Nationwide Insurance Company v. Mohamad Elchehimi, Individually and as Parent and Next Friend of Khaled Elchehimi and Lukman Elchehimi, Minors

IN THE SUPREME COURT OF TEXAS

IN THE SUPREME COURT OF TEXAS

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No. 06-0106

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Nationwide Insurance

Company, Petitioner,

v.

Mohamad Elchehimi,

Individually and as Parent and Next Friend of Khaled Elchehimi and Lukman

Elchehimi, Minors, Respondent

════════════════════════════════════════════════════

On Petition for Review from the

Court of Appeals for the Tenth District of

Texas

════════════════════════════════════════════════════

Justice Wainwright

delivered the opinion of the Court, joined by Chief Justice Jefferson, Justice Hecht, Justice

Brister, Justice Green, Justice Johnson , and Justice Willett .

Justice O’Neill filed a

dissenting opinion, joined by Justice

Medina .

This breach of contract suit stems from the denial of coverage by

Nationwide Insurance Company on a claim arising from a collision between insured

Mohamad Elchehimi’s vehicle and an axle-wheel assembly separated from an

unidentified semi-trailer truck. The court of appeals reversed the trial court’s

grant of summary judgment in favor of Nationwide. Because there was no actual

physical contact between Elchehimi’s vehicle and the unidentified truck as

required by statute to trigger the uninsured motorist coverage, we reverse the

court of appeals’ judgment.

On January 4, 2002, Mohamad Elchehimi’s station wagon collided with a

drive axle and attached tandem wheels that had separated from an eighteen-wheel

semi-trailer truck. The unidentified truck, which was being driven in the

opposite direction on a divided highway, did not stop. Momentum carried the

axle-wheel assembly across the dividing median where it struck Elchehimi’s

vehicle, injuring the occupants and damaging the car. Elchehimi had purchased

from Nationwide a standard Texas personal automobile insurance policy,

including the optional statutorily defined unidentified motorist coverage.

Nationwide denied Elchehimi’s claim for uninsured motorist benefits because the

impact between Elchehimi’s vehicle and the axle-wheel assembly was not “actual

physical contact” with an unknown “motor vehicle” as required by the terms of

the policy and the Texas Insurance Code.

Elchehimi sued Nationwide for breach of contract and breach of the duties

of good faith and fair dealing. Nationwide moved for summary judgment, arguing

that no actual physical contact occurred between Elchehimi’s vehicle and the

unidentified truck. The trial court granted the motion. A divided court of

appeals reversed, concluding that an issue of fact remained as to whether actual

physical contact occurred. 183 S.W.3d 833, 839 . Specifically, the court of

appeals interpreted the Texas uninsured/underinsured motorist statute, then

article 5.06-1(2)(d) of the Texas Insurance Code, [1] to require actual physical contact only

with an “integral part” of an unidentified motor vehicle as a “result of an

unbroken chain of events with a clearly definable beginning and ending,

occurring in a continuous sequence” rather than actual physical contact with a

motor vehicle. Id. at 838–39; see also Brooks v.

State Farm Mut. Auto. Ins. Co. , 2003-0389, p. 7 (La. App. 4 Cir. 9/24/03);

855 So. 2d 419, 424 (citing references omitted). Nationwide petitioned this

Court for review.

The parties do not dispute the facts of the collision and agree that the

following statutory provision, which provides the parameters of coverage for

damage or injury caused by unidentified motorists in Texas, governs this

dispute:

class=Section2>

[F]or the

insured to recover under the uninsured motorist coverage if the owner or

operator of any motor vehicle that causes bodily injury or property damage to

the insured is unknown, actual physical contact must have occurred

between the motor vehicle owned or operated by the unknown person and the person

or property of the insured.

class=Section3>

Tex. Ins. Code § 1952.104(3) (emphasis

added). The relevant policy language is consistent with the statute. To survive

summary judgment, Elchehimi must raise a fact issue that his vehicle’s collision

with the axle-wheel assembly qualified as “actual physical contact” with a

“motor vehicle” or a legally recognized substitute for such contact.

Because there was actual physical contact between Elchehimi’s vehicle and

the axle-wheel assembly, we examine whether the assembly is a motor vehicle

under the Texas Insurance Code. Section 1952.104(3) does not define motor

vehicle. However, the common usage of the term motor vehicle does not include a

single axle attached to two wheels. See Slaughter v. Abilene State

Sch. , 561 S.W.2d 789 , 791–92 (Tex. 1977). “Common usage has made the phrase

‘motor vehicle’ a generic term for all classes of self-propelled vehicles not

operating on stationary rails or tracks.” Id. at 792 . In addition, other relevant

statutory definitions aid our analysis. The Texas Insurance Code expressly

incorporates the Texas Motor Vehicle Safety-Responsibility Act, chapter 601 of

the Transportation Code. Tex. Ins. Code

§ 1952.101(a). Chapter 601 sets minimum coverage amounts for vehicle

liability insurance, and those amounts explicitly apply to uninsured motorist

coverage. Tex. Transp. Code §

601.072. Because Section 1952.104(3) and Chapter 601 address the same subject

matter—motor vehicle insurance—the definition of motor vehicle in section

601.002 of the Transportation Code is persuasive, if not controlling. Chapter

601 defines a motor vehicle as “a self-propelled vehicle designed for use on a

highway, a trailer or semitrailer designed for use with a self-propelled

vehicle, or a vehicle propelled by electric power from overhead wires and not

operated on rails.” Tex. Transp. Code

§ 601.002(5).

