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Law Update

AREAS OF INTEREST:   Automobile insurance, “occupying” vehicle

LEGAL IMPACT:  A passenger may still be “occupying” a vehicle while in the process of moving to a place of safety for purposes of entitlement to coverage under the vehicle’s automobile insurance policy. 


Burbank v. Philadelphia Insurance Companies, Hillsborough County Superior Court, Northern District #216-2010-EQ-00066 (1/31/12)
(J. Brown)


On May 6, 2008 a school bus operated by the Manchester Transit Authority (“MTA”) dropped Liam Burbank, a minor, off at his designated bus stop on Union Street.  In order to reach his house located at the corner of Union Street and Whitford Street, Liam had to walk north on Union Street with his back to traffic.  Access to the property on which Liam’s house was located was blocked by a stone wall that ran parallel to Union Street. 

As he was walking on a grass path that runs alongside Union Street toward his driveway, Liam was struck by an underinsured motorist.  The accident occurred about 12-27 seconds after Liam exited the bus and approximately 45-100 feet from the bus stop. 
By that time the school bus had proceeded to its next designated stop.

A Department of Safety (“DOS”) regulation requires school bus drivers to wait until exiting passengers have “cleared the danger zone of the bus” - consisting of the ten foot area immediately surrounding the stopped school bus - before proceeding. 

The MTA bus was insured under a Business Auto Policy and a Commercial Excess Policy issued by Philadelphia Insurance Companies.  Coverage under the policies was dependent on whether Liam was an “insured” at the time of the accident.  The policy defined “insured” as “[a]nyone ‘occupying’ an ‘insured motor vehicle’”.  “Occupying” was defined as “in, upon, getting in, on, out or off.” 

The Court held a bench trial to determine whether at the time of the accident Liam was “occupying” the school bus as defined under the Philadelphia policy.  Philadelphia’s expert testified that Liam was beyond the ten foot danger zone at the time he was struck and that under the DOS regulation it was safe for the bus to proceed.  Liam’s expert testified that the purpose of the DOS regulation was only to prevent the bus from striking its passengers and that Liam was not at a place of safety with respect to other vehicles until he reached his driveway. 


The Court ruled that Liam was “occupying” the school bus at the time of the accident because he had not yet reached a place of safety.  Therefore, he was entitled to underinsured motorist coverage under the Philadelphia policies.

New Hampshire courts apply a “vehicle-orientation test” in interpreting whether a passenger is “occupying” a vehicle for purposes of insurance coverage.  This test requires that the claimant is “engaged in an activity essential to the use o the vehicle” at the time of the accident.  This activity may include “the process of moving away from the vehicle to a place of safety.”

The Court found to be persuasive the testimony of Liam’s expert that a student remains on the bus trip from the moment he exits until he reaches a place of safety. The Court determined that Liam had not yet reached a place of safety at the time of the accident since there was no sidewalk or paved shoulder on which to walk, and he was required to walk on a busy street with his back to traffic in order to get home.  It ruled that the term “occupying” was ambiguous because it was reasonably susceptible of more than one interpretation and, therefore, would be interpreted in favor of coverage. 



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