Articles Posted in Insurance Claims

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Marilyn Bowers was seriously injured when she was standing at a convenience store and an underinsured motorist drove into the building, seriously injuring her. Bowers and her husband were named insureds under an auto policy that General Casualty Insurance Co. issued for their three vehicles.

Each vehicle was listed on the declaration page as having underinsured motorist coverage with limits of $250,000 in return for separate premiums for $24 for a Chevrolet and $29 each for a 2005 Pontiac Grand Prix and a 2005 Ford F-150 pickup truck.

On the insurance document regarding information on the policy it read: “The coverage listed below applies separately for each vehicle and are provided where a premium is shown. The limit of liability applies separately for each vehicle.”

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Deanne Berrey was working for Curry Ice when she was injured in a car accident caused by Sheri Campbell who only had $100,000 in liability insurance coverage.

Berrey sued Campbell and also collected $103,224 in worker’s compensation benefits. In addition, Berrey claimed underinsured-motorist benefits under a $1 million policy that Travelers Indemnity Co. sold to Curry Ice.

Campbell’s insurer settled with Berrey for $100,000 but paid all of the policy proceeds to Curry Ice because of Curry’s worker’s compensation lien. When the arbitrators considered the underinsured motorist (UIM) claim, it decided that Berrey’s damages totaled $310,000. Travelers claimed that Section D.2.4 of its insurance policy permitted it to reduce the award ($310,000) to $210,000 because Berrey had already technically received $100,000 from Campbell’s insurance policy, which was paid directly to Curry Ice.

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The Illinois Appellate Court has reversed a summary judgment order that was entered by a Cook County judge in favor of Safeway Insurance Co. In this case, Jeffrey and Stephanie Hadary were injured in a car crash when Carlos Velez was driving a car he rented from Hertz Corp. The Hadarys claimed that they had suffered injuries that amounted to damages in excess of $40,000, which was the insurance limits of Velez’s insurance carrier, American Access Casualty Co., which had limits of $20,000 per person and $40,000 per accident. The Hadarys reportedly declined to buy the “liability insurance supplement” when they rented the car from Hertz.

Under Illinois’ financial responsibility law, Hertz was bound to provide a bond, an insurance policy or certificate of self-insurance that promised to pay judgments against its customers and anyone driving a Hertz vehicle with a customer’s consent. Section 9-105 of the Illinois Vehicle Code required Hertz to provide this liability coverage with limits of (a) $50,000 for injury to one person or damage to property and (b) $100,000 for injuries to two or more persons.

After American Access paid its $40,000 policy limits to Hadarys, who paid $57 as a premium for underinsured motorist coverage from Safeway Insurance Co. with limits of $100,000 per person and $300,000 per occurrence, they alleged that Velez was an underinsured motorist.

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Robert Lodholtz was seriously injured in 2011 while working at a plant owned by Pulliam Enterprises in Indiana. Lodholtz filed a personal-injury lawsuit against Pulliam in the Indiana state court. Pulliam called on Granite State Insurance Co., its primary liability insurer, along with New Hampshire Insurance Co., to defend and indemnify it against the lawsuit.

Granite State refused to indemnify Pulliam stating that Lodholtz as an employee should pursue his claim for worker’s compensation. Lodholtz disagreed arguing that he was employed by another company while he worked at Pulliam’s plant and therefore had no basis for a worker’s compensation claim.

Pulliam chose not to file an answer to the complaint, so Lodholtz moved for default judgment, which was granted. Lodholtz then agreed with Pulliam not to pursue the default judgment and in return Pulliam assigned to Lodholtz its rights against Granite State. Granite State then moved to intervene in Lodholtz’s lawsuit. The Indiana state court denied the motion to intervene.

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The Illinois Appellate Court has answered a certified question that was brought to it from a circuit court judge. In this case, Michael McGrath owned a home designed and built by Patrick Plunkett Architectural Design Ltd. and insured by American Family Insurance Co. McGrath filed an insurance claim on Aug. 23, 2006 claiming that the water damage to his home was caused by the faulty design in construction by the defendant, Patrick Plunkett Architectural. American Family first denied McGrath’s claim; he then filed suit against American Family and won in federal court. McGrath won his case on summary judgment, and American Family agreed to a settlement for about $1.1 million. After paying McGrath, American Family requested that McGrath sign a written assignment to the extent of its payment, but McGrath chose not to respond.

American Family then filed suit against the defendants, Patrick Plunkett and his architectural firm, claiming negligence and causing the damage to McGrath’s home. Since American Family did not have an executed written assignment, the insurance company filed suit in its capacity as McGrath’s equitable subrogee. At the same time the American Family lawsuit was pending, it filed a lawsuit against McGrath for specific performance in order to obtain his executed written assignment. However, American Family’s suit against defendants was dismissed with prejudice on a combined motion to dismiss under §2-619.1 of the Code of Civil Procedure (735 ILCS 5/2-619.1), with a trial court finding that American Family was required to have a written assignment in order to pursue a subrogation claim. Shortly after that, American Family’s lawsuit against McGrath was dismissed with a trial court finding that American Family had released its claim for an assignment by settling the federal lawsuit. The trial judge also found that the claim was barred by res judicata based on the dismissal of the equitable subrogation suit against defendants.

