Wednesday, January 11, 2012
Upcoming changes to insurance law
Van Mayhall at Insurance Regulatory Law has posted an informative article on upcoming federal and state changes to liability insurance regulations.
Wednesday, January 4, 2012
U.S. District Court finds coverage for Pring-Wilson under umbrella policy but not homeowner's policy
I have posted previously here and here about the declaratory judgment action over insurance coverage issues in the civil wrongful death case against Alexander Pring-Wilson. Pring-Wilson was a Harvard graduate student who was in a drunken street fight with Michael Colono, resulting in Colono's death. Pring-Wilson pleaded guilty to involuntary manslaughter. Colono's estate filed a civil wrongful death suit against him, resulting in a judgment of $260,000 which is currently under appeal.
Pring-Wilson sought coverage for the wrongful death suit under a homeowner's policy issued by Fire Insurance and an umbrella policy issued by Farmers Insurance to his mother, Cynthia Pring, in Colorado. The insurers filed a declaratory judgment action in the United States District Court for the District of Massachusetts.
After a bench trial, in Fire Ins. Exchange v. Pring-Wilson, __ F. Supp. 2d __, 2011 WL 6396518, Judge Saris ruled that under Colorado law the Fire Insurance policy is not required to indemnify Pring-Wilson, but the Farmers policy must indemnify him.
The Fire Insurance policy defined "insured" as a "permanent resident" of the policyholder's household under the age of 21 or a relative of the policyholder. The Farmers policy covers "the following residents of your household . . . (1) your relatives." "Relative" is defined in the policy as "persons living with you who are related to you by blood, marriage, or adoption."
The judge had ruled earlier that under the Fire Insurance policy Pring-Wilson was a permanent resident of his mother's household.
Farmers argued that Pring-Wilson is not covered under the umbrella policy because he was not "living with" his mother, the policyholder.
The court disagreed, "Pring-Wilson was not physically living with his mother on the date of the accident because he was away at school, but he was living with her in the sense that his school addresses were all temporary and he was a resident of [his mother's] home. He was not yet formally engaged and planned to move home within weeks."
The court held that under Colorado law coverage was excluded in the Fire Insurance policy by an exclusion for damages that resulted "for any occurrence caused by an intentional act of any insured where the results are reasonably foreseeable."
The Farmers policy did not contain that exclusion. Rather, it excluded coverage for damages that are "expected or intended from the standpoint of the insured." The court held that Farmers failed to establish that Pring-Wilson subjectively expected or intended any harm to Colono.
The court finally held that the umbrella policy would drop down to cover the loss where the primary policy did not provide coverage.
Pring-Wilson sought coverage for the wrongful death suit under a homeowner's policy issued by Fire Insurance and an umbrella policy issued by Farmers Insurance to his mother, Cynthia Pring, in Colorado. The insurers filed a declaratory judgment action in the United States District Court for the District of Massachusetts.
After a bench trial, in Fire Ins. Exchange v. Pring-Wilson, __ F. Supp. 2d __, 2011 WL 6396518, Judge Saris ruled that under Colorado law the Fire Insurance policy is not required to indemnify Pring-Wilson, but the Farmers policy must indemnify him.
The Fire Insurance policy defined "insured" as a "permanent resident" of the policyholder's household under the age of 21 or a relative of the policyholder. The Farmers policy covers "the following residents of your household . . . (1) your relatives." "Relative" is defined in the policy as "persons living with you who are related to you by blood, marriage, or adoption."
The judge had ruled earlier that under the Fire Insurance policy Pring-Wilson was a permanent resident of his mother's household.
Farmers argued that Pring-Wilson is not covered under the umbrella policy because he was not "living with" his mother, the policyholder.
The court disagreed, "Pring-Wilson was not physically living with his mother on the date of the accident because he was away at school, but he was living with her in the sense that his school addresses were all temporary and he was a resident of [his mother's] home. He was not yet formally engaged and planned to move home within weeks."
The court held that under Colorado law coverage was excluded in the Fire Insurance policy by an exclusion for damages that resulted "for any occurrence caused by an intentional act of any insured where the results are reasonably foreseeable."
The Farmers policy did not contain that exclusion. Rather, it excluded coverage for damages that are "expected or intended from the standpoint of the insured." The court held that Farmers failed to establish that Pring-Wilson subjectively expected or intended any harm to Colono.
The court finally held that the umbrella policy would drop down to cover the loss where the primary policy did not provide coverage.
Saturday, December 31, 2011
Insurance for reality tv shows
I admit it. I'm a fan of reality tv. Not only that, I don't understand the disdain people hold for that genre. I don't see a bright line between "scripted" and "unscripted" shows. Plenty of so-called scripted shows feature ad libs or at least input by actors. Reality shows are plotted, just by people whose job title is producer rather than writer. I liken the process to eliciting testimony at trial. You can prep your witnesses, you can ask the right questions, but sometimes it's the unexpected answer that leads to magic (or the money shot).
