Arkansas Requires Actual Physical Contact with Uninsured Motorist

Injured Party Must Fulfill Conditions Precedent to Recover UM Benefits

On August 15, 2014, George Konecny (Konecny), an employee of Arkansas Electric Cooperative Corporation (“AECC”), was driving an AECC pickup truck northbound on Highway 11 in Prairie County when he encountered a Jeep towing another Jeep in the center of the highway. The Jeep, which was making a u-turn in the center of the highway, caused Konecny to swerve to avoid a collision and to leave the highway. As he veered off the highway on the west side shoulder, he struck a culvert, continued, traveling northwest outside the traffic lane, and hit two trees before coming to a final rest.

In George Konecny v. Federated Rural Electric Insurance Exchange and Auto-Owners Insurance Company, No. CV-18-945, 2019 Ark. App. 452, Arkansas Court of Appeals Division II (October 16, 2019) George Konecny appealed the denial of his uninsured-motorist benefits—specifically arguing that the Prairie County Circuit Court erred in granting summary judgment to his insurers, Federated Rural Electric Insurance Exchange (“Federated”) and Auto-Owners Insurance Company (“Auto-Owners”) and in denying his cross-motion for summary judgment.

FACTS

It was undisputed that there was no physical contact between the truck operated by Konecny and the Jeep. It also is undisputed that the Jeep left the scene immediately after the incident, and neither the Jeep nor its driver were ever identified.

Michael Livesay witnessed Konecny’s accident and saw the driver of the Jeep leaving the accident scene. Arkansas State Police officer Kris McCrea investigated the wreck. Officer McCrea’s investigation confirmed that on the basis of the evidence left at the scene, the actions of the Jeep caused Konecny’s vehicle to leave the highway. Officer McCrea’s investigation confirmed that the Jeep left the scene and corroborated Livesay’s statement.

The cause of the wreck is not disputed—the fleeing Jeep caused the wreck but did not hit Konecny’s automobile.

INSURANCE AVAILABLE

At the time of the wreck, there were two insurance policies in effect that provided uninsured-motorist coverage to Konecny, one with appellee Federated and one with appellee Auto-Owners. Both appellees moved for summary judgment arguing that each was entitled to summary judgment because the uninsured-motorist provision required that the insured provide proof that the other vehicle was uninsured and further that contact with a hit-and-run driver was a condition precedent to coverage.

Konecny filed a cross-motion for summary judgment against both  insurers. The basis for his cross-motion was that there is a statutory presumption that the fleeing driver was uninsured and that he was entitled to coverage under the terms of the policies.

The circuit court granted both insurers’ motions for summary judgment. The circuit court found that the plain language of both policies required physical contact before the uninsured-motorist provision of the policies was applicable.

APPLICABLE LAW

The provisions of an insurance contract are to be interpreted by the court in the plain and ordinary meaning of the terms and cannot be construed to contain a different meaning. Accordingly, when an insurance contract is unambiguous, its construction is a question of law for the court. Contracts of insurance should receive a practical, reasonable, and fair interpretation consonant with the apparent object and intent of the parties in the light of their general object and purpose.

Konecny submitted that the contract provision of the insurance policies violated Arkansas public policy, and he urged the court to overrule the initial case that upheld the direct-contact requirement. Konecny maintained that this requirement makes no sense when, as here, there is corroborative evidence that proves that the wreck was caused by the fleeing driver, and the possibility of fraud is nonexistent.

It is undisputed that the plain language of both policies requires that Konecny, in order to obtain his uninsured-motorist benefits, prove that the other vehicle was uninsured. Under the express provisions of the policies, Konecny is entitled to uninsured-motorist benefits if there is no liability bond or liability insurance that applies. Konecny submits that the fact there was no insurance available is supported by section 27-19-503, which he claims creates a presumption that the unidentified motorist and the Jeep he was operating were uninsured.

The appellate court concluded that the Motor Vehicle Safety Responsibility Act does not create a presumption that a vehicle is uninsured for purposes of uninsured-vehicle insurance coverage and that a plaintiff must prove that the other vehicle is uninsured.

The circuit court correctly rejected Konecny’s argument that there existed a presumption that the unidentified vehicle was uninsured. Moreover, the appellate court held that the circuit court correctly declined to allow a jury to speculate that the other vehicle was uninsured merely because it left the scene.

In an attempt to circumvent his lack of proof that the other vehicle was uninsured, Konecny argued that the mere fact that the other vehicle fled the scene was sufficient evidence to create a factual question as to whether that vehicle was insured. The circuit court correctly rejected this argument. To the contrary, there are many possible motivations for the other driver to have left the scene other than a lack of insurance including, but not limited to, the driver may have had a suspended driver’s license, unpaid tickets, or an outstanding warrant for his or her arrest or the driver may have had insurance but wanted to avoid increased premiums resulting from a reported accident.

The plain language of the policies requires, as a condition of underinsured-motorist coverage, that physical contact occur. It is undisputed that the unidentified Jeep that fled the scene and caused the accident did not make physical contact with either Konecny or his vehicle.

Konecny urged, without success, that the appellate court conclude that since it is not a statutory requirement that there is physical contact the policy language is inconsistent with the uninsured-motorist statue. It discourages an obedient driver from attempting to avoid striking a vehicle that violates traffic laws and causes property damage and personal injury to the non-offending driver. Rather, it affirmed the trial court because of the clear and unambiguous language of the insurance contract.

ZALMA OPINION

No insurance policy covers every possible event. In Arkansas, the policies providing uninsured motorist coverage required the injured person to prove two things: that the other party was uninsured and that there was contact between the plaintiff’s vehicle and that of the uninsured driver. Konecny was unable to prove either condition precedent to coverage.


© 2019 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 51 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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