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Speedboat surprise: No insurance, no claim

Speedboat surprise: No insurance, no claim

September 15
12:58 2016

Speedboat surprise: No insurance, no claim

In May 2011, Pamela Graves was injured on a speedboat trip offered by Rocket Tours of Key West. Between August 2011 and July 2012, Graves— through counsel—notified Rocket Tours of her injury and claims at least five times. No one, however, notified Rocket’s insurer, Prime Insurance Company, of her claims until September 2013, more than a year after Rocket Tours’ policy had expired. And, although Rocket Tours obtained a subsequent policy that was effective from February 2012 to February 2013, this policy did not provide retroactive coverage that would have applied to Graves’s claim.

Because it had not been notified of Graves’s claim in accordance with the terms of Rocket Tours’ policy, Prime initiated an action against Rocket Tours seeking declaratory relief that it had no obligation to defend or indemnify Rocket Tours on Graves’s claim. Rocket Tours did not contest Prime’s declaratory action, and the court entered default judgment against it. But the court allowed Graves to intervene and defend in the suit, and Graves then answered Prime’s complaint. Prime provided Graves its initial disclosures and the discovery it had obtained up to that point.

About a week later, Prime filed a motion for summary judgment claiming that it owed no obligations to Rocket Tours or Graves. In support of its motion, Prime attached copies of the insurance agreements and an affidavit from its claims representative indicating it had not received notice of Graves’s claim before September 2013.

Graves then filed a motion asking the court to continue Prime’s summary judgment motion to allow her more time to conduct discovery. The court denied Graves’s motion and granted Prime’s motion. Graves appealed.

On appeal, the court said that Graves’s appeal raised two issues: whether she properly preserved her arguments for appeal and whether the court abused its discretion when it denied the motion.

In her motion, Graves explained to the trial court that Prime requested summary judgment less than 20 days after she answered the complaint and this brief period did not allow her adequate time for discovery. She pointed out that with further discovery she would be able to find out “why Prime was not given notice of her claims,” especially considering the undisputed fact that she had “given her written notices to [Rocket Tours].” She also argued she should be entitled to discovery of “the insurance files maintained by Stephen Apetz Insurance, Inc.,” to obtain information regarding “any applications Rocket completed to obtain the initial and renewal policies.”

On appeal, Graves again argued she did not have enough time for proper discovery, but she advanced a different explanation for why she needed it. She argued that Stephen Apetz was Prime’s agent and reasoned that if he “had notice of Graves’s claim, Prime had notice of Graves’s claim” because “ ‘the knowledge of an agent concerning the business which he is transacting for his principal is to be imputed to his principal.’ ”

The distinction between Graves’s appellate argument and her motion, the court said, was critical to its analysis. In her motion, Graves expressed her desire to depose Apetz and obtain his files to “determine what he knew about the Graves claim … and why it was not disclosed on Rocket’s renewal application.” But she did not assert the basis for the request she asserted on appeal: that Apetz was Prime’s agent and his likely knowledge of her claim provided Prime with constructive notice. Indeed, the court said, her motion argued no legal theory demonstrating the relevance of whatever was known to Apetz, and therefore was not “presented to the trial court in such a way that the trial court [had] an opportunity to rule on [it].” Accordingly, although she preserved the argument that she did not have adequate time to conduct discovery, the court concluded that Graves’s argument that Apetz was Prime’s agent was not properly preserved for appeal. The court held that the trial court had not exceeded its discretion in denying Grave’s motion Judgment, the court held that it was proper because Graves raised issues on appeal that she had not presented at trial, such as the agency issue, and the assertion that Rocket Tours’ policy that ran from February 2012 to February 2013 should have provided coverage for her injury despite the fact that it was a claims-made policy.

The judgment of the lower court was affirmed.

Prime Insurance Company vs. Graves-Court of Appeals of Utah- February 4, 2016-2016 WL 556291.


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