Roden v. General Cas. Co. of Wisconsin

• Decision Date: 29 October 2003
• Docket Number: No. 22236.,22236.
• Citation: 671 N.W.2d 622,2003 SD 130
• Parties: Roy J. RODEN, Plaintiff and Appellee, v. GENERAL CASUALTY COMPANY OF WISCONSIN, Defendant and Appellant, and Wayne Anderson, Defendant.
• Court: South Dakota Supreme Court

671 N.W.2d 622

2003 SD 130

Roy J. RODEN, Plaintiff and Appellee, v. GENERAL CASUALTY COMPANY OF WISCONSIN, Defendant and Appellant, and Wayne Anderson, Defendant.

No. 22236.

Supreme Court of South Dakota.

Argued October 8, 2002.

Reassigned July 29, 2003.

Decided October 29, 2003.

Steven C. Beardsley, Ted L. McBride of Beardsley, Jensen & Von Wald, Rapid City, South Dakota, Attorneys for plaintiff and appellee.

William G. Beck of Woods, Fuller, Shultz & Smith, Sioux Falls, South Dakota, Attorneys for defendant and appellant.

GILBERTSON, Chief Justice (on reassignment).

[¶ 1.] Roy Roden (Roden) filed a claim against General Casualty for underinsured motorist's benefits. General Casualty moved for summary judgment, and Roden filed a cross-motion for partial summary judgment. The trial court denied General Casualty's motion and granted Roden partial summary judgment. General Casualty appeals, and we now affirm.

FACTS AND PROCEDURE

[¶ 2.] On July 9, 1999, Roden, an employee of Fiber Logic, was standing beside his supervisor's pickup parked on North Highway 79. At this time, a vehicle operated by Wayne Anderson struck Roden. As a result Roden was hospitalized for six weeks and sustained permanent physical injuries and had extensive medical expenses.

[¶ 3.] Roden settled his claim against Wayne Anderson and his insurer. Next, Roden filed a claim against his employer's insurance company, General Casualty, for underinsured motorist benefits. In his claim against General Casualty, Roden contends he was occupying the vehicle and is therefore entitled to underinsured motorist coverage.

[¶ 4.] Both Roden and General Casualty filed cross Motions for Summary Judgment on the issue of whether he is covered by the insurance. The trial court denied General Casualty's Motion for Summary Judgment and granted Roden Partial Summary Judgment on the issue of coverage. General Casualty appeals the following issues:

1. Whether Roy Roden was occupying the pickup insured by General Casualty for purposes of underinsured motorist coverage.

2. Whether the trial court erred in granting Roden's Motion for Summary Judgment on the issue of coverage.

STANDARD OF REVIEW

[¶ 5.] Our standard of review for the grant or denial of summary judgment is well settled. Summary judgment is proper where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." SDCL 15-6-56(c). Thus, "[w]e will affirm only when there are no genuine issues of material fact and the legal questions have been correctly decided." Holzer v. Dakota Speedway, 2000 SD 65, ¶ 8, 610 N.W.2d 787, 791 (citing Bego v. Gordon, 407 N.W.2d 801, 804 (S.D.1987)). We view all reasonable inferences drawn from the facts in the light most favorable to the non-moving party. Id. (citing Morgan v. Baldwin, 450 N.W.2d 783, 785 (S.D. 1990)). In addition, the moving party has the burden of clearly demonstrating "an absence of any genuine issue of material fact and an entitlement to judgment as a matter of law." Dakota Speedway, 2000 SD 65, ¶ 8, 610 N.W.2d at 792, (citing Wilson v. Great N. Ry. Co., 83 S.D. 207, 212, 157 N.W.2d 19, 21 (1968)).

[¶ 6.] The construction of a contract is a question of law that is reviewed de novo. Westfield Ins. Co., Inc. v. Rowe ex rel. Estate of Gallant, 2001 SD 87, ¶ 4, 631 N.W.2d 175, 176 (citing Sawyer v. Farm Bureau Mut. Ins. Co., 2000 SD 144, ¶ 13, 619 N.W.2d 644, 648). "This includes determining whether an insurance contract is ambiguous." National Sun Industries, Inc. v. South Dakota Farm Bureau Ins. Co., 1999 SD 63, ¶ 7, 596 N.W.2d 45, 46 (citations omitted).

ANALYSIS AND DECISION

[¶ 7.] 1. Whether Roy Roden was occupying the pickup insured by General Casualty for purposes of underinsured motorist coverage.

[¶ 8.] The trial court ruled as a matter of law that Roden occupied the vehicle at the time of the accident. General Casualty, however, asserts that the term "occupying" is unambiguous and, therefore, this Court should interpret the term narrowly. Given a narrow interpretation of the term, General Casualty contends that Roden was not occupying the vehicle within the meaning of the policy definitions.

[¶ 9.] A. Whether the term "occupying" is ambiguous within the meaning of the policy definitions.

