Case Law Watch

ARBITRATION

Allstate Insurance Company v. Great American Insurance Company
(Super. Ct. N. J. June 15, 2006)

Ruling: Insurance company could contest adverse arbitration finding where plaintiff insurance company improperly served demand for arbitration to incorrect address. Further, the incorrect policy number was referenced, and no specific consent was obtained as required for a matter to be submitted to arbitration.

AUTO- LIABILITY

Universal Underwriters Group v. Heibel
(Super. Ct. N.J. June 16, 2006)

Ruling: New Jersey’s motor vehicle liability statute, which requires insurers to provide liability coverage for permissive users of vehicles, does not require an insurer to provide collision coverage. Therefore, a permissive user is covered only where the accident results in injury to the person or property of third persons.

AUTO—UNINSURED/UNDERINSURED

Anderson v. Pellet
(Wis. App. June 21, 2006)

Ruling: Motorcyclist Not “Occupying” Vehicle within Meaning of UIM Policy Exclusion. The estate of a deceased claimant brought suit against the claimant’s UIM carrier, arguing that an exclusion which barred coverage for injuries sustained while occupying a vehicle with fewer than four wheels did not apply. The insurer contended that the exclusion applied to the claimant, who was approximately fifty feet away from his motorcycle when he was hit and killed by another vehicle. The court held that the deceased claimant was not “occupying” the motorcycle at the time he was struck. The court held that the deceased claimant was not vehicle-oriented at the time of the accident insofar as he had left his motorcycle fifty feet behind and was concerned with an injured passenger who was lying on the side of the road.

BAD FAITH

Cain v. Griffin
(Ind. June 21, 2006)

Ruling: Injured Claimant Has No “Bad Faith” Claim Against Tortfeasor’s Insurer.

Plaintiff sued defendant’s insurance company after a dispute arose over payments due to the plaintiff for injuries she suffered when she was injured in a fall at the defendants’ restaurant. Plaintiff contended that she is a “third-party beneficiary” of the defendants’ insurance policy and was entitled to maintain a claim for “bad faith” against the insurance company in addition to her claim for benefits under the policy. The Supreme Court of Indiana held that the plaintiff’s third-party beneficiary claim to go forward but that she had no bad-faith claim against the insurer.

EXCLUSIONS—HOUSEHOLD MEMBERS

State Farm Fire v Hooks
(Ill. App., 1st Dist., June 19, 2006)

Ruling: Severability clause applies to determine whether claimant is a member of insured’s household. The claimant was injured when, while residing in an apartment in a multi-unit residential building, a fire broke out. The claimant brought suit against her sister-in-law, alleging that her sister-in-law, as owner of the building, was negligent in failing to provide working smoke detectors. At the time of the fire, the claimant was married to and living with her husband, who was named as an insured on a policy issued to him and the sister-in-law, as owners of the building. The insurer denied coverage on the ground that the household exclusion applied. The court disagreed, finding that severability clause dictated that the household exclusion did not apply since the injured claimant and sister-in-law were not members of the same household.