United States: State Farm Mutual Automobile Insurance Company v. Mizuno

Last Updated: September 20 2019
Article by Michael R. Velladao and Kayla Berlin

(September 2019) - In State Farm Mutual Automobile Ins. Co. v. Mizuno, ____ F.3d _____ (9th Cir. August 5, 2019), the United States Court of Appeals for the Ninth Circuit certified the following question to the Hawai’i Supreme Court:

Under Hawai’i law, is a permissive user of an insured vehicle, whose connection to the insured vehicle is permission to use the vehicle to run errands and drive to work, entitled to uninsured motorist (UM) benefits under the chain-of-events test because he was injured by an uninsured motorist?

The parties’ coverage dispute arose out of Mizuno's permissive use of a vehicle insured under a policy issued by State Farm Mutual Automobile Insurance Company ("State Farm") to Mizuno’s girlfriend, Daryl-Jean S. Wong ("Wong"). Mizuno was injured when he was struck by an uninsured motorist while crossing a street as he returned to the vehicle after running an errand. Mizuno was insured under an automobile insurance policy issued by GEICO with UM limits of $50,000 per person and $100,000 per accident. The State Farm insured Wong and her vehicle "with UM limits $100,000 per person and $300,000 per accident." The State Farm policy defined "insured" in part as:

any other person while:

a. occupying, with a reasonable belief that he or she is entitled to do so:

(1) your car.

The policy provided that "occupying means in, on, entering or exiting.”

The accident occurred after Mizuno drove Wong's vehicle to the post office to mail the couple's bills. Mizuno parked the vehicle crossed the street from the post office, walked across the street, and deposited the bills in a mailbox. As Mizuno was returning to the vehicle, he was struck by an unidentified driver as he was approaching Wong's vehicle. Mizuno suffered injuries to his left leg, left arm, left wrist and left hand and required surgery to repair his broken left wrist.

GEICO paid its UM limits of $50,000 to Mizuno for the accident. However, State Farm denied coverage of Mizuno's UM claim based on the position that he was not "occupying" the vehicle at the time of the accident. In response, Mizuno contended that he was entitled to UM coverage under the State Farm policy based on the "chain-of-events test" first articulated by the Hawai’i Supreme Court in Dawes v. First Ins. Co. of Hawai’i, Ltd., 883 P. 2D 38 (Haw. 1994). In Dawes, an uninsured motorist killed a passenger in a vehicle driven by a covered driver after the latter's vehicle became inoperable. The passenger was not in the vehicle when she was struck. Rather she had walked for 20 to 25 minutes along the highway and traveled approximately 1 mile from the insured vehicle when she was struck. The UM policy provided coverage for “any other person occupying “the covered auto” and defined "occupying to mean in, upon, getting in, on, out or off."

The Hawai’i Supreme Court held that the passenger's estate was entitled to benefits under the UM policy. In determining whether the passenger was entitled to coverage, the supreme court held that the "occupying" restriction was void and could not bar coverage. Rather, the appropriate determination was whether there was "some connection with the insured vehicle." The supreme court emphasized that would be anomalous if the passenger was denied UM coverage even though the driver, if injured under identical circumstances, would receive full benefits. The supreme court adopted the following chain-of-events test for determining UM coverage:

For purposes of entitlement to UM benefits, (1) if a person was a passenger in an insured vehicle being operated by a named insured or a named insured’s family member, (2) during the chain of events resulting in injury to the person caused by an accident involving an uninsured motor vehicle, (3) then the person is a covered person at the time of his or her injury to the same extent as the named insured or the named insured’s family members would be entitled to receive UM benefits under the applicable UM policy.

By applying the above chain-of-events standard, the Hawai’i Supreme Court held that the passenger was entitled to UM benefits. The chain of events test has also been applied by Hawai’i courts to UM coverage for an employee of a repair service who was injured while transporting tools back and forth from a parked truck. Liki v. First Fire & Cas. Ins. of Hawai’i, Inc., 185 P.3d 871 (Haw. Ct. App. 2008).

As applied to the circumstances of Mizuno’s UM claim, the Court of Appeals noted that there is no Hawai’i law exactly on point applying the chain of events test to an individual who was injured while returning to a vehicle after running errands. The Court of Appeals explained its decision to certify a question to the Hawai’i Supreme Court as follows:

Dawses and Liki applied the chain-of-events test in determining that a passenger of an insured vehicle that was disabled, and who was accompanied by a family member of the named insured had established sufficient connections to the insured vehicle to create coverage under a UM policy, and that an employee, using his employer’s truck to perform his work duties, did so as well. However, Hawai’i precedent does not clearly address the circumstances of this case, where a permissive user was injured while returning to the insured vehicle after conducting an errand.

The parties disagree on the proper application of these cases. Mizuno posits that Dawes and Liki mandate coverage because, under the chain-of-events test, he was required to demonstrate only that he occupied an insured vehicle and was injured as a pedestrian by an uninsured motorist. State Farm counters that Mizuno is not entitled to coverage under Dawes, Liki, or Olson because Mizuno, unlike the claimants in those cases, is unable to demonstrate any connection between his injuries and the use of Wong’s vehicle.

We cannot readily discern whether the Hawai’i Supreme Court would extend the chain-of-events test to this circumstance where (1) the vehicle was not disabled as in Dawes and a covered family member of the named insured was not present, or (2) the driver was not an employee of the insured performing work duties as in Olson and Liki.”

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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