Articles Posted in Insurance Claims

This case was brought as a declaratory judgment action filed by the plaintiff, Pekin Insurance Co., seeking a declaration that it owed the defendant Lexington Station LLC no duty to defend it in a personal injury lawsuit filed by Marcos Botello against Lexington.

Pekin had issued a commercial general liability (CGL) policy to ACC Inc. The defendant, Marcos Botello, was injured during the effective policy period while working as an employee of ACC on a development project owned by Lexington. Botello filed a personal injury lawsuit against Lexington. Lexington in turn tendered the defense of the case to Pekin, which refused to tender and then filed this declaratory judgment action. Pekin argued that it had no duty to defend Lexington as an additional insured under the policy issued to ACC.

Westfield Insurance Co., as Lexington’s own CGL insurer, intervened in the declaratory action and argued, along with Lexington, that Pekin did owe a duty to defendant. The circuit court denied Pekin’s motion for summary judgment and granted Lexington and Westfield’s cross-motion for judgment on the pleadings, finding that Pekin had a duty to defend Lexington. Pekin appealed.  It argued that the court’s entry of judgment in favor of Lexington and Westfield was in error because (1) Botello’s complaint did not contain allegations that created a potential for a claim of vicarious liability against Lexington; and (2) the circuit court improperly considered a third-party complaint in coming to its conclusion.

Continue reading

Donald Waterhouse made a claim for $100,000 in underinsured motorist coverage from State Farm Mutual Automobile Insurance Co. for the injuries he suffered in a car crash caused by George D. Robinson. Robinson was insured by State Farm, which settled Waterhouse’s negligence case for his $50,000 policy limit. The common fund doctrine might apply to the offset State Farm declared it would take (totaling $27,463) for the money Waterhouse received under his policy’s medical payments coverage.

When State Farm settled on behalf of Robinson, it sent a letter waiving its subrogation rights. But the correspondence to Waterhouse’s lawyer continued, “As of today, we have paid $27,463 under your client’s medical payments coverage. In the event that your client’s case goes into underinsured motorist arbitration, we will be taking this amount as an offset along with a credit of $50,000, which is deemed paid under Robinson’s liability coverage.”

In a motion to adjudicate State Farm’s alleged lien, Waterhouse claimed he was entitled to a credit under the Common Fund Doctrine – against the offset claimed by State Farm – for a proportional share of the fees and costs he incurred in obtaining the tort recovery.

Continue reading

Donald Etherton was injured in a rear-end car crash. The other driver’s insurer settled with Etherton for $250,000, which was the insurance policy limits. Etherton entered a claim to Owners Insurance Co., his underinsured motorist coverage insurer, which had limits of $1 million. He requested that the company pay up to $750,000, which was the remainder of his insurance policy limit. Etherton’s vehicle had only minor damage, but Etherton underwent three back surgeries to repair disk damage to his spine.

Between July and December of 2009, he communicated frequently with Owners. Owners repeatedly indicated it needed additional information to assess his claim. On Dec. 30, 2009, Owners offered to settle the underinsured motorist claim for $150,000. Etherton asked Owners to explain the basis for the low offer. Owners responded that “our $150k offer is based on the documentation you have provided to date . . . We note serious questions of causation of Mr. Etherton’s injuries . . .”  Many other additional communications between Etherton and Owners failed to resolve the matter. Etherton filed this lawsuit in March 2010.

He first filed his lawsuit in the state of Colorado, which was removed to the Federal District Court. As the jury trial approached, Owners filed a motion in limine under Federal Rule of Evidence 702, seeking to exclude Dr. Joseph Ramos, Etherton’s causation expert. Owners argued that Dr. Ramos’s methodology was not reliable under Rule 702 and Daubert v. Merrill Dow Pharmaceuticals Inc., 509 U.S. 579 (1993). After a Federal Rule of Evidence 104(a) Daubert hearing, the presiding federal judge ruled from the bench and excluded Dr. Ramos’s testimony, concluding his methodology was not reliable. Shortly thereafter, Etherton moved for reconsideration wherein the presiding judge recused herself from the case, and the case was reassigned to another judge who granted Etherton’s motion to reconsider. Based upon his review of the Daubert hearing transcript, the new judge concluded Dr. Ramos’s methodology was reliable and he therefore could testify.

Continue reading

West Side Salvage had insurance coverage from RSUI Indemnity that included $12 million in liability insurance and a secondary level of $11 million in coverage. The underlying lawsuit involved the injuries to John Jentz and Robert Schmidt who were severely injured when a grain elevator exploded. ConAgra was the owner of the storage grain elevator and hired West Side Salvage to eliminate explosive hazards. When Jentz and Schmidt sued ConAgra and West Side, ConAgra sued the independent contractor.

During trial, it seemed that the defense witnesses were ineffective. There was a “scramble” to settle the case.

