Zerfas v. Amco Ins. Co.

• Decision Date: 16 December 2015
• Docket Number: No. 27317.,27317.
• Citation: 873 N.W.2d 65
• Parties: Stacey ZERFAS, Plaintiff and Appellant, v. AMCO INSURANCE COMPANY, a Nationwide Company, Defendant and Appellee.
• Court: South Dakota Supreme Court

873 N.W.2d 65

Stacey ZERFAS, Plaintiff and Appellant,

v.AMCO INSURANCE COMPANY, a Nationwide Company, Defendant and Appellee.

No. 27317.

Supreme Court of South Dakota.

Argued on Oct. 5, 2015.

Decided Dec. 16, 2015.

Seamus W. CulhaneNancy J. Turbak Berry of Turbak Law Office, P.C. Watertown, South Dakota, Attorneys for plaintiff and appellant.

Kent R. CutlerKimberly R. WassinkBrian Donahoe of Cutler & Donahoe, LLP, Sioux Falls, South Dakota, Attorneys for defendant and appellee.

WILBUR, Justice.

[¶ 1.] David Zerfas lost control of his vehicle after he swerved to avoid a deer carcass in his lane of travel on the interstate. His vehicle was hit by oncoming traffic and Zerfas died. His wife Stacey sought uninsured motorist benefits with AMCO Insurance Company. She claimed that an unidentified driver negligently left the deer carcass in the lane of travel on the interstate, which negligence caused Zerfas to lose control of his vehicle. AMCO denied her claim after it concluded that Stacey would not legally be entitled to recover damages from the unidentified driver. Stacey brought suit against AMCO for breach of contract, and AMCO moved for summary judgment. After a hearing, the circuit court granted AMCO summary judgment. It ruled that AMCO's policy coverage was not implicated because, under the facts of this case, the unidentified driver owed no common law or statutory duty to Zerfas. Stacey appeals. We affirm.

Background

[¶ 2.] On December 2, 2011, at approximately 6:23 a.m., David Zerfas was traveling south on Interstate 29 from Brookings to Sioux Falls, South Dakota. He lost control of his vehicle, swerved, and crossed the median into oncoming traffic. Zerfas's vehicle was struck by oncoming traffic and he was fatally injured. The South Dakota Highway Patrol issued an accident report noting that "[t]here were remains of a deer in the south bound lanes where tire marks show Vehicle 1 [Zerfas] swerved left and lost control." The summary of the investigation detailed that "Vehicle 2 [driven by Mark Misar] was traveling north bound when Vehicle 1 came into the right lane.... Vehicle 2 struck Vehicle 1 in the driver's side doors." According to the investigation report, "Vehicle 1 left tire marks from the southbound lanes into the median where the vehicle was partially sideways. The tire marks go thru the median and marks show where the tires hit the paved median shoulder and spun the vehicle into the north bound lanes." Misar reported his speed to be 70 mph prior to locking his brakes to avoid the collision. The report did not indicate a speed for Zerfas's vehicle.

[¶ 3.] After the accident, Zerfas's wife Stacey filed a claim with their automobile insurance company, AMCO Insurance Company, for uninsured motorist benefits. Stacey informed AMCO that the circumstances of the accident implicated AMCO's coverage for damage caused by an unidentified hit-and-run driver. In particular, Stacey claimed that at some point prior to the accident an unidentified driver hit the deer and negligently failed to ensure that the deer carcass did not create a hazard to other travelers on the road.

[¶ 4.] AMCO investigated Stacey's claim. It interviewed two witnesses: Mark Misar (the driver of the vehicle that collided with Zerfas's vehicle) and Harriet Greene (a passenger in a vehicle behind Misar's vehicle). Although neither Misar nor Greene saw Zerfas swerve to avoid the deer carcass, Greene reported that after the accident she saw a deer carcass from across the median and noticed other cars maneuver to avoid it. AMCO did not inspect Zerfas's vehicle, but did review the accident investigation report.

[¶ 5.] AMCO's investigation produced no evidence revealing how the deer carcass came to be in Zerfas's lane of travel. Nonetheless, AMCO's claim notes indicate that it assumed for purposes of the claim that a deer carcass was in fact lying in the roadway when Zerfas lost control of his vehicle. The notes further suggest that the circumstances of the accident could implicate the policy definition of an "uninsured vehicle." However, the claim note qualified that policy coverage depended on whether the accident "was caused by the negligence of the unidentified vehicle leaving the deer in the roadway or the [insured's] negligence for lookout and failure to maintain control[.]"

[¶ 6.] Ultimately, AMCO denied Stacey's claim. It informed Stacey that coverage was not implicated because, even assuming an unidentified driver hit the deer and left the carcass in Zerfas's lane of travel, Stacey would not legally be entitled to recover damages from the unidentified driver of the vehicle. AMCO explained that, based on its research of state law and common law in South Dakota, the mere fact that an individual hits a deer and kills it does not create a duty to remove it from the roadway or to warn motorists that the remains exist in the roadway. AMCO informed Stacey that it also denied her claim because Stacey failed to present competent evidence that the accident was in fact caused by an unidentified driver and not that Zerfas himself hit the deer.