[¶ 10.] Whether or not the term "occupying" is ambiguous as used in the insurance contract is an issue of first impression for this Court. As we have previously stated, "[a]n insurance policy is ambiguous when it `is fairly susceptible to two constructions.'" Id., ¶ 18 (quoting American Family Mut. Inc. v. Elliot, 523 N.W.2d 100, 102 (S.D.1994)). Ambiguity is not created merely because the parties offer different interpretations of the contract. Alverson v. Northwestern Nat. Cas. Co., 1997 SD 9, ¶ 8, 559 N.W.2d 234, 235-36. In addition, "[a]mbiguity in an insurance policy is determined with reference to the policy as a whole and the plain meaning and effect of its words." National Sun, 1999 SD 63, ¶ 18, 596 N.W.2d at 48. We apply strict rules of construction when interpreting an insurance policy:

Where the provisions of an insurance policy are fairly susceptible of different interpretations, the interpretation most favorable to the insured should be adopted. This rule of liberal construction in favor of the insured and strictly against the insurer applies only where the language of the insurance contract is ambiguous and susceptible of more than one interpretation.... This rule does not mean, however, that the court may seek out a strained or unusual meaning for the benefit of the insured.

Alverson, 1997 SD 9, ¶ 8, 559 N.W.2d at 235 (quoting Olson v. United States Fid. & Guar. Co., 1996 SD 66, ¶ 6, 549 N.W.2d 199, 200).

[¶ 11.] The policy issued by General Casualty provides in pertinent part:

We will pay all sums the `insured' is legally entitled to recover as compensatory damages from the owner or driver of an `uninsured' or `underinsured motor vehicle.' The damages must result from `bodily injury' sustained by the `insured' caused by an `accident.' The owner or driver's liability for these damages must result from the ownership, maintenance, or use of the `uninsured' or `underinsured motor vehicle.'

Included in the definition of "insured" is "anyone else `occupying' a covered `auto' or a temporary substitute for a covered `auto.'" The policy defines "occupying" to mean "in, on, upon, getting in, on, out, or off." [¶ 12.] This language is fairly standard in the insurance industry. Although we have not specifically addressed this issue before, the definition of "occupying" or "in or upon" has given rise to repeated litigation in many jurisdictions. There is a split of authority on whether there is coverage under the definition of "occupying" and it appears that there is no bright line rule for determining coverage under the policy definition of "occupying."

[¶ 13.] After examining the pertinent case law, we agree with those jurisdictions that have found the definition of "occupying" to be ambiguous. Indeed, the very fact that there is no bright line rule for interpreting "occupying" suggests that it is an ambiguous term. In Tata v. Nichols, the Supreme Court of Tennessee held the term "occupying" to be ambiguous and noted that "[t]he many different meanings given the word in the cases which have considered this issue, demonstrate that the word has no precise meaning, and is, therefore sufficiently ambiguous...." 848 S.W.2d 649, 651 (1993). The Supreme Court of Iowa has also found "occupying" to be ambiguous. Henderson v. Hawkeye-Security Ins. Co., 252 Iowa 97, 106 N.W.2d 86, 89 (Iowa 1960) (citations omitted). In addition, as an Illinois court observed in a similar situation to the case before us:

[I]t is the use of the word `upon' which creates an ambiguity. It cannot mean that the insured, to be within the meaning of the clause, had to be couched on the roof of the car or on the running board or sitting on the hood.

Wolf v. American Casualty Co., 2 Ill. App.2d 124, 118 N.E.2d 777, 780 (1954) (holding that a man standing between two insured vehicles while attempting to jump start one of them was "occupying" them when one of the vehicles between which he was standing was struck by a third vehicle).

[¶ 14.] We hold that the term "occupying" as used in the insurance contract is ambiguous and subject to differing interpretations. Accordingly, the interpretation most favorable to Roden must be adopted. Alverson, 1997 SD 9, ¶ 8, 559 N.W.2d at 235.

[¶ 15.] B. Whether Roden was "occupying" the vehicle at the time of the accident.

[¶ 16.] We now turn to the question of whether Roden occupied the vehicle at the time of the accident. The trial court ruled as a matter of law that Roden was occupying the vehicle when struck by Anderson's automobile; therefore, we review this finding de novo. City of Deadwood v. Summit, Inc., 2000 SD 29, ¶ 9, 607 N.W.2d 22, 25 (citations omitted). Generally, whether or not a person occupied a vehicle at a given time is factually intensive. Tata, 848 S.W.2d at 653. This case is unique, however. Because Roden remembers nothing about the accident, the testimony of the only other witness, Ryan Dunkle, is factually controlling. We have long recognized that facts proven by uncontradicted testimony not inherently improbable should be taken as conclusively established. National Bank of Commerce of New York v. Bottolfson, 55 SD 196, 225 N.W. 385, 386 (1929).

[¶ 17.] Courts have generally followed two basic approaches in determining whether a person occupied a vehicle for purposes of coverage under insurance contracts. The first approach is the literal approach in which a person cannot be "occupying" a vehicle unless part of him is inside the vehicle or he is in contact with the vehicle. The second approach does not define "occupying"...