What is a four-wheel passenger auto? That was a question that recently was answered by the New Jersey Appellate Division in Starner v. Haemmerle, No. A-0153-17T2, 2018 WL 5273995 (N.J. App. Div. Oct. 24, 2018). Specifically, the issue before the court was whether an all-terrain vehicle (ATV) qualified as a “four-wheel passenger auto” under an automobile liability policy. The trial court held that it did. On appeal, however, the Appellate Division reversed the trial court’s decision.
The insurer in that case, Government Employees Insurance Company (GEICO), issued an automobile liability policy to the parents of Bailey Snyder. The policy provided coverage for, among other things, a “private passenger auto,” which was defined as “a four-wheel private passenger, station wagon or jeep type auto.”
Ms.Snyder, who was 14 at the time, was driving an ATV with several passengers. The ATV was owned by a third party. Ms. Snyder lost control of the ATV, causing injuries to Hanna Starner, one of her passengers. Ms. Starner subsequently sued the owner of the ATV and Ms. Snyder. Ms. Snyder sought coverage under her parents’ insurance policy. Unfortunately, the ATV was neither registered nor insured.
The trial court concluded that the ATV qualified as a four-wheel passenger auto because it had four wheels and had the capacity to transport passengers. The court further noted that a registered ATV can be operated on public roadways, albeit in extremely limited circumstances. Specifically, a registered ATV can be used to cross, or be driven adjacent and parallel to, a highway to get to an area whereATVs can be driven.
The Appellate Division reversed the trial court. The court held that is was bound by the New Jersey Supreme Court’s decision in Wilno v. New Jersey Manufacturers Ins. Co., 89 N.J. 252 (1982). In Wilno, rather than write a separate opinion, the Court simply adopted the dissenting opinion in the court below. In that opinion, former Judge Allcorn, relying on the dictionary definition of automobile, held that a dune buggy was not a private passenger automobile. In reaching his conclusion, Judge Allcorn emphasized, among other things, “the unusual dangers presented by dune buggies, due to their construction and their intended use as high-risk off-road recreational vehicles.”
After discussing Wilno, and summarizing and contrasting various statutory provisions that apply to automobiles with those that apply to ATVs, the court reasoned:
All of these statutory provisions convince us that an ATV is not a private passenger automobile. Further, given that an ATV cannot be driven on public roads, except to cross a road in order to reach an ATV site, and given that children can drive ATVs, we conclude that no reasonable policyholder would believe that the GEICO policy reference to “private passenger auto” coverage would extend to an ATV.Lastly, even if we had doubts about our conclusion, we are bound by the Supreme Court’s holding in Wilno. Given Judge Allcorn’s reasoning, which the Court adopted, we can find no principled basis on which to distinguish the case.
2018 WL 5273995 at *4. The court specifically rejected the argument that the phrase “private passenger auto” was ambiguous. The court also rejected the argument that an insured would reasonably have believed that an ATV qualifies as a “private passenger auto.”
This is a case where the trial court overreached in an attempt to create coverage where none existed. Clearly, there was no intent on the part on the insureds to obtain coverage under their automobile liability policy for injuries caused by their fourteen-year-old daughter while riding someone else’s ATV. Yet, the trial court granted summary judgment in favor of the insureds. Fortunately, rather than simply hold that the language of the policy was ambiguous, or mechanically apply the reasonable expectations doctrine, the Appellate Division performed a detailed analysis of the policy language, the relevant statutes, and prior New Jersey Supreme Court precedent to arrive at its conclusion that there was no coverage.
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