Insurance Coverage Extended to Those with “Some Connection” to the Vehicle


State Farm Mut. Ins. Co. v. Mizuno (HSC November 20, 2020)

Background. Michael Mizuno borrowed his girlfriend’s car to run errands. He drove the vehicle to the post office to mail paid bills. He was in the crosswalk between the vehicle and the post office when he was hit and injured by an unidentified driver. The vehicle drove away. Mizuno sought uninsured motorist coverage from his girlfriend’s policy. State Farm, the insurance company, filed a motion for declaratory judgment in federal court. The U.S. District Court granted summary judgment for State Farm and determined there was no coverage under Hawai'i law for Mizuno. Mizuno appealed to the Ninth Circuit. The appellate court was unsure how far to extend Hawai'i law in this area and certified the question to the HSC.


The Uninsured Motorists Statute and the Chain-of-Events Test. “[A]ny motor vehicle registered or principally garaged in this State” must have liability coverage “for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefrom[.]” HRS § 431:10C-301(b)(3). Coverage must extend to “all damages arising out of accidental harm sustained as a result of any one accident and arising out of ownership, maintenance, use, loading, or unloading of a motor vehicle[.]” HRS § 431:10C-301(b)(1).


According to the HSC, this statute serves a “broad ameliorative purpose” that has been interpreted broadly to extend coverage. To determine coverage under the statute, the HSC adopted the chain-of-events test:


(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.


Dawes v. First Ins. Co. of Haw., Ltd., 77 Hawai'i 117, 132-33, 883 P.2d 38, 53-54 (1994). The test is a clarification of an older case that held that the insured need not be occupying the vehicle at the time of the accident. Nat’l Union Fire Ins. Co. of Pittsburgh v. Olson, 69 Haw. 559, 751 P.2d 666 (1988).


The test was expanded further by the ICA in Liki v. First Fire & Cas. Ins. of Haw., Inc., 118 Hawai'i 123, 131, 185 P.3d 871 (App. 2008). There, the ICA held that coverage can extend to individuals beyond the first prong in the Dawes test. “[A]uto policies extend UM coverage for the protection of all insured persons . . . who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury[.]” Id. at 127, 185 P.3d at 875. The ICA also noted that in applying the Dawes test, it examined the physical proximity between the insured vehicle and the injured person seeking coverage. Id. at 130, 185 P.3d at 878.


The Chain-of-Events Test Extends Here. In light of this ameliorative purpose, the HSC held that coverage extends to Mizuno. According to the HSC, the chain-of-events test requires the person seeking coverage to show “some connection” with the insured vehicle. Mizuno’s case does just that. He was injured outside of the vehicle in a crosswalk between the post office and the vehicle.


The HSC rejected State Farm’s argument that extending coverage this far would result in “virtually limitless” coverage. The HSC noted that the test is fact-driven. The facts here show “some connection,” but had there been other facts—for example, if Mizuno was going to a bus stop or hailing a cab or even talking to a friend—the application of the test might yield a different result.


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