreover, because the facts of the accident are undisputed, the Court only need to decide whether Plaintiffs qualify as insureds as a matter of law.
Many courts have addressed the issue of occupancy. Plaintiffs were neither walking to or from the tour bus but had deboarded the bus nearly two hours prior and were heading back to their hotel.
Plaintiffs argued that both Arizona and California look to the person’s purpose and intent at the time of the accident to determine “occupancy.” Because Plaintiffs’ purpose and intent was to tour the Southwest, and they were using the tour bus for that purpose, Plaintiff argued either state would find them to be insureds under the Policy. The tour bus was not being used for any purpose other than transportation and, more importantly, the tour bus was not being used by Plaintiffs at the time of the accident.
Because the Court found that Plaintiffs were not “occupying” the tour bus under either Arizona or California law, it concluded that Plaintiffs were not insured under the Policy. As a result, their breach of contract claim fails.
Liability for “bad faith” has been strictly tied to the implied-in-law covenant of good faith and fair dealing arising out of an underlying contractual relationship. Where no such relationship exists, no recovery for “bad faith” may be had. Defendant RLI’s Motion for Summary Judgment was granted because there was no coverage under RLI’s policy there could be no possibility of a tort of bad faith claim.
ZALMA OPINION
The court opinions that stretch the meaning of the “in, on or upon” language of an insurance policy caused this case to be brought to a trial court even though the plaintiff was neither in, on, upon or close to the vehicle but was three tenths of a mile away walking toward the hotel. It is time for the courts to use the simple, clear and unambiguous language of the policy and conclude that “in” means the plaintiff must be inside the vehicle, “on” means touching the vehicle, and “upon” means sitting on the vehicle. It does not logically mean near, close, or withing blocks of the vehicle.
© 2020 – Barry Zalma
This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States. The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.
Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.
Over the last 52 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.
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