American Family simultaneously appealed the dismissal of both lawsuits and the appellate court affirmed the dismissal of the subrogation claim, holding that American Family had failed to perfect its rights of subrogation under the terms of the insurance policy. However, the appellate court reversed the dismissal of American Family’s claim against McGrath and remanded the case. The opinion of the court in that case was unpublished under Supreme Court Rule 23. On remand, McGrath eventually did execute the assignment for American Family and that case was dismissed.

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In Illinois, the Illinois Vehicle Code Section 9-101 requires that an entity may only engage in the business of renting out motor vehicles if it first provides the Illinois Secretary of State with proof of its financial responsibility. The purpose of the requirement is to provide the public with protection for negligent drivers who don’t have insurance and rent cars or other vehicles.

Section 9-102 of the Illinois Vehicle Code provides that a rental car company may give proof of financial responsibility by filing a bond, an insurance policy or a certificate of self-insurance issued by the director of the Department of Insurance.

A bond must be in the sum of $100,000 and conditioned on the rental car company’s payment of any judgment resulting from the operation of a rental vehicle or against the company, the renter or anyone driving the car with the consent of the company and the renter. 625 ILCS 5/9-103.

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Mei Pang was a passenger in a car driven by Ingrid Chan in January 2002 when a crash occurred between Chan’s car and another vehicle driven by Donald McGinnis. Pang was injured severely. McGinnis’s insurer paid Pang $100,000 to settle her personal injury lawsuit and claim.

Chan was insured by Farmers Insurance Group. Chan and her husband had a special “umbrella policy.” The umbrella policy covered the named insureds (the Chans themselves), any relatives of the Chans by blood, marriage or adoption or any person under 21 in the care of the named insured.

On Jan. 7, 2010, Pang filed a complaint for underinsured motorist coverage seeking coverage both from Farmers under the Chan umbrella policy and also from Mid-Century Insurance Co., which issued the Chans their primary auto insurance policy.

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Deshaw Nelson fractured his right femur in a car crash in 2007. The defendant in the case, Donald Artley, was driving an Enterprise Rent-A-Car vehicle. In January 2010, Nelson filed a lawsuit in the Circuit Court of Cook County alleging his injuries were caused by the negligence of the defendant Artley. On May 4, 2010, after Artley defaulted, a default judgment was entered against him in the amount of $600,000. Nelson then initiated citation proceedings against Enterprise Rent-A-Car in June 2010.

A month later, Enterprise answered and asserted that it was only responsible for $100,000 per occurrence for the liability for its cars’ drivers under the rental agreement and the Illinois Vehicle Code. Enterprise had already paid $75,000 to two other people injured in the same car accident. Enterprise argued that it was only required to pay Nelson the remaining $25,000.

In September 2011, Nelson filed a petition with the court against Enterprise for turnover order for the entire $600,000, plus interest and costs. Nelson argued that when Enterprise applied for a certificate of self-insurance with the state, it said it retained a risk of loss for third-party liability up to $2 million per occurrence.

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The ruling by a Cook County trial judge mistakenly applying the collateral source rule against a jury verdict has been reversed. Hector Romero was alleged to have caused an automobile accident with the plaintiff, Sylvia Segovia. In that lawsuit, it was claimed that Segovia was injured while a passenger in her husband’s car caused by the negligence of the defendant Romero. Segovia’s husband, Rodolfo, was insured by State Farm, which paid for his vehicle repairs and reimbursed Sylvia $5,000 in medical bills under the “medpay” provision of the State Farm Insurance policy.

The medpay included $3,711 for treatment at Advocate Lutheran General Hospital in Park Ridge, Ill.  State Farm filed a subrogation lawsuit against Romero seeking $10,766 for the medical care for Sylvia. Romero’s insurance carrier, American Heartland Insurance Co., settled with State Farm for a total of $5,383.

Later, when Sylvia brought a lawsuit against Romero, she listed her damages as including $4,560 as a hospital bill from Lutheran General Hospital. The jury returned a verdict in her favor for $5,395, which was the medical expenses, but offered nothing for her loss of normal life or her pain and suffering.

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The Illinois Appellate Court has affirmed in part and reversed in part a case dealing with an insurer’s duty to defend an insured.

In this case, Hilco, an Illinois corporation, had four related companies. They are Hilco Trading, and its three majority-owned subsidiaries, Hilco Appraisal, Hilco Valuation and Hilco Financial LLC.

Hilco Trading purchased a professional liability insurance policy from the Liberty Surplus Insurance Corp. The insurance policy provided a limit of $10 million in excess of the $250,000 deductible and required Liberty to defend Hilco if it were sued for any wrongful act regarding its professional services. In addition, Hilco bought a similar policy from Illinois Union, providing an additional $10 million limit beyond the Liberty policy.

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