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Uninsured Motorist - Supreme Court Decision
By Kevin McGillicuddy - JT Parker & Associates

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NATIONWIDE INSURANCE COMPANY v. ELCHEHIMI, 2008 WL 821039, 51 Tex.Sup.Ct.J. 626 (March 28, 2008)

Uninsured motorist

FACTS – Mohamad Elchehimi was driving his station wagon on a divided highway when an eighteen-wheel semi-trailer truck headed in the opposite direction on the other side of the divide lost an axle-wheel assembly from the truck. The assembly came across the highway divide and collided with Elchehimi’s vehicle. The truck did not stop, and it could not be identified. Elchehimi and his occupants were injured and his station wagon was damaged. Elchehimi carried a standard personal auto policy from Nationwide, including UM coverage. Nationwide denied Elchehimi’s UM claim on the basis that the contact between Elchehimi’s vehicle and the axle-wheel assembly was not “actual physical contact” with an unknown “motor vehicle” as required by the policy and the Texas Insurance Code.

CASE HISTORY – Elchehimi sued Nationwide for breach of contract and breach of its duty of good faith and fair dealing. The trial court granted Nationwide’s motion for summary judgment on the basis that there was no actual physical contact between Elchehimi’s vehicle and the unidentified truck. Elchehimi appealed, and the court of appeals reversed on the basis that an issue of fact remained as to whether actual physical contact had occurred between Elchehimi’s vehicle and the unidentified vehicle. The court of appeals held that article 5.06-1(2)(d) of the Texas Insurance Code requires actual physical contact only with an “integral part” of an unidentified motor vehicle as a “result of an unbroken chain of events with a clearly definable beginning and ending, occurring in a continuous sequence.” The Texas Insurance Code provision referenced above was codified in 2005 as Section 1952.104(3) of the Texas Insurance Code, with no change in language.

HOLDING – Nationwide appealed, and the Texas Supreme Court writes that §1952.104(3) provides that “[F]or the insured to recover under the uninsured motorist coverage if the owner or operator of any motor vehicle that causes bodily injury or property damage to the insured is unknown, actual physical contact must have occurred between the motor vehicle owned or operated by the unknown person and the person or property of the insured.” (emphasis by Court) Therefore, for Elchehimi’s suit to survive summary judgment, he must have raised a fact issue with respect to whether his collision with the axle-wheel assembly qualified as “actual physical contact” with a “motor vehicle” or a legally recognized substitute for such contact. The Court writes that §1952.104(3) does not define the term “motor vehicle,” but that common usage would not include a single axle attached to two wheels. Rather, common usage has made the phrase a generic term for all classes of self-propelled vehicles not operating on stationary rails or tracks. In addition, the Texas Motor Vehicle Safety-Responsibility Act, Chapter 601 of the Texas Transportation Code, sets minimum coverage amounts for motor vehicle liability insurance, which limits also apply to uninsured motorist coverage. Section 601.102 of the Transportation Code defines a motor vehicle as “a self-propelled vehicle designed for use on a highway, a trailer or semitrailer designed for use with a self-propelled vehicle, or a vehicle propelled by electric power from overhead wires and not operated on rails.” The Court holds that a drive axle with two tandem wheels attached on one side lacks an engine or other means of propulsion and is therefore neither a self-propelled vehicle nor a vehicle propelled by electric power from overhead wires. Following the common meaning of “motor vehicle” and the definition in the Transportation Code, the Court holds that physical contact with a detached axle and tandem wheels is not actual physical contact with a motor vehicle under the UM statute or the insurance policy. The Court also rejects Elchehimi’s argument that the collision in this case involved a legally recognized substitute for the actual physical contact requirement. In 1972, one court of appeals had held that if vehicle A strikes vehicle B, which is propelled into vehicle C, then the court would consider this to amount to physical contact between vehicles A and C. However, no court has held this principle to extend to a situation where there was no intermediary vehicle. In addition, at the time that court of appeals case was decided, there was no statutory language requiring actual physical contact. The Texas Legislature added that requirement in 1977. (The Supreme Court did not address whether the A/B/C reasoning of the 1972 court of appeals opinion would still hold). Texas courts have also uniformly rejected the contention that a collision with cargo or other objects falling from a vehicle satisfies the requirement of actual physical contact with a motor vehicle. Finally, the Court rejects the “integral part” test used by the court of appeals as being too unclear in practice, and instead focuses on whether the object that struck Elchehimi’s vehicle was itself a motor vehicle.

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