INSURANCE-RELATED COURT CASES
Digested from case reports published online
COURT DECISIONS
Arson doesn’t pay
A fire damaged a malt beverage store owned by A Maxon Company, LLC (AMC). Acuity Insurance Com-pany sought a declaratory judgment to determine coverage under a policy that listed Greg and Tammy Weatherspoon as additional loss payees.
The Weatherspoons counterclaimed for breach of contract. The circuit court granted Acuity’s motion for judgment as a matter of law on the Weatherspoons’ counterclaim, determining that the policy terms prevented the Weatherspoons from recovering damages unless AMC successfully asserted a claim. The jury found that AMC principal Russel Maxon had intentionally started the fire, which meant that coverage was excluded under AMC’s policy. The Weatherspoons appealed.
The circuit court initially denied the Weatherspoons’ motion for summary judgment, ruling that the contract was unambiguous and that the Weatherspoons’ claim was dependent on AMC’s claim. The court also denied Acuity’s motion for summary judgment, finding that there were factual disputes suitable for a jury.
At trial the court granted Acuity’s motion for judgment as a matter of law, concluding that the Weatherspoons could not recover under the policy because AMC’s claim was excluded as a result of Russel’s intentional act.
The South Dakota Supreme Court affirmed the circuit court’s decision. The court held that the policy’s loss payable clause allowed the Weatherspoons to collect only if AMC could collect, and because the jury found that Russel intentionally started the fire, AMC was precluded from recovering. The court also found no abuse of discretion in admitting expert testimony from special agent Derek Hill and allowing the impeachment of Tracy Maxon with prior inconsistent statements.
The court concluded that the Weatherspoons’ arguments regarding ambiguity and third-party beneficiary status were unavailing.
Acuity Insurance v. A Maxon Company—Supreme Court of the State of South Dakota—2024 S.D. 53—September 4, 2024.
