Chavez v. Arizona School Risk Retention Trust, Inc.
227 Ariz. 327
Ariz. Ct. App.2011Background
- Minor Chavez and Valle children were school bus riders involved in a rear-end collision while boarding a Marana Unified School District bus insured by the Trust.
- The Trust denied underinsured motorist (UIM) coverage to the students; plaintiffs sued for judicial determination that the children were insured under the policy’s UIM provision.
- Arizona law requires UIM coverage for “all persons insured under the policy” and defines use of a vehicle to include permissive use.
- The bus is a specialized vehicle with safety equipment; the court recognizes school buses serve functions beyond transportation, including student safety.
- The trial court granted summary judgment in favor of the Trust; the court of appeals reverses and remands for proceedings consistent with its ruling that the students are entitled to UIM benefits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether students using the bus with permission are insured under UIM, under §§ 28-4009(A)(2) and 20-259.01(B). | Chavez: students are insured under permissive use. | Trust: students are not covered under UIM. | Yes; students are insured and entitled to UIM benefits. |
| Whether permissive use includes passengers waiting to board and using safety functions of the bus. | Chavez: use includes permitting operation and safety features while boarding. | Trust: use requires occupancy in a way not shown. | Yes; use extends to passengers using the bus’s safety features while boarding. |
| Whether policy exclusions can defeat statutory UIM coverage for these students. | Chavez: statutory UIM coverage cannot be narrowed by policy exclusions. | Trust: policy limits may exclude some scenarios. | Statutes prevail; exclusions not interlined to defeat UIM. |
| Whether the policy’s “occupying” definition would exclude the students from UIM coverage. | Chavez: exclusion would defeat statutory UIM. | Trust: applying “occupying” could exclude. | Not controlling; statutory requirement controls. |
Key Cases Cited
- Tobel v. Travelers Ins. Co., 195 Ariz. 363, 988 P.2d 148 (App. 1999) (use includes more than driving; bus safety equipment; specialized vehicle)
- Mission Ins. Co. v. Aid Ins. Servs., 120 Ariz. 220, 585 P.2d 240 (1978) (interprets 'use' to include loading/unloading and broader vehicle use)
- Farmers Ins. Co. of Ariz. v. Till, 170 Ariz. 429, 825 P.2d 954 (App. 1991) (broad meaning of 'use' of vehicle continues beyond driving)
- Taylor v. Travelers Indem. Co. of Am., 198 Ariz. 310, 9 P.3d 1049 (App. 2000) (exclusions on coverage generally invalid absent statute)
- Lowing v. Allstate Ins. Co., 176 Ariz. 101, 859 P.2d 724 (Sup. Ct. 1993) (exclusions not implied by statute; UM/UIM interplay)