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Lancer Insurance Co. v. Lake Shore Motor Coach Lines, Inc.

Supreme Court of Utah

February 15, 2017

Lancer Insurance Company, Appellant,
v.
Lake Shore Motor Coach Lines, Inc., Janna Crane, Elizabeth Hutchison, Mette Seppi, Tiffany Thayne, Appellees.

         On Certification from the United States District Court for the District of Utah The Honorable Judge Jill N. Parrish Case No. 2:14cv00785

         Attorneys:

          Barbara L. Maw, Park City, for appellant

          Dallas B. Young, Michael D. Esplin, Trent V. Cahill, Laura H. Cabanilla, Provo, for appellees

          Chief Justice Durrant, Justice Durham, Justice Himonas, and Justice Pearce joined.

          Lee Associate Chief Justice

         ¶1 This case comes to us on certification from the United States District Court for the District of Utah. The questions presented concern the proper interpretation of Utah Code section 31A-22-303(1), which requires motor vehicle liability insurance policies to "cover damages or injury resulting from a covered driver of a motor vehicle" who suddenly and unforeseeably becomes incapacitated. We interpret this provision to impose strict liability on an insured driver, and to limit the driver's liability to the coverage of the applicable insurance policy.

         Opinion of the Court

         I

         ¶2 The personal injury claims at issue in the underlying federal case arise out of a bus accident that happened on October 10, 2009. The bus was driven by Debra Jarvis and owned by Lake Shore Motor Coach Lines, Inc. Jarvis experienced a sudden and unforeseeable loss of consciousness while driving back to Utah from a high school band competition in Idaho. Her loss of consciousness caused the bus to leave the roadway, hit a ravine, and roll over. Several passengers were injured in the crash.

         ¶3 The injured passengers included Janna Crane, Elizabeth Hutchison, Tiffany Thayne, and Mette Seppi. Each of these individuals filed separate lawsuits in the Fourth Judicial District Court in Utah seeking damages for their injuries. Crane and Hutchison filed motions for partial summary judgment, asserting that Lancer Insurance Co. (Lake Shore's insurer) was strictly liable for the passengers' injuries under Utah Code section 31A-22-303(1). Those motions were denied. In denying the motions, the state district court rejected the strict liability premise attributed by the passengers to Utah Code section 31A-22-303(1). Instead, the court held that the statute preserved the common-law "sudden incapacity" defense, under which Jarvis would not be liable for her sudden loss of consciousness and the injured parties could recover only upon a showing of fault.

         ¶4 These state cases are still pending. But they are not the cases before us here. For reasons not apparent on the record, Lancer Insurance filed a separate federal case after it succeeded in defending against the motions for summary judgment in state court. In the federal case, Lancer sought a declaratory judgment confirming the state district court's interpretation of Utah Code section 31A-22-303(1)-reinforcing the conclusion that this provision preserves the common-law "sudden incapacity" defense and thus requires proof of fault to sustain liability in this case.

         ¶5 The federal district court may have recognized the unusual procedural posture of this case-a federal declaratory judgment suit under review while parallel cases involving claims for money damages are still pending in state court (and subject to appeal). That posture presents a risk that a declaratory judgment in federal court could be undermined by an eventual-and conclusive- interpretation of state law by this court. Perhaps with that in mind, the federal district court appropriately certified the following two questions to us: (1) whether Utah Code section 31A-22-303(1) imposes strict liability on an insured driver for damages to third parties resulting from the driver's unforeseeable loss of consciousness while driving; and (2) if so, whether the driver's liability is limited by the applicable insurance policy or by the applicable minimum statutory limit.

         ¶6 We agreed to accept these certified questions. We exercise our jurisdiction ...


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