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The meaning of ‘occupy’

4th Circuit denies UIM to woman returning to vehicle

What does it mean to “occupy” a vehicle? For a South Carolina federal judge, intent was the key. But the 4th U.S. Circuit Court of Appeals focused on proximity.

The appellate court on May 30 reversed U.S. District Judge J. Michelle Childs’ interpretation of state case law addressing a common argument in insurance cases, as most policies stipulate that an insured must be occupying a vehicle to qualify for coverage.

Childs held last year in Cramer v. National Casualty Co. that an insurer had to provide underinsured motorist coverage to an ambulance driver, even though she was standing across the road from the ambulance when she was hurt.

Margaret Cramer had parked the ambulance near a traffic crash and testified that she was trying to return to the vehicle when a passing car hit her. The driver was underinsured.

In denying Cramer’s claim for coverage, National Casualty argued that she did not qualify as an insured under the plain terms of the policy, which included commonly used language that defined “occupying” as being “in, upon, getting in, on, out or off” a vehicle.

But Childs found that Cramer’s “intent to occupy the ambulance was clear, as it is undisputed that the engine was running and she was walking back to the ambulance.”

Childs had to predict how the state Supreme Court might decide Cramer’s argument, because the high court has never considered what “getting in” means in terms of occupying a vehicle.  She noted that several other states, including Maine and Ohio, have concluded that the insurance industry’s definition of “occupying” was ambiguous.

Childs considered the state Supreme Court’s 1970 decision in Whitmire v. Nationwide Mutual Insurance Co. and its 2012 opinion in S.C. Farm Bureau Mutual Insurance Co. v. Kennedy, both of which held that claimants who ran from their disabled vehicles while trying to dodge cars that veered off the road did not lose their status as “occupying” insureds.

Drawing from Kennedy and Whitmire, Childs found that a claimant does not have to be touching the insured vehicle to be “occupying” it at the time of an accident; that UIM policy terms should be construed liberally in favor of coverage; that a “causal connection” must exist between the accident and the claimant’s use of the insured vehicle; and that the court should also consider factors such as time, intent and proximity.

Childs also noted that National Casualty’s argument “would require plaintiffs, whose use of insured vehicles requires them to occasionally be in or near a roadway, to walk into traffic and put themselves in harm’s way in order to insure that their actions can be construed as ‘getting in’ the insured vehicle.”

In reversing Childs, the 4th Circuit stressed that unlike the claimants in Kennedy and Whitmire,

Cramer was “separated from the ambulance by a lane of traffic. She was not within two or three feet of the emergency vehicle.”

“Cramer urges the court to construe ‘getting in’ to cover persons with the present intent of getting in an insured vehicle coupled with action reasonably anticipated from someone getting in a vehicle under the particular circumstances,” Circuit Judge J. Harvie Wilkinson wrote for the unanimous three-judge panel, which did not include any South Carolina-based judges. The panel concluded that Cramer “was not yet engaged in actions reasonably anticipated from someone actually getting in a vehicle.”

National Casualty’s attorney, J.R. Murphy of Murphy & Grantland in Columbia, wrote in an email that while the opinion is unpublished and cannot be cited as precedent, it “gives a sound analysis of the policy language involved [which] is fairly standard in the industry and aligns South Carolina with the vast majority of states which have interpreted similar policy definitions.”

Cramer’s attorney, Robert Goings of Columbia, said the decision “further shows why a South Carolina state court should be interpreting South Carolina insurance laws, especially cases involving underinsured motorist coverage dealing with issues of public policy and the interpretation of state statutes.”

He was unsure about whether Cramer would ask the 4th Circuit for a rehearing or petition the U.S. Supreme Court to hear the case.

Columbia personal injury lawyer John Nichols, whose law partner Blake Hewitt argued the Kennedy case, disagreed with the 4th Circuit’s decision in Cramer. Based on his reading of the facts outlined in the opinion, he said, “There’s no question [Cramer] was doing anything other than making a beeline for this ambulance.”

“Where would the 4th Circuit draw the line? Apparently, they think 2 or 3 feet is OK, but 12 or 15 feet is not,” he added. “It should not be a matter of proximity. It’s a matter of intent.”

Follow Phillip Bantz on Twitter @SCLWBantz

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