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No UIM coverage and a missed flight

No UIM coverage and a missed flight

No UIM coverage and a missed flight
February 01
15:42 2022

INSURANCE-RELATEDCOURTCASES

Digested from case reports published online

COURT DECISIONS

No UIM coverage and a missed flight

In the early morning, Kevin McGrath was traveling from his home in Lowell, Vermont, to the Burlington International Airport to catch a flight. McGrath was driving a car with the owner riding in the passenger seat. McGrath stopped at a gas station/convenience store in Johnson, Vermont. After pulling up to the pump at approximately 6:28 a.m., McGrath got out of the car, inserted a credit or debit card into the pump, and began pumping gas. The owner got out of the car and went into the convenience store.

At approximately 6:31 a.m., McGrath finished pumping gas and walked toward the store. Approximately three minutes later, McGrath and the owner left the store; they were carrying coffee and walking toward the car with the intention of reentering and continuing their trip to the airport. When they were about 30 to 40 feet from the owner’s car, a pickup truck struck both McGrath and the owner.

McGrath filed a claim for underinsured motorist (UIM) benefits with the owner’s auto insurer, Progressive Northern Insurance Company, asserting that he qualified for coverage under the terms of the policy. The policy provided coverage for “damages that an insured person is legally entitled to recover from the owner or operator of … an underinsured motor vehicle” because of injuries sustained by an insured person caused by an accident involving the underinsured motor vehicle. The policy defined “insured person” for purposes of UIM benefits to include: (1) the individuals who are named insureds under the terms of the policy—i.e., the owner; (2) “[a]ny person while operating a covered auto with the permission of” a named insured; and (3) “[a]ny person occupying, but not operating, a covered auto.” McGrath was not a named insured, so he was entitled to UIM coverage under the owner’s policy only if he was “operating” or “occupying” the car under the terms of the policy. The policy did not define the term “operating”; it defined “occupying” to mean “in, on, entering or exiting.”

Progressive denied McGrath coverage under the owner’s policy based on its determination that he was not “operating” or “occupying” the car under the terms of the policy. McGrath filed suit, and the parties agreed to a declaratory judgment action on stipulated facts; without discovery, they filed cross-motions for summary judgment.

The trial court granted summary judgment to Progressive, concluding that neither “operating” nor “occupying” was ambiguous with respect to an individual who was 30 to 40 feet from the car. Specifically, the court said that, based on a “common sense lay person’s understanding” of those terms, McGrath “was not controlling the operation of the vehicle at the time, nor was he near enough to be in the process of entering it,” and thus he was not entitled to UIM coverage under the owner’s policy.

McGrath appealed, arguing that the court adopted an overly narrow interpretation of the policy language. Specifically, he argued that modern technology necessitates an understanding of “operating” that takes into account that people can do things incidental to the operation of a car, such as locking or unlocking the doors, or even starting the ignition, from a distance. As to “occupying,” McGrath urged the court to adopt a multi-factorial approach in determining whether he was “occupying” the vehicle in this case.

The supreme court concluded that McGrath was neither “operating” nor “occupying” the car at the time of the accident. Because the only plausible theory was that McGrath was “entering” the car at the time of the accident, the court said, it must determine the meaning of “entering” and whether it was ambiguous in this case. The court noted that “entering” may be susceptible to more than one reasonable meaning depending on at what point a person is considered to begin the process of “coming or going into” the insured car.

In a narrow sense, “coming or going into” may mean the point in time at which an individual crosses the threshold of a car to enter it; but it also may encompass a broader scope of conduct, including some time leading up to the point when an individual actually crosses the threshold into the car.

The court recognized that a narrow interpretation requiring physical contact with the vehicle was inconsistent with the remedial purpose of underinsured motorist coverage. But the court declined to adopt any particular test because it concluded that there was no ambiguity as to whether McGrath was entering the car under any reasonable understanding of that term. The court concluded that he was not “entering” the car for purposes of Progressive’s UIM coverage.

The judgment of the trial court was affirmed.

Progressive Northern Insurance Company v. McGrath—Supreme Court of Vermont—June 22, 2021—No. 2021-026.

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