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Insurer can’t halt depositions in fatal church bus crash

October 12, 2015

The estate of a man killed in an Indianapolis church bus crash may proceed with a countersuit against an insurance company the estate claims acted in bad faith by refusing payment after the fatal crash.

A federal judge last week denied Illinois Farmers Insurance Co.’s motion to stay discovery in a countersuit filed by the estate of Charles Phelps III, who was killed in the crash in July 2013 along with his pregnant wife, Courtney. Their son, C.P., survived.

Phelps was a youth pastor at Colonial Hills Baptist Church and was among three people killed and more than 40 injured in the crash. Investigators said the bus was being driven at an excessive speed on its return from a church retreat when it hit a concrete median and flipped.

Phelps held an Illinois Farmers uninsured/underinsured auto policy, but the company filed a lawsuit in federal court seeking a declaratory judgment relieving it of liability. Illinois Farmers moved for judgment on the pleadings and asked the court to stay discovery until that issue is resolved.

“The court concludes discovery should not be stayed,” Magistrate Judge Tim Baker ordered in Illinois Farmers Insurance Co. v. Charles R. Phelps, Jr., personal representative of Charles Phelps III and guardian of C.P., 1:14-CV-02018.   

Illinois Farmers argued in asking for a declaratory judgment to limit its liability that the couple’s estates have received distributions from other sources of insurance.

The estate countersued, alleging breach of contract by Illinois Farmers and bad faith. The estate claims it has not been made whole, and the insurer has failed to pay on the policy. Illinois Farmers argued that depositions the estate seeks would be an unnecessary expense if its motion for judgment on the pleadings is granted.

But Baker refused to stay discovery, writing that regardless of the outcome of the judgment on the pleadings motion, C.P. will still have live claims. “Depositions related to the bus accident are relevant to C.P.’s claim. Thus, a stay of discovery would merely delay inevitable discovery.”

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