Jan. 20, 2010 – The Wisconsin Supreme Court is to decide whether uninsured motorist coverage exists for a hit-and-run accident when the driver stops to see if the victim needs assistance before leaving without giving a name or other identification.

In briefs for Zarder v. Acuity, a Mutual Ins. Co., 2008AP919, the insurance company Acuity argues that Wisconsin has embraced a literal meaning of the term “hit-and-run” so that a “run” occurs only when the motorist “flees” the scene without regard for the victim. The company’s insureds ask the court to find a “run” where the motorist has left the scene without providing identification as required by the criminal hit-and-run statute.

The statute for uninsured and unidentified motor vehicles does not precisely define “hit-and-run” accident, leaving the matter for the courts.

A bicycle accident

Thirteen-year-old Zachary Zarder was struck by a car while on his bicycle. The vehicle stopped and three unidentified occupants stepped out to ask if Zarder was hurt. Zarder said he was fine and so the occupants returned to their vehicle, driving away without identifying themselves.

Within 24 hours after the accident, Zarder discovered he was injured and the police were contacted. Zarder eventually sought treatment for a right forearm and left femur fracture. The left femur fracture required two surgical procedures.

Because the driver stopped to check on Zarder, the police did not investigate the accident as a hit-and-run. Likewise, the insurance company refused to recognize the incident under the Zarder family’s uninsured motorist policy from Acuity. The Zarders sued for the coverage benefits and both the circuit court and court of appeals ruled in their favor, but on different rationales.

Characterizing the case as one of first impression, the Waukesha Circuit Court determined there had been no “run,” but held that coverage in this case furthered the purpose of Wis. Stat. sec. 632.32, which is to protect injured persons who are legally entitled to recover damages from unidentified motorists. The court made special consideration of Zarder’s age in reaching its conclusion.

The court of appeals affirmed, but approached the case as a dispute over the meaning of “run” when the insurance policy fails to define the term. The court agreed with the Zarders that a “run” occurs when the motorist leaves the scene without providing identification.

Precedent

Acuity argues that the circuit court incorrectly identified this issue as one of first impression, pointing to the Wisconsin Supreme Court’s examination of the meaning of “hit-and-run” in Hayne v. Progressive Northern Ins. Co., 115 Wis. 2d 68 (1983).

“The question for the Hayne court was ‘whether the term “hit-and-run” includes “miss-and-run” or whether it requires an actual physical striking,” Acuity wrote. The court resolved the issue by giving the term its “common and accepted meaning,” which not only meant “hit” requires a striking but that a “run” involves “fleeing from the scene of an accident.” Because the Hayne court said the term is unambiguous, Acuity said the Hayne interpretation should control the outcome of this case in which the motorist did not “flee.”

But the Zarders defend the court of appeals’ determination that Hayne’s treatment of the term “run” was mere dicta. In Hayne, the supreme court thoroughly analyzed the meaning of “hit” because that term determined the issue actually before it. By contrast, the court’s mention of “run” amounted to a virtual afterthought given that it “provided no analysis to support its selection of the phrase ‘fleeing from the scene of the accident’ over other quoted definitions of ‘hit and run.’”

The paucity of analysis leads to the limited usefulness of the term, the Zarders continued. If the justices decide that Hayne did define “run,” the Zarders argue that they will need to explain what constitutes “fleeing.” For example, the Zarders ask how fast does the vehicle have to leave the scene and what does it mean if an unidentified motor vehicle “stops” after committing a “hit.”

Acuity rejected efforts to marginalize discussion of “run” in Hayne as dicta. The Hayne court’s “affirmative step” of defining the term demonstrated the court’s intention to construe the term “hit-and-run” as it is used in Wisconsin’s insurance laws, which was the central issue of Hayne.

Likewise, Acuity said that the Hayne meaning of “run” is unambiguous and conforms to the legislative intent to omit a bright-line definition of “hit and run.” Acuity quoted the supreme court’s observation in Theis v. Midwest Sect. Ins. Co., 2000 WI 15, that the Legislature determined a “precise definition of hit-and-run is not necessary for in the rare cases where a question arises, the court can draw the line.”

Application of the criminal statute

As an alternative to Hayne, the Zarders argue that a “run” should be found when a motorist leaves the scene without providing to the victim a name, address, and vehicle registration number as required by the criminal hit-and-run statute Wis. Stat. sec. 346.67.

But Acuity argued that the criminal statute has no bearing on laws governing the distinctly different subject of insurance. The Zarders responded that whether or not the statutes relate to the same subject matter, the justices are not prohibited from analyzing sec. 346.67 when determining a definition for “run.” The Zarders looked to the court of appeals decision in this case to bolster their point.

The court of appeals remarked that the criminal hit-and-run statute had been on the books for more than 20 years when the Legislature added a hit-and-run provision to the insurance statute. Given that the Legislature is presumed to enact statutory provisions with full knowledge of existing laws, the court of appeals concluded “we presume that the legislature had full knowledge of the requirements in the ‘hit-and-run’ statute when it repeated that phrase in § 632.32 (4) (a)2.b.”

A minor’s ‘dismissal’ of the motorist

Acuity point out that “not only was there an attempt made to render assistance to Zarder, but Zarder affirmatively acted to dismiss the occupants of the unidentified vehicle from the scene” so that “[t]here simply was no ‘hit-and-run’ … given the totality of the circumstances.”

The Zarders responded that Acuity seeks “to punish its insured, Zachary Zarder (a 13-year-old minor on the date of the accident) for failing to comprehend the ramifications of not insisting upon identifying information before the unidentified motorist left the scene of the accident.” The Zarders argued that neither the insurance contract nor statute imposed a duty on the insured to obtain that information.

Acuity denied that it wants to shift any duty to the insured and away from the wrongdoing motorist. Its analysis of whether a “run” occurred “puts the focus squarely” on whether the unidentified driver flees the scene or not, Acuity argued.

However, the Zarders warn that a person unaware of an injury until it is too late to seek identification will be deprived of a remedy just as if he or she had known of the injury, but the driver left the scene without giving an opportunity for identification. Accordingly, the Zarders argue, Acuity would create a gap in mandated coverage contrary to the Legislature’s intent when it added unidentified motor vehicles to sec. 632.32.

Acuity responded that no gap in hit-and-run coverage would be created because when a motorist stops to speak to the victim as in this case, there is no “run.”

Oral arguments in this case are scheduled for Feb. 10.

By Alex De Grand, Legal Writer, State Bar of Wisconsin