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COA: Insurance company can't deny coverage

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The Indiana Court of Appeals upheld a trial court's decision that an insurance company was estopped from denying coverage to the suspected driver of a car because the company failed to properly preserve its right to deny the driver coverage.

In Founders Insurance Co. v. Virginia Olivares, Linda M. Vara, Daniel R. Farley, AAA Chicago Motor Club Insurance Co., No. 45A04-0712-CV-743, Founders appealed the trial court's declaratory judgment in favor of Virginia Olivares and other appellees, which ruled the insurance company was barred from denying coverage to Daniel Farley because he was an "excluded driver" under the car insurance policy of his mother, Linda Vara.

Vara insured a 1992 Oldsmobile Cutlass with Founders, which she co-owned with Farley, who was specifically listed under the policy as an excluded driver. Also included in the policy is liability coverage that extended to any "family member," under which coverage for Farley would fall.

Virginia Olivares was in a car accident in which the driver of the other vehicle - the Cutlass owned by Vara and Farley - was unidentified because he or she fled the scene. Farley later reported the car as stolen. Olivares believed Farley was driving the vehicle at the time and filed suit against Vara, Farley, and AAA. As a result, Founders provided defense counsel to Vara and Farley but later sent unsigned letters without Founders' letterhead to Vara and Farley saying if Farley was found to be driving the Cutlass, defense and indemnification would be withdrawn for him. The letter also misidentified Farley as David Farley instead of Daniel.

After Olivares filed an amended complaint adding a count against Founders, the company filed a counterclaim seeking declaratory judgment that it wasn't obligated to provide coverage to Farley for the accident because he wasn't insured under the policy.

Founders was estopped from raising the defense of non-coverage because it had sufficient knowledge of facts that would have permitted it to deny coverage, Founders assumed the defense of Farley without obtaining an effective reservation of rights agreement, and Farley suffered some type of harm or prejudice as a result, wrote Judge Carr Darden.

Founders claimed the unsigned letters it mailed to Vara and Farley properly preserved its right to later rely on the "excluded driver" defense, but the company provided no evidence to confirm Vara or Farley ever received the letters, wrote the judge.

And, because there was no proper reservation of rights by Founders as to the "excluded driver" defense, Farley wasn't aware at the time he accepted defense counsel from Founders that the company would later deny coverage if it found he were the driver of the Cutlass. As such, Farley couldn't make an intelligent choice between retaining his own counsel and accepting Founder's defense counsel, Judge Darden wrote.

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  1. Employers should not have racially discriminating mind set. It has huge impact on the society what the big players do or don't do in the industry. Background check is conducted just to verify whether information provided by the prospective employee is correct or not. It doesn't have any direct combination with the rejection of the employees. If there is rejection, there should be something effective and full-proof things on the table that may keep the company or the people associated with it in jeopardy.

  2. Unlike the federal judge who refused to protect me, the Virginia State Bar gave me a hearing. After the hearing, the Virginia State Bar refused to discipline me. VSB said that attacking me with the court ADA coordinator had, " all the grace and charm of a drive-by shooting." One does wonder why the VSB was able to have a hearing and come to that conclusion, but the federal judge in Indiana slammed the door of the courthouse in my face.

  3. I agree. My husband has almost the exact same situation. Age states and all.

  4. Thanks Jim. We surprised ourselves with the first album, so we did a second one. We are releasing it 6/30/17 at the HiFi. The reviews so far are amazing! www.itsjustcraig.com Skope Mag: It’s Just Craig offers a warm intimacy with the tender folk of “Dark Corners”. Rather lovely in execution, It’s Just Craig opts for a full, rich sound. Quite ornate instrumentally, the songs unfurl with such grace and style. Everything about the album feels real and fully lived. By far the highlight of the album are the soft smooth reassuring vocals whose highly articulate lyrics have a dreamy quality to them. Stories emerge out of these small snapshots of reflective moments.... A wide variety of styles are utilized, with folk anchoring it but allowing for chamber pop, soundtrack work, and found electronics filtering their way into the mix. Without a word, It’s Just Craig sets the tone of the album with the warble of “Intro”. From there things get truly started with the hush of “Go”. Building up into a great structure, “Go” has a kindness to it. Organs glisten in the distance on the fragile textures of “Alone” whose light melody adds to the song’s gorgeousness. A wonderful bloom of color defines the spaciousness of “Captain”. Infectious grooves take hold on the otherworldly origins of “Goodnight” with precise drum work giving the song a jazzy feeling. Hazy to its very core is the tragedy of “Leaving Now”. By far the highlight of the album comes with the closing impassioned “Thirty-Nine” where many layers of sound work together possessing a poetic quality.

  5. Andrew, if what you report is true, then it certainly is newsworthy. If what you report is false, then it certainly is newsworthy. Any journalists reading along??? And that same Coordinator blew me up real good as well, even destroying evidence to get the ordered wetwork done. There is a story here, if any have the moxie to go for it. Search ADA here for just some of my experiences with the court's junk yard dog. https://www.scribd.com/document/299040062/Brown-ind-Bar-memo-Pet-cert Yep, drive by shootings. The lawyers of the Old Dominion got that right. Career executions lacking any real semblance of due process. It is the ISC way ... under the bad shepard's leadership ... and a compliant, silent, boot-licking fifth estate.

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