ILNews

COA: insurer owed duty to defend

Jennifer Nelson
January 1, 2008
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After nearly 10 years of litigation, the Indiana Court of Appeals has reversed a grant of summary judgment in favor of an insurance company because the company couldn't show it was prejudiced by a late notice from its insured as a matter of law.

In the unanimous 27-page opinion, Tri-Etch Inc., et al v. Cincinnati Insurance Co., No. 49A02-0709-CV-827, the appellate court ruled in favor of the appellants-plaintiffs in this appeal - Tri-Etch, which provides security services; the estate of Michael Young; and Scottsdale Insurance Co., which provided insurance to Tri-Etch with a $1 million limit of liability.

The back-and-forth litigation between Tri-Etch, the estate, and Scottsdale and Cincinnati Insurance Co., which also provided a commercial general liability (CGL) and umbrella policy to Tri-Etch, began in 1999 after the estate filed a complaint against Tri-Etch.

Tri-Etch provided security for Muncie Liquors and would call a store's general manager if the store's night alarm wasn't set within 30 minutes of closing. Michael Young, an employee at the liquor store, was found beaten outside of the store after Tri-Etch called the store's owner at 3:15 a.m. The store closed at midnight and the alarm wasn't set, but Tri-Etch didn't call the general manager to make sure everything was OK at the store until 3:15 a.m. Young subsequently died of his injuries, and the complaint alleged he would have lived had Tri-Etch called at 12:30 a.m. once it realized the alarm wasn't set.

At issue in this case are two orders granted by Marion County trial courts. In 2006, the first order granted partial summary judgment in favor of Tri-Etch and the appellants on the bad faith counterclaim brought by Cincinnati. It granted partial summary judgment to the appellants finding that Young's death is covered under Cincinnati's CGL and umbrella policies and denied Scottsdale and Cincinnati's motions for summary judgment regarding Scottsdale's claim to recover 50 percent of the legal fees and costs Scottsdale paid to defend Tri-Etch.

Cincinnati claimed it didn't learn of the litigation until 2004, just before the claim was to go to trial. The insurance company informed Tri-Etch that the estate's claim wasn't covered by either of its policies with Cincinnati, so it wouldn't be responsible to pay a portion of the $2.5 million in damages the estate won against Tri-Etch.

The second order issued in 2007 granted summary judgment in favor of Cincinnati and ordered that Tri-Etch's late notice to Cincinnati was unreasonably late as a matter of law, and due to the prejudice arising from the untimely notice, the company owes no coverage or indemnity to Tri-Etch.

The Indiana Court of Appeals determined that Cincinnati wasn't prejudiced by Tri-Etch's allegedly late notice because the insurance company consistently maintained Tri-Etch wasn't entitled to coverage for the claim, wrote Chief Judge John Baker. As a result, the appellate court reversed the grant of summary judgment in favor of Cincinnati in the second order and remanded with instructions to enter summary judgment in favor of the appellants.

Regarding the first order, the judges concluded Tri-Etch is entitled to coverage pursuant to both Cincinnati's CGL and umbrella policies, requiring Cincinnati to be responsible for $1.5 million in damages the estate won.

The court also remanded the issue of Cincinnati's liability for defense costs to Scottsdale because Scottsdale defended Tri-Etch from the start of the claim.

"Because we have concluded that coverage existed under Cincinnati's policies, each of which contained duty-to-defend provisions, it logically follows that Cincinnati must pay a portion of the costs Scottsdale incurred while defending Tri-Etch during the liability litigation," the chief judge wrote.

The appellate court remanded the issue to the trial court to determine when Cincinnati received notice of the claim to determine the amount of reasonable defense costs Cincinnati should pay.
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  1. Call it unauthorized law if you must, a regulatory wrong, but it was fraud and theft well beyond that, a seeming crime! "In three specific cases, the hearing officer found that Westerfield did little to no work for her clients but only issued a partial refund or no refund at all." That is theft by deception, folks. "In its decision to suspend Westerfield, the Supreme Court noted that she already had a long disciplinary history dating back to 1996 and had previously been suspended in 2004 and indefinitely suspended in 2005. She was reinstated in 2009 after finally giving the commission a response to the grievance for which she was suspended in 2004." WOW -- was the Indiana Supreme Court complicit in her fraud? Talk about being on notice of a real bad actor .... "Further, the justices noted that during her testimony, Westerfield was “disingenuous and evasive” about her relationship with Tope and attempted to distance herself from him. They also wrote that other aggravating factors existed in Westerfield’s case, such as her lack of remorse." WOW, and yet she only got 18 months on the bench, and if she shows up and cries for them in a year and a half, and pays money to JLAP for group therapy ... back in to ride roughshod over hapless clients (or are they "marks") once again! Aint Hoosier lawyering a great money making adventure!!! Just live for the bucks, even if filthy lucre, and come out a-ok. ME on the other hand??? Lifetime banishment for blowing the whistle on unconstitutional governance. Yes, had I ripped off clients or had ANY disciplinary history for doing that I would have fared better, most likely, as that it would have revealed me motivated by Mammon and not Faith. Check it out if you doubt my reading of this, compare and contrast the above 18 months with my lifetime banishment from court, see appendix for Bar Examiners report which the ISC adopted without substantive review: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS

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