COURT DECISIONS

Rough Notes, Apr 2006

The judgment of the lower court was affirmed.

Virginia Surety Company, Inc., vs. Northern Insurance Company of New York-No. 3-04-0701-Appellate Court of Illinois, Third DistrictDecember 22, 2005-840 North Eastern Reporter 2d 1271.

Medical payments sought for tree felling injury

Irving Theodore held a Commerce Insurance Company, Inc., homeowners property policy for his residence in Framingham, Massachusetts. He also owned property in the Dorchester section of Boston. This property was not insured.

Theodore asked Timothy DeAmelio to help him cut down a dying tree on the Dorchester property. Theodore held an extension ladder while DeAmelio sawed the tree with a chain saw. Theodore left his spot at the ladder to keep onlookers from the area where the tree might fall. At this point, the ladder began to shift. DeAmelio lost his balance, fell to the ground, and was injured.

DeAmelio brought a negligence action against Theodore. Commerce defended Theodore, but under a reservation of rights. It then filed a complaint seeking a judicial determination that it had no obligation to defend or indemnify Theodore. According to Commerce, under its policy, coverage for personal liability and medical payments to others "[ajrising out of a premises: (1) Owned by an 'insured' ... that is not an 'insured location'" were excluded. DeAmelio counter claimed, arguing that his medical expenses were covered under the "medical payments to others" provision of the policy.

The lower court found in favor of DeAmelio, holding that the exclusion cited by Commerce did not apply. Commerce appealed.

On appeal, the Appeals Court of Massachusetts, Middlesex, held that the exclusion applied to the "personal liability" and "medical payments to others" coverages under the policy. The court found that there was a close relationship between the injury and the premises, and that it was not necessary that the condition of the premises be the actual cause of the injury. Where a third person was on the property to repair a condition of the property and, while the repair was being performed, an injury resulted, the injury was one "arising out of a premises." Accordingly, the exclusion of coverage applied, and the medical expenses associated with DeAmelio's injuries were not covered.

The judgment of the lower court was vacated, and the matter was remanded to the lower court for entry of judgment consistent with the decision of the appeals court.

Commerce Insurance Company, Inc., vs. Theodore-No. 05-P-383-Appeals Court of Massachusetts, Middlesex-January 30, 2006-841 North Eastern Reporter 2d 281

Insurers dispute liability in personal injury suit

Stephen Chitwood leased his tractor-semitrailer to Foster Brothers. The parties agreed that Chitwood would drive the vehicle and deliver Foster Brothers' products throughout the Midwest. Also pursuant to this lease agreement, Chitwood agreed to indemnify Foster Brothers for any loss that resulted from his own negligence. Both parties obtained liability insurance policies. Chitwood bought a Continental Western Insurance Company policy with a maximum limit of $750,000. Foster Brothers bought a Reliance Insurance policy with a $1 million coverage limit. Chitwood and Foster Brothers were insured parties under both policies.