Use and Operation – Should the SUM endorsement be read differently than the no-fault endorsement?

Use and Operation.  This is one area of law that is all over the place.  Practitioners that are called upon to give opinions on whether coverage is implicated through a vehicle’s use and operation, and whether coverage should be shared between numerous carrier, should usually walk on egg shells.  This is a difficult area of law, and it changes every day, and this case is a doozy.

I am going to pretty much cut and paste this decision and the dissent – something I try to avoid.  In my years of practice, I have never seen a court explicitly hold that use and operation should have a different interpretation under the SUM endorsement as opposed to the PIP endorsement.  If someone could give me a bright line rule on this coverage issue, please share.  Please do not cite Matter of Manhattan & Bronx Surface Tr. Operating Auth. (Gholson), 71 AD 1004 (2d Dept. 1979).

Also, this may end up at the court of appeals.  It really should actually.  And now………..

Matter of Liberty Mut. Fire Ins. Co. v Malatino, 2010 NY Slip Op 06204 (3d Dept. 2010)

“While respondent Marcia Malatino (hereinafter respondent) was returning to work after taking a break in the employer’s parking lot, she walked into a piece of sheet metal extending approximately five feet beyond the tailgate of a coworker’s parked pickup truck,[FN1] sustaining facial lacerations and a broken nose. According to the record, the coworker had torn the sheet metal off a building on his property and planned to deliver it to a junkyard after work.”

“Initially, we note that the issue herein involves the right to arbitration under the specific terms of the parties’ supplemental underinsured motorists policy and not the application of any statutory no-fault provisions [FN2]. A court may grant an application to stay arbitration “where ‘the particular claim sought to be arbitrated is outside [the] scope of the agreement to arbitrate'” (Matter of Farm Family Cas. Ins. Co. [Trapani], 301 AD2d 740, 741 [2003]

Clearly, the pickup truck was not being operated at the time of the accident — having been parked in the employer’s lot when the coworker arrived at work. The focus herein, however, is whether the vehicle was in use so as to fall within the scope of the terms of the supplemental underinsured motorists policy. Here, at the time of respondent’s injury, the pickup truck was being used by the coworker to transport the sheet metal to the junkyard after work. Construing the language of the supplemental underinsured motorists policy liberally “in favor of the insured and strictly against the insurer” (Penna v Federal Ins. Co., 28 AD3d at 731), and given the causal connection between the use of the pickup truck to transport the sheet metal and respondent’s injuries, we find that respondent’s request for arbitration falls within the scope of the parties’ agreement….

NOW THE DISSENT

“While “use” of a motor vehicle encompasses more than just driving and extends to other incidental activities (see Rowell v Utica Mut. Ins. Co., 77 NY2d 636, 639 [1991]), there are limits to that term and the corresponding insurance coverage [FN4]. The majority holds that the truck here was being used to contain sheet metal until the coworker could transport it, rendering the vehicle in “use.” This broad finding places no parameters on the use of a vehicle. It is unclear if the majority considered that the truck was in use while containing the sheet metal only because the coworker intended to transport the sheet metal to the junkyard that same day, or if the truck would be considered in use as a vehicle if the sheet metal was placed there a year earlier and the coworker regularly parked his truck with metal protruding from his tailgate. Conversely, if the truck was never moved from the parking lot but was regularly utilized to store different materials in the same location, would the parked truck constantly be in use as a vehicle? Rather than [*4]expanding the application of the statute and regulation requiring coverage for injuries arising out of a “motor vehicle’s ownership, maintenance or use” (11 NYCRR 60-2.3 [f] [II]; see Insurance Law § 3420 [f] [1]), we should adhere to the current rule that looks to whether the “circumstances constituted an ‘on-going activity relating to the vehicle’ which would necessitate a conclusion that the vehicle was in use” (Trentini v Metropolitan Prop. & Cas. Ins. Co., 2 AD3d 957, 958 [2003], lv dismissed 2 NY3d 823 [2004], quoting Matter of Celona v Royal Globe Ins. Co., 85 AD2d 635, 636 [1981]; see Zaccari v Progressive Northwestern Ins. Co., 35 AD3d 597, 599-600 [2006]); Wooster v Soriano, 167 AD2d at 234).

In Sullivan v Barry Scott Agency, Inc. (23 AD3d 889 [2005]), this Court held that a plaintiff’s back injury caused by lifting a heavy box was not related to the use of a motor vehicle, even though he was standing in a delivery van when unloading the box. We found the proximity to the vehicle “wholly incidental,” “[a]s plaintiff’s injuries would have occurred even if he had been standing on the ground and lifting the box” (id. at 890; see Sochinski v Bankers & Shippers Ins. Co., 221 AD2d 889, 889 [1995]; United Servs. Auto. Assn. v Aetna Cas. & Sur. Co., 75 AD2d 1022, 1022 [1980]; cf. Walton v Lumbermens Mut. Cas. Co., 88 NY2d 211, 215 [1996]). Similarly, respondent here would have received the same injuries had the sheet metal she walked into been protruding from any object other than a vehicle. Under the circumstances, there was no ongoing activity related to the parked truck — in its capacity as a motor vehicle, rather than as a storage bin for sheet metal — so as to necessitate a conclusion that the vehicle was in use when respondent was injured (see Sullivan v Barry Scott Agency, Inc., 23 AD3d at 890; Matter of New York Cent. Mut. Fire Ins. Co. [Hayden — Allstate Ins. Co.], 209 AD2d 927, 928 [1994] [staying arbitration where “accident did not arise out of the inherent nature of the automobile as such”]; Reisinger v Allstate Ins. Co., 58 AD2d 1028, 1028 [1977], affd 44 NY2d 881 [1978]; McConnell v Fireman’s Fund American Ins. Co., 49 AD2d at 677). Accordingly, petitioner was entitled to a stay of arbitration because its insurance policy does not provide coverage for respondent’s injuries.”

