While a traffic accident may occur entirely within one state, the insurance policies applicable to the vehicles and their owners may invoke the laws of two or more jurisdictions. This is why federal courts often handle personal injury lawsuits. Where there is “diversity” of jurisdiction between the parties—that is, the plaintiffs and defendants reside in different states—a federal court may hear the case.
However, state law still applies to personal injury lawsuits, even those tried before a federal judge and jury. That still may raise the question of which state law to apply in a given situation. Recently, a federal appeals court in Atlanta addressed just such a complex matter.
Travelers Property Casualty Company of America v. Moore
This unfortunate case began with a vehicle repossession. Two men, tow truck operators, went to an Atlanta home to repossess a Ford Mustang. The Mustang’s owner did not respond well. He brandished a sawed-off shotgun and proceeded to blow out one of the tow truck’s tires. The two tow truck operators immediately fled the scene. The shooter then proceeded to follow them in another vehicle, a van owned by the shooter’s employer.
During the ensuing chase, the shooter’s vehicle made contact with the tow truck and the shotgun, which was in the shooter’s hand, accidentally went off, killing one of the tow truck operators and seriously injuring the other. Police subsequently arrested the shooter, and a Georgia jury convicted him of felony murder and related offenses. The shooter is presently serving a life prison sentence.
The shooter was employed by a Rhode Island-based company that sold and serviced lottery machines in Georgia. The company provided the van for work-related purposes only. No personal use was permitted without company authorization. The van itself was insured by Travelers, which delivered the policy to the company’s headquarters in Rhode Island.
In anticipation of a lawsuit by the shooter’s victims, Travelers asked a federal court to declare it not responsible for the shooter’s actions pursuant to the employer’s commercial liability policy. A federal judge declined to do so, finding the shooter had his employer’s permission to use the van at the time of his rampage.
In adecision issued on August 14 of this year, a three-judge panel of the U.S. 11th Circuit Court of Appeals reversed the trial court ruling and entered judgment for Travelers. The panel said the “undisputed testimony” of the employer showed the shooter had no authorization to use the van for any personal reasons, especially for chasing the two men in the tow truck. No reasonable jury could therefore find the shooter an insured person under the Travelers policy.
The 11th Circuit also clarified that, although this case arose from an incident in Georgia, under Georgia law an insurance contract is interpreted according to the state where the policy is delivered, in this case, Rhode Island. While Rhode Island law states the registered owner of a vehicle is presumptively liable for an accident caused by an employee-driver, that presumption does not extend to an a third party who merely insures the vehicle.