A drive axle with two tandem wheels attached on one side lacks an engine

or other means of propulsion. It is therefore neither a self-propelled vehicle

nor a vehicle propelled by electric power from overhead wires. This wheel

assemblage is not capable of carrying a load, nor can it be towed down a road by

a self-propelled vehicle other than being dragged by or mounted underneath one,

as Elchehimi’s expert witness testified. The axle-wheel assembly is thus not a

trailer or semitrailer designed for use with a self-propelled vehicle. The

axle-wheel assembly is not a motor vehicle under Chapter 601. Applying the

common usage of the term and the definition in Chapter 601, we conclude that

physical contact with a detached axle and tandem wheels is not actual physical

contact with a motor vehicle under the unidentified motor vehicle provision.

Elchehimi also argues that this collision involved a legally recognized

substitute for the statute’s actual physical contact requirement. In Latham

v. Mountain States Mutual Casualty Co. , the court of appeals determined that

the physical contact requirement could be satisfied through indirect contact

where an unidentified vehicle first impacts an intermediary vehicle that in turn

collides with an insured claimant. 482 S.W.2d 655, 657 (Tex. Civ. App.—Houston

[1st Dist.] 1972, writ ref’d n.r.e.). The court of appeals held that “[w]here a

Car A strikes Car B and propels it into Car C, there is physical contact between

Car A and Car C” within the meaning of an automobile insurance policy that

required physical contact with an unidentified vehicle. Id.

No Texas court, however, has ever relied on

Latham to conclude that physical contact occurred where there was no “Car

B.” Cf.

Old Am. County Mut. Fire Ins. Co. v.

Sanchez , 81 S.W.3d 452, 462 (Tex. App.—Austin 2002) (observing, but not

holding, that Latham ’s rule “survives in the fact situation . . . where

car A hits car B which then hits car C” in a case where an uninsured motorist

hit an insured’s vehicle, causing the vehicle to collapse on the insured),

rev’d on other grounds , 149 S.W.3d 111 (Tex. 2004). Only two motor

vehicles were involved in Elchehimi’s collision: the unidentified truck and

Elchehimi’s station wagon. Because the axle-wheel assembly is not a motor

vehicle, it cannot fill the role of an intermediary vehicle to provide indirect

contact between the unidentified truck and Elchehimi’s vehicle. Latham is

further distinguishable because the court in Latham was interpreting

insurance policy language, not a statute, and the policy language did not have

an actual physical contact requirement. Latham , 482 S.W.2d at 657 . Five

years after Latham , the Legislature added the actual physical contact

requirement to the uninsured motorist statute. See Act of May 6, 1977,

65th Leg., R.S., ch. 182, § 1, art. 5.06-1(2)(d), 1977 Tex. Gen. Laws 370 , 371

(repealed 2005).

No other substitute exists for the requirement of actual physical contact

with the motor vehicle itself. Texas courts have uniformly rejected the

contention that a collision with cargo and other objects falling from a car

satisfies the requirement of actual physical contact with a motor vehicle.

See, e.g. , Tex. Farmers Ins. Co. v. Deville , 988 S.W.2d 331 ,

333–34 (Tex. App.—Houston [1st Dist.] 1999, no pet.) (holding that water pump

falling from truck and striking insured was not actual physical contact with a

motor vehicle); Republic Ins. Co. v. Stoker , 867 S.W.2d 74 , 77–78 (Tex.

App.—El Paso 1993) (holding that insured rear-ending another car that was trying

to avoid furniture dropped on the highway by an unknown driver was not actual

physical contact with an unknown vehicle), rev’d on other grounds , 903

S.W.2d 338 (Tex. 1995); Williams v. Allstate Ins. Co , 849 S.W.2d 859, 861

(Tex. App.—Beaumont 1993, no writ) (holding that collision between the

claimant’s vehicle and a steel pipe dropped from an exiting truck was not actual

physical contact with a motor vehicle). Another court of appeals considering the

issue of contact with parts of the vehicle itself, rather than simply cargo, has

concluded that such contact is also not enough to satisfy this strict

requirement. See Smith v. Nationwide Mut. Ins. Co. , No. 04-02-00646-CV,

2003 WL 21391534 , 2003 Tex. App. LEXIS 5056 , at *6–8 (Tex. App.—San Antonio June

18, 2003, pet. denied) (holding that collision between loading ramp that

detached from trailer and insured’s vehicle was not actual physical contact with

a motor vehicle). We agree that a collision with a separated piece of a motor

vehicle, such as an axle-wheel assembly, is not actual physical contact with the

motor vehicle as specifically required by the statute.

