In Eppich v. State Farm Mutual Automobile Insurance Company, No. 08-CV-01697-PAB-MEH (Sept. 30, 2009), the United States District Court for the District of Colorado held that an insurer failed to meet its burden on summary judgment of establishing that an accident caused by a motorcycle that was not “street legal” at the time it struck and injured a woman riding her bicycle on a trail fell within an uninsured motorist coverage’s exclusion for “land motor vehicle[s] . . . designed for use mainly off public roads.”  For a complete copy of the opinion, please click here.

The plaintiff was riding her bicycle on a trail when she was struck and injured by a man driving an unlicensed, unregistered and uninsured motorcycle.  At the time of the accident, the motorcycle did not have the tires, mirror, horn, muffler, head or tail lamps that would render it “street legal.”  The plaintiff submitted a claim under her policy’s uninsured motorist coverage.  The policy defined “uninsured motor vehicle” to mean “a land motor vehicle, the ownership, maintenance or use of which is . . . not insured or bonded for bodily injury liability at the time of the accident.”  The policy also contained an exclusion providing that “[a]n uninsured motor vehicle does not include a land motor vehicle . . . designed for use mainly off public roads except while on public roads . . . .”  Based on this exclusion, the insurer denied plaintiff’s claim for coverage.

Plaintiff filed a lawsuit to recover the uninsured motorist benefits and for bad faith.  The insurer moved for summary judgment.  Because the parties agreed that the motorcycle was uninsured, the issues confronting the court were whether the motorcycle qualified as a “land motor vehicle” and, if so, whether it was “designed for use mainly off public roads” so as to fall within the exclusion to uninsured motor vehicle coverage.

Because the policy failed to define “land motor vehicle,” the court found that the plain meaning of the term contemplated off-road vehicles.  The court next looked to whether the exclusion applied.  Although evidence was presented demonstrating that the motorcycle was not “street legal” at the time of the accident, the court disagreed with the insurer that the motorcycle’s present condition was its “designed for use.”  The court also found that the insurer failed to meet its burden of establishing that the bike trail did not constitute a “public road” in light of authority defining a “public road” broadly.

Finding there were genuine issues of fact regarding the insurer’s denial of plaintiff’s claim, the court held that it could not determine the reasonableness of the insurer’s conduct for purposes of the plaintiff’s bad faith claim.  Accordingly, the insurer’s motion for summary judgment was denied.