For uninsured motorist coverage to apply, vehicle liability policies provide that the injury to the insured must be “caused by accident and arise out of the ownership, maintenance, or use of an uninsured auto.”
The “arising out of” clause defines the required causal link between the uninsured vehicle and the injury.
Insurers have consistently argued for a narrow interpretation of the phrase while policyholders have advocated for a broader reading.
The Third Circuit Court of Appeals recently issued one of the broadest interpretations of the necessary causal link between the use of an uninsured vehicle and the injury to the insured, holding that an accident caused by a box lying in the middle of the road arose out of the use of an uninsured auto.
In Allstate Property and Casualty Insurance Co. v. Squires, 667 F.3d 388 (3rd. Cir. 2012), a pickup truck was driving on a country road in Pennsylvania when the driver swerved to avoid a cardboard box lying the middle of the road. The driver, seriously injured, filed a claim for uninsured motorist benefits with his insurer, Allstate. He submitted that because the box had fallen from an unidentified, and therefore uninsured vehicle, the accident arose out of the use of a vehicle. Allstate stipulated that an uninsured vehicle had dropped the box, but dismissed the claim because the injury was caused by the box, not a vehicle, and any causal connection between the injury and the “use of an auto” was too tenuous to support an uninsured motorist claim.
These competing interpretations of the “arising out of” language of the policy presented an interesting question for the court: “whether an accident caused by a box which fell from an uninsured motor vehicle can be attributed, as a matter of law, to the ‘ownership, maintenance, or use’ of an automobile.” Squires, 667 F.3d at 390.
The trial court and the appellate court agreed that the Pennsylvania Supreme Court’s decision in Manufacturers Casualty Insurance Co. v. Goodville Mutual Casualty Co., 170 A.2d 571 (Pa. 1961), provided the controlling law.
The court in Goodville held that “arising out of’ means causally connected with, not proximately caused by. ‘But for’ causation, i.e. a cause and result relationship, is enough to satisfy this provision of the policy.” But, while acknowledging that the analysis was one of “cause in fact” rather than “proximate cause,” the two courts disagreed as to the scope of the required causal connection.
The trial court affirmed Allstate’s position and stated that uninsured motorist coverage is “designed to compensate victims for vehicle-caused injuries.” Allstate Property and Casualty Insurance Co. v. Squires, 782 F.Supp. 2d 146 (W.D. Pa. 2011).
Relying on previous case law, the court determined that the analysis hinges on “the instrumentality used to cause the injury” and that “the vehicle must be more than merely incidental to the injury-it must be the instrumentality which caused the injury.” Squires, 782 F. Supp. 2d at 150.
This is not to say that contact with a vehicle is necessary, but simply that the vehicle must have directly caused the accident. The court held that whether the box was lying in the road because it fell off of a car was irrelevant because the “determinative fact is that the instrumentality causing the underlying accident was a box – not a vehicle.” Squires, 782 F. Supp. 2d at 152. Although the trial court’s decision relied on strong precedent, the Third Circuit disagreed and reversed the ruling.
The Third Circuit acknowledged that previous courts “quite broadly have indicated that if injuries are caused by an ‘instrumentality or external force other than the motor vehicle itself,’ the vehicle will not be regarded as having contributed to the cause of the injuries pursuant to the ‘arising out of’ language.” Squires, 667 F.3d at 392.
But, whereas the trial court focused on the instrumentality causing the harm, the circuit court centered its analysis on the chain of causation and thus constructed a broader interpretation of the policy language.
The court noted that the “central inquiry in assessing whether an incident ‘arose out of the maintenance, ownership, or use’ of a motor vehicle concerns causation, which is informed by – but does not necessarily turn on – the ‘instrumentality’ directly causing the accident.” Squires, 667 F.3d at 395 (emphasis added). Whether the uninsured vehicle directly caused the accident is relevant but is not dispositive.
The Third Circuit turned to the decision in Smith v. United Services Automobile Association, 572 A.2d 785 (Pa. Super. Ct. 1990), to illustrate the distinction.
In Smith, a cyclist was denied coverage for an injury that occurred after a boy riding on hay wagon threw hay in the cyclist’s face. The trial court had relied on the case to support its position that coverage does not apply where the vehicle is not the instrumentality causing the harm. The circuit court observed, however, that coverage was denied in Smith not because the instrumentality causing the harm was not the vehicle, but rather because the injury was caused by an intervening force, the boy throwing the hay.
Under the Third Circuit’s analysis, the causal relation was interrupted by an independent force, which precluded coverage. Applying this principle to the present case, the court found no interruption in the causal chain. The causal relation between the uninsured vehicle, the box that it left behind, the accident, and the resulting injury was close enough and pure enough to implicate the “arising out” provision.
The decision represents one of the most liberal applications of the “arising out of” clause but the conclusion is not unyieldingly broad. The court noted that while “arising out of” means causally connected, it does not implicate “every incidental factor that arguably contributes to an accident.” Squires, 667 F.3d at 394. The court also suggested that the injuries sustained must be attributable to common uses of a vehicle. Here, transporting the box as cargo was determined to be a common use of vehicles. But the court distinguished a number of cases in which uninsured motorist coverage was denied, including cases where a passenger was bitten by a dog chained inside a van and where motorists were involved in a post-collision fistfight. Arguably, such instances could be said to have “arisen out of” the use of vehicle, but reasonable constraints limited coverage.
The causal connection articulated by the Third Circuit is much broader than previous interpretations of the ‘arising out of’ provision but is not without limit. Although the decision does not require the instrumentality causing the injury to be the vehicle, it does require an uninterrupted causal relation stemming from the common use of a vehicle.
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