The 6th Circuit Court Tells Us.
In Bennett v. State Farm Mutual Automobile Company, No. 13-3047 (6th Cir. Sept. 24, 2013) (click on link to access a full copy of the opinion) issued today, the plaintiff was a pedestrian who was struck by a car. When the car hit the plaintiff, she was thrown onto the hood and rolled off, sustaining serious injury. Coverage turned on whether the plaintiff was an occupant of the vehicle at the time of the impact. State Farm denied coverage, claiming that it was “ridiculous” to consider her as “occupying” the car. The trial court agreed, and dismissed the case summarily.
The 6th Circuit overturned the claim. It found as a matter of law that the State Farm policy defined the word “occupying” as someone who was “in, on, entering or alighting from” the car. Both parties stipulated that the plaintiff was on the vehicle. ” Per the policy’s terms, therefore, Bennett was an “occupant” of the vehicle and thus entitled to coverage for those additional injuries.”
As regular readers of this column know, an insurance policy is a contract. Both parties are bound by its unambiguous written terms. The contract terms dictate coverage for certain losses. State Farm wrote the policy. It choose to define the term “occupying” in clear, unequivocal language to include people on top of a car. Thus, the 6th Circuit was correct in its ruling; but not without tweaking State Farm and its counsel for hyperbole. The Court of Appeals also admonished the insurer and its lawyer, lecturing that “the better practice (in the law) is usually to lay out the facts and let the court reach its own conclusions.” Without a doubt, State Farm’s rhetoric reared back to bite them in a very public way.