Last month the Supreme Court of Washington spoke: A bicyclist is a “pedestrian.”  As a result, coverage was owed under an automobile policy.

Many reading this do not handle claims under auto policies.  And while the question whether a bicyclist is a “pedestrian” comes up now and then, a case addressing the issue is certainly not common enough to warrant a nod as one of the tem most significant of the year.

McLaughlin v. Travelers Insurance Company, No. 97652-0 (Wash. Dec. 10, 2020) was chosen, as a top ten case, for this reason: It offers very important lessons for insurers, not to mention that the lessons apply to all lines of insurance.

Lesson one.  Insurance coverage litigation is unpredictable.  Really unpredictable.  Two lower courts concluded that a bicyclist is not a “pedestrian.”  This seems incontrovertible.  Yet, six Justices (6!) of the Washington Supreme Court concluded otherwise.  There are no sure things in insurance coverage litigation.  It is not death and taxes. 

Second, McLaughlin is a reminder that the rules can differ, between insurers and policyholders, in coverage litigation.  In general, insurers are usually obligated to prove what a term means.  Policyholders, however, can often win by simply proving that a term has more than one reasonable meaning.  If so, the term is generally construed in their favor.  As the Supreme Court noted in McLaughlin, the term “pedestrian” has several different meanings.

In McLaughlin, the Washington high court addressed coverage under the following circumstances.  Todd McLaughlin was injured after his bicycle crashed into an open parked car door in Seattle.  McLaughlin, a transplant from California, sought MedPay coverage (California’s version of PIP coverage) under his automobile policy, issued by Travelers.  The policy provided coverage for up to $5,000 worth of medical expenses incurred by the insured, who was defined, in relevant part, as “a pedestrian when struck by[] a motor vehicle”.  The term “pedestrian” was not defined. Travelers denied coverage based upon Washington and California vehicle codes which defined “pedestrian” to exclude bicyclists.

McLaughlin filed suit, claiming breach of contract.  The trial court ruled that Travelers was not in breach because “an ordinary and common meaning of pedestrian does not include bicyclist.”  The Court of Appeals affirmed the trial court’s decision, relying on the dictionary definition of pedestrian and the definition of “pedestrian” contained within Washington’s vehicle code.

The Supreme Court of Washington reversed, finding that McLaughlin qualified as a “pedestrian” under the terms of the Travelers’ policy.  The court determined that Washington’s motor vehicle statutes were inapplicable, and instead relied upon Washington’s casualty insurance statute, RCW 42.22.005. 

Under RCW 42.22.005, a pedestrian is defined as “a natural person not occupying a motor vehicle,” which is defined in RCW 46.04.320 as “every vehicle which is self-propelled.”  The court found that the application of this definition also comported with “Washington’s strong public policy in favor of full compensation of medical benefits for victims of road accidents.”

A three justice dissent had this to say:

"The majority relies in part on the very litigation itself to find ambiguity, noting that the “vigorous debate in this case over the meaning of ‘pedestrian’ demonstrates that the term is susceptible to more than one reasonable interpretation.” Majority at 11. This interpretive principle that litigation implies ambiguity would result in the end of unambiguous contract terms. The clear, unambiguous dictionary definition of “pedestrian” is sufficient to resolve this case."

While the case has some quirks tied to choice of law, the take away is this: The court noted that, even if RCW 48.22.005’s definition of “pedestrian” was inapplicable, the term “pedestrian” was clearly ambiguous, as the term had several different meanings under various statutes, and therefore must be construed against Travelers.