Expert Commentary

No Insurance Coverage for "Actual Physical Contact" with "Integral Part" of Auto

Should there be uninsured/underinsured coverage for a collision between an axle-wheel assembly separated from an unidentified semi-trailer truck and an insured's vehicle? According to a recent Texas Supreme Court case, the answer in Texas is no. However, other jurisdictions may not agree.


Courts and Coverage
May 2008

The Texas Supreme Court, as a matter of first impression, examined whether uninsured/underinsured motorist coverage applies to an accident involving something less than the entire unknown vehicle colliding with the insured vehicle in Nationwide Insurance Co. v. Elchehimi, [court case] No. 06-0106, 2008 Tex. LEXIS 229 (Tex. 2008).

Facts of the Case

On January 4, 2002, Mohamad Elchehimi's station wagon collided with a drive axle and attached tandem wheels (axle-wheel assembly) from an 18-wheel semi-trailer truck. The axle-wheel assembly separated from the semi-trailer truck and was carried by momentum across the dividing median where it struck Elchehimi's vehicle, damaging the vehicle and injuring the occupants.

Elchehimi had purchased a standard personal auto policy from Nationwide Insurance, including the statutorily defined unidentified motorist coverage. Nationwide denied the claim for uninsured motorist benefits, alleging the impact between Elchehimi's vehicle and the axle-wheel assembly was not "actual physical contact" with an unknown "motor vehicle" as needed by the terms of the policy and the Texas Insurance Code.

The court of appeals determined that Texas's uninsured/underinsured motorist statute required only that there be actual physical contact 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'" rather than an actual physical contact with a motor vehicle. Id. at *3 (quoting 183 S.W.2d 833, 839). The Texas Supreme Court examined the unidentified motorist statute that governs in Texas which states as follows:

[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 un-known person and the person or property of the insured.

Id. at *3-4 (citing Tex. Ins. Code § 1952.104(3)).

Nationwide obtained a summary judgment on a motion that there was no physical contact between Elchehimi's vehicle and the axle-wheel assembly. The court of appeals reversed in favor of Elchehimi, concluding that there was a question of fact whether actual physical contact occurred. 183 S.W.2d 833, 839.

"Motor Vehicle" Definition

The Texas Supreme Court concluded that there was actual physical contact between Elchehimi's vehicle and the axle-wheel assembly. The court then examined whether the axle-wheel assembly constituted a "motor vehicle" under the Texas Insurance Code § 1952.104(3). The Texas Insurance Code does not define "motor vehicle." The Texas Insurance Code did expressly incorporate the Texas Motor Vehicle Safety Responsibility Act, Chapter 601 of the Transportation Code. Under Chapter 601, a motor vehicle is defined as:

a self-propelled vehicle designed for use on a highway, a trailer or semi-trailer designed for use with a self-propelled vehicle, or a vehicle propelled by electric power from overhead wires and not operated on rails.

Id. (citing TEX. TRANSP. CODE § 601.002(5)).

Using this definition, the Texas Supreme Court determined that the axle-wheel assembly lacked an engine or other means of propulsion and was not a self-propelled vehicle or a vehicle propelled by electric power from overhead wires. Further, the court determined that the axle-wheel assembly was not a trailer or semi-trailer designed for use with a self-propelled vehicle. The Texas Supreme Court concluded that "physical contact with a detached axle and tandem wheels is not actual physical contact with a motor vehicle under the unidentified motor vehicle provision." Id.

Actual Physical Contact Requirement

The insured then argued that a substitute for the actual physical contact requirement. In Latham v. Mountain States Mutual Casualty Co., 482 S.W.2d 655, 657 (Tex. Civ. App.—Houston [1st Dist.] 1972, writ ref'd n.r.e.), the court of appeals determined that the physical contact requirement could be satisfied through indirect contact where an unidentified vehicle first impacts an intermediary vehicle that in turn collides with an insured claimant. The court of appeals held that:

Where a Car A strikes Car B and propels it into Car C, there is physical contact between Car A and Car C to satisfy the required physical contact with an unidentified vehicle in a standard auto policy.

