ILNews

COA: Insurance company can't deny coverage

Back to TopCommentsE-mailPrintBookmark and Share

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to Vara and Farley saying if Farley was found to be driving the Cutlass, defense and indemnification would be withdrawn for him.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.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Not enough copperheads here to care anymore, is my guess. Otherwise, a totally pointless gesture. ... Oh wait: was this done because somebody want to avoid bad press - or was it that some weak kneed officials cravenly fear "protest" violence by "urban youths.."

  2. Should be beat this rap, I would not recommend lion hunting in Zimbabwe to celebrate.

  3. No second amendment, pro life, pro traditional marriage, reagan or trump tshirts will be sold either. And you cannot draw Mohammed even in your own notebook. And you must wear a helmet at all times while at the fair. And no lawyer jokes can be told except in the designated protest area. And next year no crucifixes, since they are uber offensive to all but Catholics. Have a nice bland day here in the Lego movie. Remember ... Everything is awesome comrades.

  4. Thank you for this post . I just bought a LG External DVD It came with Cyber pwr 2 go . It would not play on Lenovo Idea pad w/8.1 . Your recommended free VLC worked great .

  5. All these sites putting up all the crap they do making Brent Look like A Monster like he's not a good person . First off th fight actually started not because of Brent but because of one of his friends then when the fight popped off his friend ran like a coward which left Brent to fend for himself .It IS NOT a crime to defend yourself 3 of them and 1 of him . just so happened he was a better fighter. I'm Brent s wife so I know him personally and up close . He's a very caring kind loving man . He's not abusive in any way . He is a loving father and really shouldn't be where he is not for self defense . Now because of one of his stupid friends trying to show off and turning out to be nothing but a coward and leaving Brent to be jumped by 3 men not only is Brent suffering but Me his wife , his kids abd step kidshis mom and brother his family is left to live without him abd suffering in more ways then one . that man was and still is my smile ....he's the one real thing I've ever had in my life .....f@#@ You Lafayette court system . Learn to do your jobs right he maybe should have gotten that year for misdemeanor battery but that s it . not one person can stand to me and tell me if u we're in a fight facing 3 men and u just by yourself u wouldn't fight back that you wouldn't do everything u could to walk away to ur family ur kids That's what Brent is guilty of trying to defend himself against 3 men he wanted to go home tohisfamily worse then they did he just happened to be a better fighter and he got the best of th others . what would you do ? Stand there lay there and be stomped and beaten or would u give it everything u got and fight back ? I'd of done the same only I'm so smallid of probably shot or stabbed or picked up something to use as a weapon . if it was me or them I'd do everything I could to make sure I was going to live that I would make it hone to see my kids and husband . I Love You Brent Anthony Forever & Always .....Soul 1 baby

ADVERTISEMENT