Case Watch

In Re Madrid
Tex. App. El Paso Oct. 11, 2007
Reservation of rights letter protected by work product privilege. A party injured in a motor vehicle accident sued the insured. The injured party made a demand for insurance information, including the production of a reservation of rights letter issued to the insured. The injured party asserted the letter was relevant in determining the settlement value of the case. The insured’s attorney produced the insured’s insurance policy, but asserted that the reservation of rights letter was protected by the work product privilege. The court held that the reservation of rights letter was privileged work product.

National Automotive Ins. Co. v. Castleman
La. App. 2nd Cir. Oct. 24, 2007
Exclusion precluding coverage for a named member of household remains in effect regardless of whether the named member of household changes residences. The court held that a policy exclusion that precluded coverage for a particular named member of a household precluded coverage for an accident that occurred while that individual was operating the insured vehicle, regardless of whether the facts demonstrated that the individual was a member of the household at the time of the accident. The court reasoned that the insurance policy expressly excluded coverage for the individual. Further, the policy was issued in reliance on the insured’s representations that the individual was a member of the insured’s household.

Gray v. American Nat’l Prop. & Cas. Co.
La. App. 3rd Cir. Oct. 3, 2007
Regular use exclusion in uninsured/underinsured motorist coverage policy precludes coverage for accident that occurred while insured was driving a school bus in the scope of his employment. An insured was injured in a car accident in which an underinsured individual struck the school bus the insured was driving. The insured sought underinsured motorist coverage from his insurer. The insurer disclaimed coverage arguing that coverage was precluded by its policy exclusion which stated that coverage did not apply to any automobile “owned by or furnished for the regular use of the named insured … and not described in the declarations.” The court concluded that the school bus was provided for the insured’s regular use in his job and that the exclusion applied.

Gomez v. Allstate Texas Lloyds Ins. Co.
Tex. App. 2nd Dist. Nov. 1, 2007
Recreation vehicle exception to motor vehicle exclusion only applies where recreational vehicle is used on the insured’s premises. Exception to homeowners’ motor vehicle exclusion, which provided that the exclusion did not apply to “motor vehicles which are not subject to motor vehicle registration and are: … designed and used for recreational purposes; and are: owned by an insured while on the residence premises” was unambiguous. The exception clearly stated coverage existed only if the vehicle was operated on the insured’s premises.

Specialized Comm. Lending, Inc. v. Murphy-Blossman Appraisal Serv., LLC
La. 1st Cir. Nov. 2, 2007
Real estate licensee professional liability policy does not cover claims against real estate appraisal company for negligent training and/or supervision of employees. A lending company brought claims against the insured, a real estate appraisal company, alleging, in part, that the insured negligently trained and/or supervised its employees. The insured sought coverage under a real estate licensee professional liability insurance policy that provided coverage for damages the insured must pay because of a wrongful act in the rendering of or failure to render real estate services, including appraisal services. The court held that the claim for negligent training and/or supervision was not covered, since failure to properly train or supervise does not constitute real estate services, but, rather, constitutes administrative or managerial duties traditionally insured under commercial general liability insurance.

Case Watch is provided by Goldberg Segalla LLP (www.goldbergsegalla.com). Editors are Richard J. Cohen, Daniel W. Gerber and Sarah J. Delaney.