Tag Archives: insurance

Alleged Good Faith Obligations Concerning Credit Insurance–Vantage Credit Union v. Chisholm

So here we have a circumstance that requires some thought to put in order.  The brief reports summary judgment was granted for the lender. That seems difficult to support. Briefs are at Vantage Credit Union v. Chisholm, 2014 WL 1872072 (Mo. Ct. App., E.D.); and 2014 WL 1458186 (Mo. Ct. App., E.D.)

A lender, Vantage, offers debtors disability insurance. A debtor, Chisholm, makes the payments for the insurance, and then allegedly has a covered disability. The lender’s employee, one Berry, allegedly promises to assist in making a claim. The lender subsequently disclaims any obligation, as recited in the debtor’s brief.

More after the break …

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“Hereunder” is Hereinafter Banned Herein–Naeger v. Farmers Insurance Co.

One of the practice pointers I received while practicing on Wall Street is that one should review with skepticism use in contracts of “herein” and like expressions.  Though it’s often clear what’s “here”–sometimes it’s not (whether an entire agreement or a section or something else.  So, for the past decade or so, in teaching either Contracts or the law of Corporate Finance (generally involving construction of corporate financing instruments), I’ve shared concern with that phrasing with students.

I’m not always sure they’ve been convinced.  Behold–a brief quoting a dictionary to define “hereunder”.  Naeger v. Farmers Insurance Co., Inc., 2014 WL 462945 (Mo. Ct. App., W.D.).

The plaintiff/victim was evidently a passenger in a vehicle that was struck by a car being allegedly operated negligently by another.  The victim’s brief recites receipt of $190,000 from underinsured motorist insurance obtained by the operator of the car she had been in, and $50,000 from the insurer of the other driver.  The victim’s brief recites the victim’s policy identifies relevant policy limits of $250,000 for the following coverage  (emphasis removed):

We will pay all sums which an insured person is legally entitled to recover as damages from the owner or operator of an UNDERinsured motor vehicle because of bodily injury sustained by an insured person. The bodily injury must be caused by an accident, and arise out of the ownership, maintenance or use of the UNDERinsured motor vehicle.

According to the brief, there are a variety of limits on this coverage, one of which, as reported by the brief, is this:

 We will not provide insurance for a vehicle other than your insured car or your insured motorcycle, unless the owner of that vehicle has no other insurance applicable hereunder.

So here we have one of those cryptic usages of “herein”, “hereunder”, etc.  Who knows what the sentence means.

Another exclusion recited by the brief is:

This coverage does not apply to bodily injury sustained by a person:
***
3. If the injured person was occupying a vehicle you do not own which is insured for this coverage under another policy.

The victim’s counsel, relying on some out-of-State authority, makes a thoughtful argument–it surely would be an awkward state of affairs if coverage by other insurers aggregating less than the policy limit under the plaintiff’s own underinsured motorist coverage would operate to eliminate coverage under the plaintiff’s own underinsured motorist coverage.  Victim’s counsel seems to categorize the victim’s insurer as taking that position.  Perhaps the insurer/defendant will clarify–there is a cryptic reference in the brief to the $190,000 having been “settled”, although not in reference to policy limits, unlike the $50,000 from the other driver’s insurer.

 

Riprap and an Anomalous Argument Against Set-off–Bucksaw Resort, LLC v. Mehrtens, 2013 WL 6065091 (Mo. App. W.D. 2013)

In Bucksaw Resort, LLC v. Mehrtens, 2013 WL 6065091 (Mo. App. W.D. 2013), we have a surprising brief submitted on behalf of a party losing on appeal.  Frankly, it’s difficult not to be confused by the brief.

The basic facts involve a claim that an insurance broker failed to procure coverage on the all the requested property, and a claim against the insurers who issued the coverage in question.  Though this author spent quite some time sailing as a youngster, he cannot recall having previously heard the term “riprap”.  Now he has been reliably informed by a footnote in the opinion:

Riprap is a larger rock that is placed on the edge of a waterway to help control erosion.

Evidently, coverage for riprap is uncommon.

Bucksaw, the insured, sued both the insurers and the broker.  The opinion recites:

Bucksaw filed a four-count petition against Federal, XL, and Broker. In the first two counts, Bucksaw asserted breach of contract claims against the two insurance companies. In the third count, Bucksaw asserted a claim of reformation against all three defendants. In the fourth count, Bucksaw asserted a claim of negligence against all three defendants claiming that each defendant had a duty to provide the insurance appropriate for the marina and with coverages represented to Bucksaw, including all structures, improvements, and business interruption.

After filing suit but before trial, Bucksaw settled with both insurance companies. An offer of proof was made outside the presence of the jury to show that the stipulated amounts of the respective settlements were $24,000 paid by XL and $97,100 paid by Federal. After the settlement, both insurance companies were dismissed with prejudice from the lawsuit. Bucksaw then continued its negligent failure to procure insurance suit against Broker.

At trial, the court did not allow evidence of the settlement to be introduced to the jury. The court did allow the Broker to put on evidence to show that the two insurance companies had paid Bucksaw for damages. At the close of Bucksaw’s evidence and again at the close of all evidence, Broker moved for a directed verdict. The trial court denied the motions. The jury entered a verdict in favor of Bucksaw in the amount of $54,000. The trial court entered judgment upon the jury’s verdict for the full amount. Subsequently, Broker filed his motion for judgment notwithstanding the verdict, or, in the alternative, motion to amend the judgment, which the court also denied.

OK; I can see a number of possibilities, including:

  • the insurance covered part of the loss, some other loss allegedly should have been included in coverage for “riprap”, etc., and was not, hence, there is an additional claim against the broker;
  • the settlement with the insurers included some settlement as to matters the insured claimed should have been procured by the broker but were not.

For more on how the insured’s counsel founders on the shoals …

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