258 P.3d 145
Ariz. Ct. App.2011Background
- Appellants seek judicial determination that their minor children are insured under the school district's auto policy for underinsured motorist (UIM) coverage.
- The Marana Unified School District is insured with the Arizona School Risk Retention Trust, Inc. (the Trust) for automobile liability; the policy includes UIM.
- The Trust denied UIM coverage to the students; plaintiffs moved for summary judgment and the trial court granted summary judgment for the Trust.
- The central issue is whether the children, while waiting to board a school bus, fall within the insured under § 28-4009(A)(2) and thus are entitled to UIM benefits under § 20-259.01(B).
- The Arizona Court of Appeals reverses, holds the students were insured, and remands for proceedings consistent with that ruling.
- The court finds the school bus to be a specialized vehicle and concludes the students were using the bus with permission, triggering coverage under the statutes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are students using a school bus with permission insured for UIM benefits? | Chavez: students using bus with permission are insured under §28-4009(A)(2) and §20-259.01(B). | Trust: students are not insured under the UIM provisions simply by using the bus with permission. | Yes; students are insured and entitled to UIM benefits. |
| Does the school bus qualify as a specialized vehicle for purposes of use under the statute? | Chavez: bus is a specialized vehicle used to protect safety; use extends beyond mere transportation. | Trust: no special consideration; use is limited to driving the vehicle. | Bus is a specialized vehicle; its use for safety functions brings passengers within coverage. |
| Would excluding boarding students under the policy's 'occupying' definition defeat UIM coverage? | Chavez: exclusion would improperly narrow use; statutory coverage should apply. | Trust: occupancy exclusion could bar coverage for those not physically in contact with the vehicle. | Not necessary to decide; the statute requires coverage irrespective of such an exclusion, and the exclusion is not shown to be contemplated by the statute. |
| Is the UIM coverage incorporated into the policy by operation of the statute? | Chavez: UIM statutes are incorporated into every policy; they compel coverage for the students. | Trust: policy language could limit or exclude coverage, independent of statute. | Yes; the UIM statute is incorporated into the policy, enforcing coverage. |
Key Cases Cited
- Tobel v. Travelers Ins. Co., 195 Ariz. 363 (Ariz. Ct. App. 1999) (use includes more than driving; permissive use of a specialized vehicle triggers coverage)
- Farmers Ins. Co. of Ariz. v. Till, 170 Ariz. 429 (Ariz. Ct. App. 1991) (use extends beyond mere driving)
- Mission Ins. Co. v. Aid Ins. Servs., 120 Ariz. 220 (Ariz. 1978) (use of a vehicle includes loading/unloading during use)
- Taylor v. Travelers Indem. Co. of Am., 198 Ariz. 310 (Ariz. Ct. App. 2000) (statutory interpretation cannot permit unwritten exclusions)
- Lowing v. Allstate Ins. Co., 176 Ariz. 101 (Ariz. 1993) (exclusions must be contemplated by the statute)