Under California law, a defendant’s act of unloading an injured passenger from a motor vehicle constituted a “use” of that motor vehicle. ( Encompass Ins. Co. v. Coast National Ins. Co. (2014) WL 3930197)
Facts
Anthony Watson was driving a car in which Alexandra Van Horn was a passenger. Watson lost control of the car, causing the car to strike a light pole.
Lisa Torti was in a second car which stopped at the scene of the accident to render aid. Torti saw Van Horn trapped inside Watson’s wrecked car and allegedly feared that the wrecked car might catch fire. Torti thus grabbed Van Horn and physically removed her from Watson’s car. In the process, Torti allegedly caused Van Horn to suffer a severe spinal injury and become a paraplegic.
Van Horn later sued Torti in California state court. Van Horn alleged that Torti’s act of removing Van Horn from Watson’s car resulted in injuries to Van Horn.
At the time of the accident, Torti was insured under a “Package Policy” (which included auto, homeowners and personal excess liability coverage) issued by Encompass Insurance Company. Torti tendered her defense to Encompass, and Encompass accepted Torti’s defense.
Torti also tendered defense of the action to her auto insurer, Mid-Century Insurance Company. The Mid-Century policy covered Torti in connection with her own car (which was not involved in the accident), and also covered Torti for “use” of “any other private passenger car” provided such “use” was “with the permission of the owner.” Thus, if Torti “used” Watson’s car with Watson’s permission when she removed Van Horn from Watson’s car, the Mid-Century policy covered Torti.
In addition, Torti tendered defense of the action to Watson’s auto insurer, Coast National Insurance Company. The Coast National policy covered not only Watson, but also “any person using ‘[Watson’s] covered auto’ with [Watson’s] permission.” Thus, if Torti “used” Watson’s car with Watson’s permission when she removed Van Horn from Watson’s car, the Coast National policy also covered Torti.
Both Mid-Century and Coast National denied coverage to Torti. Encompass thus bore sole responsibility for Torti’s defense, and ultimately paid $4 million in settlement of Torti’s alleged liability to Van Horn.
Encompass then sued Mid-Century and Coast National in federal district court, seeking contribution for the costs Encompass had incurred in defending and indemnifying Torti. Encompass alleged that Torti’s act of removing Van Horn from Watson’s car constituted permissive “use” of Watson’s car, and that Mid-Century and Coast National thus had a duty to contribute toward the costs of defending and indemnifying Torti. The district court ruled in favor of Mid-Century and Coast National, reasoning that Torti did not “use” Watson’s car when she removed Van Horn from Watson’s car. Encompass appealed.
Holding
The Ninth Circuit Court of Appeals, applying California law, reversed. The appellate court noted that California Insurance Code section 11580.06(g) specifically defines “use” of a motor vehicle so as to include “unloading” of a motor vehicle. Thus, section 11580.06(g) “unambiguously equates the ‘unloading’ of a motor vehicle with the ‘use’ of a motor vehicle.” Here, Torti allegedly injured Van Horn while Torti was “unloading” Van Horn from Watson’s vehicle. Because Torti’s alleged liability arose from a “use” of Watson’s vehicle, Mid-Century and Coast National covered Torti, provided Torti had Watson’s “permission” to use Watson’s vehicle.
The appellate court rejected Mid-Century’s and Coast National’s argument that “unloading” a motor vehicle only constitutes “use” of that motor vehicle if the person doing the unloading “gains a benefit” from the vehicle as a means of transportation. According to the appellate court, prior case law does not does not support that conclusion.
The appellate court remanded the case to the district court for further proceedings, which will presumably focus on whether Torti had Watson’s “permission” to use Watson’s motor vehicle.
Comment
One judge dissented, arguing that the unloading of a vehicle constitutes use of the vehicle only when the unloading is part of the user’s act of availing himself or herself of the vehicle. Thus, according to the dissent, while loading or unloading a vehicle may constitute a use of the vehicle, it must be a component of some broader employment of the vehicle. Here, the dissenting judge argued, Torti’s act of unloading Van Horn from Watson’s vehicle was not part of some broader act of using Watson’s vehicle.