Insurance Law

Defendant insured properly demanded arbitration by sending a letter to his insurer, under underinsured motorist provision of Defendant's car insurance policy.  Nothing else was required of Defendant to "commence" the arbitration, and thus his right to seek arbitration was not barred by 3-year limitations provision in the policy. Policy language makes it clear that selection of arbitrator was not mandatory, so that selection of arbitrator was not necessary to "commence" the arbitration. (McBRIDE and COBBS, concurring.)

Court properly granted summary judgment for Defendant insurer of concrete subcontractor, and denied cross-motion for summary judgment filed by Plaintiff insurer of carpentry subcontractor, in declaratory judgment action involving coverage for worker injured at construction site.16-month delay, from time that injured worker filed underlying action against construction company to when Plaintiff insurer received actual notice of suit and its counsel filed appearance on behalf of its insured, was unreasonable as a matter of law.  Construction company (Defendant in underlying suit) tendered notice to other insurers within 1 month after their insureds were named as Defendants in underlying case. Judicial estoppel applies to statements of fact and not to legal opinions or conclusions.  As construction company's untimely notice barred coverage under Defendant insurer policy, Plaintiff insurer was not entitled to seek contribution from Defendant insurer for the $1 million that it paid in settling underlying action. (LIU and CONNORS, concurring.)

Clause in umbrella policy that made its coverage apply only after exhaustion of limits of all applicable "insurance and self insurance" is unambiguous and enforceable.  Plaintiff Municipal Association's contract with Village qualifies as self-insurance within meaning of other insurance clause in umbrella policy. Public policy does not make contract unenforceable. (PIERCE and HYMAN, concurring.)

Court properly determined, on summary judgment, that home insurer had no duty to defend or indemnify homeowners in underlying suit filed by their neighbor, seeking to relocate a driveway easement that crosses over a portion of her property. Neighbor alleged that location and size of driveway easement contributed to poor storm water drainage on her property, which caused frequent and severe flooding of her home. Recurring flood damage alleged was a natural and ordinary consequence of Defendants' conduct in repeatedly refusing to allow neighbor to relocate driveway easement and was reasonably expected by Defendants, and thus was not the product of an accident, and thus not result of an "occurrence".  (ROCHFORD and HOFFMAN, concurring.)

(Modified upon denial of rehearing 1/28/16.) After evening out with friends, 21-year-old died of methadone intoxication in bedroom of one Defendant, who lived at his parents’ home. Father of decedent filed wrongful death suit against Defendant and his parents.  Underlying complaint contains allegations within, or potentially within, the coverage of both homeowners’ and umbrella policies. Thus, insurer has duty to defend. Complaint alleges that Defendant son failed to request emergency medical assistance for decedent within a reasonable period of time; and discovering she ingested methadone or other illegal substances in the Defendants’ home; and that Defendant son refused to allow decedent’s 2 friends to check on her or render aid to her. Presence of genuine issue of material fact precludes summary judgment.  Question of negligence can be resolved only after a full hearing on facts and circumstances. (NEVILLE and SIMON, concurring.)

Safeway insureds were in auto accident with another driver who was driving a rental car; that driver declined the rental car company's supplemental liability insurance, and relied on his own insurance which had $20,000  and $40,000 limits. Safeway insureds recovered $40,000 policy limits from other drivers insurer, and then claimed underinsured motorist coverage and demanded arbitration of their claims under Safeway policy. Safeway's policy is triggered; its underinsured motorist provision applies before rental car's liability under financial responsibility statute. Thus, Safeway is obligated to comply with its policy's process to handle underinsured motorist claims, which is by arbitration, if insured and insurer do not reach agreement. (DELORT and CUNNINGHAM, concurring.)

Plaintiff was injured in motor vehicle accident while working for his employer.  Plaintiff received workers' compensation benefits through his employer's worker's compensation carrier. Plaintiff also reached settlement with insurer for third-party tortfeasor (other driver), for full policy limit, and Plaintiff paid worker's compensation insurer from  that settlement the amount required to satisfy workers' compensation lien. Plaintiff filed UIM claim with his employer's auto insurance carrier. Employer's auto policy does not treat workers’ compensation as an element of loss under a “Liability Coverage Form.” Plaintiff should be allowed to present all elements of loss in UIM arbitration, including those elements paid through workers’ compensation. However, those elements will be subject to the set off for the amount Plaintiff actually recovered on his workers’ compensation claim and on his claim against other driver. (HUTCHINSON and ZENOFF, concurring.)