“It is clear from the record that every attorney who worked on this case thought at one time or another that there should have been a way to settle the case,” wrote Chief U.S. District Court Judge Michael J. Reagan. “Emails and letters during the trial showed the insistence of various parties on finding a way to settle, and the deposition testimony and declarations of lawyers reflect almost a sense of remorse that settlement never was achieved in the underlying litigation.”

Continue reading

Heron Salgado was a construction worker employed by Abel Building & Restoration. He was assigned to work at a job site at 51st Street on a scaffold that was designed, built, erected and maintained by the defendant Designed Equipment Corp. While working at that construction site, he was injured twice.

The first time Salgado was injured was on Jan. 17, 2011 when a heavy bucket fell and struck him.  Then he was injured two days later when he fell into an “opening” in the scaffolding.

Salgado filed a lawsuit against Designed Equipment Corp. in December 2012. Designed tendered its defense of the case, first to its own insurance company and then to Pekin Insurance Co., which was Abel’s insurers, arguing that Abel was an “additional insured” under Abel’s policy of insurance with Pekin.

Continue reading

In a memorandum opinion written by a Cook County Circuit Court Chancery judge, it was ruled that an exhibit to the complaint did not control contrary allegations because the documents served as “mere evidence” rather than the foundation for a claim.

The judge’s opinion reflected that Illinois National Insurance Co. and American Home Assurance Co. filed the lawsuit as “subrogees of their insured Panduit Corp.” They claimed Arch Insurance Co. breached “its duty to indemnify Panduit” for an action in which Ronald Bayer allegedly “fell from a steel beam and was severely injured while working as an iron-worker for Area Erectors Inc.” at Panduit’s DeKalb, Ill., warehouse.

Bayer filed a lawsuit for his injury against Panduit and Garbe Iron Works. Panduit later filed a third-party complaint against Area Erectors for contribution.

Continue reading

Gilbert Gail Gerth was riding his lawnmower down a street when he was rear-ended by a pickup truck. The incident killed Gerth. At the time of the collision, the defendant pickup owner and driver, Gary Sachau, was insured under an automobile insurance policy with a $30,000 liability limit.

Gerth had an automobile insurance policy as well with an underinsured-motorist liability limit of $100,000 per person.  In addition, Gerth had an umbrella insurance policy with Grinnell Select Insurance Co. with an underinsured-motorist liability limit of $1 million per accident.

Dawn Goldstein, the executor of the estate for Gilbert Gerth, settled the claim against Sachau for $30,000, and her underinsured claim against Hartford for $100,000 minus $30,000 recovered from the settlement with Sachau.

Continue reading

In 2006, Kipling Development Corp. was building a home in Will County, Ill. Kipling was the general contractor on the job.  The firm hired subcontractors to handle specific pieces of the job, including Speed-Drywall and United Floor Covering.

A service technician, Brian Harwell, entered the worksite to replace a furnace filter, using the stairs leading to the first floor to the basement. In the process, the stairs collapsed beneath Harwell, sending him falling into the basement. He sustained serious injuries and filed a lawsuit against Kipling as the general contractor of the building site.

In the lawsuit, it was alleged that Kipling was negligent in choosing not to properly supervise and direct construction and failing to furnish Harwell with a safe workplace and a safe stairway. In addition, Harwell also sued Speed-Drywall and United Floor Covering, claiming that they had modified or failed to secure the stairwell.

Continue reading

The United States Court of Appeals for the Seventh Circuit in Chicago has affirmed in part and reversed in part the district court’s decision regarding a third-party lawsuit.

Sam Chee was driving with his wife, Toni Chee, in August 2010 when their car slammed into a tree. Toni was seriously injured and taken to a hospital where she died within a week. The estate of Toni Chee filed two lawsuits. One was against Sam Chee for negligent driving and another was against the hospital and the attending physicians claiming medical negligence was a cause of Toni’s death.

The defendants in the medical malpractice claim filed a third-party action against Sam Chee, seeking contribution or other compensation from him should the medical defendants be held liable to the estate.

Continue reading

On April 7, 2010, Jeffrey and Stephanie Hadary were involved in an automobile crash with Carlos Velez. Velez was driving a car owned by Hertz Corp.  Both the Hadarys and Velez were insured; the Hadarys had insurance through Safeway Insurance Co. They paid a monthly premium of $57. The Hadarys’ policy included underinsured motorist coverage up to $100,000 per person or $300,000 per occurrence.

Velez did not carry insurance through Hertz, but was insured through American Access Casualty Co. for a maximum of $20,000 per person or $40,000 per occurrence.

In line with Illinois law, Hertz was required to insure the operator of its rented cars at a minimum of $50,000 per person or $100,000 per incident. The Hadarys recovered $40,000 from American Access as Velez’s insurer, but this amount did not cover their extensive injuries from this incident.

Continue reading