Court decisions

Rough Notes, Feb 1998

Digested from case reports published in the North Eastern Reporter 2d, with permission from West Publishing Co., St. Paul, MN

Unlisted "regularly used" auto not covered by policy

Matthew Friedman, a college student, was driving his father's Mazda RX-7 at the time of the accident discussed here. His passenger suffered serious injuries. The car was listed in a policy issued to his father by USF&G. Also, RLI Insurance Company had issued the Friedman family an umbrella policy. Hanover Insurance had issued to Matthew's mother a policy which covered two cars not involved here, and which also provided coverage for "damages to people injured" by the insured or members of the insured's household.

In a settlement between Matthew and his passenger, USF&G paid the limits of its policy, $250,000, and RLI contributed $500,000. Hanover refused to contribute and relied upon its policy exclusion of coverage of cars furnished "for regular use."

Hanover's policy exclusion clause provided that Hanover "will not pay for injuries resulting from an accident while you or a household member is using an auto which you or a household member owns or uses regularly, unless a premium ...is shown for that auto on the Coverage Selections Page." The only cars listed on that page for which a premium was paid were the mother's Datsun and her Plymouth.

It was shown that for several years, Matthew had stayed at his parents' home during his school vacations, and that during those times he had his parents' blanket permission to use the RX-7 whenever he wanted, and that the RX-7 was one of three vehicles available to him during his 1987 vacation.

RLI contended that Hanover should contribute to the settlement and brought this action for declaratory judgment. The trial court ruled that since no premium had been paid to cover the RX-7 on his mother's policy, and since the policy plainly excluded cars for which no premium had been paid, Hanover was not liable. RLI appealed.

The higher court ruled that (1) the RX-7 was available for Matthew's regular use, and Hanover's policy excluded coverage under the circumstances here.

The judgment entered in the trial court was affirmed.

RLI Insurance Company v. The Hanover Insurance Company-No. 95-P-495-Appeals Court of Massachusetts--February 12, 1997-675 North Eastern Reporter 2d 1167.

HO policy excludes liability for auto-related injury

Thomas Fisher, the sevenyear-old son of Tamara Fisher, was struck by a car driven by Jodi Arndt while he was crossing a street in Macon, Illinois, on the afternoon of July 27, 1993. Arndt was alleged to have been negligent in that she was driving faster than was safe in a residential area and had failed to keep a proper lookout. Arndt countered with a claim that Tamara was negligent since she failed to supervise her child although she was in her nearby yard.

Tamara Fisher and her husband had an HO policy which had been issued by Country Casualty and which contained the usual exclusion for liability arising from the use of motor vehicles, with the exception of vehicles not licensed for use on public roads, and which also excluded bodily injury to a resident of the insureds' household.

The Fishers sought to obtain coverage by Country Casualty in the counterclaim by Arndt alleging that Tamara was negligent; and Country Casualty filed for declaratory judgment to determine its liability.

In affirming the decision of the trial court in favor of Country Casualty, the higher court found that the HO policy did not cover the bodily injuries sustained by Thomas when he was struck by a car driven by Jodi Arndt at a street crossing near his home. Furthermore, the policy excluded liability for injuries sustained by a resident of the insureds' home.

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

Country Casualty Insurance Company v. Tamara Fisher et al., Appellants-No. 4-96-0633Appellate Court of Illinois, Fourth District-March 5, 1997-676 North Eastern Reporter 2d 1379. Physician's refusal to settle is not part of "medical incident"

Frank Lovewell filed a medical malpractice action against his doctor, Pradist Satayathum, for damages. The jury in the trial court returned a verdict in Lovewell's favor, and he then moved the trial court for an award of prejudgment interest in the amount of $101,753.42 under the statute.

Dr. Satayathum had a malpractice policy issued by Physicians Insurance Company of Ohio, which provided that the doctor had a right to prevent the company from entering into any settlement without his consent. Prior to the trial, the physician had exercised that right and refused to settle the action. When requested to pay the prejudgment interest, Physicians denied coverage, pointing out that the physician's refusal to consent to a settlement was the basic cause of the prejudgment interest; therefore, the physician was responsible for the award of interest. Lovewell then instituted this action against the doctor and Physicians for the interest payment. The trial court granted summary judgment to Lovewell and the doctor; and later, that court ordered Physicians to pay the interest. The intermediate court affirmed that judgment, and this discretionary appeal was granted.