Auto-Owners Ins. Co. v. Shipley, 2021 WL 5707653 (Ind. Ct. App. 2021)
Although auto policies generally extend liability coverage to anyone “using” a covered auto, they often limit uninsured/underinsured motorist (UM/UIM) coverage to individuals “occupying” a covered auto. However, in Indiana, like many states, a person who qualifies for liability coverage under an auto policy must also qualify for UM/UIM coverage under that policy. As a result, a person not “occupying” a covered vehicle may still qualify for UM/UIM coverage if the person was “using” the vehicle at the time of the accident. That was the result the Court of Appeals reached in Auto-Owners Ins. Co. v. Shipley.
A roadside tire repair company sent its employee to help a customer whose car was stuck with a flat tire on the shoulder of an exit off the interstate. After parking his company van in front of the customer’s car, the employee opened the side doors on the van, took out an air hose and tire pry bars, and walked to the customer’s car. The employee removed the customer’s flat fire and rim from the trunk of the car and placed them between his van and the car. As the employee was standing on the rim trying to dismount the flat tire, he was hit by a runaway tire that fell off a passing truck. At the time, the employee was “about 20 seconds” from going back to his work van to start the air compressor to inflate the new tire. The employee later sued his employer’s auto insurer for UIM coverage.
The UIM insurer moved for summary judgment, arguing that the employee was not entitled to UIM coverage because he was not “occupying” or “using” his work van at the time of the accident. The trial court denied the motion, and the insurer sought and received permission to bring an interlocutory appeal.
The Indiana Court of Appeals affirmed the trial court’s denial of the insurer’s motion for summary judgment and held that the employee was “using” his work van when the accident happened. In doing so, the Court of Appeals relied on two earlier decisions in which it held that a person is “using” a vehicle for insurance purposes if the person has an “active relationship” with the vehicle at the time of the accident. See Monroe Guar. Ins. Co. v. Campos, 582 N.E.2d 865, 869 (Ind. Ct. App. 1991) (holding that a tow truck driver was “engaged in an activity essential to the towing process” and thus “using” his tow truck when walking toward disabled vehicle “to determine what steps needed to be taken to tow the vehicle”); Argonaut Ins. Co v. Jones, 953 N.E.2d 608, 625 (Ind. Ct. App. 2012) (holding that police officer directing traffic was “using” her patrol car because she “had an active relationship to the patrol car” and “the car was central to her role in controlling traffic at the scene”). The insurer tried to distinguish Campos and Argonaut because they involved policies that required only “ownership, maintenance or use” of an auto while the policy issued to the roadside tire repair company required the ownership, maintenance, or use of an auto “as an auto.” According to the insurer, the employee was not “using” the van “as an auto” because he was not driving or directing its movement. The Court of Appeals disagreed and pointedly stated that the employee “was using his roadside-assistance van as a road-side assistance van—to accomplish the repair necessary to get the customer back on the road.”
Relying on its guidance in Campos and Argonaut, the Court of Appeals found that the employee maintained an active relationship with his van, which was “central” to his work in providing roadside assistance. The employee “parked his van within feet of the customer’s car” and “opened the side doors and took out an air hose and tire [pry] bars—items he needed for the job and would have to put back in the van when he was done.” When the employee was hit by the runaway tire, the Court of Appeals noted, “some of the van doors were still open, and he was only about twenty seconds from going back to the van to turn on an air compressor to inflate the new tire.” The Court of Appeals held that these facts established that the employee was “using” the van for purposes of liability coverage. Because that necessarily meant the employee qualified for UM/UIM coverage, the Court of Appeals did not address whether the employee was “occupying” the van for purposes of UM/UIM coverage.
Since the Court of Appeals decided Campos and Argonaut, the analysis of whether a person was “using” a vehicle has turned on whether the person had an “active” relationship with the vehicle at the time of the accident, and the reasonable expectations of the parties to the insurance policy. Although the Court of Appeals considered those two factors in Shipley, its analysis highlights the importance that the latter factor may have in analyzing the former. That is, even though the accident in Shipley happened while the employee was dismounting a flat tire from the rim of the customer’s car, the insurer should have contemplated that the company’s employees would have to park vehicles on the roadside and exit the vehicles to do their work. Thus, practitioners addressing UM/UIM coverage under commercial auto policies should be mindful not only to consider whether the person had an “active” relationship with the vehicle but also whether the circumstances under which the accident occurred were reasonably foreseeable when the insurer issued the policy.