Chavez v. Ariz. Sch. Risk Retention Trust Inc.

• Decision Date: 18 May 2011
• Docket Number: No. 2 CA–CV 2010–0112.,2 CA–CV 2010–0112.
• Parties: Joaquin CHAVEZ and Elvira Chavez, as husband and wife in their capacity as the parents of Joaquin Chavez, a minor; Santiago Valle and Yolba Valle, as husband and wife in their capacity as the parents of Yuriel Valle, a minor, Plaintiffs/Appellants/Cross–Appellees,v.ARIZONA SCHOOL RISK RETENTION TRUST, INC., an Arizona corporation, Defendant/Appellee/Cross–Appellant.
• Court: Arizona Court of Appeals

227 Ariz. 327

258 P.3d 145

270 Ed. Law Rep. 842

609 Ariz. Adv. Rep. 37

Joaquin CHAVEZ and Elvira Chavez, as husband and wife in their capacity as the parents of Joaquin Chavez, a minor; Santiago Valle and Yolba Valle, as husband and wife in their capacity as the parents of Yuriel Valle, a minor, Plaintiffs/Appellants/Cross–Appellees,

v.ARIZONA SCHOOL RISK RETENTION TRUST, INC., an Arizona corporation, Defendant/Appellee/Cross–Appellant.

No. 2 CA–CV 2010–0112.

Court of Appeals of Arizona, Division 2, Department A.

May 18, 2011.

Barassi, Curl & Abraham, P.L.C. By David L. Curl and Katrina M. Conway, Tucson, Attorneys for Plaintiffs/Appellants/Cross–Appellees.Holm Wright Hyde & Hays PLC By Alan K. Hyde and J. Thomas Allen, Phoenix, Attorneys for Defendant/Appellee/Cross–Appellant.

OPINION

HOWARD, Chief Judge.

¶ 1 Appellants Elvira and Joaquin Chavez, on behalf of their minor son, and Yolba and Santiago Valle, on behalf of their minor son, challenge the trial court's grant of summary judgment in favor of appellee Arizona School Risk Retention Trust, Inc. (“the Trust”) in their action seeking judicial determination of their children's status as insured parties under the underinsured motorist provision of a motor vehicle liability policy provided by the Trust. Appellants argue here that both Arizona law and the insurance policy require that the children be insured and, therefore, entitled to recovery. For the following reasons, we reverse and remand.

Factual and Procedural Background

¶ 2 We view the facts and reasonable inferences from those facts in the light most favorable to the party against whom summary judgment was granted. Andrews v. Blake, 205 Ariz. 236, ¶ 12, 69 P.3d 7, 11 (2003). But most of the facts here are undisputed. Appellants' minor children, students in the Marana Unified School District, were waiting in line to board one of its school buses when a vehicle came from behind the bus, colliding with the bus and then the students. The school district is insured with the Trust for automobile liability insurance, which includes an underinsured motorist (“UIM”) provision. The Trust denied that the students were insured under the UIM provision. Appellants sued the Trust. Both parties moved for summary judgment, and the trial court ultimately granted the Trust's motion. This appeal followed.¹

Discussion

¶ 3 Appellants contend they are entitled to UIM benefits under Arizona law. They assert that because the students were using the bus with permission, as described in A.R.S. § 28–4009(A)(2), they were insured for purposes of liability and entitled to UIM benefits according to A.R.S. § 20–259.01(B). We review de novo a grant of summary judgment. Valder Law Offices v. Keenan Law Firm, 212 Ariz. 244, ¶ 14, 129 P.3d 966, 971 (App.2006).

¶ 4 Section 20–259.01(B) requires an insurer for automobile or motor vehicle liability to offer UIM coverage to “all persons insured under the policy.” Under § 28–4009(A)(2) a motor vehicle liability policy must insure the person named in the policy and any other person “using the motor vehicle ... with the express or implied permission of the named insured” against liability “arising out of the ownership, maintenance or use” of the vehicle. Thus, a UIM provision must insure a person using a vehicle with permission. See Tobel v. Travelers Ins. Co., 195 Ariz. 363, ¶¶ 39–40, n. 5, 988 P.2d 148, 155–56, 155 n. 5 (App.1999).

¶ 5 In addressing a previous version of § 28–4009, our supreme court decided the term “use” included loading and unloading the vehicle.² Mission Ins. Co. v. Aid Ins. Servs., 120 Ariz. 220, 221–22, 585 P.2d 240, 241–42 (1978) (negligently closing valve on storage tank during unloading oil, allowing hot oil to spray on plaintiff, within “use” of vehicle). And, the term “use” of a vehicle in an insurance liability contract included failing to close a window properly to secure a dog. Farmers Ins. Co. of Ariz. v. Till, 170 Ariz. 429, 431–32, 825 P.2d 954, 956–57 (App.1991) (putting dog in back of pickup/camper “use” of inherent design of vehicle).

