Auto-No-fault
Auto-Owners Insurance Co. vs. Great West Casualty
(Minnesota Court of Appeals, May 10, 2005)
-Ruling: Injury resulted from “maintenance or use” of vehicle.
Auto-Owners commenced a declaratory judgment action, alleging that it was not responsible for payment of no-fault benefits. It insured the injured claimant for his business vehicles. The insured was injured in an accident involving a stalled vehicle loaded on top of an automobile transport trailer. The court reversed the lower court’s holding and found that the injury resulted from the “maintenance or use” of the stalled vehicle, and the insurer of the stalled vehicle, rather than the insurer of the auto-transport trailer, was responsible for payment of no-fault insured benefits to the insured under a Minnesota statute.
Auto-Uninsured/Underinsured Motorist Byer vs. Wright
(Ohio Court of Appeals, April 15, 2005)
-Ruling: UM benefits properly rejected.
Employee brought action against his employer’s auto insurer for declaratory judgment, arguing that he was entitled to UM benefits. The court held that “where nationwide coverage is provided, the policy’s legitimate expectation is that the site of the insured risk is more significant than the insurer’s residence or the place of negotiation.” As such, the court found that Ohio law, rather than Minnesota law, applied. Nonetheless, the court found that the employer validly rejected UM coverage by marking a box for rejecting such coverage on a signed rejection form. Hence, the court reaffirmed judgment in favor of the employer’s automobile insurer.
Exclusions-Expected/Intended Harm
American Family Mutual Insurance Co. vs. Eastman
(Iowa Court of Appeals, April 28, 2005)
-Ruling: Expected/ intended harm exclusion bars coverage for sexual abuse claims; no coverage for innocent insured under severability clause.
Insurer brought declaratory judgment action seeking declaration that it had no duty to defend and indemnify insured, a daycare worker, in underlying suits commenced against her for her son’s sexual abuse of children. The insured procured a homeowners’ policy with a home day care endorsement that defined “insured” as the defendant and any relatives residing in her household.
The insurer disclaimed coverage based on three exclusions in the contract: abuse, intentional injury and violation of law. The court held that the insured’s son constituted an “insured” for purposes of the policy and that claims related to his abuse were excluded under the intentional injury and violation of law exclusions.
In a matter of first impression in Iowa, the court held that the policy’s severability clause did not make the mother’s coverage severable from her son’s and therefore did not trump the exclusions in the policy. As such, the court granted summary judgment in favor of the insurer.
Fire and First Party
Hickman vs. Safeco Insurance Company of America
(Minnesota, May 5, 2005)
-Ruling: Borrower is intended third-party beneficiary under fire policy
Borrower under a mortgage brought action against insurer alleging that he was an intended third-party beneficiary of a fire and windstorm policy between the mortgage company and the insurer. After the borrower failed to provide proof of insurance as required by his mortgage agreement, his mortgage company purchased a fire and windstorm policy from the insurer. The borrower’s home was damaged by a windstorm and he was denied coverage under the policy. The court held that the borrower was an intended third-party beneficiary of the policy because the policy recognized the class of persons of “borrowers,” provided coverage in excess of the mortgage company’s interest and for loss of personal property, provided excess payment directly to the borrower, and gave the borrower certain rights related to contesting a loss appraisal.
Assurance Company of America vs. Adbar
(8th U.S. Circuit Court of Appeals, Missouri, April 29, 2005)
-Ruling: Insured entitled to actual cash value for building damaged by fire
This case involved the insured’s purchase of a building for $40,000 intending to replace or renovate it. The insurer issued the insured a commercial fire policy, listing in its declarations coverage for any one structure as $450,000, subject to the policy’s Builders Risk Coverage Form. The building was damaged by fire and the insured contended that it was entitled to recover $450,000, the declared value of the building, pursuant to the Missouri “value policy” statute. The court rejected the insured’s argument as contrary to the plain language of the policy, which provided, among other things, that the insurer would pay the actual cash value as of the time of loss to any existing building or structure.
Goldberg Segalla (www.goldbergsegalla.com)
counsels and represents individuals and busi-
nesses in specialized areas of civil litigation,
contractual and extra-contractual disputes and
regulatory matters before state and federal
agencies. Kevin T. Merriman can be reached at
kmerriman@goldbergsegalla.com.