Britt v. Phoenix Indem. Ins. Co.

• Citation: 120 N.M. 813,1995 NMSC 75,907 P.2d 994
• Decision Date: 13 November 1995
• Docket Number: Nos. 22769,22765,s. 22769
• Parties: Daniel BRITT, Plaintiff-Appellee, v. PHOENIX INDEMNITY INSURANCE COMPANY and Dairyland Insurance Company, Defendants-Appellants.
• Court: Supreme Court of New Mexico

Page 994

907 P.2d 994

120 N.M. 813

Daniel BRITT, Plaintiff-Appellee, v. PHOENIX INDEMNITY INSURANCE COMPANY and Dairyland Insurance

Company, Defendants-Appellants.

Nos. 22769, 22765.

Supreme Court of New Mexico.

Nov. 13, 1995.

[120 N.M. 814] Miller, Stratvert, Torgerson & Schlenker, P.A., Terri L. Sauer, Albuquerque, for Appellant Dairyland.

Massey, McDonald & Boone, P.C., Bruce S. McDonald, Albuquerque, for Appellant Phoenix Indemnity.

Law Offices of Daniel J. O'Friel, Ltd., Daniel J. O'Friel, Santa Fe, for Appellee.

OPINION

MINZNER, Justice.

In this consolidated appeal Dairyland Insurance Co. (Dairyland) and Phoenix Indemnity Insurance Co. (Phoenix) appeal from the trial court's order granting declaratory relief and directing the parties to arbitrate an uninsured motorist dispute. This appeal raises an issue of first impression for New Mexico courts: whether uninsured motorist coverage extends to a victim of an intentional tort perpetrated by a passenger in an uninsured motor vehicle. We conclude that an intentional act may be an "accident" for uninsured motorist coverage purposes but that there must be some connection, other than proximity in time and place, between the act of the passenger and that of the uninsured motorist. We affirm in part, vacate in part, and remand for arbitration.

I. FACTS

On April 22, 1994, Plaintiff Daniel Britt (Britt) was a passenger in a vehicle driven by Jacqueline Glass (Glass) when it was struck from behind by another vehicle. Although there was minor damage to Glass's vehicle, neither Britt nor Glass sustained any injury from the collision. Britt exited the vehicle in order to assess the damage and to obtain information from the driver of the other vehicle. Two male passengers exited the other vehicle, and a physical altercation ensued. As Britt retreated to Glass's vehicle, one of the men pursued him and stabbed him through the open passenger-door window. It is undisputed that the female driver of the other vehicle remained in the vehicle during the attack. The identity of the assailants and the other vehicle were never established. See generally American States Ins. Co. v. Frost, 110 N.M. 188, 188, 793 P.2d 1341, 1341 (1990) (noting that NMSA 1978, Section 66-5-301 (Repl.Pamp.1994) equates uninsured and unknown motorists). The stab wound severed an artery in Britt's leg, and he lost a great deal of blood before receiving medical treatment. Britt incurred medical bills of approximately $17,000, and he sought indemnification of those expenses under insurance policies issued by Dairyland and Phoenix.

Dairyland provided uninsured motorist coverage on the Glass vehicle, and Phoenix provided the same coverage on two vehicles owned by Britt's mother. The language of the uninsured motorist provisions of the two policies are, for purposes of this appeal, substantially similar. Both policies provide that the insurer will pay damages "which an insured [person] is legally entitled to recover from the owner or operator of an uninsured motor vehicle." Moreover, both policies specify that coverage applies to "accidents" arising out of the "ownership, maintenance or use of the uninsured motor vehicle." This standard policy language generally tracks the language of the New Mexico uninsured motorist statute. See § 66-5-301.

Britt brought this action for declaratory judgment in district court seeking declarations that (1) he is an "insured" under the uninsured motorist provisions of both policies; (2) his injuries arose out of an "accident" as that term is used in both policies; and (3) he is entitled to recover from the uninsured motorist, and therefore he is entitled to recover under the uninsured motorist endorsements of the two policies. The trial court granted Britt the requested declaratory relief with respect to the first two issues and ordered the case to arbitration for resolution of the third.

II. DISCUSSION

A. Was the trial court's order a final order?

As a threshold issue, we consider whether the trial court's order is a final, appealable order. Although none of the parties have raised this issue, we raise it sua sponte because this Court lacks jurisdiction to entertain an appeal from a non-final order. See, e.g., B.L. Goldberg & Assocs. v. Uptown, Inc., 103 N.M. 277, 278, 705 P.2d 683, 684 (1985).

The trial court's order¹ states, in pertinent part:

1. Daniel Britt sustained an accident on April 22, 1994;

2. Daniel Britt may be legally entitled to recover damages [from] the owner or operator of the uninsured motor vehicle;

3. The accident arose out of the use of an uninsured motor vehicle;

4. Plaintiff's Motion for Summary Judgment is granted....

IT IS THEREFORE, ADJUDGED AND DECREED that the Plaintiff Daniel Britt is covered [under the uninsured motorist provisions of the insurance policies] and that this matter should proceed to arbitration² to determine whether Daniel Britt is legally entitled to recover damages from the owner or operator of the uninsured motor vehicle and if so, in what amount.

