Alarm company's actions not covered by policies

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The Indiana Supreme Court reversed the denial of summary judgment on an insurance company's coverage defenses, ruling its insured's actions leading to a lawsuit were "errors or omissions," and so weren't covered by the commercial general liability or umbrella policies.

In Tri-Etch, Inc., d/b/a Sonitrol Security Systems of Muncie, et al. v. Cincinnati Insurance Co.,  No. 49S02-0901-CV-8, the justices unanimously held that alarm company Tri-Etch's CGL and umbrella insurance policies don't cover a wrongful death claim against Tri-Etch for delays in observing or reacting to the failure of a liquor store to make a scheduled setting of a night alarm. In 1997, Muncie liquor store clerk Michael Young was abducted and beaten just before the store's midnight closing, so the scheduled midnight alarm wasn't activated. It wasn't until 3 a.m. that Tri-Etch discovered the alarm hadn't been set. Young was found later that morning and died of his injuries.

Young's estate won a $2.5 million jury verdict against Tri-Etch in December 2004. The company had three insurance policies; at issue in this appeal is whether Cincinnati's CGL and umbrella policies cover the claim against Tri-Etch. Also disputed is whether Tri-Etch gave Cincinnati timely notice of the wrongful death claim.

In a dispute between Cincinnati, the estate, and the other insurers, the trial court ruled the estate's claim against Tri-Etch was covered by Cincinnati and ruled Tri-Etch's notice to Cincinnati was unreasonably late and no coverage under the CGL or umbrella policies was owed. The Indiana Court of Appeals reversed.

Cincinnati's CGL and umbrella policies both insure against liability for "bodily injury" caused by an "occurrence." The parties disputed whether Young's death was considered an accident, which would be covered as an occurrence, but the justices concluded Tri-Etch's unintentional oversight to call about the alarm around 12:30 a.m. was an error or omission, so it's not an occurrence covered by the CGL or umbrella policies, wrote Justice Theodore Boehm.

The umbrella policy also specifically excludes bodily injury "arising out of any act, error or omission of the insured in rendering or failing to render telephone answering, alarm monitoring or similar services."

"The jury's verdict necessarily established that Tri-Etch's failure breached its contractual obligation to the store or fell below the standard of care of a reasonable alarm company," wrote the justice. "The judgment therefore was for liability squarely within the exclusions of the umbrella policy."

In determining whether Cincinnati received late notice and was prejudiced by it, the Supreme Court looked to Miller v. Dilts, 463 N.E.2d 257 (Ind. 1984). The high court disagreed with the ruling of the Court of Appeals using Miller, believing that an insurer's denial of coverage on other grounds as a matter of law doesn't rebut the presumption of prejudice from late notice.

"Even if an insurer consistently denies coverage, timely notice gives the insurer an opportunity to investigate while evidence is fresh, evaluate the claim, and participate in early settlement. The fact that an insurer asserts other coverage defenses does not render these opportunities meaningless," he wrote.

Because the high court determined Cincinnati's polices don't apply to the claim in this case, it didn't consider whether Tri-Etch's notice was late or if so, whether the late notice prejudiced Cincinnati. The trial court's denial of summary judgment in favor of Cincinnati's coverage defenses was reversed and the issue remanded with instructions to enter judgment in favor of the insurer.


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  1. I think the cops are doing a great job locking up criminals. The Murder rates in the inner cities are skyrocketing and you think that too any people are being incarcerated. Maybe we need to lock up more of them. We have the ACLU, BLM, NAACP, Civil right Division of the DOJ, the innocent Project etc. We have court system with an appeal process that can go on for years, with attorneys supplied by the government. I'm confused as to how that translates into the idea that the defendants are not being represented properly. Maybe the attorneys need to do more Pro-Bono work

  2. We do not have 10% of our population (which would mean about 32 million) incarcerated. It's closer to 2%.

  3. If a class action suit or other manner of retribution is possible, count me in. I have email and voicemail from the man. He colluded with opposing counsel, I am certain. My case was damaged so severely it nearly lost me everything and I am still paying dearly.

  4. There's probably a lot of blame that can be cast around for Indiana Tech's abysmal bar passage rate this last February. The folks who decided that Indiana, a state with roughly 16,000 to 18,000 attorneys, needs a fifth law school need to question the motives that drove their support of this project. Others, who have been "strong supporters" of the law school, should likewise ask themselves why they believe this institution should be supported. Is it because it fills some real need in the state? Or is it, instead, nothing more than a resume builder for those who teach there part-time? And others who make excuses for the students' poor performance, especially those who offer nothing more than conspiracy theories to back up their claims--who are they helping? What evidence do they have to support their posturing? Ultimately, though, like most everything in life, whether one succeeds or fails is entirely within one's own hands. At least one student from Indiana Tech proved this when he/she took and passed the February bar. A second Indiana Tech student proved this when they took the bar in another state and passed. As for the remaining 9 who took the bar and didn't pass (apparently, one of the students successfully appealed his/her original score), it's now up to them (and nobody else) to ensure that they pass on their second attempt. These folks should feel no shame; many currently successful practicing attorneys failed the bar exam on their first try. These same attorneys picked themselves up, dusted themselves off, and got back to the rigorous study needed to ensure they would pass on their second go 'round. This is what the Indiana Tech students who didn't pass the first time need to do. Of course, none of this answers such questions as whether Indiana Tech should be accredited by the ABA, whether the school should keep its doors open, or, most importantly, whether it should have even opened its doors in the first place. Those who promoted the idea of a fifth law school in Indiana need to do a lot of soul-searching regarding their decisions. These same people should never be allowed, again, to have a say about the future of legal education in this state or anywhere else. Indiana already has four law schools. That's probably one more than it really needs. But it's more than enough.

  5. This man Steve Hubbard goes on any online post or forum he can find and tries to push his company. He said court reporters would be obsolete a few years ago, yet here we are. How does he have time to search out every single post about court reporters and even spy in private court reporting forums if his company is so successful???? Dude, get a life. And back to what this post was about, I agree that some national firms cause a huge problem.