Beth R. Throesch v. U.S. Fidelity etc.

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 00-2669
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Beth R. Throesch, *
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Appellee, *
*
v. *
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United States Fidelity and Guaranty *
Company, *
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Appellant. *
__________ Appeals from the United States
District Court for the
No. 00-2704 Eastern District of Arkansas.
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Beth R. Throesch, *
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Appellant, *
*
v. *
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United States Fidelity and Guaranty *
Company, *
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Appellee. *
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Submitted: April 11, 2001
Filed: July 9, 2001
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Before WOLLMAN, Chief Judge, MURPHY, Circuit Judge, and GOLDBERG,1
Judge.
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WOLLMAN, Chief Judge.
United States Fidelity and Guaranty Company (USF&G) appeals from the
district court’s entry of judgment entitling Beth R. Throesch to coverage under her
vehicle’s automobile insurance policy; Throesch cross-appeals. We reverse in part and
affirm in part.
I.
The facts of this case are undisputed. On April 26, 1997, while driving south on
Highway 67 near Pocahontas, Arkansas, Throesch swerved off the road and onto the
shoulder. She subsequently lost control of the vehicle, which overturned, causing her
serious injuries. According to Throesch and two eyewitnesses, Throesch swerved to
successfully avoid colliding with a truck coming from the opposite direction that had
crossed the center line of traffic and entered her lane. The truck’s driver did not stop,
and Throesch was unable to identify him or locate him or the truck.
In relevant part, Throesch’s insurance policy issued by USF&G provides:
PART C – UNINSURED MOTORISTS COVERAGE
...
We will pay compensatory damages which an “insured” is legally entitled to
recover from the owner or operator of an “uninsured motor vehicle” . . . .
...
“Uninsured motor vehicle” means a land motor vehicle or trailer of any type:
1
The Honorable Richard W. Goldberg, Judge, United States Court of
International Trade, sitting by designation.
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1. To which no bodily injury liability bond or policy applies at the time of
the accident.
...
3. Which is a hit-and-run vehicle whose operator or owner cannot be
identified and which hits:
a. You or any “family member”;
b. A vehicle which you or any “family member” are “occupying”; or
c. “Your covered auto”.
Appellant’s App. at 53. Throesch seeks coverage under provisions 1 and/or 3, which
provide different definitions for the “uninsured motor vehicle” involved in the accident.
USF&G denied Throesch’s request for coverage under provision 3 because the
truck did not hit her or her vehicle, and determined that because Throesch had not
shown that the truck was uninsured, her injuries were not covered under provision 1.
The district court granted summary judgment to USF&G on the hit-and-run
policy provision, concluding that, in this case, it required physical contact between the
vehicles as a condition of coverage. The court subsequently determined, however, that
Arkansas statute section 27-19-503 created a presumption, applicable in this case, that
both the unidentified motorist and the truck he was operating were uninsured.
Accordingly, the court concluded that Throesch’s injuries were covered under the
policy and entered judgment for Throesch. USF&G appeals from the court’s judgment
and ruling on the statutory presumption, and Throesch cross-appeals the court’s grant
of summary judgment on the hit-and-run provision.
II.
“State law controls the construction of insurance policies when a federal court
is exercising diversity jurisdiction.” Bell v. Allstate Life Ins. Co., 160 F.3d 452, 455
(8th Cir. 1998). We review de novo the district court’s determination of state law, id.,-3-
and its grant of summary judgment. Henerey v. City of St. Charles, 200 F.3d 1128,
1131 (8th Cir. 1999).
A. Arkansas statute section 27-19-503
Arkansas statute section 27-19-503 provides:
Presumption of uninsured.
There shall be a presumption created that a motorist who has failed
to file, or caused to be filed in his behalf, within ninety (90) days of the
date of an accident, a certificate proving he is insured in at least minimum
insurance limits as required by law, is uninsured, and any person alleging
or contending that the motorist is insured shall have the burden of proving
that coverage.
Ark. Code. Ann. § 27-19-503 (Michie 1994). This provision is part of the Motor
Vehicle Safety Responsibility Act, which requires a driver of a vehicle involved in an
accident in Arkansas that resulted in bodily injury to file a report with the Department
of Finance and Administration. See id. at § 27-19-501 (Michie 1994).
