Authored by: Joseph Ciollo
Superior Court – Underinsured Motorist Coverage – Undeclared Vehicle and Anti-Stacking Provisions
In Syzmczyk v. Old Dominion Insurance Company, the plaintiff was injured in a motorcycle accident and filed an action to recover Underinsured Motorist (“UIM”) benefits from the defendant. The plaintiff’s motorcycle was insured with GEICO. At the time of the accident the plaintiff was living with his grandparents and was therefore also an insured on the grandparents’ insurance policy. The motorcycle, however, was not listed or declared to be covered by the grandparents’ policy. The defendant, which was the grandparents’ insurer, moved for summary judgment and argued there was no UIM coverage for the plaintiff. The UIM provisions in the policy excluded coverage for bodily injuries sustained by an insured while occupying a vehicle owned by that insured which is not insured for coverage under policy. The Court found such an exclusion to be consistent with state public policy as expressed in the applicable statute. The defendant argued that coverage was also precluded under the grandparents’ policy and the applicable statutes pursuant to the anti-stacking provisions found in both, which provided that if a person insured for UIM coverage is an occupant of an owned vehicle, the UIM coverage afforded by the policy covering the vehicle occupied at the time of the accident shall be the only UIM coverage available. Based on the undisputed material facts, the motion for summary judgment was granted.
U.S. District Court – Property Damage – Standing
In W.A. Griffin v. Travelers Property Casualty Company of America et al, the plaintiff was insured under a commercial property insurance policy issued by Fidelity & Guaranty Insurance Company and an excess and umbrella liability policy issued by Travelers. After discovering hidden cameras at her place of business, the plaintiff claimed that her discovery of the hidden cameras diminished the value of her property, which was a form of property damage. The plaintiff submitted a business interruption claim pursuant to the Fidelity Policy and an umbrella coverage claim pursuant to the Travelers Policy. The claims were denied and the plaintiff filed suit. The defendants moved to dismiss the complaint on multiple grounds, including: (1) the plaintiff lacked standing to assert claims for breach of contract under the Fidelity policy because she was not a named insured or a party to the contract; (2) the complaint failed to allege “direct physical loss of or damage to property,” which was a prerequisite to the coverage the plaintiff sought under the Fidelity policy; and, (3) the Travelers policy was a third-party excess and umbrella liability policy, which was not triggered by the allegations in the complaint. In support of her argument that she was an insured, the plaintiff mistakenly cited language from the third-party commercial liability coverage section of the Fidelity policy, under which the plaintiff did not assert a claim. Because the plaintiff was not a named insured and the property coverage section of the Fidelity policy did not authorize any person or entity other than the named insured to sue Fidelity to recover benefits, the Court found that the plaintiff lacked standing to sue. The Court also found that even if the plaintiff did have standing, her claim still failed as she did not allege facts sufficient to establish “direct physical loss of or damage to the property,” as required by the language of the Fidelity policy. Rather, she attempted to convert a business interruption claim into a property damage claim. The Court observed that the plaintiff asserted in conclusory fashion that the “discovery of the hidden cameras diminished the value of [her] property, is a form of property damage, … invaded [her] privacy,” and forced her to abandon the premises. However, the plaintiff did not explain how the cameras themselves caused physical damage to her property. On these additional grounds, the plaintiff’s claim under the Fidelity policy was dismissed. Finally, the claims brought under the Travelers policy were dismissed because said policy did not provide first-party property coverage. Rather, it was solely a third-party excess and umbrella liability policy, and rendered Travelers responsible for providing coverage only when an insured becomes “legally obligated to pay damages” for certain third-party claims, but only to the extent such damages exceed the applicable “underlying limit.”
U.S. District Court – Declaratory Judgment – Duty To Defend
In AmGUARD Insurance Company v. Shawn Gibson and Santa Perez, AmGUARD commenced a declaratory judgment action to resolve a coverage dispute between AmGUARD and its insured, who was a defendant in an underlying action by a decedent’s estate. In the underlying action, the estate asserted a claim for negligence and alleged that alleges that AmGUARD’s insured assaulted but did not intend to kill the decedent. The estate further alleged that the insured was under the influence of drugs and/or alcohol at the time of the assault. In the declaratory judgment action, AmGUARD asserted that it had no duty to defend or indemnify its insured in the underlying action because the damages stemming from the bodily injuries suffered by the decedent were not covered in the first instance because the injuries did not result from an “occurrence.” AmGUARD further alleged that the injuries were also excluded from coverage under the applicable insurance policy because the insured “expected and intended the bodily injury” the decedent suffered regardless of the insured’s purported state of intoxication, and/or “because the bodily injury arose out of sexual molestation, corporal punishment or physical or mental abuse.” In the declaratory judgment action, the estate filed a motion to dismiss and argued that AmGUARD failed to state a claim upon which relief can be granted. The estate argued that because the underlying complaint alleged that the decedent’s death was the result of an accident, AmGUARD, therefore, could not plausibly allege that its insured’s actions were not an “occurrence” within the meaning of the policy. The Court disagreed and found that the allegations in the underlying complaint did not prohibit AmGUARD from seeking a declaratory judgment and challenging the conclusory labels of negligence in the underlying complaint when compared to the estate’s own factual allegations, which describe the insured as repeatedly striking the decedent, causing him to “suffer serious personal injuries, including multiple blunt trauma injuries,” and thereafter leaving the decedent “injured and unresponsive for an extended period of time. The Court also noted that the estate was the party seeking damages from the insured in the underlying action, and insofar as it appeared that the recovery of any damages would likely require coverage under the policy, the estate had a vested interest in framing the allegations in the underlying complaint in favor of coverage. The estate’s motion to dismiss was denied.
