Which policies apply to underinsured motorist claim?

On April 21, 1991, Jeffrey Gordon, who was a passenger in a car driven by Scott Beach, was seriously injured in an accident. Beach had a policy with State Farm with a one-person limit of $100,000, and this was paid and the claim against that company was settled.

Jeffrey then applied for underinsured motorist (UIM) benefits under various policies: One was a family policy naming him as the insured with a limit of $100,000/ 300,000; the second policy was a family policy issued to his stepfather, Gerald Craig, with the same limits; a third policy was a homeowners policy issued to Gerald; and a fourth policy was a personal umbrella policy issued to the Craigs which provided for a limit of $1 million. The lower court found: (1) Jeffrey qualified for UIM coverage under the policy issued to him; (2) that he was not covered for UIM benefits under the family policy issued to Gerald; (3) that he was not covered under the homeowners policy and was not covered under the umbrella policy.

On appeal, the court agreed that the anti-stacking provisions of the policy prevented recovery by Jeffrey since the policies were purchased by family members living in the same house. (The court noted that it did not address, since it was not raised, whether Jeffrey could choose to recover under the Craig policy rather than his own policy.)

However, this did not apply to the personal umbrella policy, which listed the automobile policies as well as the homeowners policy. In addition, the company's claims representative testified that the umbrella policy could attach to either policy.

The umbrella policy excluded coverage for claims or legal actions for "...injury to any insured person." The trial court found this prevented Jeffrey's recovery since he was insured under that policy.

The court, on appeal, decided that this exclusion eliminates recovery to an insured for UIM coverage and was prohibited by Ohio statute R.C.3937.18.

The company argued that since Jeffrey had received $100,000 from State Farm, and this was also the limit of his policy, he could not recover UIM benefits under his own policy. The higher court disagreed, concluding that since his damages exceeded that amount, and since his own policy provided for limits of $100,000/300,000, he was entitled to UIM benefits under his policy.

The judgment entered in the trial court was affirmed in part, reversed in part, and remanded for further proceedings.

(Appeal to the Supreme Court of Ohio was not allowed--659 North Eastern Reporter 2d 712.)

Midwestern Indemnity Company v. Craig et al; Gordon et al, Appellants v. GRE Insurance Group, d/b/a Midwestern Indemnity Group--Nos. 1-95-2, 1-95-3--Court of Appeals of Ohio, Third District, Allen County--August 30, 1995--665 North Eastern Reporter 2d 712.

Corporation auto policy doesn't cover owner's family member

Beverly Schoenberger lived in Newington, Connecticut, and was the owner of one-half of a company known as Connecticut Center for Massage Therapy. The remaining half was owned by her ex-husband, Stephen Kitts. Beverly was the mother of James Kitts, and Stephen was his former stepfather.

James Kitts was injured in a car accident in Ohio on September 20, 1992, while he was a passenger in a friend's car. At that time James resided in Oberlin, Ohio. He filed a claim under the UM provision of a policy issued by Utica Mutual to the company partly owned by his mother, and Utica denied the claim on the ground that he was not covered by that policy.

The policy had been issued on July 1, 1992, to the "Connecticut Center for Massage Therapy, Inc." A checked box on the policy identified the only insured as a corporation. Neither Beverly nor Stephen was shown as a named insured. Furthermore the only cars listed in the policy were a 1986 Toyota and a 1985 SAAB. The car in which James was riding at the time he was hurt was not listed.

James contended that he was covered as a "family member" of his mother's household.

The lower court found that James was not covered under the policy since the policy showed only the corporation as the insured. The court found that coverage was afforded only to the corporation and the persons using the listed automobiles. Neither Beverly nor Stephen was individually insured; therefore, neither was the other's family member.

In view of this, the court found that it was not necessary to determine whether or not James was a "family member" eligible for coverage in view of its determination that the policy did not cover family members.

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

Kitts, Appellant v. Utica Na-
tional Insurance Group--No. 95CA006088--Court of Appeals of Ohio, Ninth District, Lorain County--October 4, 1996--667 North Eastern Reporter 2d 30.