Here's a great article by Emily Holbrook at Risk Management Monitor on insurance issues for reality tv. Best quote:
Here's a great article by Emily Holbrook at Risk Management Monitor on insurance issues for reality tv. Best quote:
What types of reality shows spur the most insurance claims?
LM: Many times it’s more of the “walk and talk” shows as opposed to
those with stunts that spur the most claims. Audience members are often hurt
while being moved in and out of the auditorium.
I'm waiting for the lawsuit by the estate and family of Russell Armstrong from Real Housewives of Beverly Hills.
On a related note, here's an article on how game shows insure large prizes.
Wednesday, December 28, 2011
Happy New Years, Everyone.
I wanted to post some funny insurance jokes today, but after wasting a lot of time searching the web I couldn't find any that were actually funny. So I asked my ten year old daughter for the best joke she knows. This is what she said:
An alien comes down from Mars. He changes into the form of a human except he doesn't give himself any ears because he thinks they look weird.
He starts a business and puts a "Now Hiring" sign on the window. The first person comes in to ask for a job. The alien asks, "Do you notice anything odd about me?" The person says, "Yes, you don't have any ears." The alien disintegrates him on the spot.
The second person comes in to ask for a job. The alien asks, "Do you notice anything odd about me?" The person says, "Yes, you don't have any ears." The alien disintegrates her.
The third person comes in to ask for a job. The alien asks, "Do you notice anything odd about me?" The person says, "Yes, you're wearing contacts."
The alien says, "How did you know that?"
The person answers, "You can't wear glasses if you don't have any ears."
An alien comes down from Mars. He changes into the form of a human except he doesn't give himself any ears because he thinks they look weird.
He starts a business and puts a "Now Hiring" sign on the window. The first person comes in to ask for a job. The alien asks, "Do you notice anything odd about me?" The person says, "Yes, you don't have any ears." The alien disintegrates him on the spot.
The second person comes in to ask for a job. The alien asks, "Do you notice anything odd about me?" The person says, "Yes, you don't have any ears." The alien disintegrates her.
The third person comes in to ask for a job. The alien asks, "Do you notice anything odd about me?" The person says, "Yes, you're wearing contacts."
The alien says, "How did you know that?"
The person answers, "You can't wear glasses if you don't have any ears."
Labels:
jokes
Tuesday, December 20, 2011
Appeals court holds judge not required to give jury instruction on presumption of consent to use vehicle if contrary evidence has been offered
McConnico, an employee of Dollar Rent-A-Car, struck and killed Kohlmeyer, a pedestrian, while he was driving one of Dollar's automobiles.
McConnico's primary responsibility was to deliver automobiles to hotels. On the evening before the accident McConnico took a Dollar vehicle to run a a personal errand. The accident occurred as he was driving the car back to Dollar the next day.
McConnico had signed a written acknowledgement when he was hired that he was prohibited from using company rental vehicles except under the direction of a Dollar manager, and that unauthorized use of a vehicle was grounds for discharge. He was in fact fired on the morning of the accident for violating the policy.
There was evidence that personal use of Dollar automobiles was commonplace and few employees were reprimanded for doing so.
Dollar and its excess carrier filed a declaratory judgment action seeking a declaration that there was no coverage because McConnico did not have express or implied permission to drive the car.
The excess policy provided coverage for liability incurred by Dollar and "anyone . . . using with [Dollar's] permission" an automobile Dollar owned.
After trial the jury returned a verdict that McConnico was an unauthorized driver, thereby finding no coverage.
On appeal, Kohlmeyer's estate argued that under Mass. Gen. Laws ch. 231, § 85C*, McConnico was presumed to be driving with Dollar's express or implied consent. The statute states that in certain circumstances in cases against automobile insurers a driver is presumed to have consent to drive a car.
In United Nat'l Ins. Co. v. Kohlmeyer, 81 Mass. App. Ct. 32 (2011), the Massachusetts Appeals Court held:
The court noted that the statute applied only to compulsory policies, and the policy at issue was excess, not compulsory.
It went on to hold that even if the statute had applied, the presumption would have been enough to meet the estate's burden initially, but it was rebuttable, "and continue[d] only until evidence [was] introduced which would warrant a finding contrary to the presumed fact." Because there was such evidence, the judge was not required to instruct the jury on the presumption.
*This link is to the statutes posted by the Commonwealth of Massachusetts. Massachusetts Lawyers Weekly recently ran an article explaining that this website is not updated frequently, and recent revisions to statutes are not shown.
McConnico's primary responsibility was to deliver automobiles to hotels. On the evening before the accident McConnico took a Dollar vehicle to run a a personal errand. The accident occurred as he was driving the car back to Dollar the next day.
McConnico had signed a written acknowledgement when he was hired that he was prohibited from using company rental vehicles except under the direction of a Dollar manager, and that unauthorized use of a vehicle was grounds for discharge. He was in fact fired on the morning of the accident for violating the policy.
There was evidence that personal use of Dollar automobiles was commonplace and few employees were reprimanded for doing so.
Dollar and its excess carrier filed a declaratory judgment action seeking a declaration that there was no coverage because McConnico did not have express or implied permission to drive the car.
