Allied Mut. Ins. Co. v. Action Elec. Co., Inc.
| Decision Date | 09 April 1999 |
| Docket Number | No. S-97-1223,S-97-1223 |
| Citation | 593 N.W.2d 275,256 Neb. 691 |
| Parties | ALLIED MUTUAL INSURANCE COMPANY, a Corporation, Appellee, v. ACTION ELECTRIC COMPANY, INC., and Connie W. Emry, Personal Representative of the Estate of Thomas D. Emry, Deceased, Appellants. |
| Court | Nebraska Supreme Court |
Syllabus by the Court
1. Insurance: Contracts: Appeal and Error. The interpretation of an insurance policy is a question of law, in connection with which an appellate court has an obligation to reach its own conclusions independent of the determination made by the lower court.
2. Insurance: Contracts: Parties. Parties to an insurance contract may contract for any lawful coverage, and the insurer may limit its liability and impose restrictions and conditions upon its obligation under the contract not inconsistent with public policy or statute.
3. Statutes: Appeal and Error. Statutory interpretation is a matter of law, in connection with which an appellate court has an obligation to reach an independent, correct conclusion irrespective of the determination made by the court below.
4. Statutes: Legislature: Intent. In construing a statute, a court must determine and give effect to the purpose and intent of the Legislature as ascertained from the entire language of the statute considered in its plain, ordinary, and popular sense.
5. Insurance: Contracts: Motor Vehicles: Statutes: Public Policy: Highways. A provision drawn by an insurer to comply with the statutory requirements of uninsured or underinsured motorist coverage must be construed in light of the purpose and policy of the statute. Such a provision, drawn in pursuance of a statutorily declared public policy, is enacted for the benefit of injured persons traveling on the public highways.
6. Insurance: Contracts: Motor Vehicles. The purpose of the Uninsured and Underinsured Motorist Insurance Coverage Act is to give the same protection to a person 7. Insurance: Contracts: Statutes. Where a statutory omnibus provision is in conflict with the provisions of an insurance policy, the statute and not the policy provision is controlling.
injured by an uninsured or underinsured motorist as the person would have had if he or she had been injured in an accident caused by an automobile covered by a standard liability policy.
8. Insurance: Contracts. Whether an insurance contract is ambiguous and, therefore, in need of construction is a question of law.
9. Insurance: Motor Vehicles. A causal relationship or connection must exist between an accident or injury and the ownership, maintenance, or use of a vehicle in order for an incident to fall within the meaning of the phrase "arising out of the ownership, maintenance, or use of a vehicle."
David Geier, of Healey & Wieland Law Firm, Lincoln, for appellants.
James A. Snowden and Michael A. England, of Wolfe, Snowden, Hurd, Luers & Ahl, Lincoln, for appellee.
Before HENDRY, C.J., and WRIGHT, CONNOLLY, GERRARD, STEPHAN, McCORMACK, and MILLER-LERMAN, JJ.
Action Electric Company, Inc. (Action), and Connie W. Emry, personal representative of the estate of Thomas D. Emry (Emry's estate), appeal from a summary judgment granted in favor of Allied Mutual Insurance Company (Allied) on the grounds that Emry was not "using" the vehicle for purposes of insurance coverage at the time he was struck and killed by another vehicle. The issue presented is whether a person who has stopped and exited a vehicle in order to assist victims of a traffic accident is "using" the vehicle for purposes of a policy of automobile insurance.
The interpretation of an insurance policy is a question of law, in connection with which an appellate court has an obligation to reach its own conclusions independent of the determination made by the lower court. American Family Ins. Group v. Hemenway, 254 Neb. 134, 575 N.W.2d 143 (1998).
Thomas Emry (Emry) died September 17, 1993, while attempting to help persons involved in an automobile accident which Emry witnessed. Emry and his family had been to a high school football game and were returning home, traveling southbound on Highway 31. While stopped at a stop sign at the crossroads of Highways 31 and 36, Emry witnessed a car and a pickup truck collide in the intersection.
Emry exited his vehicle, telling his family he was going to see if anyone was hurt. As Emry approached the intersection, he raised his hands to warn other drivers, and he was struck by an underinsured automobile which traveled through the intersection at approximately 55 m.p.h. Emry was approximately 25 feet from his vehicle at the time he was struck.