Insurer fails to provide notice of claim denial

John Hopkins sustained serious injuries on July 23, 1989, while riding in a friend's car. The evidence showed that an unknown person took control of the car by force and caused a collision with other cars. On June 4, 1992, almost three years later, Hopkins notified Fireman's Fund that he intended to bring an uninsured motorists claim under his father's policy, since at the time of the accident the car was stolen and thus was not insured.

Fireman's sent two letters asking for more information and the reason for the long delay in making claim. On October 5, 1992, Hopkins furnished details of the accident but no excuse for the delay. Fireman's filed an action to permanently stay arbitration of the claim since Hopkins failed to give notice of his claim "within 90 days or as soon as practicable" as required.

The lower court dismissed Fireman's petition and directed the parties to proceed to arbitration. Fireman's appealed.

The higher court decided that the company should have known that the claim was untimely upon receipt of Hopkins' first notification in June 1992. However, it sent no notice of disclaimer, and the only communication of its intent to disclaim was in February 1993 when it filed the petition to stay arbitration--nearly eight months after it was notified of the accident and almost four months after it received a complete account of the incident. Fireman's attorney testified that the claim was denied on November 11, 1992, but furnished no evidence to support his statements.

The order of the lower court ordering the parties to proceed with arbitration was affirmed.

In the Matter of Fireman's Fund Insurance Company of Newark, Appellant, v. John Hopkins, Jr.--Court of Appeals of New York--April 30, 1996--666 North Eastern Reporter 2d 1354.

Administrator's settlement must be approved by probate court

Rodney Fosnight died as the result of an automobile collision with a car driven by John Esquivel. Rodney's son, Lonnie Fosnight, was appointed administrator of his father's estate. Although the Ohio statute requires any settlement by an administrator to be approved by the probate court, Lonnie entered into a settlement agreement for the policy limit of $15,000 without such approval.

The trial court entered judgment ordering the enforcement of the settlement agreement. The administrator brought this appeal, asserting that Esquivel's policy limit was $30,000.

The higher court found that the trial court's finding was erroneous since the agreement had not been approved by the probate court as required by the Ohio statute.

The administrator further maintained that, under the Esquivel policy, each "next of kin" of Rodney Fosnight could collect the per-person limit of $15,000, subject to the per-accident limit of $30,000.

The court agreed, concluding that the total available coverage was the per-accident limit of $30,000.

The judgment entered in the trial court finding that the settlement agreement was valid was reversed and remanded for proceedings consistent with this opinion.

Fosnight, Admr., Appellant, v. Esquivel, Admr. et al--No. 13 95 21--Court of Appeals of Ohio, Third District, Seneca County--September 18, 1995--666 North Eastern Reporter 2d 273.

Insured must obtain consent to settle with another company

Monte Moore was injured while he was a passenger on a motorcycle owned and operated by Eric Gray. A van owned and operated by Daniele Davis struck the motorcycle. The van was uninsured.

Moore's mother, Lillian Daniels, had a policy issued by Commercial Union which provided UM/UIM protection. Moore filed a claim with that company. He then settled his claim against Gray for the limits of Gray's policy but did not notify Commercial Union, nor did he obtain their permission prior to settlement.

The trial court decided that the policy provision was ambiguous and denied the company's motion for summary judgment. This appeal followed.

The pertinent provision in the policy read as follows:

"We do not provide coverage...for property damage or bodily injury sustained by any person...if that person or the legal representative settles the bodily injury or property damage claim without our consent."

The court, on appeal, found that the language used in the policy was clear and unambiguous and said: "...It has no limitations or restrictions which lead to an interpretation that some settlements are excluded. It states simply that settlement without Commercial Union's consent voids the coverage..."

It held that Moore had violated the terms and conditions of his mother's policy, and Commercial Union was not obligated to provide coverage to Moore for the accident.

The judgment entered in the trial court was reversed and remanded with instructions for the trial court to enter summary judgment for Commercial Union.

Commercial Union Insurance, Appellant v. Monte Moore et al--No. 45A03-9508-CV-280--Court of Appeals of Indiana--March 20, 1996--663 North Eastern Reporter 2d 179.

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