Use of "levalator" is not "use of truck"

William Walton, a truck driver employed by Crowley Foods, Inc., was injured while delivering dairy products to a supermarket in New York. After backing the tractor-trailer up to the loading dock, he opened the rear door. The supermarket had a "levelator" to facilitate delivery. Walton secured the control device from the supermarket, raised the levelator to the same height as the truck bed and attached plates connecting the levelator to the truck, thus creating a ramp. While he was standing on the ramp, the levelator tipped over, throwing him to the ground and causing injuries.

Walton filed a claim for no-fault benefits with his employer's insurance carrier, Lumbermens. The claim was denied. He then filed suit, and the trial court dismissed the action on the ground that his injuries were not caused by the insured motor vehicle but by the levelator. Walton appealed.

Walton contended that he was entitled to benefits since he was injured while he was unloading the insured vehicle and thus he was using the vehicle within the meaning of the New York no-fault provisions. Lumbermens contended that his injuries were caused by the failure of the levelator and did not arise out of the use of the insured truck. It was noted that the no-fault statute provides that benefits are available only if the injury sustained arose out of the use or operation of the motor vehicle.

In affirming the judgment of the trial court in favor of Lumbermens, the court pointed out that the vehicle must be a proximate cause of the injury before the statute applies. The court noted that a person engaged in loading or unloading the vehicle might be using it within the meaning of the statute "but that does not necessarily mean that his or her injuries arose out of the use of the vehicle. In such circumstances, if the injuries are caused by something other than the vehicle itself, the injuries cannot be said to have arisen out of the use of the vehicle and thus no-fault first-party benefits are unavailable to the injured party."

The judgment entered in the trial court in favor of Lumbermens was affirmed.

William M. Walton, Appellant, v. Lumbermens Mutual Casualty Company--Court of Appeals of New York--June 5, 1996--666 North Eastern Reporter 2d 1046.

Corporation officers' fight not part of "business"

Hydrotech, Inc., had secured a business liability policy from American Employers (AEIC) which provided coverage for bodily injuries allegedly caused by negligence. The evidence showed that Clair Jones and Louis Wetherill, who were officers of the corporation, had taken two other employees and Jack Droder to dinner and drinks at the Kenwood Country Club in order to become better acquainted with Droder, who was a new employee. As the group left the club, Jones and Wetherill started fighting. They were separated by their employees and a waiter, John Smith, who allegedly was injured when he assisted in breaking up the fight.

Smith sued Jones and Wetherill, and they filed this action for declaratory judgment to determine whether AEIC provided coverage for bodily injuries allegedly caused by their "negligence" in fighting at the club. AEIC filed a third-party action against American States and Cincinnati Insurance Company which had issued homeowner's policies to Jones and Wetherill to determine which company was required to defend Wetherill and Jones. The trial court granted summary judgment in favor of Jones, American States, Wetherill and Cincinnati, and denied summary judgment to AEIC. This appeal followed.

AEIC contended that the fighting was not related to the duties of Jones and Wetherill as officers of the insured corporation; but the officers argued that they were covered since there was a relation between their actions; that the fight was related to the business dinner; and AEIC was obligated to defend them. They stated that AEIC did not prove that the fight stemmed from personal comments rather than comments about the business.

On appeal, the court noted that, in general, courts have ruled that fights between employees are presumed to be outside the scope of employment, and that the party, or parties, claiming otherwise have the burden of proof. The court found that Jones and Wetherill had failed to prove that the fight was within the scope of employment.

The action brought by the waiter had been settled, prior to oral argument before the higher court, for $27,500; so the only remaining issue before the court was which insurance company, if any, was liable. The trial court's summary judgment against AEIC was reversed and the action was remanded with instructions to enter judgment in favor of AEIC.

Jones et al. v. American Employers Insurance Company, Appellant--No. C-940939--Court of Appeals of Ohio, First District, Hamilton County--September 29, 1995--666 North Eastern Reporter 2d 1152.

Spoilage from power failure not covered without endorsement

On July 28, 1993, high winds and severe storms struck the northeast area of Ohio, causing power outages and food spoilage at the insureds' grocery stores. The insureds, Mapletown Foods and Noble Bi-Rite, had secured businessowners special property coverage under their policies issued by Motorists. Noble Bi-Rite had also bought a special spoilage endorsement with limits of $15,000.

The special property coverage form contained the following exclusions:

"B. 1. We will not pay for loss or damage caused directly or indirectly by any of the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss....The failure of power or other utility service supplied to the described premises, however caused, if the failure occurs away from the described premises. But if loss or damage by a covered cause of loss results, we will pay for that resulting loss or damage."

Noble Bi-Rite received the limit of $15,000 provided by its spoilage endorsement, but both insureds sought to recover the losses from spoilage.

The insureds contended that the language of the exclusion was ambiguous and was to be construed in their favor.

The trial court, in finding for Motorists, said:

"The losses...resulted directly from the power outages. The power outages were caused by tripped breakers at the stores' respective substations. Thus, the power loss occurred unquestionably away from the stores' premises and was not caused by a covered cause of loss."

In addition, the court pointed out that the insureds were aware that separate spoilage insurance was available.

On appeal, the court concurred in the trial court's analysis of policy, and the judgment entered in the lower court in favor of the company was affirmed.

Mapletown Foods, Inc. et al, Appellants v. Motorists Mutual Insurance Company--No. 68158--Court of Appeals of Ohio, Eighth District, Cuyahoga County--June 5, 1995--662 North Eastern Reporter 2d 48.

