Mikelson v. United States Automobile Association

In January 1999, Mathew Mikelson (plaintiff) was a full-time student at the University of Hawaii and financially dependent on his father, Larry Mikelson. The Mikelsons’ permanent residence was in California. Mathew was listed as an operator under Larry’s automobile insurance policy (the policy) with United States Automobile Association (USAA) (defendant), and three vehicles were listed on the policy. Not long after moving to Hawaii, Mathew was driving a motorcycle and got in an accident with another motorcycle driver, who was at fault. The motorcycle that Mathew was driving was not listed on the policy. Mathew filed a lawsuit in Hawaii against the other driver and USAA to recover compensation for his injuries. Mathew recovered $20,000 from the other driver, which was insufficient to cover his medical expenses. USAA denied that the policy provided underinsured motorist coverage to Mathew given that the motorcycle was not listed on the policy, based on applying California law. Under Hawaii law, however, underinsured motorist coverage followed the insured person, not the insured vehicle, and Mathew would be entitled to benefits. The policy contained no choice-of-law provision but did contain a geographical-area provision, which contemplated the occurrence of accidents anywhere in the United States. The trial court applied Hawaii law and entered judgment in Mathew’s favor. USAA appealed.