ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Monday, June 30, 2008

It Depends What You Mean By “Occupying” The Vehicle

Insurance disputes often provide the most interesting interpretation issues. Take for example this recent appellate case out of New York’s Third Department.

Plaintiff truck driver was struck by a hit-and-run driver while standing on the street in the City of Albany after unloading construction equipment from the tractor-trailer owned by his employer and insured by defendant American Home Assurance Company. Plaintiff filed a supplementary uninsured/underinsured motorist claim with American Home Assurance Co. (American) and also with defendant Nationwide Mutual Insurance Co. (Nationwide), which was his insurer. American denied the claim asserting that plaintiff was not covered by its policy because he was not "occupying" the vehicle at the time of the accident. Nationwide contended that plaintiff was covered by American and that its coverage was thus secondary.

The pertinent endorsement in American's policy provided coverage for an individual "occupying" a covered vehicle. The term "occupying" was further defined in American's policy to include "in, upon, entering into, or exiting from a motor vehicle.” The interpretation of the term “occupying” has apparently resulted in differing tests in various jurisdictions.

On cross-motions for summary judgment, the trial court determined that plaintiff was "occupying" the vehicle and, accordingly, among other things, declared that plaintiff’s injury came with in the coverage of American’s policy. American appealed. The appellate court reversed, holding that plaintiff was not occupying the vehicle at the time of the accident. The court reasoned:

Here, plaintiff was off-loading a 44,000 pound, 50-to-55 foot-long boom lift from a 70-foot tractor-trailer. The procedure involved many steps, including setting out safety cones, unchaining the boom lift, folding out and inserting pins in the jib, inspecting the basket, lowering the trailer, backing the machine off the trailer, and securing and extending axle shifts. Plaintiff had completed these steps, which he testified at his deposition typically took 20 to 30 minutes. He further testified that, after removing and readying the boom lift, he next trains the person renting it on the proper operation of the equipment, a procedure he estimated to take 30 to 35 minutes. He recalled during his testimony that, in the current situation, he had been training the person who was going to operate the equipment for 10 to 15 minutes when the accident occurred. Although the tractor-trailer reportedly remained running during the entire time and plaintiff's affidavit sets forth a more condensed time frame than his deposition for his activities at the site, it is inescapable that he was no longer vehicle-oriented. His absence from the vehicle was not intended to be brief and, at the time of the accident, he was engaged in instructing the lessee about the operation of the delivered equipment. Under such circumstances, he was no longer "occupying" his employer's vehicle.

Because American did not cover plaintiff, this meant that Nationwide was on the hook.

Faragon v. American Home Assur. Co., --- N.Y.S.2d ----, 2008 WL 2278093 N.Y.A.D. 3 Dept. (June 5, 2008).

[Meredith R. Miller]

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