Occupation of a vehicle implicated through rearranging items inside vehicle while standing outside of it

Rosado v Hartford Fire Ins. Co., 2010 NY Slip Op 02119 (2d Dept. 2010)

“[An injured person was] standing with his feet on the pavement, reaching with his hands into a side bay of the delivery truck to rearrange empty cases of beer. When the box truck hit the plaintiff, it pushed him approximately 10 to 12 feet, pinning him between his delivery truck and the box truck, until he came to a stop against the first side bay of the truck on the driver’s side.”

“In accordance with the liberal interpretation afforded the term “occupying” (see Rowell v Utica Mut. Ins. Co., 77 NY2d 636, 639), we find, as a matter of law, that the injured plaintiff was “in” or “upon” the delivery truck at the time of the accident such that he was “occupying” the delivery truck within the meaning of the SUM endorsement”

Since the PIP case law seems to track the SUM case law as to use, occupation and operation, do we have an expansion of these terms of art?

A person who parks a truck on the side of the road, exits it and directs traffic is not using or operating the truck

Gallaher v Republic Franklin Ins. Co., 2010 NY Slip Op 01143 (4th Dept. 2010)

“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”

Use and operation issues are usually fact sensitive and can go either way many times.  In this case, the tipping point was that Plaintuff’s actions were not incidental to his use of the vehicle.  This fact patter is similar to Progressive Cas. Ins. Co. v. New York State Ins. Fund, 47 A.D.3d 633 (2d Dept. 2008).  But See, Mazzarella v. Paolangeli, 63 A.D.3d 1420 (3d Dept. 2009).

Robbing someone while they are chaging a tire is considered use and operation in Florida

In light of the dearth of no-fault cases, I have devoted this week’s postings to interesting issues that have arisen in Florida no-fault law. Today’s case is from the Florida Supreme Court, and was decided in 1999. It should be noted that the issue of “use and operation” in New York is one that has created numerous conflicts between the Second Department and Third Department.

But, this case is really interesting in seeing how expansive the phrase “use and operation” of a motor vehicle is in Florida.

Blish v. Atlanta Causalty Company, 736 So.2d 1151 (Fla. 1999)

Karl Blish left work on January 6, 1995, drove a coworker home, spent a few minutes at the coworker’s house, and then headed home himself. Blish’s pickup truck had a blowout on U.S. 1 in Brevard County and he pulled over to change the tire. He jacked up the truck and was loosening the lug nuts when he was attacked from behind by several assailants. The men choked and beat him (he testified that he “might have went unconscious”) and stole between eighty and a hundred dollars from his pocket. After the attack, Blish recovered his glasses, did his best to finish changing the tire, and drove home (“I just barely got the tire on and I drove home.“). He did not go to the hospital or call police because he did not think that he had been hurt badly enough (“I was just going to write it off as a loss, I guess.“).

A week later, he experienced severe abdominal pain, was rushed to the hospital in an ambulance, and was diagnosed as suffering from a ruptured spleen, which doctors removed.

Under these circumstances, the actual source of the injury-causing blow is not dispositive–whether it came from a negligent driver in a passing vehicle or a violent group of passing thugs is not decisive. It was the use and maintenance of the truck that left Blish stranded and exposed to random acts of negligence and violence, and he was in the very act of performing emergency maintenance on the vehicle when he was injured.

Acts of violence are an ageless and foreseeable hazard associated with the use of a vehicle–for once a person sets out in a vehicle, he or she is vulnerable. The highwaymen and desperados of bygone times preyed on the wayfarer, and these villains are with us still. Each Floridian today, when he or she gets behind the wheel, faces a variety of dangers: a car-jacking at a stoplight, or a strong-arm robbery at a deliberately staged rear-end collision, or a road rage assault in rush hour traffic, or even a random shooting by an anonymous sniper from an overpass.

The danger is particularly acute when the motorist is stranded as the result of a disabled vehicle. The scenario in the present case is every motorist’s nightmare. Losses resulting from a violent encounter with this ageless road hazard–i.e., the highwayman or opportunistic thug–might reasonably be said to be very much in the contemplation of Florida consumers when they are contracting to purchase auto insurance. The motivation of the assailant–whether it be to “possess or use” the vehicle, or to steal the victim’s wallet or purse, or simply to harm the victim–is a nonissue to the consumer.

Compare, e.g., Hammond v. GMAC Ins. Group 56 AD3d 882 (3d Dept. 2008); Matter of Manhattan & Bronx Surface Transit Operating Authority, 71 AD2d 1004 (2d Dept. 1979). But see, Mazzarella v. Paolangeli, 63 AD3d (3d Dept. 2009); 1420Trentini v. Metropolitan Property and Cas. Ins. Co., 2 AD3d 957 (3d Dept. 2003).