Authored by: Joseph Ciollo
Superior Court – Underinsured Motorist Coverage – Plaintiff’s Evidentiary Burden
In Lubin v. Kemper Independence Insurance Company, the plaintiff was injured in a motor vehicle accident and filed an action to recover Underinsured Motorist (“UIM”) benefits from his insurer. At trial, the plaintiff failed to submit a copy of the applicable insurance policy into evidence, such that the Court was presented with no evidence whatsoever that the plaintiff’s claim was based on a UIM policy. The only testimony and the only exhibits that the plaintiff offered were solely about the nature and extent of his personal injuries and the subsequent medical treatment he received for these injuries. The Court noted that where a plaintiff has failed to provide a copy of the relevant insurance policy, there is no evidence of the amount of UIM coverage provided under the policy, which is necessary to the determination of whether the vehicle is underinsured. Due to the plaintiff’s failure to offer evidence at trial that there was a UIM policy that existed, the Court ruled that the plaintiff did not introduce sufficient evidence to support the UIM claim. At trial, the plaintiff also failed to offer any evidence about the insurance policy covering the tortfeasor who allegedly caused his injuries. Thus, the Court was unable to determine, based on the evidence presented, that the plaintiff had exhausted the limits of the tortfeasor’s insurance policy or that all available coverage was exhausted. Although the police report placed into evidence suggested that the tortfeasor may have had insurance, the plaintiff failed to produce any competent evidence about this policy at trial, so the Court could not find that the tortfeasor had insurance and that the limits of that policy had been exhausted. The Court entered judgment in favor of the defendant.
U.S. District Court – Property Damage – Coverage Exclusions
In A Priori Family Office LLC et al v. Valley Forge Insurance, the plaintiffs maintained an office on the third floor of a commercial building and discovered that water had seeped into and damaged their office after a storm and heavy rain. The plaintiffs filed an insurance claim with the defendant, which denied coverage. After the plaintiffs filed suit, the parties filed cross-motions for summary judgment. The defendant’s coverage denial letter had cited to the applicable insurance policy’s Water Exclusion, which precluded coverage “for loss or damage caused directly or indirectly by … ‘Flood,’ surface water, waves, tides, tidal waves, overflow of any body of water, or their spray, all whether driven by wind or not.” After the plaintiff asked the plaintiff to reconsider the denial, the defendant maintained its position and also cited to the policy’s Rain Limitation, which stated that no coverage is provided for loss or damages to the “ ‘interior of any building or structure’ or to personal property in the building or structure, caused by rain, snow sleet or ice whether driven by wind or not.” The Court’s review of the Water Exclusion centered around the term “surface water,” which was not defined by the policy. The Court noted that multiple courts across jurisdictions have either disagreed about the definition of the term “surface water” or held the term to be ambiguous under state law for the purposes of insurance policies like the one at issue in the present case. The Court decided that the term is ambiguous and accordingly construed it in favor of coverage. The defendant also relied on the policy’s Weather Exclusion, which barred coverage for any “loss or damage caused by or resulting from … [w]eather conditions,” but only if such conditions “contribute in any way with a cause or event excluded under Paragraph B.1 above to produce the loss or damage.” The Weather Exclusion also contained the following concurrent causation requirement: “But this exclusion only applies if weather conditions contribute in any way with a cause or event excluded in Paragraph B.1 above to produce the loss or damage.” Since the only possible exclusion under Paragraph B.1 that could have arguably applied was the surface water provision of the Water Exclusion, which the Court already concluded did not apply, it necessarily followed that neither did the Weather Exclusion. The defendant also relied on the policy’s Negligent Work Exclusion, which the Court noted was subject to an ensuing loss exception. The Court found that the defendant incorrectly relied on the Negligent Work Exclusion because even if the drains or the terrace door at the property were indeed defective at the time of the storm and contributed to the damage, the plaintiffs were not requesting coverage for the cost of “making good” those defects, i.e., the drains or the terrace door. Rather, the plaintiff’s claim was solely for the cost of the “Covered Cause of Loss” that resulted from those defects: water damage to the interior of its building. As such, the Court held that the Negligent Work Exclusion did not apply. Regarding the Rain Limitation, the Court decided as a threshold issue that it was akin to a coverage exclusion, and thus it was the defendant’s burden to prove its application. Turning to the merits of the Rain Limitation, the Court determined that it did not preclude coverage for the losses at issue in this case, which consisted of damage to interior flooring and fixtures (as opposed to portions of the structure that are within the exterior skin of the structure’s walls and roof, including, but not limited to lathe, sand paper, framing, wallboard and tarpaper, any one of which would have triggered the Rain Limitation). In addition, the damage at issue was not directly caused by rain entering the office, which is what the Court found the language of the Rain Limitation to clearly contemplate. Because none of the defendant’s relied-upon exclusions or limitations applied to bar coverage, the Court concluded that the plaintiffs were entitled to summary judgment on their claims for breach of contract and declaratory judgment.
Superior Court – Underinsured Motorist Benefits – Resident Relative and Temporary Substitute Car
In Gamboa-Vasquez v. State Farm Mutual Automobile Insurance Company, the plaintiff was injured in a motor vehicle accident and filed an action to recover Underinsured Motorist (“UIM”) benefits from his insurer. The plaintiff alleged that the vehicle he was driving was a “temporary substitute car” under the terms of the subject insurance policy. The defendant filed a motion for summary judgment and argued that the plaintiff did not meet any of the definitions of “insured” under the policy and therefore could not be afforded coverage for the injuries he sustained. The defendant argued that the term “resident relative” was not ambiguous as defined in the policy and that the plaintiff was not within the definition thereof because he was not related by blood, in a civil union with, married to, or adopted by the insured. The plaintiff contended that there was an ambiguity as to whether his relationship with and cohabitation with the named insured (his then-girlfriend) constituted sufficient familial ties to qualify as a resident relative. However, the plaintiff did not provide any authority that his status as the insured’s boyfriend was within the policy definition of “relative.” The Court noted that other judges have previously rejected essentially the same argument. It was undisputed that the vehicle the plaintiff was driving at the time of the accident was a rental because both parties characterized it as such. During discovery, the plaintiff failed to respond timely to a request for admissions which had sought to establish whether the listed insured vehicle was broken down, in repair, in service, damaged, stolen, or otherwise inoperable when the accident occurred and that the vehicle in the accident was rented to minimize the number of miles put on the listed insured vehicle. Given the deemed admissions that the listed insured vehicle was not broken down, in repair, in service, damaged, stolen, and otherwise was operable when the accident occurred, the Court found that the defendant showed that there is no genuine issue of material fact in dispute that the vehicle at issue was outside the policy definition of “temporary substitute car.” Accordingly, the Court granted the defendant’s motion for summary judgment.
