Le v. Vaknin

• Decision Date: 06 October 2006
• Docket Number: No. 04-0947.,04-0947.
• Parties: Trang LE, as Mother and Next Friend of Amanda Le, A Minor, and Trang Le, Appellants, v. Yaacov VAKNIN and American Family Mutual Insurance Company, Appellees.
• Court: Iowa Supreme Court

722 N.W.2d 412

Trang LE, as Mother and Next Friend of Amanda Le, A Minor, and Trang Le, Appellants, v. Yaacov VAKNIN and American Family Mutual Insurance Company, Appellees.

No. 04-0947.

Supreme Court of Iowa.

October 6, 2006.

Nathan E. Levin and Angelina M. Thomas of Newbrough, Johnston, Brewer, Maddux & Howell, L.L.P., Ames, for appellants.

Scott K. Green, West Des Moines, for appellee American Family Mutual Insurance Company.

No appearance for appellee Yaacov Vaknin.

CARTER, Justice.

Plaintiffs, Amanda Le and her mother, Trang Le, appeal from an adverse judgment in their action against American Family Insurance Company (American Family), their uninsured-motorist carrier. They also appeal from the district court's reduction of the damages awarded against defendant Yaacov Vaknin based on a third-party payment of plaintiffs' medical expenses. After reviewing the record and considering the arguments presented, we affirm the judgment in favor of American Family, vacate the judgment against Vaknin, and remand for further proceedings.

Amanda Le (Amanda) was a passenger in an automobile driven by defendant Vaknin and owned by his father. Amanda's boyfriend, Hop Nguyen, and her friend, Kate Polouchkina, were also passengers in the car. Both Amanda and Kate were thirteen years of age, did not have learning permits, and had not previously driven a car. Notwithstanding this fact, Vaknin permitted first Kate and later Amanda to drive the car. When Amanda was driving, she lost control of the vehicle when negotiating a curve. At this point, Vaknin, who was seated next to her, attempted to grab the steering wheel in order to control the vehicle, but was unsuccessful in preventing the car from leaving the road and crashing into a tree. As a result of that collision, Amanda sustained severe personal injuries.

Amanda and her mother brought this action against Vaknin and his father. The suit against Vaknin's father was later dismissed without prejudice. Plaintiffs' claim against Vaknin was based on his alleged negligent entrustment of a motor vehicle to an unqualified driver. Later, plaintiffs amended their action to include American Family, which provided uninsured-motorist coverage to Amanda and Trang.

The jury returned a verdict finding that Vaknin's fault was a sixty percent contributing cause of plaintiffs' injuries and Amanda's fault was a forty percent contributing cause. The jury fixed plaintiffs' damages at $18,864.29. In addition, it answered interrogatories finding that Vaknin was not the "operator" of the motor vehicle at the time of the accident, a response that negated liability of American Family under its uninsured-motorist policy, and also finding that Trang's health insurer had paid $9891 toward the medical expenses that had been included in the damage award. The district court reduced the gross damage award to account for both third-party payment and contributory fault.

I. Whether the Jury Was Properly Instructed Concerning the Term "Operator" of a Motor Vehicle as Used in the American Family Policy.

Plaintiffs argue that in instructing the jury the district court provided an improper definition of "operator" as that term was used in determining American Family's uninsured-motorist coverage. We review the district court's rulings on jury instructions to determine if they are a correct statement of the applicable law based on the evidence presented. Collister v. City of Council Bluffs, 534 N.W.2d 453, 454 (Iowa 1995); Johnson v. Interstate Power Co., 481 N.W.2d 310, 324 (Iowa 1992).

The uninsured-motorist provisions contained in American Family's policy state:

We will pay compensatory damages for bodily injury which an insured person is legally entitled to recover from the owner or operator of an uninsured motor vehicle.

In the present litigation, the action against the owner of the vehicle had been dismissed by plaintiffs. They sought to invoke uninsured-motorist benefits on their claim against Vaknin on the theory that he was the operator of the motor vehicle in which Amanda was injured.

The district court in its Instruction No. 17 defined the word "operator" in the manner in which that word is defined in Iowa Code section 321.1(48) (1999). Accordingly, the instruction defined "operator" as "every person who is in actual physical control of a motor vehicle upon a highway." Plaintiffs urge that the definition of operator contained in Iowa Code section 321.1(48) is only intended to apply in matters governing the duties of persons operating motor vehicles on the public highway and is not applicable in insurance coverage disputes. They suggest that entirely different policies come into play in determining the meaning of "operator" for purposes of uninsured-motorist coverage and suggest that in that context that term should include persons with a right to control the vehicle who have delegated physical control to another under their supervision.