¶ 6 Furthermore, when a vehicle is “intended to be used as more than a means of transportation,” it is a specialized vehicle and its use may depend on the nature of the owner's business and “the specialized nature and function of the vehicle involved.” Tobel, 195 Ariz. 363, ¶¶ 20, 31, 988 P.2d at 152, 154. In Tobel, the underinsured claimant was an employee of a traffic barricade company who was away from his truck carrying a barricade to another location when he was hit. Id. ¶¶ 3, 7. The court found the truck was equipped with specialized safety equipment, was intended as a safety device, and the driver was using it as such. Id. ¶ 31. Therefore, the driver was covered by the policy's UIM provision. Id. ¶¶ 1, 32.

¶ 7 A school bus is equipped with flashing safety lights and a stop sign in order to allow school children to board or exit the bus safely and cross the street. It is intended not only to transport students but also to allow them to navigate the streets safely before and after riding the bus. Therefore, a school bus is a specialized vehicle. See id. n. 4, 988 P.2d at 154 n. 4 (implicitly relying on school bus being specialized vehicle). The Marana Unified School District, which is in the business of educating students, uses its buses to board the students safely, transport them from the bus stop to school and back, unload them, and aid them in crossing the street if necessary.

¶ 8 Here, the students were waiting in line to board the school bus when the accident occurred. The bus had the “lights and haz[ ]a[r]ds” on. Thus, the bus was functioning to protect the students' safety at the time of the accident, and the students were using the bus's safety functions to board it for purposes of § 28–4009(A)(2). See Tobel, 195 Ariz. 363, n. 4, 988 P.2d at 154 n. 4 (relying on Newman v. Erie Ins. Exch., 256 Va. 501, 507 S.E.2d 348 (1998)); see also Newman, 507 S.E.2d at 349, 352 (student hit crossing highway “using” school bus under UIM statute when using bus's safety equipment and intending to become passenger); cf. Georgia Farm Bureau Mut. Ins. Co. v. Greene, 174 Ga.App. 120, 329 S.E.2d 204, 208 (1985) (under liability policy “use” continues “[w]hile the bus is standing guard with its lights flashing, its stop signals on and all visual signals functioning ... [and] does not conclude until the bus stops operating as a school bus in relation to that child [and] ... until each one has crossed any immediate road and is in a place of safety in a direction towards their home”); Eden Prairie Indep. Sch. Dist. 272 v. Auto–Owners Ins. Co., 279 N.W.2d 358, 359–60 (Minn.1979) (loading under liability policy “commences when the driver properly turns on the amber prewarning signals as he approaches the boarding point ... [and] terminates when he properly retracts the stop arm and extinguishes the flashing red lights”). But see First Sec. Bank of Searcy v. Doe, 297 Ark. 254, 760 S.W.2d 863, 868 (1988) (distinguishing between “user” protected under uninsured statute and unprotected passenger).

¶ 9 The Trust argues that a vehicle's passengers are never entitled to be insured for liability purposes because “use” of the vehicle consists only of driving it. However, the legislature did not limit the coverage to driving. See § 28–4009(A)(2). We presume the legislature says what it means. See Turner v. City of Flagstaff, 226 Ariz. 341, ¶ 11, 247 P.3d 1011, 1013 (App.2011). And the Trust cites to no Arizona case holding that passengers are not insured for liability purposes. To the contrary, our courts specifically have interpreted “use” to include more than merely driving. See, e.g., Tobel, 195 Ariz. 363, ¶¶ 20, 31, 988 P.2d at 152, 154; Farmers Ins. Co. of Ariz., 170 Ariz. at 431–32, 825 P.2d at 956–57; Mission Ins. Co., 120 Ariz. at 222, 585 P.2d at 242; see also, Lee R. Russ et al., Couch on Insurance § 111:31 (3d ed. 2005) (“The term ‘use’ ... is given broad meaning ... [and] includes more than driving or riding in an automobile; it extends to utilizing the vehicle as an instrumental means to an end in any manner intended or contemplated by the insured.”); cf. Nationwide Gen. Ins. Co. v. Gov't Employees Ins. Co., 81 Md.App. 104, 566 A.2d 1117, 1124–25 (1989) (using car under policy included “be[ing] a passenger in it”); Nationwide Mut. Ins. Co. v. Davis, 118 N.C.App. 494, 455 S.E.2d 892, 893, 895 (1995) (van in “use” under policy when driver parked it and both driver and passenger/victim walking toward supermarket). Because the students were using the bus with permission and thus were insured for liability purposes as defined in § 28–4009(A)(2), Arizona law requires they be afforded UIM benefits according to § 20–259.01(B).³

¶ 10 Chavez further argues that the policy would cover the students by its own terms. But the UIM statute is incorporated into every policy. See Progressive Cas. Ins. Co. v. Estate of Palomera–Ruiz, 224 Ariz. 380, ¶¶ 10–11, 231 P.3d 384, 386–87 (App.2010). Because we have concluded that §§ 28–4009(A)(2) and 20–259.01(B) required the students be covered, we need not address this argument.

¶ 11 The Trust nevertheless asserts that, even if the students were covered by other provisions of the policy, the UIM provision does not extend to these students because they were waiting to board and were not, therefore, “occupying” the bus, as the insurance policy UIM provision requires. That provision defines occupying as “being in or being in physical contact with a covered...