Steven Plitt, Expert Witness Steven Plitt, Expert Witness
Insurance Bad Faith Claim Handling Expert Serving Clients Nationwide

January 2019 Archives

Criminal Acts Exclusion Conclusively Applies In Cases Where The Insured Is Convicted Of A Crime

In Country Mutual Insurance Co. v. Dahms, 116 Ill. App. (1st) 141392, 2016 WL 2941713 (Ill. App., May 19, 2016) the Court found that a criminal conviction extinguished the insurance company's obligation to defend the insured. The Court held that prior to a criminal conviction the insurance company was required to defend its insured in a mixed complaint, alleging both negligence and criminal activity, because there was the potential for coverage based upon the non-criminal allegations. However, when the insured was convicted by a jury of aggravated battery, the criminal acts exclusion became applicable and the duty to defend ceased. Following the conviction, the insurance company could rely upon the jury verdict, which was based on the highest burden of proof known to the American legal system.

Insured's Duty To Defend Could Not Be Based On Speculation Over Whether Unpled Claims Existed Or Not

While it is an obvious conclusion, the Montana Supreme Court recently held in Fire Insurance Exchange v. Weitzel, 371 P.3d 457 (Mont. 2016) that the insured's duty to defend could not be based on speculation over whether unpled claims existed or not. The Court found that the complaint in question did not potentially seek damages for false imprisonment or bodily injury where the sole allegation was that the insured defrauded an elderly person. The Montana Supreme Court noted that a complaint did not need to expressly allege a covered cause of action to trigger the insurer's defense obligation, the complaint did need to contain facts that would support a covered claim.

A Pedestrian's Being Struck By A Motor Vehicle Did Not Give Rise To "Occupancy" During The Sequence In Which The Pedestrian Was In Physical Contact With The Vehicle

In Hahn v. GEICO Choice Insurance Co., 420 P.3d 1160 (Alaska 2018), the Alaska Supreme Court held that UIM benefits did not extend to a person falling on an insured vehicle after it struck him. In this case, the insured was sitting on his motorcycle while stopped at a traffic signal. The tortfeasor's vehicle struck the insured's motorcycle, throwing the insured backward onto the tortfeasor's vehicle's hood, windshield, and roof. The motorcyclist then landed on the pavement. Focusing on the "upon" language in the GEICO UIM coverage, the motorcyclist attempted to argue that he was an occupant of the tortfeasor's vehicle which was insured by GEICO. The Alaska Supreme Court found this argument to be unreasonable. The Court found that the policy insured covered persons who were actually occupying the vehicle, and not persons who happened to be "upon" the insured vehicle. According to the Court, the concept of "occupying" meant "in, upon, getting into, or getting out of" in accordance with the policy's language. When the phrase was read in context rather than in isolation, the term "upon" was a subset of "occupying." The Court found that no reasonable person would come to the conclusion that the fortuity of where a person's body bounced enroute to being thrown to the pavement allowed for UIM coverage attachment.

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