We agree with plaintiffs that caution should be exercised in applying statutory definitions to situations in which the particular statutory scheme may not be involved. Notwithstanding this cautionary approach, we are satisfied that, within the context of American Family's uninsured-motorist coverage, the term "operator" has reference to a person having physical control of a motor vehicle. Uninsured-motorist coverage is statutorily mandated and exists in the milieu of automobile liability disputes. Consequently, we are satisfied that this word is used in both Iowa Code section 516A.1 (the statute mandating uninsured-motorist coverage) and American Family's policy in the same sense that it is employed in the statutory law of motor vehicle regulation.

In Twogood v. American Farmers Mutual Automobile Insurance Ass'n, 229 Iowa 1133, 296 N.W. 239 (1941), we resorted to the statutory definition contained in the motor vehicle laws to determine the meaning of the word "operator" as used in an insurance policy. In considering the meaning of that word, we stated:

With reference to the use of a motor vehicle on the highway, paragraph 39 of the 1939 Code section 5000.01 defines an operator thereof as meaning ". . . every person, other than a chauffeur, who is in actual physical control of a motor vehicle upon a highway."

Twogood, 229 Iowa at 1138, 296 N.W. at 242. We further stated in Twogood:

This does not mean that one who has general authority over a driver with respect to the destination, route, or rate of speed of the vehicle, is operating the vehicle.

Id. We adhere to this view in the present case.¹

The Twogood decision relied in part on a decision of the New York Court of Appeals, which applied that state's motor vehicle statutes to define the word "operator" as used in an insurance policy exclusion. The court in that case stated:

The word "operate" is used throughout the statute as signifying a personal act in working the mechanism of a car. The driver operates the car for the owner, but the owner does not operate the car unless he drives it himself. . . .

Obviously, the word is used in the policy in the same sense in which it is used in the Highway Law.

Witherstine v. Employers' Liab. Assurance Corp., 235 N.Y. 168, 139 N.E. 229, 230 (1923). A similar view was expressed by the Rhode Island Supreme Court in Elgar v. National Continental/Progressive Insurance Co., 849 A.2d 324 (R.I.2004), wherein the court stated:

Elgar's assailants were passengers in the car she was driving. They were not physically operating the taxi or any other vehicle, and did not become the de facto operators of her vehicle merely because they were directing her to a specific location.

Elgar, 849 A.2d at 327-28. The district court did not err in defining the term "operator" in Instruction No. 17.

II. Plaintiffs' Temporal Argument.

Plaintiffs' second argument is that it was error for the district court to phrase its interrogatory to the jury so as to only determine Vaknin's status as an operator at the time of the accident. They urge that the court should have allowed Vaknin's status as an operator of the vehicle at an earlier time to trigger uninsured-motorist coverage under the American Family policy. For this reason, plaintiffs assert that interrogatory No. 4 should not have read "was Yaacov Vaknin the operator of an uninsured motor vehicle at the time of the accident?" But rather, "was Yaacov Vaknin the operator of an uninsured motor vehicle at the time of his negligence?"

We are satisfied that the district court correctly determined that the type of uninsured liability that triggers application of American Family's coverage is operational fault causing the injury for which recovery of uninsured-motorist benefits is claimed. See Elgar, 849 A.2d at 326 (uninsured-motorist coverage requires that insured present credible evidence that his or her injury was caused by the owner or operator of an uninsured motor vehicle). That being the case, it was logical for the trial court to fix the time for the jury's determination of operator status as the time of the accident.

III. Vaknin's Degree of Physical Control.

Plaintiffs argue in the alternative that, if actual physical control is the determining factor in deciding whether Vaknin was an operator of the motor vehicle, he exercised that degree of control when he seized the wheel of the vehicle. Based on this premise, they urge that the jury's finding that he did not have control is not supported by substantial evidence. Plaintiffs rely in part on the decision of the Washington court in North Pacific Insurance Co. v. Christensen, 143 Wash.2d 43, 17 P.3d 596 (2001). There, a passenger seized control of the wheel of a motor vehicle that the driver was properly operating and through that action diverted the course of travel across the centerline causing a collision. The Washington court in the Christensen case concluded that,

[w]hen Chase suddenly grabbed the steering wheel, he became the operator of the vehicle in which he...