The excess policy provided coverage for liability incurred by Dollar and "anyone . . . using with [Dollar's] permission" an automobile Dollar owned.
After trial the jury returned a verdict that McConnico was an unauthorized driver, thereby finding no coverage.
On appeal, Kohlmeyer's estate argued that under Mass. Gen. Laws ch. 231, § 85C*, McConnico was presumed to be driving with Dollar's express or implied consent. The statute states that in certain circumstances in cases against automobile insurers a driver is presumed to have consent to drive a car.
In United Nat'l Ins. Co. v. Kohlmeyer, 81 Mass. App. Ct. 32 (2011), the Massachusetts Appeals Court held:
The presumption embodied in G. L. c. 231, § 85C is part of a legislative structure
supporting the Commonwealth's compulsory motor vehicle insurance requirements.
Read in the context of the statutes to which § 85C refers, the support structure operates in this fashion. An insurer's liability under an automobile policy “insuring against liability for loss or damage on account of bodily injury or death” becomes absolute when a covered loss occurs and is not conditioned on an insured's payment of the loss to the injured party. See G.L. c. 175 § 112, amended by St.1977, c. 437. If the injured party obtains a judgment against the insured, the injured party is entitled to bring an action against the insurer to reach and apply the insurance proceeds.
See G.L. c. 175 § 113; G.L. c. 214 § 3(9). In an action to reach and apply, the
presumption desired by the estate applies but, as § 85C expressly states, only if the plaintiff is seeking to “reach and apply the proceeds of [a] motor vehicle liability policy, as defined in” G.L. c. 90 § 34A.
The court noted that the statute applied only to compulsory policies, and the policy at issue was excess, not compulsory.
It went on to hold that even if the statute had applied, the presumption would have been enough to meet the estate's burden initially, but it was rebuttable, "and continue[d] only until evidence [was] introduced which would warrant a finding contrary to the presumed fact." Because there was such evidence, the judge was not required to instruct the jury on the presumption.
*This link is to the statutes posted by the Commonwealth of Massachusetts. Massachusetts Lawyers Weekly recently ran an article explaining that this website is not updated frequently, and recent revisions to statutes are not shown.
Friday, December 16, 2011
Gap insurance
Here's an interesting article at The Frugal Toad on a type of insurance I'd never heard of. I was hoping that Gap Insurance might cover the jeans my kid spilled tomato sauce on just after I bought them. But it actually covers the difference between the actual value of a new car and what you paid for it, since new cars lose their value the instant you drive them off the lot.
Another solution to this problem: Don't buy new cars.
Another solution to this problem: Don't buy new cars.
Wednesday, December 14, 2011
U.S. District Court holds that insurer who wrongfully denied duty to defend must indemnify insured where question of duty to indemnify is in equipoise
A couple of days ago I wrote about Manganella v. Evanston Ins. Co., 2011 WL 5118898 (D. Mass.), in which Evanston Insurance Company denied coverage for a sexual harassment claim because the misconduct began before the policy period.
At issue was the MCAD claim of Burgess against her employer, Jasmine Company, alleging that she had been harassed by Luciano Manganella since she began her employment a couple of years before the Evanston policy went into effect. At a deposition she clarified that although Manganella had made inappropriate comments prior to the policy period, she had not felt physically or emotionally threatened by him until after the policy period began.
Evanston made an argument that I don't quite understand that it was entitled to rely on readily knowable facts outside the complaint to deny coverage. (I don't understand it because the black letter law it cites states that facts outside the complaint may be used to trigger the duty to defend, not the opposite; and because the facts outside the complaint appear to trigger coverage rather than show no coverage.)
The court rejected Evanston's argument. It went on to hold that because it had breached its duty to defend Jasmine, Evanston is liable for the costs of settlement reached with Burgess. Although a breach of the duty to defend does not provide an automatic right to indemnity, an insurer that has wrongfully declined to defend a claim has the burden of proving that the claim was not within the coverage of the policy. "Because the evidence on this later issue is in equipoise, Evanston has not met its burden of showing coverage did not attach."
At issue was the MCAD claim of Burgess against her employer, Jasmine Company, alleging that she had been harassed by Luciano Manganella since she began her employment a couple of years before the Evanston policy went into effect. At a deposition she clarified that although Manganella had made inappropriate comments prior to the policy period, she had not felt physically or emotionally threatened by him until after the policy period began.
Evanston made an argument that I don't quite understand that it was entitled to rely on readily knowable facts outside the complaint to deny coverage. (I don't understand it because the black letter law it cites states that facts outside the complaint may be used to trigger the duty to defend, not the opposite; and because the facts outside the complaint appear to trigger coverage rather than show no coverage.)
The court rejected Evanston's argument. It went on to hold that because it had breached its duty to defend Jasmine, Evanston is liable for the costs of settlement reached with Burgess. Although a breach of the duty to defend does not provide an automatic right to indemnity, an insurer that has wrongfully declined to defend a claim has the burden of proving that the claim was not within the coverage of the policy. "Because the evidence on this later issue is in equipoise, Evanston has not met its burden of showing coverage did not attach."
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