Insurance Law

Plaintiff incurred serious injuries in work-related car accident with tortfeasor who had no car insurance. Defendant-insured thereafter sought underinsured coverage under employer’s policy. Plaintiff-insurance company filed instant action to determine limits of its liability under said coverage. Policy had arbitration clause. Dist. Ct. did not err in finding that arbitration clause did not apply to plaintiff’s bad faith claim. Moreover, Dist. Ct. did not err in dismissing plaintiff’s breach of contract bad-faith claim, where there was nothing in policy that required plaintiff to settle defendant’s claim within set time frame, and policy did not incorporate any state insurance regulations or insurance statutes/regulations. Record showed that arbitration panel found that plaintiff had incurred $1,063,895 in damages arising out of accident, and Dist. Ct. did not err in reducing $1,000,000 underinsurance policy limit by Workers’ Compensation benefits received by defendant and by $100,000 settlement proceeds received by defendant in his state-court action against tortfeasor.

Dist. Ct. did not err in granting plaintiff-instance company’s motion for summary judgment in its action seeking declaration that it had no duty to defend or indemnify defendant-insured in accident in which insured hit third-party with truck while insured was pulling woodchipper with truck onto roadway while third-party was walking on roadway. Record showed that insured had two policies, with one errors and omissions policy having exclusion for coverage for bodily injuries arising out of use of auto designated for travel on public roads including any attached machinery, and with a second commercial general liability, which covered only injuries arising out of operation of machinery or equipment that was attached to land vehicle. Dist. Ct. could properly find no coverage under either policy, where: (1) woodchipper was not being operated at time of accident; and (2) errors and omissions policy foreclosed coverage where third-party’s injuries arose out of use of truck.

Dist. Ct. did not err in dismissing plaintiff-insured’s lawsuit seeking to set aside umpire’s calculation of actual cash value of plaintiff’s restaurant that had been destroyed in fire. Term of policy allowed parties to select their own appraisers, and if there was no agreement to have appraisers to select umpire to calculate binding actual cash value for said restaurant. Record showed that selected umpire calculated actual cash value of restaurant at $939,136.58, and plaintiff filed instant action, alleging that said calculation was invalid under state law. Dist. Ct., though, could properly hold plaintiff to agreement to select umpire to establish actual cash value, and umpire did not err in applying “Broad Evidence Rule” to calculate actual cash value of said restaurant. Ct. of Appeals also found that defendant’s ultimate payment of 85 percent of policy’s coverage limit precluded any breach of contract or bad faith claim.

Dist. Ct. did not err in finding that exclusion in defendant’s policy precluded plaintiff-insured from receiving insurance proceeds arising out of damage done to refractory in plaintiff’s furnace when molten aluminum escaped furnace and damaged plant floor and furnace itself. Dist. Ct. could rely on defendant’s expert to conclude that faulty welding in furnace led to leak, such that exclusion applied to instant incident. Moreover, plaintiff failed to provide any expert testimony to support its claim that explosion caused instant leak. Fact that there was testimony that explosion occurred shortly before leak did not require different result.

In action by plaintiff-insurance company seeking declaration that it owed no duty to defendant-insured in underlying personal injury action, where underlying plaintiff incurred injuries while others were operating power crane that was permanently attached to truck that was insured by plaintiff, as well as declaration that defendant-insurance company owed insured duty to defend in underlying lawsuit. While Dist Ct. found that declaration page in plaintiff’s policy conflicted with policy’s operation exclusion, such that said conflict created ambiguity that required plaintiff to defend insured in underlying personal injury action, Ct. of Appeals found that there was no ambiguity, where there was no provision in declarations page indicating that plaintiff would cover bodily injuries arising out of operation of crane, and operations exclusion clearly indicated that plaintiff would not cover instant crane operation incident. As such, Ct. of Appeals reversed Dist. Ct. finding that plaintiff’s policy required plaintiff to defend underlying personal injury lawsuit.