The dissent argues we should follow the court of appeals’ suggestion that

Texas adopt an integral part test to determine whether actual physical contact

occurred. 183 S.W.3d at 835 . We decline, however, to adopt an integral part test

not present in the text of the statute and inconsistent with the relatively

bright line established by the Legislature. Moreover, such a test would be

practically unmanageable, requiring a case-by-case analysis to determine if a

part was substantial enough to serve as a proxy for a motor vehicle. This would

lead to a line-drawing conundrum for courts of appeals. The Legislature did not

create an exception to the statute’s requirement of actual physical contact with

a motor vehicle, and we decline to do so.

In search of support for such an integral part test, the dissent and the

court of appeals look to other state jurisdictions and the interpretation of

those states’ unidentified motorist statutes. Although interesting, we do not

believe this analysis is necessary because the language of the Texas statute is

not ambiguous. See Tex. Dep’t of Protective & Reg. Servs. v. Mega Child

Care, Inc. , 145 S.W.3d 170, 177 (Tex. 2004) (“If the statutory text is

unambiguous, a court must adopt the interpretation supported by the statute’s

plain language unless that interpretation would lead to absurd results.”) In

addition, the dissent’s citations show there is no trend from which to glean a

majority rule. Of the seven states the dissent identifies as having physical

contact requirements in their unidentified motorist statutes and as having

considered the integral part test, two have statutory language different than

Texas, [2] four have adopted the test, [3] and one has rejected it. [4] Of the four states with cases adopting

the integral part test, three have done so only at the intermediate appellate

court level. At best, there is guidance from the highest courts of two states,

New York and South Carolina, and they reach opposite conclusions on the

issue.

The dissent agrees that the Texas uninsured motorist statute should be

liberally construed to protect insureds “who are legally entitled to recover

damages from owners or operators of uninsured or underinsured motor vehicles.”

Stracener v. United Serv. Auto. Ass’n , 777 S.W.2d 378, 382 (Tex. 1989).

Liberally construing a provision, however, does not permit divorcing its

application from the words in the statute. The dissent states that our

construction “does nothing to further the anti-fraud purpose behind the

requirement of ‘physical contact’ with a ‘motor vehicle.’” To the contrary,

creation of an integral part test would force courts to draw lines in each case

along a continuum, to determine whether a particular part was large or important

enough to be “integral,” whether the part was a piece of the vehicle or merely

cargo, and whether the part was contemporaneously separated from the vehicle or

had lain in the roadway long enough to become debris. All of these questions

would open the door to uncertainty and potential fraudulent or fictitious

claims, which the Legislature saw fit not to do. See Davis , 331 S.E.2d at

354 (“The requirement of physical contact with the unknown vehicle, and not just

with an unattached part thereof, is a viable manner of preventing fraudulent,

fictitious claims.”). The Legislature drew a relatively bright line, and we

decline to fuzz it up. Requiring contact with the motor vehicle honors the

language enacted by the Legislature and enforces the legislative purposes of

protecting insured motorists and preventing fraud.

The language of the statute compels our conclusion. The salient factor

here is that the insured’s vehicle did not make actual physical contact with the

unidentified vehicle. Whether the item that did make contact with the insured’s

vehicle was initially a piece of the unidentified vehicle or was cargo that had

fallen off is irrelevant—in either case the item is not a motor vehicle. For

these reasons, and without hearing argument, we reverse the judgment of the

court of appeals, render judgment for Nationwide, and order that Elchehimi take

nothing. Tex. R. App. P .

59.1.

________________________________________

J. Dale Wainwright

Justice

OPINION

DELIVERED: March 28, 2008

[1]

In 2005, the Legislature repealed Article 5.06-1(2)(d) as part of the

codification of the Texas Insurance Code. The same language now appears in

section 1952.104(3) of the Texas Insurance Code. Accordingly, the Court will

retroactively apply Section 1952.104(3). See Subaru of Am., Inc. v. David

McDavid Nissan, Inc. , 84 S.W.3d 212 , 219–20 (Tex. 2002) (retroactive

application is constitutional where the change is remedial and procedural and

does not affect a vested right).

[2]

See La. Rev. Stat. Ann. §

22:680(1)(d)(i) (LEXIS through 2007 Sess.) (allowing testimony by a

disinterested witness in place of actual physical contact); Wis. Stat. Ann. §§ 632.32(2)(a),

.32(4)(a)(2)(b) (LEXIS through 2007 Sess.) (covering “hit-and-run” accidents

with unidentified vehicles).

[3]

See State Farm Fire & Cas. Co. v. Guest , 417 S.E.2d 419, 422 (Ga. Ct.

App. 1992); Illinois Nat. Ins. Co. v. Palmer , 452 N.E.2d 707, 709 (Ill.

App. Ct. 1983); Adams v. Mr. Zajac , 313 N.W.2d 347, 349 (Mich. Ct. App.

1981); Allstate Ins. Co. v. Killakey , 580 N.E.2d 399, 401 (N.Y.

1991).

[4]

See Davis v. Doe , 331 S.E.2d 352 , 353–54 (S.C.

1985).