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Does My Insurance Company Have to Pay If an Unidentified Vehicle Hits My Car?

The following post is part of our Law Student Blog Writing Project, and is authored by Jessie Smith, a law student from the University of Kentucky.

A Brief Review of the Ohio Supreme Court’s Opinion in Smith, et al. v. Erie Insurance Company

In Smith, et al. v. Erie Insurance Company , the Ohio Supreme Court held that an insurance company was obligated to provide coverage to a policy-holder when an unidentified motorist caused a no-contact accident, resulting in injury to the policy-holder.

At first blush, for those not well-versed in insurance law, the legal concepts that underlie this case seem to be somewhat out of the ordinary. However, upon closer inspection, it becomes clear that the primary, driving force behind this decision is derived from well-settled principles of contract law. For laymen who may be unfamiliar with contract law, the facts of the case may, nonetheless, seem all-too familiar.

Before delving into the legal analysis employed by the court, and before determining how and why an insurance company was held liable for an accident resulting from the actions of an unidentified motorist, becoming acquainted with the basic facts of the case is necessary.

In July of 2011, Scott Smith (hereinafter “plaintiff” or “insured”) was driving his vehicle on what appears to have been a two-lane road. As the plaintiff progressed south down the highway, another motorist (hereinafter “unidentified motorist”), traveling northbound, crossed the center-line. The plaintiff, in an effort to avoid a head-on collision, swerved off of the road and crashed into a small collection of trees. As a result of this crash, the plaintiff suffered several injuries.

Soon thereafter, the plaintiff contacted the appropriate authorities. Upon arrival, law enforcement took photos of the accident scene, completed an accident report, and, relying upon the plaintiff’s statement, incorporated into the report the following: “[plaintiff was traveling southbound when he] swerved to avoid an unknown northbound vehicle that was left of center. [Plaintiff’s vehicle] went off the right side of the road and struck several small trees.”

The plaintiff held an auto insurance policy with Erie Insurance Company (hereinafter “Erie,” “insurer,” or “defendant”). In order for the policy to apply to situations in which an unidentified or unknown motorist was the cause of an injury, the plaintiff was required to “provide ‘independent corroborative evidence’ that the unknown driver caused the injury.” In other words, the plaintiff was required, by the terms of the policy, to provide some additional evidence, separate from his own account of the accident, that an unknown motorist had caused the harm in question; otherwise, the policy would not cover the costs of the plaintiff’s injuries.

The plaintiff had filed a claim with Erie; however, Erie denied the claim, grounding the basis for their denial in the language of the policy. Under Erie’s interpretation of the contractual language at issue, there was no “independent corroborative evidence” that the unknown driver had caused the injury, because the only evidence that existed to such effect, asides from the plaintiff’s own account of the accident, was a police report (and accompanying photographs) that had been produced only because of the plaintiff’s recollection of the events at issue. In other words, the police report was not “independent corroborative evidence” because it owed its entire existence to the plaintiff’s own testimony, and did not rest on any independent, third-party accounts of the accident that corroborated the plaintiff’s version of events.

The plaintiff filed suit, and the trial court granted summary judgment in favor of Erie, basing their decision upon the contractual language contained in the policy. The court held that “the policy requiring the insureds to provide ‘independent corroborative evidence’ that the unknown driver caused the injury meant that the [plaintiff] had to submit evidence, independent of [plaintiff’s] own testimony, corroborating that the accident was caused by an unknown motorist, which they failed to do.” In essence, the trial court agreed with Erie’s interpretation of the contractual language: evidence cannot be “independent,” nor “corroborative,” if that evidence rests entirely upon the plaintiff’s own account of the accident. In other words, if not for the plaintiff’s own testimony, the police report itself would never have existed. Therefore, the police report cannot be said to have been “independent.”

The plaintiff appealed. The intermediate appellate court found that the language contained in the policy was susceptible to two interpretations. The first, the interpretation advanced by the plaintiff, was that “‘additional evidence’ may consist of items of evidence, such as medical records and police reports, that are based on the testimony of the insured” (emphasis added). The second interpretation, the interpretation adopted by Erie, was that “‘additional evidence’ must be independent, third party evidence not derived from the insured.”

Because the policy language was susceptible to more than one interpretation, the appellate court considered it to be ambiguous. Applying principles of insurance and contract law (specifically, the principle of “contra proferentum,” or the idea that, particularly in the case of “adhesion contracts,” any ambiguity present in a contract should be construed against that of the drafter, or the “master,” of the contract), the court construed the language of the policy “strictly against the insurer and liberally in favor of the insured.” In reaching this conclusion, the court found in favor of the plaintiff, holding that “[additional evidence] may consist of items of evidence, such as medical records and police reports, that are based on the testimony of the insured.”

The Ohio Supreme Court also found in favor of the plaintiffs. Citing the general contract principle that “in interpreting contracts, courts must give effect to the intent of the parties,” and “that intent is presumed to be reflected in the plain and ordinary meaning of the contract language,” the court concluded that the policy language meant, essentially, just what it said – that “[t]estimony of [the insured] does not constitute independent corroborative evidence, unless the testimony is supported by additional evidence” (emphasis added). Thus, the court concluded, the insured’s testimony can constitute “independent corroborative evidence” so long as that testimony is “supported by additional evidence” (emphasis added).

To put it a slightly different way, in the Ohio Supreme Court’s view, Erie itself defined the phrase “independent corroborative evidence,” and that definition explicitly provided that testimony of the insured party is “independent corroborative evidence” if it is supported by “additional” evidence. Erie itself, as drafters of the contractual language, had every opportunity to define “independent corroborative evidence” in any way that they wished. Erie itself decided that mere “additional” evidence was enough to constitute “independent corroborative evidence.”

Therefore, it seems that, in the Ohio Supreme Court’s view, the policy language, even if ambiguous, should not be interpreted against the insured simply because Erie failed to define “independent corroborative evidence” as, for example, “independent evidence derived solely from a third-party’s own recollection or account of the events that transpired” or simply “independent third-party testimony.” Therefore, from the court’s perspective, any evidence, so long as it is in addition to the insured’s testimony, would satisfy the dictates of the contractual language, even if that evidence was derived solely from the insured’s testimony.

Smith, et al. v. Erie Insurance Company broadly stands for the proposition that an insurance company can be obligated to provide coverage to a policy-holder when an unidentified motorist causes a no-contact accident, resulting in injury to the policy-holder. Perhaps more significantly (and perhaps more importantly to legal practitioners), however, Erie serves as an important reminder of how very vital the careful, and extremely precise, drafting of contractual provisions can be. As was the case in Erie, regardless of whether evaluated from the point of view of the plaintiff or the defendant, it can mean the difference between victory and defeat for one’s case.

Have you been involved in an automobile accident with a hit-and-run driver, or with an uninsured driver? We can help! Call one of our attorneys for a free consultation. We’re Working Hard for the Working Class, and we want to help you!