COURT DECISIONS

Rough Notes, Sep 2007

The Court of Appeals of Indiana disagreed. It noted that "the purpose of a severability clause is to spread protection, to the limits of coverage, among all of the ... insureds. The purpose is not to negate bargained-for exclusions which are plainly worded."

According to the court, the childcare exclusion applied because Vicki provided non-occasional childcare services to TB., a fact that was undisputed by the parties. The key was not whether Murl's childcare services were occasional; rather, the issue was whether Vicki's childcare services were occasional. Because Vicki's childcare services were nonoccasional, the exception to the exclusion did not apply and there was no coverage for T.B.'s molestation. Accordingly, the decision of the trial court was affirmed.

Bruce vs. Dobson-No. 53A04-0609CV-533-Court of Appeals of Indiana-June 22, 2007-868 North Eastern Reporter 2d 831.

Did discovery bar arbitration?

In August 2004, Richard Capps sued Daniele Virrey and Jerry Linker for injuries he sustained in an automobile accident allegedly caused by Virrey while driving Linker's van. He sought damages from both Virrey and Linker and uninsured motorist coverage from his own insurer, Nationwide Mutual Insurance Company. On the same day he filed his complaint, Capps served "requests for admissions" on Virrey, Linker and Nationwide. Nationwide filed its answer to the pontiff's complaint on October 25, 2004, by which it admitted that "certain acts" of Virrey proximately caused the accident, but it denied the injuries alleged and damages sought by the plaintiff. That same month Capps served "interrogatories and requests for production of documents" on all three defendants. The following year he served second and third "requests for production of documents" on Nationwide. The insurer provided responses to Capps' requests.

On November 22, 2005, in an attempt to evaluate Nationwide's liability, Capps and Nationwide participated in mediation. The mediation lasted only two hours, and the parties reached an impasse. On December 9, 2005, Capps sent a letter to Nationwide demanding arbitration in accordance with the terms of the policy.

When Nationwide refused to arbitrate, Capps filed a motion with the court to compel arbitration. That motion was denied. According to the court, Capps waived his right to arbitration by imposing substantial litigation costs on Nationwide and by participating in "discovery" not available during arbitration.

"Discovery" in trial practice includes the pre-trial devices that can be used by one party to obtain information from another party. "Requests for admissions" and "interrogatories and requests for production of documents" are part of the discovery process, a process that is typically governed by the Rules of Civil Procedure.

On appeal, Capps argued that the discovery procedures he used were appropriate because they were contemplated and incorporated into the arbitration agreement between the parties. The Court of Appeals of North Carolina disagreed. It found that Capps' discovery requests exceeded the scope of what was contemplated by the agreement.