[¶ 7.] In October 2012, Stacey brought a breach of contract action against AMCO for its failure and refusal to pay uninsured motorist benefits as a result of Zerfas's accident. Stacey asserted that AMCO had an obligation under the terms of the insurance contract to pay uninsured motorist benefits for Zerfas's death because she would be legally entitled to recover damages from the unidentified driver who negligently left a deer carcass in the lane of travel. AMCO moved for summary judgment, and the circuit court held a hearing. At the conclusion of the hearing, the court orally granted AMCO's motion. It found no basis under the facts to support that the unidentified driver had a legal duty to Zerfas to remove the carcass or warn of its existence. The court issued an order granting AMCO summary judgment. Stacey appeals and we restate the issue as follows:

Did the circuit court err when it granted AMCO summary judgment because the unidentified hit-and-run driver did not owe Zerfas a legal duty?

Standard of Review

[¶ 8.] We determine whether summary judgment was proper by reviewing "whether the moving party demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law." Millea v. Erickson, 2014 S.D. 34, ¶ 9, 849 N.W.2d 272, 275 (quoting Andrushchenko v. Silchuk, 2008 S.D. 8, ¶ 8, 744 N.W.2d 850, 854 ). "All facts and favorable inferences from those facts must be viewed in a light most favorable to the nonmoving party." Andrushchenko, 2008 S.D. 8, ¶ 8, 744 N.W.2d at 854 (quoting Hendrix v. Schulte, 2007 SD 73, ¶ 6, 736 N.W.2d 845, 847 ). In this negligence action, summary judgment is proper if no duty exists as a matter of law. Millea, 2014 S.D. 34, ¶ 9, 849 N.W.2d at 275. Whether "a duty [exists] is a question of law that is reviewed de novo." Id.

Analysis

[¶ 9.] AMCO's insurance policy provides that AMCO "will pay compensatory damages which an ‘insured’ is legally entitled to recover from the owner or operator of an ‘uninsured motor vehicle’ because of ‘bodily injury [.]’ " It is undisputed that Stacey is an "insured" under the policy. The policy defines an " ‘[u]ninsured motor vehicle’ " to include "a hit-and-run vehicle whose operator or owner cannot be identified and which hits or causes an accident resulting in ‘bodily injury’ without hitting[.]" For purposes of this appeal, we assume that a driver, other than Zerfas, hit the deer and that the driver cannot be identified. We further assume that the presence of the deer carcass in Zerfas's lane of travel caused him to swerve, lose control of his vehicle, and be struck by oncoming traffic. Based on these assumptions, the vehicle driven by the unidentified driver meets AMCO's policy definition of an "uninsured motor vehicle." The question remains whether Stacey would be legally entitled to recover damages from the unidentified driver.

[¶ 10.] To be legally entitled to recover from the unidentified driver, there must exist a duty between the unidentified driver and Zerfas. See Johnson v. Hayman & Assocs., Inc., 2015 S.D. 63, ¶ 13, 867 N.W.2d 698, 702 ; Millea, 2014 S.D. 34, ¶ 11, 849 N.W.2d at 275–76. This is because "[t]he existence of a duty owed by the defendant to the plaintiff, which requires the defendant to conform to a certain standard of conduct in order to protect the plaintiff against unreasonable risks, is elemental to a negligence action." Erickson v. Lavielle, 368 N.W.2d 624, 626 (S.D.1985). A duty can arise out of common law or statute. Millea, 2014 S.D. 34, ¶ 12, 849 N.W.2d at 276. However, a duty depends on "whether a ‘relationship exists between the parties such that the law will impose upon the defendant a legal obligation of reasonable conduct for the benefit of the plaintiff.’ " First Am. Bank & Tr., N.A. v. Farmers State Bank, 2008 S.D. 83, ¶ 16, 756 N.W.2d 19, 26 (quoting Casillas v. Schubauer, 2006 S.D. 42, ¶ 14, 714 N.W.2d 84, 88 ).

[¶ 11.] According to Stacey, the circuit court erred as a matter of law when it refused to recognize a specific duty between the unidentified driver and Zerfas based on the well-established law that every driver in South Dakota has a legal duty to exercise ordinary care at all times when using a public highway so as to avoid putting others in danger. Stacey declares that "[t]here is one simple question that determines whether this common legal duty applies to the undisputed facts of this case: was the hit-and-run driver using a public highway?" In her view, because "[t]he answer to that question is plainly yes[,]" the unidentified driver owed Zerfas a duty.

[¶ 12.] We disagree. One's broad duty to exercise ordinary care at all times to avoid placing another at risk of physical injury "does not define the circumstances under which the law imposes a duty on an alleged tort-feasor." See Millea, 2014 S.D. 34, ¶ 13, 849 N.W.2d at 276 (quoting Poelstra v. Basin...