Both Dairyland and Phoenix timely filed notices of appeal after entry of this order, and arbitration has apparently been stayed pending this appeal.

Although the trial court's judgment resolved the question whether the circumstances surrounding Britt's injury constituted an "accident ar[ising] out of the use of an uninsured motor vehicle," the court did not resolve two other key issues in this litigation: (1) whether Britt is legally entitled to recover from the owner or operator of the uninsured vehicle; and (2) whether the insurers must indemnify Britt for his damages. In this jurisdiction an order is ordinarily interlocutory, and thus it is not appealable, unless "all issues of law and fact have been determined and the case disposed of by the trial court to the fullest extent possible." Kelly Inn No. 102, Inc. v. Kapnison, 113 N.M. 231, 236, 824 P.2d 1033, 1038 (1992) (quoting B.L. Goldberg & Assocs., 103 N.M. at 278, 705 P.2d at 684). We conclude that this order is a final order from which an appeal may be taken. In reaching this determination, we adopt the Second Circuit's reasoning that an order compelling arbitration is final if it is the " 'last deliberative action of the court' with respect to the controversy before it." Manning v. Energy Conversion Devices, Inc., 833 F.2d 1096, 1102 (2d Cir.1987) (quoting Krauss Bros. Lumber Co. v. Louis Bossert &amp Sons, 62 F.2d 1004, 1005 (2d Cir.1933)). Although the trial court may confirm or vacate any award following arbitration, its review is very narrow and, as far as the merits of the controversy are concerned, the court is finished with the case when it goes to the arbitrators. See Krauss Bros. Lumber Co., 62 F.2d at 1005. We hold that the trial court's order was final for purposes of appeal.

B. Was there an accident?

Dairyland and Phoenix take the position that Britt's injuries resulted from an intentional attack, not an accident, and that the incident is therefore outside the scope of coverage of the uninsured motorist policies. Although some jurisdictions have taken such a view of the term "accident," see, e.g., Lindstrom v. Hanover Ins. Co., 138 N.J. 242, 649 A.2d 1272, 1276 (1994), a greater number of jurisdictions have held that, in analyzing whether a particular incident is an "accident" for purposes of uninsured motorist coverage, the courts should view the incident from the injured party's perspective. Thus if the event causing the injury is unintended and unexpected from the injured party's viewpoint, the injury is deemed to have occurred as a result of an accident. See, e.g., State Farm Mut. Auto. Ins. Co. v. McMillan, 900 P.2d 1243, 1246-49 (Colo.Ct.App.1994), cert. granted, (July 31, 1995); Redden v. Doe, 357 So.2d 632, 634 (La.Ct.App.1978); State Farm Mut. Auto. Ins. Co. v. Coon, 46 Mich.App. 503, 208 N.W.2d 532, 533-34 (Mich.Ct.App.1973); Davis v. State Farm Mut. Auto. Ins. Co., 264 Or. 547, 507 P.2d 9, 10, 13 (1973) (en banc) (applying Michigan law); 8C John A. Appleman, Insurance Law and Practice § 5092.55, at 392 (1981). We find the latter view to be more consistent with the public policies underlying our legislature's enactment of an uninsured motorist statute. Cf. Romero v. Dairyland Ins. Co., 111 N.M. 154, 156, 803 P.2d 243, 245 (1990) (holding that the uninsured motorist statute is to be liberally interpreted "in order to implement its remedial purpose"). Accordingly, we adopt it today. Because from Britt's viewpoint the stabbing injuries he sustained were an unexpected and unintended result of the automobile accident, the trial court correctly concluded that Britt's injuries arose out of an "accident" as that term is used in the uninsured motorist endorsements.

C. Did the injury "arise out of the use" of an uninsured automobile and is Britt "legally entitled to recover" from the operator of the uninsured vehicle?

Although the trial court and the parties to this appeal have addressed these two issues separately, we find them to be inextricably interrelated, and we therefore analyze them together. Under the terms of both the contract language and the uninsured motorist statute, the insurer must indemnify the insured for damages that "arise out of the use of an uninsured motor vehicle" and for which the insured is "legally entitled to recover" from the owner or operator of the uninsured vehicle. See § 66-5-301. Dairyland and Phoenix assert that, even if Britt's injury was an accident, it did not "arise out of the use of a motor vehicle." They further argue that Britt is not "legally entitled to recover" from the operator of the uninsured vehicle. In advancing these arguments, the insurers emphasize that there has been no showing that the uninsured vehicle's operator was in any way involved in the stabbing. Britt, on the other hand, argues that his right to recover does not require a showing that the vehicle's operator participated in the stabbing³ as long as his injuries arose out...