The vehicle Emry was driving was covered by a "business auto policy" issued by Allied to Action. Emry was not listed as an insured on the policy, but he was using the insured vehicle with permission. The policy included the following provisions:
SECTION II--LIABILITY COVERAGE
A. COVERAGE
We will pay all sums an "insured" legally must pay as damages because of "bodily injury" or "property damage" to which this insurance applies, caused by an "accident" and resulting from the ownership, maintenance or use of a covered "auto."
....
1. WHO IS AN INSURED
The following are "insureds":
a. You for any covered "auto." b. Anyone else while using with your permission a covered "auto" you own, hire or borrow....
....
NEBRASKA UNDERINSURED MOTORISTS COVERAGE
....
1. We will pay all sums the "insured" is legally entitled to recover as damages from the owner or driver of an "underinsured motor vehicle"....
....
1. You.
2. If you are an individual, any "family member".
3. Anyone else "occupying" a covered "auto" or a temporary substitute for a covered "auto"....
....
F. ADDITIONAL DEFINITIONS
The following are added to the DEFINITIONS Section:
....
2. "Occupying" means in, upon, getting in, on, out or off.
Emry's estate and Action filed a claim with Allied for underinsured motorist benefits, and Allied filed this action for declaratory judgment, seeking a determination of the scope of coverage under the policy. The issue before the trial court was whether the commercial automobile insurance policy issued by Allied provided underinsured motorist coverage for the damages resulting from the death of Emry. Allied contended that the policy was unambiguous and provided underinsured coverage for Emry as a permissive driver only if he was "occupying" the covered vehicle, since he was not a named insured under the policy. Emry's estate and Action conceded that he was not a named insured under the policy. However, they asserted that under Neb.Rev.Stat. § 60-577 (Reissue 1993) (now codified at Neb.Rev.Stat. § 44-6408 (Reissue 1998)), Allied could not limit underinsured motorist coverage to persons "occupying" the vehicle, when the liability portion of the policy covered persons "using" the vehicle. Emry's estate and Action contended that Emry was using the vehicle at the time he was struck and that, thus, he should be covered by the underinsured motorist portion of the policy.
The trial court found that even assuming that the coverages must be identical for insureds under the policy, Emry was not "using" the vehicle when he was struck and killed by the under-insured driver. The court distinguished between named insureds and their family members who are protected when they are operating or are passengers in a motor vehicle, as well as when they are engaged in other activities, and a permissive driver's coverage under a policy extending underinsured motorist coverage which depends on and is connected to use of the vehicle to which the policy applies. Relying upon Farmers Union Co-op. Ins. Co. v. Allied Prop. & Cas., 253 Neb. 177, 569 N.W.2d 436 (1997), and National Union Fire Ins. Co. v. Bruecks, 179 Neb. 642, 139 N.W.2d 821 (1966), the court concluded that the injuries to and the death of Emry did not arise out of the "use" of the insured vehicle.
The trial court found that Emry was struck at least 25 feet from the vehicle and was not engaged in activities connected to use of the vehicle such as changing a flat tire, loading or unloading materials or other articles carried by the vehicle, or other actions that were causally related to its use. Rather, the court determined that the vehicle was merely the means by which Emry arrived at the location of the accident. The court concluded that under the policy issued, the underinsured motorist coverage was not applicable to the accident that resulted in Emry's death and entered judgment accordingly in favor of Allied. Emry's estate and Action appeal.
Emry's estate and Action claim the trial court erred in finding that the commercial
automobile insurance policy issued by Allied did not provide coverage for the damages resulting from the death of Emry.
It is conceded that Emry was not a named insured under the policy issued by Allied. The policy states that underinsured motorist coverage is provided only for persons "occupying" the insured vehicle, which is defined in terms which imply actual contact or close physical proximity to the insured vehicle.
Emry's estate and Action argue that under the plain language of § 60-577(1) and public policy, the underinsured motorist coverage provided must apply to the same persons who are insured under the liability provisions of the policy. Allied contends that such limitation does not violate the language of § 60-577(1) or public policy.
Parties to an insurance contract may contract for any lawful coverage, and the insurer may limit its liability and impose restrictions and conditions upon its obligation under the contract not inconsistent with public policy or statute. American Family Ins. Group v. Hemenway, 254 Neb. 134, 575 N.W.2d 143 (1998). Statutory interpretation is a matter of law, in connection with which an appellate court...
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