USF&G argues that section 27-19-503 does not create a presumption that the
truck itself was uninsured. Thus, USF&G contends, because Throesch has no other
evidence to demonstrate that the truck was uninsured, her claim must fail. USF&G also
argues that even if the section creates such a presumption, it is not applicable here
because section 27-19-503 is part of the statutory scheme for the administration and
regulation of licensing and registration rather than one of the statutes that concerns
uninsured motorist liability. Additionally, USF&G contends that section 27-19-503
violates the Arkansas Constitution.
We agree with USF&G that the plain language of the statute does not create a
presumption that the truck was uninsured. By its own terms, the section’s presumption
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applies only to motorists, not vehicles. The plain language leaves no room for grafting
onto the statute a presumption that any vehicle is uninsured.2
Under Arkansas law, the distinction between an uninsured motorist and the
vehicle he was driving is critical. Arkansas’s uninsurance statutes focus both on
uninsured motorists and uninsured vehicles. See Ark. Code Ann. § 23-89-403 (Michie
1999). A claimant bears the burden of showing that the vehicle and the motorist
involved in an accident were uninsured. Home Ins. Co. v. Harwell, 568 S.W.2d 17, 18
(Ark. 1978) (vehicle); Southern Farm Bureau Cas. Ins. Co. v. Gottsponer, 434 S.W.2d
280, 283 (Ark. 1968) (motorist). For uninsured vehicles, the claimant must specifically
demonstrate that the vehicle is uninsured, not just the driver. Harwell, 568 S.W.2d at
18 (stipulation that driver was uninsured insufficient to show vehicle uninsured);
Southwestern Underwriters Ins. Co. v. Miller, 493 S.W.2d 432, 434 (Ark. 1973)
(statement by driver that he was uninsured insufficient to establish vehicle uninsured).
Therefore, assuming arguendo that section 27-19-503 creates a statutory presumption
that the motorist was uninsured, it does not aid Throesch’s claim because it contains
no mention of uninsured vehicles.
Because Throesch’s attempts to locate either the driver or the truck have been
unsuccessful, she has no evidence to show that the truck was uninsured. Her claim,
therefore, cannot succeed. See id. Accordingly, the district court erred when it
concluded that Throesch could recover under provision 1.
2
We note that even the background information cited by the district court to
support the vehicle presumption complains only of the difficulty of locating identified
but uninsured motorists and makes no references to vehicles.
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B. Hit-and-Run Provision
Noting that the Arkansas Supreme Court has upheld against public policy
challenges a hit-and-run provision that provided coverage only for injuries “arising out
of physical contact,” the district court held that Throesch was required to establish that
the on-coming truck made physical contact with her vehicle as a condition of coverage
under her policy.
We agree with the district court that the language of the hit-and-run provision is
unambiguous and that it requires that the uninsured vehicle be one “which hits,” that
is, physically contacts the insured or another vehicle. Cf. Bruner v. USAA Property
and Cas. Ins. Co., 649 So. 2d 584, 585 (La. Ct. App. 1994) (same language, same
holding). The cases cited by Throesch indicate that hit-and-run policy provisions may
encompass “miss-and-run” situations, but they reach that conclusion through either an
interpretation of the term “hit-and-run” in clauses that lack the additional requirement
of “which hits” and thus do not apply in the present case, or through the voiding of a
physical contact requirement through the interpretation of state public policy and state
statutes. See, e.g., Clark v. Regent Ins. Co., 270 N.W.2d 26, 27-31 (S.D. 1978)
(discussing various approaches; voiding contact provision on statutory grounds).
Throesch accordingly turns to public policy arguments. She contends that a
clause like the one in this case, which does not provide coverage for a “near hit” even
when supported by eyewitness accounts, is unconscionable under Arkansas public
policy and does not further the clause’s purported purpose of preventing fraud. As the
district court observed, although the Arkansas Supreme Court has not addressed this
specific argument, it has concluded that a hit-and-run provision that requires physical
contact is valid and does not violate public policy. See Ward v. Consolidated
Underwriters, 535 S.W.2d 830, 832 (Ark. 1976). We agree with the district court that
given this precedent the Arkansas courts are unlikely to find the provision to be
unconscionable or contrary to the public policy of the state. The physical contact
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requirement of the hit-and-run provision of Throesch’s policy is thus enforceable, and
her claim under this provision also fails.
The other arguments raised are either without merit or have been rendered moot
by our disposition of the case. Accordingly, the judgment is affirmed in part and
reversed in part, and the case is remanded to the district court with instructions to enter
judgment in favor of USF&G.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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