When Sitting in a Car With the Engine Running is Not Use & Operation of a Vehicle

Coverage for Negligent Conduct While in an Automobile

Automobile liability insurance can become complicated. When is an automobile in use? When is an automobile in operation? Was the accident the result of the use or operation of an automobile qua automobile?

In Nationwide Mutual Fire Insurance Company v. Lisette M. Oster, Carol Daniele, As Executrix of the Estate of Douglas P. Daniele, Deceased, and Carol Daniele, Individually, Gabrielle M. Oster, Andrew J. Abbene and State Farm Mutual Insurance Company, 2018 NY Slip Op 51018(U), 304/2016, Supreme Court, Putnam County (June 29, 2018) two insurers disputed who was obligated to pay for a judgment resulting in the death of a motorcycle operator running into an automobile.

FACTS

On August 31, 2011, Lisette Oster (“Lisette”), her daughter, Gabrielle Oster (“Gabrielle”), and Andrew J. Abbene (“Abbene”) (an Oster family friend), drove to Cycle City on Route 17 in Sloatsburg, New York in two separate cars. Lisette and Abbene rode together in Abbene’s 1995 BMW. Gabrielle followed them, driving her family’s Honda. Abbene remained at Cycle City while Lisette drove his BMW back to Putnam County.  Lisette drove Abbene’s BMW insured by Defendant State Farm Mutual Insurance Company (“State Farm”). Gabrielle followed in the Honda owned by Lisette and insured by Allstate Insurance Company (“Allstate”).

Lisette turned left onto Harriman Avenue and then made a U-turn in a driveway to go back to Route 17 and the New York State Thruway. After making the U-turn, Lisette stopped her vehicle at an angle on or near the shoulder where Harriman Avenue meets Route 17 to wait for her daughter to make the same turn “because we had to go back the opposite direction to get home.” The engine was running, but the car was not moving. Lisette could not recall whether the gear was in “park,” whether her foot was on the brake, or both.

Lisette saw Gabrielle driving and waved to her through the open driver’s side window “to let her see that that’s where we were turning around, to make sure…that she saw where we were turning around.” Gabrielle saw Lisette and turned left to go onto Harriman Avenue so she could follow her. As Gabrielle changed lanes to make the left turn, Douglas P. Daniele, who was traveling behind Gabrielle on his motorcycle, struck her vehicle, and was fatally injured.

On August 4, 2010, Plaintiff Nationwide Mutual Fire Insurance Company (“Nationwide”) issued a Homeowner’s Policy to William and Lisette Oster for the policy period September 22, 2010 to September 22, 2011.

The issue of liability in the Wrongful Death Action was tried before a jury in December 2015.  The jury concluded that Lisette was negligent in the manner in which she waved to Gabrielle, and that Lisette’s negligence was a substantial factor in causing the accident. Similarly, the jury concluded that Gabrielle was negligent and her negligence was a substantial factor in causing the accident.

Following the May 2016 trial on the issue of damages, the jury awarded the Estate $2,148,000.00 in damages, and with interest, costs, and disbursements, the total damages were $2,976,402.34. Judgment was entered on July 1, 2017.

THE DECLARATORY RELIEF ACTION

Nationwide sued seeking a judgment (1) declaring that the Nationwide policy does not provide coverage for the incident of August 31, 2011, and the claims set forth in the [Wrongful Death Action] and that Nationwide is not required to defend or indemnify Lisette M. Oster with respect to the incident of August 31, 2011, and the claims set forth in the [Wrongful Death Action] or any claims for contribution or indemnity therein and (2) declaring that the State Farm policy provides coverage for the incident of August 31, 2011, and the claims set forth in the [Wrongful Death Action] and that State Farm is required to defend and indemnify defendant Lisette M. Oster with respect to the incident of August 31, 2011, and the claims set forth in the [Wrongful Death Action] and any claims for contribution or indemnity therein together with such other and further relief as to the court may seem just and proper.”

