Encompass Ins. Co. v. Coast Nat'l Ins. Co.

An injury that occurs when a third-party unloads an injured person from a vehicle is covered under permissive use under the third-party and driver's car insurance policy.

Lisa Torti (“Torti”) stopped at a single vehicle car accident to render aid. Torti decided to remove the passenger, Alexandra Van Horn (“Van Horn”), from the vehicle fearing the car may start on fire. Van Horn ultimately suffered a spinal injury that left her paraplegic. Van Horn sued Torti alleging that Torti caused the spinal injury when she removed Van Horn from the wrecked car. At the time, Torti was covered by two insurance policies, a “package policy” issued by Encompass and a car insurance policy issued by Mid-Century Insurance Company (“Mid-Century”). The driver and owner of the wreck vehicle, Greg Watson, had a car insurance policy issued by Coastal National Insurance Company (“Coastal”). Encompass tendered defense of Torti in the lawsuit and settled with Van Horn for $4 million. Encompass now brings suit against Mid-Century and Coastal for subrogation of expenses and settlement costs. Under California Insurance Code section 11580.1 (b)(4), car liability insurance must cover permissive users to the same extent it would cover the insured. The issue is whether Torti was a permissive user. All parties agreed that Torti removing Van Horn from the wrecked car was considered “unloading.” The district court held that Torti did not “use” Watson’s car, thereby ruling against Encompass. The panel disagreed and ruled that Torti did “use” Watson’s vehicle with permission. California Insurance Code includes “unloading” in its definition of “use” and does not distinguish between commercial and non-commercial unloading. The panel rejected the argument by Mid-Century and Coastal that Torti must gain a benefit from the “unloading”. Since Torti had permission by Watson to “unload” Van Horn from the car, Torti was “using” Watson’s car and Van Horn’s injuries would be covered by the policies issued by Mid-Century and Coastal. REVERSED AND REMANDED.