Insurer's UIM provision ruled to be ambiguous

Craig Cummins was injured in a two-car collision, and at the time of the accident he had a policy issued by Country Mutual which provided for undersinsured motorist (UIM) benefits of $50,000\$100,000. Those limits were the same as those found in the at-fault motorist's policy. Cummins received a settlement of $35,000 (which was court-approved) with the balance of the insurance proceeds going to passengers in the other car.

Cummins then filed claim with Country Mutual for the $15,000 difference between the settlement and the UIM benefits of his policy. Country Mutual denied the claim since the at-fault driver's vehicle was not underinsured inasmuch as his policy and Cummins' policy had identical limits.

The trial court dismissed the insured's complaint on the ground that the "at-fault" driver's vehicle was not underinsured. The insured appealed.

The court, in a lengthy opinion, concluded that it would be absurd to allow an insured to receive fewer benefits after being injured by an underinsured driver rather than an uninsured driver. Such an interpretation would deny the insured the economic value of the coverage for which (s)he paid a premium. It believed the relevant factor to be considered was the amount actually received from the at-fault driver, not the limits of liability coverage.

Since the court found that the policy provision was ambiguous and subject to a reasonable interpretation, it had to be interpreted in favor of the insured.

The court found that the amount available for payment was less than the insured's limits, the other driver was underinsured, and the insured was entitled to recover under his UIM coverage the "gap" of $15,000.

The judgment entered in the lower court was reversed, and the action remanded for further proceedings.

Craig Cummins, Appellant v. Country Mutual Insurance Company--No. 5-94-0821--Appellate Court of Illinois, Fifth District--June 12, 1996--666 North Eastern Reporter 2d 909.

Insurer reissuing auto policy in affiliated company must again provide UIM notice

On October 1, 1993, with Michal as a passenger, Ewa Skrzypczak was driving their Mercury Tracer. They were struck by a car driven by an underinsured motorist who was found to be at fault. After recovering the limits of their policy, the Skrzypczaks filed a claim for UIM benefits under their policy with State Farm. The company then filed this action for declaratory judgment, contending that the insureds' policy did not provide for such benefits.

The same agent for State Farm had provided car insurance for the Skrzypczaks for several years, commencing in 1986. The initial policy made no provision for UIM coverage. On January 1, 1988, the Indiana statute was changed to require the applicant for insurance to show on the application that the UIM was rejected.

On March 9, 1990, Ewa signed a reinstatement of insurance that indicated she rejected the UIM coverage. On November 9, 1990, State Farm Mutual replaced the policy then in effect and issued by State Farm Fire & Casualty with one issued by State Farm Mutual. This was the policy in effect at the time of the accident. Neither of the insureds specifically rejected the UIM coverage in the replacement policy. The courts considered State Farm Mutual as the parent corporation and a separate entity from State Farm Casualty which was its subsidiary.

The court said the issue to be resolved by it was whether the November 9 policy was a new policy or a renewal. It decided that, in accordance with Ind. Code 27-7-5-2, it was a new policy and the company was required to obtain a written rejection of the UIM coverage from the insureds. Since this was not done, State Farm was required to provide them with UIM coverage equal to the bodily injury liability limits of $100,000/300,000 for the accident which occurred October 1, 1993.

In view of its conclusion that State Farm Fire and Casualty and State Farm Mutual were separate companies, and a separate written rejection was required, the court did not address the issue of whether a written rejection signed by only one of the named insureds satisfied the requirements of the Indiana Code.

Ewa Skrzypczak and Michal Skrzypczak, Appellants v. State Farm Mutual Automobile Insurance Company--No. 79A05-9510-CV-422--Court of Appeals of Indiana--July 16, 1996--668 North Eastern Reporter 2d 291.

Business policy does not cover hunting accident

At the time of the issuance of the Business Liability policy by Erie Insurance, "Terry Perigo d/b/a Perigo Vision Centers" was shown as the named insured. Later, Terry Perigo notified Erie that the business had been incorporated. When the policy was renewed on December 3, 1987, the named insured was shown as "Terry Perigo Vision Centers, Inc., Terry Perigo d/b/a" as named insured. The policy remained essentially the same until December 1991, when the named insured was shown as "Terry Perigo Vision Centers, Inc., Terry Perigo ATIMA."

On December 7, 1991, while on a hunting trip, Terry Perigo fatally shot Bradley Boso, and this action was filed by Boso's widow. In exchange for her release of Terry Perigo from personal liability, Erie paid her the full limit of $500,000 under Perigo's Homeowners policy. The only question which remained was whether Perigo was covered for the accidental shooting of Boso under the Business policy.

The trial court found that the Business policy did not cover Perigo for the shooting accident, and judgment was entered in favor of Erie. The widow of Bradley Boso appealed.

The Business policy provided that it would cover "...executive officers, trustees or directors if doing business as a corporation...but only while acting within the scope of their duties..."

The parties did not dispute the fact that the hunting trip was unrelated to the insured's business.

The policy did not define "ATIMA" which followed the designation of the insured, and the widow objected to the fact that the court went "outside the policy" to find that it meant "as their interest may appear." Mrs. Boso contended that since "ATIMA" is not readily understood outside the insurance business, the designation was ambiguous. The higher court agreed but said that when the policy was read in its entirety, it was clear that the parties intended to provide Mr. Perigo with protection for incidents related to the operation of his business. In addition, the policy provided liability protection "for all operations and all locations" rather than for individuals.

The judgment entered in the lower court in favor of Erie was affirmed.

(Discretionary appeal to the Supreme Court of Ohio was denied--664 North Eastern Reporter 2d 1293.)

Boso, Exr., et al, Appellants v. Erie Insurance Company/Erie Insurance Exchange--No. 95APE05-520--Court of Appeals of Ohio, Tenth District, Franklin County--November 21, 1995--669 North Eastern Reporter 2d 47.

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