The essence of Nationwide’s motion for summary judgment is that the liability claims against Lisette and Gabrielle arise out of the “use and operation” of the 1995 BMW by Lisette, and the Honda by Gabrielle, and are, therefore, excluded from coverage under the Homeowner’s Policy.

Nationwide contended that Lisette’s use of the BMW and her wave to Gabrielle constitutes “use” of a motor vehicle and is therefore excluded under their Homeowner’s Policy.

If the actions of Lisette constitute solely “use and operation,” then Nationwide’s motion should be granted, and they should not be liable under the Homeowner’s Policy. If it is determined that Lisette’s actions constitute “use and operation,” State Farm’s motion fails and it is obligated to satisfy the Judgment to the extent of the policy limits. However, if Lisette’s actions do not constitute “use and operation,” then Nationwide may be compelled to pay the Judgment to the extent of its policy limits while State Farm escapes liability.

The definition and application of “use and operation” language varies with the statutory purposes and policies served. An accident arising from the “use,” must have arisen out of the inherent nature of the automobile and, as such, inter alia, the automobile must not merely contribute to the condition which produces the injury, but must, itself, produce the injury. A motor vehicle may be in “operation” without motion.

The “use” and “operation” both incorporate the intended purpose of the automobile to serve as a means of transportation from one location to another. The “plain language” and meaning of “use” and “operation” encompasses a broad range of activity. The tendency “to know it when one sees it” (to paraphrase Justice Stewart in another context) yields a long line of decisions that reflect varied forms of human behavior but provide little guidance where there are close questions of fact. Not every injury occurring in or near a motor vehicle is covered by the phrase ‘use or operation.’ The accident must be connected with the use of an automobile qua automobile.

The jury had the opportunity to hear this testimony, evaluate it, and reach its verdict. It was for the jury to say what effect, if any, Lisette’s wave had on Gabrielle’s actions. Its verdict compels the conclusion that Lisette waved to Gabrielle to turn, that such wave was negligent under the circumstances, and the wave was a substantial factor in causing the accident. But it cannot be said that the “wave” was essential to the use of the Abbene vehicle.

The “use” or “operation” of a vehicle is not limited to a vehicle in motion. Here, Lisette was sitting in the driver’s seat of the Abbene BMW at an intersection, with the vehicle in “park” or her foot on the brake, or both, when she waved to her daughter. Lisette’s “actions” and her wave set the events in motion, even if they did not “produce the injury,” Lisette’s “wave” was an act independent of the “use and operation” of the Abbene BMW. The fact that it was made from the driver’s seat, with the engine running and other indicia of “use and operation” is fortuitous, but to the New York court it was neither convincing or controlling.

The Court concluded that Lisette was not “using” the Abbene vehicle when she waved to her daughter. Instead, the wave, found by the jury as a negligent act, gives rise to coverage under the Nationwide Homeowner’s policy, and the exclusion for the use of an automobile does not apply here. In addition, since the “accident was not the result of the ownership maintenance or use” of the Abbene vehicle, but was merely the location for which Lisette waved to her daughter, the denial of coverage by State Farm was not improper.

It is not “bad faith” where, as here, there was an arguable basis for denying coverage. Nationwide conducted some investigation and took a position that a denial of coverage was warranted. Its actions flowed from that decision. To the extent that the decision denying coverage was a close question (as discussed herein), it cannot support a finding of “bad faith”.

ZALMA OPINION

Both insurers had a logical argument about coverage and presented their position to the court in great detail. The court took its time, reviewed multiple authorities, and the jury verdict to determine that the negligent act – the wave from the front seat of a BMW – was not part of the use or operation of the vehicle. As a result of that decision the homeowners policy was required to defend and indemnify and the auto policy was not. Facts are curious things and the decision could have gone either way.


© 2018 – 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.

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The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

 

 

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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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