Id.

The Texas Supreme Court noted that no Texas court had relied on Latham to conclude that the physical contact occurred where there was no "Car B." In this case, only two vehicles were involved: Elchehimi's vehicle and the unidentified truck. The court then determined that the axle-wheel assembly is not a motor vehicle and thus cannot be an intermediary vehicle to provide indirect contact between the unidentified truck and the insured's vehicle. Additionally, the court noted that Latham was distinguishable from this matter because it interpreted insurance policy language, not a statute, and the policy language did not have an actual physical contact requirement. The Texas Legislature added the physical contact requirement to the uninsured motorist statute 5 years after Latham.

Case Law

The court then examined prior case law which uniformly rejected the contention that a collision with cargo and other objects falling from a car satisfies the requirement of actual physical contact with a motor vehicle.1 The court concluded that "a collision with a separated piece of a motor vehicle, such as an axle-wheel assembly, is not actual physical contact with the motor vehicle as specifically required by the statute." Id. at *9.

Integral Part Test

The Texas Supreme Court next examined the Texas Court of Appeals' suggestion that Texas adopt the integral part test to determine whether actual physical contact occurred. The court declined to adopt the integral part test because the "Legislature did not create an exception to the statute's requirement of actual physical contact with a motor vehicle." 2008 Tex. LEXIS 229, at *10. The dissenting justices only note seven states that have physical contact requirements in their unidentified motorist statutes and have considered the integral part test, two have statutory language different than Texas, four have adopted the test, and one has rejected it.2

The Texas Supreme Court rejected the creation of an integral part test because it would:

force courts to draw lines in each case along a continuum, to determine whether a particular part was large or important enough to be "integral," whether the part was a piece of the vehicle or merely cargo, and whether the part was contemporaneously separated from the vehicle or had lain in the roadway long enough to become debris.

Id. at *12.

The Texas Supreme Court refused to "fuzz" up a relatively bright line drawn by the Texas Legislature, holding that the "salient factor here is that the insured's vehicle did not make actual physical contact with the unidentified vehicle." Id. at *13.

Next the court examined the integral parts test urged by the dissent and the court of appeals:

When an integral part of an unidentified vehicle is propelled by the vehicle's momentum and, in a continuous and unbroken sequence of events, collides with an insured's vehicle, "actual physical contact" with a "motor vehicle" has occurred and coverage is afforded under the statute.

Id. at *14 (O'Neill dissenting).

The Dissent

The dissent noted the purpose of Texas's uninsured/underinsured motorist (UM/UIM) statute:

The statute protects motorists by requiring that all Texas automobile insurance policies provide coverage to the insured when the insured is hit by a motorist who is uninsured, underinsured, or unidentified.

Id.

The integral parts test requires:

"actual physical contact" with a "motor vehicle" for purposes of the UM statute when the insured is struck by an integral part of another vehicle and there is a temporal continuity between the part's detachment from the unknown vehicle and collision with the insured.

Id. at *19.

The dissent argued that the court's holding requires contact with the entire motor vehicle for UM/UIM coverage, and the purpose of the statute would be frustrated with this "whole vehicle" requirement. The dissent argues that the substantial majority of jurisdictions that have UM statutes similar to Texas have determined that coverage exists in situations even more attenuated than the facts in the present case. There are 11 states that require "physical contact" or "actual physical contact" with a "motor vehicle," "vehicle," or "automobile" to trigger UM coverage.3 Five other states require either physical contact with the other motor vehicle or, if there is no physical contact, the insured must meet additional evidentiary burdens to prove the accident was caused by another vehicle.4

The dissent argued that 7 of the 16 states with statutes similar to Texas have considered the scenario of an insured auto coming into contact with a vehicle part; however, there is no trend from which to glean a majority rule as noted by the Texas Supreme Court.5 At best, there is guidance from the highest courts of two states, New York and South Carolina, and they reach opposite conclusions on the issue. Further, the majority opinion requires that a motor vehicle as a whole must strike the insured's vehicle for coverage under the UM statute and that this frustrates the overarching purpose for the statute.

