Articles Posted in Insurance Claims

Brian Squire hit a bicycle rider while driving his car. The bicyclist died from injuries six months later.

GEICO, Squire’s automobile insurer, never offered the bicyclist or his estate Squire’s $300,000 policy limits or attempted to settle with the decedent’s estate and family.

In addition, the insurer, GEICO, allowed several settlement offers by the estate and family of the bicyclist to expire.

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The issue in this case was whether Liberty Mutual Insurance Co. was liable to pay the default judgment of $4.6 million against its insured whose policy limits for this incident was just $25,000. The question then became whether the insurer’s conduct proximately cause the $4.6 million judgment against the insured.

Kimberly Perkins was insured by Liberty Mutual Fire Insurance Co. for auto liability up to $25,000. While her car was being driven by Miquasha Smith, a 16-year-old with a driver’s license permit, it crashed into two parked cars. Smith was convicted of reckless driving.

At the time of the crash, Monteil Hyland was a passenger in the Smith car and was seriously injured. Monteil’s mother, Shannon Hyland, filed suit against Smith. Smith had no auto insurance, but was covered by the car owner’s insurance, Liberty Mutual. In order to be covered, Smith had to have permission from Perkins. Smith claimed that she received the car keys from Perkins’s daughter, Michiah Risby.  She said she gave the keys to a person named “Rob” and not to Smith.

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Thomas Dempsey, 78, was driving his SUV on a busy four-lane highway during a cross-country trip. He exited the highway to use a restroom. His car approached a line of stopped cars, but he was unable to take his foot off the accelerator and swerved his SUV onto a grassy median, which led the SUV to accelerate and hit a deep drainage ditch.

In turn, Dempsey’s SUV became airborne and eventually landed on top of a truck driven by plaintiff Boris Woodard. The impact caused both the Dempsey SUV and the Woodard truck to cross two lanes of traffic and roll down an embankment.

Woodard suffered eye injuries and bruising. Much worse and tragic was the witnessing of the injury and subsequent death of Woodard’s 25-year-old daughter who was his passenger. Anna Woodard lapsed into a coma and was hospitalized for nine days after the crash before she died. She was a student who had hoped to work in childcare. She is survived by her parents. Her medical expenses were in the hundreds of thousands of dollars.

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Victoria Metal Processor Co. bought an insurance policy from Nautilus Insurance Co. to provide insurance coverage to Vivify Construction for accidents involving negligence by Victoria for a construction project in which Vivify was the general contractor.

Nautilus refused to cover a lawsuit filed by a Victoria Metal Processor employee, Pablo Vieyra, who fell from a second-story scaffold because of the alleged negligent supervision by Vivify.

There were two “injury to employee” exclusions in the body of the Nautilus Insurance policy that said it didn’t apply to tort claims by the employees of any subcontractors. Vivify appealed from a judgment that concluded that Nautilus Insurance was not obligated to defend Vivify, the general contractor.  It was argued on appeal that the trial court judge erred in choosing not to consider the terms of the subcontract between Vivify and Victoria.

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The Illinois Appellate Court of the 1st District resolved a discovery dispute in an insurance coverage lawsuit between plaintiff-insured Motorola Solutions Inc. and the defendant-insurers Zurich Insurance Co. and Associated Indemnity Corp. The court held that absent an applicable cooperation clause, attorney-client privilege applies to any appropriate documents.

This was an insurance coverage dispute between Motorola and the two insurance companies that had to do with several personal injury lawsuits brought by former employees and contractors who claimed they had been exposed to chemicals in “clean rooms” located in Motorola’s manufacturing facilities. It was argued that the court should require defendants to defend and absorb defense costs for these personal injury actions.

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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.

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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.

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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.

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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.”

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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.

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