The Washington State Supreme Court recently issued a decision that clarified whether a bicyclist is a “pedestrian” for purposes of personal injury protection (“PIP”) coverage. McLaughlin v. Travelers Commercial Ins. Co., 476 P.3d 1032 (2020).
The case involved an accident whereby a parked motorist opened his car door and hit McLaughlin while he was riding a bicycle, resulting in injury. Travelers insured McLaughlin under an auto policy that provided up to $5,000 in MedPay coverage, which provides payments for injuries to an insured similar to PIP. Travelers issued the policy to McLaughlin when he lived in California, and continued to insure him after he moved to Washington. However, the MedPay coverage only applied to an “insured,” which was defined in the policy as “a pedestrian when struck by[] a motor vehicle.” The policy did not define the term “pedestrian.” Thus, the pertinent coverage issue in the case was whether McLaughlin could be considered a “pedestrian” while riding a bicycle.
Travelers denied coverage on the grounds that the vehicle codes of Washington and California excluded bicyclists from the respective State’s statutory definition of “pedestrian.” The Washington State Supreme Court disagreed and held that the applicable definition of “pedestrian” was found in the Washington statutes that apply to casualty insurance (RCW 48.22 et seq.), and not in Washington’s general motor vehicle code (RCW 46, et seq.) or the statutory title that applies to public highways or transportation (RCW 47, et seq.).
Specifically, the Supreme Court reasoned that RCW 48.22.005(11) defines “pedestrian” for purposes of casualty insurance as “a natural person not occupying a motor vehicle as defined in RCW 46.04.320.” In relevant part, RCW 46.04.320 defines “motor vehicle” as “a vehicle that is self-propelled[.]” The Supreme Court further noted that Washington case law has previously interpreted RCW 46.04.320 to mean that “a bicycle is not a motor vehicle.” City of Montesano v. Wells, 79 Wn. App. 529, 532, 902 P.2d 1266 (1995). The Supreme Court therefore concluded that because McLaughlin was not occupying a motor vehicle at the time of the accident, he qualifies as a “pedestrian” under RCW 46.04.320. McLaughlin, 476 P.3d at 1036.
The Supreme Court further supported its finding of coverage by acknowledging the public policy implications of insurance contracts and “Washington’s strong public policy in favor of the full compensation of medical benefits for victims of road accidents.” McLaughlin, 476 P.3d at 1037. The Supreme Court explained that “applying RCW 48.22.005(11)’s definition of pedestrian affords the insured the maximum protection provided by the insurance policy and is not unfair to the insurer.” Id.
As an additional, independent basis for finding coverage, the Supreme Court also concluded that the undefined term “pedestrian,” as used in the subject policy, was ambiguous. The Court noted that where there is ambiguity, “[a]ny legal ambiguity must be resolved in favor of the insured.” Id. Given the ambiguity surrounding the term “pedestrian,” the Court concluded that the term should be construed to encompass bicyclists because “[t]he average purchaser of insurance would expect to be covered by this policy when injured by an automobile.” Id. at 1038.
In contrast, the dissent objected to interpreting the policy pursuant to a Washington statutory scheme. It reasoned that the parties had not considered Washington law at the time they entered into the policy while the insured lived in California. Instead, the dissent would have applied the normal rules of contract interpretation to evaluate what the parties intended “pedestrian” to mean when they entered into the insurance contract in California. According to the dissent, the plain, ordinary meaning of “pedestrian” as provided for in a standard English dictionary does not include bicyclists. As a result, the dissent would not have found coverage in this instance, without any consideration as to Washington’s insurance statutes. McLaughlin, 476 P.3d at 1040-42 (dissent).
This case demonstrates the technical nature of interpreting legal terms in an insurance policy, and the Washington Court’s inclination to find coverage when it supports Washington’s public policy to provide full compensation for auto accident victims.
If you have questions regarding policy interpretation or insurance coverage generally, please feel free to reach out to a member of the insurance team at Gordon Rees Scully Mansukhani, LLP.