Court decisions

Court decisions


Digested from case reports published in the North Eastern Reporter 2d, West Publishing Co., St. Paul, MN

Injured person seeks compensation from driver’s grandparents

Richard Burkett was seriously injured when his car was struck by one driven by Terrance Prewitt, Jr. Terrance was a minor who lived with his grandparents, George and Marilyn Greer He owned his own car and had secured an auto policy from American Standard Insurance Company of Wisconsin. His grandparents had an auto liability policy issued by American Family. At the time of the accident Terrance was driving a car owned by Steven Jones with his permission. Jones had auto insurance with Growers Insurance Company, which covered the car operated by Terrance.

Both Growers Insurance and American Standard paid the limits of their policies to Burkett. On March 21, 1997, Burkett signed a “General Release” with American and Growers, which released and discharged Terrance, Marilyn Greer and American Family from any and all liability resulting from the accident. The release further recited that Terrance did not own any real estate or other assets. It also stated:

“…In the event it is later determined that, at the time of the execution of this General Release, other insurance or assets were available and subject to application for satisfaction of the claims of Richard Burkett arising from the aforementioned motor vehicle collision, the undersigneds specifically and explicitly reserve the right to pursue such insurance coverage and/or assets and this General Release shall not be applicable to, nor effective against, the pursuit of such additional recovery even against those parties otherwise released herein.”

On October 9, 1997, Burkett and his wife, Barbara, filed this action against American Family and Terrance alleging that other policies issued to George Greer by American Family provided additional coverage for the accident which occurred on October 10, 1996. After the complaint was filed, the Burketts discovered that Terrance Prewitt, Sr., and Marilyn Greer had signed a financial responsibility affidavit that enabled Terrance to secure his Indiana driver’s license. By doing so, they agreed to be responsible for any injuries or damages caused by his operation of a motor vehicle. On March 26, 1998, the Burketts amended their complaint and added Prewitt, Sr., and Marilyn Greer as defendants. Later, Marilyn Greer was dismissed with prejudice. Marilyn alleged the action was barred not only by the statute of limitations but also by the General Release. American Family denied liability under the policy issued to the grandparents since Terrance did not meet the policy definitions.

The trial court granted American Family’s motion for summary judgment, and the Burketts appealed.

The policy issued to the Greers included the usual definitions of “relative,” but also provided: “…It excludes any person who, or whose spouse, owns a motor vehicle other than an off-road motor vehicle.” While the parties agreed that Terrance was the grandson of the Greers and was residing with them as their ward, it was not disputed that he owned his own car and had secured his own auto policy.

On appeal, the court found that the language used in the exclusion was clear and not ambiguous. The fact that Terrance was driving a car owned by another person was immaterial.

The higher court further ruled that the two-year statute of limitations applied in this action involving the grandparent’s liability under the financial responsibility affidavit that she had signed. In this case, the Burketts did not add the grandparents as defendants until more than two years after the accident. Therefore, the action was barred by the statute of limitations.

The judgment entered in the trial court in favor of American Family and the grandparents was affirmed.

Richard Burkett and Barbara Burkett, Appellants, v. American Family Insurance Company et al.-No. 49A02-0004-CV-260-Court of Appeals of Indiana-October 31, 2000-737 North Eastern Reporter 2d 447.

Cause of action for negligence governed by four-year tort statute of limitations

John Kosa, d / b/a Kosa Excavating, developed a small subdivision in Ottawa County, Ohio, and constructed a canal in order to provide access to the lake. The canal was buttressed by a seawall. Later the seawall collapsed and the owners of the lots sold by Kosa filed suit for their damages. Kosa referred the action to his insurance company, Auto Owners, which denied liability. Judgment was entered for Auto Owners, and was affirmed by the court on appeal.

In August 1997, Kosa filed this action against his insurance agent, David Frederick, alleging the agent was negligent because he didn’t procure the proper insurance and/or insurance limits to protect Kosa for the project. The agent filed his motion for summary judgment because the action was barred by the four-year statute of limitations. The only issue was the date when the insured’s cause of action accrued. The agent contended that date was December 26, 1990, at which time the court entered its declaratory judgment in favor of the company. The insured retorted that the date was 1995, when the appellate court affirmed that decision.

On appeal, the court concluded that the insured sought to be indemnified for liability from the claims of others. “That being the case, no cause would have accrued in 1985, when the insured completed the seawall, or in 1987, when the defective seawall collapsed. The earliest cause of action could have accrued was in 1988, when the lot owners made claims and brought suit to recover the damages they had sustained when the seawall collapsed.

The insured’s action against the agent, brought in 1997, was barred by the statute of limitations, and the trial court’s judgment in favor of the insurance agent was affirmed.

Kosa, d/b/a Kosa Excavating, Appellant, v. Frederick-No. OT-99-067– Court of Appeals of Ohio, Sixth District, Ottawa County-March 24, 2000-737 North Eastern Reporter 2d 1071.

