Coverage Pointers - Volume IV, No. 4
Visit the HOT CASES section of the Federation of Defense and Corporate Counsel website for cases covering a broad range of legal issues from other jurisdictions: www.thefederation.org.
Washington Supreme Court
Premium Finance Agency Cannot Cancel Policy for Party For Which Had No Notice
Court addresses the consequences of a requested cancellation of an insurance policy by a premium finance company. This policy had two named insureds, one of which had given the finance company a power of attorney to request cancellation of the policy in the event of nonpayment of premiums. That insured also received notice of the requested cancellation. The other insured had not given the finance company a power of attorney, and was not notified of the requested cancellation. The policy remains in effect for the benefit of the insured who received no notice and who did not give the premium finance company a power of attorney.
08/20/02: SEACO INS. CO. v. DAVIS-IRISH
First Circuit (applying Maine law)
Who is “You”?
The definition of “you,” as used in a corporation’s business automobile insurance policy, does not extend to that corporation’s employee acting in the course of her employment.
08/20/02: ARP v. AON/COMBINED INS. CO.,
Eighth Circuit (applying South Dakota law)
Without Medical Basis for Denial of Claim, Bad Faith Claim Reinstated
Summary judgment for an insurer on a bad faith claim was improper where no medical basis or contractual reason existed upon which an insurer could deny (to the South Dakota Department of Labor) that an insured was permanently and totally disabled.
08/19/02: DART INDUSTRIES v. COMMERCIAL
California Supreme Court
Extrinsic Evidence, Even Without Exact Words of Policy, May establish contents of Lost Insurance Policy
Where policy is lost, the claimant has the burden of proving (1) the fact that he or she was insured under the lost policy during the period in issue, and (2) the substance of each policy provision essential to the claim for relief, i.e., essential to the particular coverage that the insured claims. Which provisions those are will vary from case to case; the decisions often refer to them simply as the material terms of the lost policy. In turn, the insurer has the burden of proving the substance of any policy provision “essential to the . . . defense” (Evid. Code, § 500), i.e., any provision that functions to defeat the insured’s claim. Those provisions, too, will be case specific.
Must Be The Day For It -- Second Circuit Allows Insured to Prove Existence and Terms of Missing Policy by Clear and Convincing Evidence
An insured proved the existence and terms of a missing insurance policy by clear and convincing evidence, through overwhelming documentary and testimonial evidence, after a diligent but unsuccessful search and inquiry for the policy itself.
08/15/02: HARRIS v. ALLSTATE INS. COMPANY
Civil Rights Lawsuit Against Insurer Dismissed
A 42 U.S.C. section 1981 claim brought by a minority-owned repair shop, alleging racial discrimination in an insurer's referral practices, is not actionable where plaintiff failed to show that the insurer had authority to interfere, and actually interfered with, its ability to obtain contracts with third parties.
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