On December 14, 2017, the Appeals Court entered a decision in the case of Cardona v. Encompass Insurance Company regarding a point of uninsured motorist (“UM”) coverage law. The plaintiff, Christian Cardona (“Mr. Cardona”) after losing in the Superior Cour, had appealed to the Appeals Court. Mr. Cardona’s appeal raised the issue of whether he was entitled to arbitration under the standard Massachusetts automobile policy of his UM claim where the owner of hit-and-run vehicle causing the accident “is believed to be identified, but the operator is not?”
The Appeals Court ruled against Mr. Cardona finding that although the operator of a hit-and-run vehicle may not be identified, the law relating to UM coverage made the vehicle insured where the owner of the hit-and-run vehicle was identified.
Facts of Accident
On December 28, 2013, Mr. Cardona was a front-seat passenger in a motor vehicle owned and operated by one Ana Vergara (“Vergara”). Encompass Insurance Company (“Encompass”), insured Ms. Vergara’s vehicle. While attempting to pull into a parking lot, Ms. Vegara’s vehicle was suddenly struck from behind by what was thought to be a 2010 Honda. The operator of the Honda fled the scene of the collision.
Ms. Vegara and Mr. Cardona obtained what they believed to be the license plate of the vehicle that rear-ended them. The number was given to the Springfield Police Department. The police later identified the owner of the Honda as Stephanie Carnevale (“Ms. Carnevale”). The police were never able to identify the operator the Honda.
Ms. Carnevale was insured through Allstate Insurance Company (“Allstate”). Allstate conducted an investigation into the collision. Ms. Carnevale denied operating the Honda at the time and place of the collision. Allstate subsequently denied Mr. Cardona’s bodily injury claim, taking the position that the Ms. Carnevale vehicle was not involved in the December 28 collision, and therefore, their insured was not legally responsible for Mr. Cardona’s injuries.
Encompass denies hit-and-run vehicle UM coverage applies
After Allstate’s denial, Mr. Cardona filed for UM benefits with Encompass claiming the provisions of the standard Massachusetts Automobile Policy, for UM coverage stating the company will pay for “hit‑and-run accidents only if the owner or operator causing the accident cannot be identified” applied. (Emphasis added).
Mr. Cardona’s argument was the language of the policy allowed for his recovery of UM benefitswithout suing the owner whose insurer, Allstate had denied liability for the involved vehicle’s owner but had not taken a coverage position with regard to the unidentified driver. Mr. Cardona seized upon the disjunctive, “or” in the policy provision because although he had correctly identified the plate number and ultimately the owner of the hit‑and-run vehicle the driver of the vehicle remained unidentified.
Encompass denied that UM coverage applied under the circumstances.
Superior Court denies request for arbitration under policy
On or about June 4, 2014, Mr. Cardona made a formal demand for arbitration pursuant to the Policy issued by Encompass.2 Encompass refused to arbitrate Mr. Cardona’s UM claim, initially stating Mr. Cardona (1) failed to meet the tort threshold; (2) made material misrepresentations during the course of Encompass’ investigation; and (3) failed to cooperate with the investigation.
After Encompass denied the claim, on April 16, 2016, Mr. Cardona filed for arbitration under the policy. Encompass immediately moved to dismiss the request arbitration because Encompass claimed Mr. Cardona was not entitled to arbitrate his claim as the owner of the hit-and-run Honda was identified.
The Superior Court dismissed Mr. Cardona’s request pointing out Mr. Cardona had a cause of action against the owner even if the driver was not identified. The judge cited the provision of G.L. c. 231 §85A making an owner’s registration of a vehicle prima facie evidence in any suit against the owner that she was responsible for an operator’s accident.
Mr. Cardona appealed.
Appeals Court rules vehicle with unidentified driver but idenitfied owner not uninsured
The Appeals Court focused on the policy language at issue, “Part 3. Bodily Injury Caused By An Uninsured Auto,” that stated in relevant part:
… Some accidents involve unidentified hit-and-run autos. Under this Part, we will pay damages for bodily injury to people injured or killed in certain accidents caused by uninsured or hit-and-run autos…We will pay for hit-and-run accidents only if the owner or operator causing the accident cannot be identified.”
Mr. Cardona’s argument to the Appeals Court again highlighted the last sentence in this paragraph, contending that, because the operator of the 2010 Honda had not been identified, UM benefits were triggered.
The Court stated, however, the policy was controlled by a statute, and thus, the Court had to look to that statute for guidance. The statute in question, G. L. c. 175, § 113L, states, in pertinent part:
No policy shall be issued or delivered in the commonwealth with respect to a motor vehicle . . . unless such policy provides coverage in amounts or limits prescribed for bodily injury or death for a liability policy under this chapter . . . for the protection of persons issued thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles . . . and hit-and-run motor vehicles because of bodily injury….”
A prior decision of the Supreme Judicial Court held that for anyone to bring a claim for UM benefits under this language, the motor vehicle responsible for the accident must be uninsured. Hit-and-run accidents involving offending vehicles that have fled the scene without being identified are considered uninsured under the standard policy.
In Mr. Cardona’s case, by contrast, the responsible vehicle had been identified as the 2010 Honda owned by Ms. Carnevale and insured by Allstate. Thus, Court reasoned the vehicle was not an “unidentified hit-and-run auto,” as contemplated in the standard policy, but rather it was an insured motor vehicle.
In finding against Mr. Cardona’s appeal, the Court concluded:
As such, UM benefits are not triggered under the statutory scheme…In these circumstances, the statutory scheme prevails even when the result is denial of coverage in the face of equitable factors.”