Conclusion

The Texas Supreme Court has declined to "fuzz" a relatively bright-line test designed by the Texas Legislature when it declined to adopt the "integral parts test" for determining uninsured motorist coverage. What are drivers to do if the "vehicle" that strikes them had broken into several parts or is broken in half? The Texas Supreme's ruling may leave some drivers frustrated at the result.


1Id. at *8 (citing Tex. Farmers Ins. Co. v. Deville, 988 S.W.2d 331, 333-34 (Tex. App.—Houston [1st Dist.] 1999, no pet.) (holding that water pump falling from truck and striking insured was not actual physical contact with a motor vehicle); Republic Ins. Co. v. Stoker, 867 S.W.2d 74, 77-78 (Tex. App.—El Paso 1993) (holding that insured rear-ending another car that was trying to avoid furniture dropped on the highway by an unknown driver was not actual physical contact with an unknown vehicle), rev'd on other grounds, 903 S.W.2d 338 (Tex. 1995); Williams v. Allstate Ins. Co., 849 S. W.2d 859, 861 (Tex. App.—Beaumont 1993, no writ) (holding that collision between the claimant's vehicle and a steel pipe dropped from an exiting truck was not actual physical contact with a motor vehicle).

2Id. at *10-11 (citing State Farm Fire & Cas. Co. v. Guest, 203 Ga. App. 711, 417 S.E.2d 419, 422 (Ga. App. 1992); Illinois Nat'l Ins. Co. v. Palmer, 116 Ill. App. 3d 1067, 452 N.E.2d 707, 709, 72 Ill. Dec. 454 (Ill. App. 1983); Adams v. Mr. Zajac, 110 Mich. App. 522, 313 N.W.2d 347, 349 (Mich. App. 1981); Allstate Ins. Co. v. Killakey, 78 N.Y.2d 325, 580 N.E.2d 399, 401, 574 N.Y.S.2d 927 (N.Y. 1991); Davis v. Doe, 285 S.C. 538, 331 S.E.2d 352, 353-54 (S.C. 1985)).

3Id. (citing CAL. INS. CODE § 11580.2(b)(1) (Deering 2007); FLA. STAT. ANN. § 627.736(4)(e)(1) (West 2008); GA. CODE ANN. § 33-7-11(b)(2) (2007); 215 ILL. COMP. STAT. ANN. 5/143a(2)(i) (West 2007); MICH. COMP. LAWS SERV. § 257.1112 (Lexis Nexis 2008); MISS. CODE ANN. § 83-11-103(c)(v) (2008); NEV. REV. STAT. ANN. § 690B.020(3)(f)(1) (LexisNexis 2007); N.C. GEN. STAT. § 20-279.21(b)(3)(b) (2007); N.Y. INS. LAW § 5217 (Consol. 2008); W. VA. CODE ANN. § 33-6-31(e)(iii) (Lexis Nexis 2007); WIS. STAT. ANN. §§ 632.32(2)(a), (4)(a)(2)(b) (West 2007)).

4Id. at *24 (citing ARIZ. REV. STAT. § 20-259.01(M) (2007); LA. REV. STAT. ANN. § 22:680(1)(d)(i) (2008); S.C. CODE ANN. § 38-77-170(2) (2007); TENN. CODE ANN. § 56-7-1201(e)(1)(B) (2008); WASH. REV. CODE ANN. § 48.22.030(2), (8) (West 2008)).

5Id. at *10 (stating "Of the four states with cases adopting the integral part test, three have done so only at the intermediate appellate court level.")


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