Personal car policy not liable in business-related accident

Indiana law requires an escort vehicle to accompany certain oversized loads that operate under a special permit. Philip Foster was driving an oversized tractor-trailer outfit and was escorted by a car driven by Donna Flannigan. Foster was en route from Illinois to Indianapolis. He became lost in Indianapolis and attempted to turn around. While doing so, the outfit completely blocked the road. Harry Eberhard drove into the tractor-trailer and was killed. His estate filed this action against Foster and Flannigan to recover damages for his wrongful death.

Donna Flannigan had an auto liability policy issued by Illinois Founders Insurance Company, which she notified of the accident. Her policy excluded coverage for the use of any vehicle while the insured was employed or otherwise engaged in any business. The policy defined “business” as including a trade, profession, or occupation. The record showed that Flannigan’s mother operated a vehicle escort business. Her mother was hired to furnish the necessary escort car for Foster, and Donna Flannigan agreed to escort Foster She placed special lights and flags on her personal car, met Foster at a designated spot, and followed him from Illinois to Indianapolis. When she returned home, she sent an invoice for her services to Foster’s employer and received payment by check.

Illinois Founders filed this action for declaratory judgment, alleging the insured was using her car for business and coverage was excluded. The trial court agreed, and the Eberhard estate appealed.

In affirming the judgment entered in the lower court, the court stated the insured was using her car for business, and there was no coverage. The Eberhard estate maintained that the exclusion did not apply to the maintenance or use of a private passenger vehicle. The court disagreed, stating that Flannigan was not using her car as a private passenger vehicle at the time.

The judgment entered in favor of Illinois Founders was affirmed.

Estate of Harry Eberhard, Appellant, v. Illinois Founders Insurance Company-No. 49AO2-0004-CV-266-Court of Appeals of Indiana-December 13, 2000-742 North Eastern Reporter 2d 1.

Can insurer, as subrogee, recover property damage from third party?

Zurich Insurance had issued a liability policy to Jerome Patrick covering his tractor and semi-trailer and it was in force on February 22, 1995. At that time Patrick was hauling baskets of aluminum casting owned by Amcast Industrial from Wisconsin to Cicero, Illinois. The cargo apparently shifted en route, and Patrick and Zurich alleged Amcast had negligently failed to secure the load. As a result, Patrick lost control of his outfit and it crashed and rolled over on its side. Zurich subsequently paid Patrick $21,653.75 for the damage to the outfit. Zurich then filed this action to recover, as subrogee, from Amcast for the property damage it had paid to Patrick.

Patrick had previously filed a complaint against Amcast to recover damages for his personal injuries and damage to his eyeglasses. The action was referred to arbitrators and Patrick was awarded $11,090.

Amcast filed a motion to dismiss the Zurich action because its action was barred by Patrick’s prior action against Amcast to recover for personal injuries and damage to eyeglasses. The trial court granted the motion to dismiss, and Zurich appealed.

The higher court said it was clear that the previous action by Patrick against Amcast did not cover the damage to the tractor-trailer for which Zurich had paid. Therefore, it did not prevent Zurich, as subrogee, to recover from Amcast.

The judgment entered in the trial court dismissing the subrogation action by Zurich was reversed, and remanded for further proceedings consistent with this opinion.

Zurich Insurance Company, as subrogee of Jerome S. Patrick, Appellant, v. Amcast Industrial Corporation-No. 1-99-3404-Appellate Court of Illinois, First District, Second Division-December 19, 2000– 742 North Eastern Reporter 2d 337.

Personal auto policy not applicable to business car

Jeff Earl and Jeanne Conley were involved in an auto accident while Jeanne was driving a Pontiac Bonneville provided by her husband’s employer for his regular personal and business use. The evidence indicated that Jeanne’s husband, Brian Conley, had given her permission to use the car on the date of the accident. Jeff Earl was seriously injured and filed suit against Jeanne, alleging the accident was caused by her negligence. The insurance carrier for the Bonneville agreed to defend her, and eventually paid $1,360,000 of a $1,860,000 judgment entered against her. Earl agreed not to attempt to recover the rest of the judgment from Jeanne.

Jeanne and her husband had an auto liability policy issued by American States Preferred Insurance Co. Jeff Earl then instituted garnishment proceedings against American States in an attempt to recover the balance of the judgment. American States denied coverage for the accident.

The policy excluded any vehicle, other than “your covered auto,” which was “furnished or available for your regular use.” The only vehicle listed in the policy was a Pontiac Transport.

The car which was driven by Jeanne Conley at the time of the collision was not listed in the policy, and Jeff Earl failed to present any evidence that car was a “temporary substitute.”

The exclusion in the policy for any unlisted automobile “owned by you or made available for your replacement use” referred to both husband and wife whose names were shown as insureds.

The trial court entered summary judgment in favor of American States, and that judgment was affirmed on appeal.

Jeff Earl, Appellant, v. American States Preferred Insurance Co., -No. 84A01-0007-/cv-235-Court of Appeals of Indiana-March 20, 2001-744 North Eastern Reporter 2d 1025.

Copyright Rough Notes Co., Inc. Dec 2001

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