A Lawyer Should Never Sue an Insurer When There is Obviously no Coverage
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A Lawyer Should Never Sue an Insurer When There is Obviously no Coverage
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This case involves an insurance dispute in which Appellant, Benjamin G. Dusing (Dusing), alleges that a 2016 leased Mercedes was properly insured by Appellee, Metropolitan Property & Casualty Insurance Company (Metropolitan). Metropolitan disclaims coverage for the vehicle, which was destroyed by fire on June 25, 2016.
In Benjamin G. Dusing v. Metropolitan Property & Casualty Insurance Company, No. 2021-CA-0200-MR, Court of Appeals of Kentucky (August 26, 2022) Dusing claimed he was driving the vehicle at the time it caught fire. As a of Metropolitan’s refusal to pay Dusing sued for declaratory judgment in Kenton Circuit Court on June 21, 2017. The court subsequently granted what is styled as Metropolitan’s “Motion for Judgment,” on the basis that there was no coverage pursuant to the terms of insurance policy with Metropolitan (hereafter, the Policy).
A motion for summary judgment should be granted if the pleadings, depositions, answers to interrogatories, stipulations, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
THE POLICY
The Policy at issue here provides the following relevant terms:
We will pay for loss to your covered automobile or to a non-owned automobile, including its equipment, not caused by collision, minus any applicable deductible shown in the Declarations. Coverage is included for a loss caused by but not limited to the following:
Fire, explosion or earthquake . . . .
The Policy defines “non-owned automobile” as:
an automobile or trailer while being used by you or a relative, with the owner’s permission, which is not owned by, furnished to, or made available for regular use to you or any resident in your household.
2.a commercially rented automobile or trailer used by you or a relative on a temporary basis.
In granting a judgment in favor of Metropolitan, the circuit court reasoned as follows:
On March 31, 2016, BGD Law, a law firm owned by [Dusing] leased the 2016 Mercedes for a period of five years or 60,000 miles. That lease also provided a 24-month service agreement. The lease also charged BGD Law fees for license and registration of the vehicle.
Dusing asserted that he is entitled to coverage for the loss of the 2016 Mercedes, claiming that that vehicle was a “non-owned” vehicle under the policy. In response Metropolitan takes the position that the 2016 Mercedes could not qualify as a “non-owned” vehicle for several reasons.
The 2016 Mercedes was not provided on a temporary basis, but rather was the subject of a 5-year, 60,000 mile lease, with a 24-month service agreement.
Metropolitan states that the vehicle was not “commercially rented.” Unlike a rental agreement, the 2016 Mercedes was provided to BGD Law and charged license and registration fees which are not standard for “commercially rented” vehicles. Having reviewed the evidence in this case and having considered the Briefs of the parties, this Court agrees with the position taken by Metropolitan that the 2016 Mercedes was not a “non-owned” vehicle which would allow it to be covered by the policy issued in 2015. In sum, there is no coverage for the loss to this vehicle under the Metropolitan policy.
It is undisputed that Dusing failed to purchase insurance coverage for the 2016 Mercedes. Therefore, it is not a “covered vehicle” pursuant to the Policy which, to be clear, is Dusing’s personal Policy.
The Court of Appeal was logically inclined to agree with the circuit court that a vehicle subject to a five-year lease cannot reasonably be considered as “non-owned” for purposes of the Policy. Indeed, it strains credulity to consider the 2016 Mercedes at issue here to be a “commercially rented” vehicle being used on a “temporary basis,” merely because it was being leased by Dusing’s law firm. Therefore, it was unreasonable to conclude that Dusing had a “reasonable expectation” of coverage.
ZALMA OPINION
This case is an example ofa lawyer attempting to force an insurer to pay for a loss he knew, or reasonably should have known, was not covered by his personal auto insurance. A car leased by his law firm and provided for his use is not a personal auto, leased for five years could not be considered “temporary” under any concept of reason, and should have been insured by the law firm that leased it. Although he had an insurable interest in the Mercedes he failed to advise the insurer that it was leased for his use nor did he pay a premium for the policy. Taking the case up to the Court of Appeal was a waste of his time, the trial court’s time and the time of the Court of Appeal.
(c) 2022 Barry Zalma & ClaimSchool, Inc.
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and [email protected].
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Jury’s Findings Interpreting Insurance Contract Affirmed
Post 5105
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Madelaine Chocolate Novelties, Inc. (“Madelaine Chocolate”) appealed the district court’s judgment following a jury verdict in favor of Great Northern Insurance Company (“Great Northern”) concerning storm-surge damage caused by “Superstorm Sandy” to Madelaine Chocolate’s production facilities.
In Madelaine Chocolate Novelties, Inc., d.b.a. The Madelaine Chocolate Company v. Great Northern Insurance Company, No. 23-212, United States Court of Appeals, Second Circuit (June 20, 2025) affirmed the trial court ruling in favor of the insurer.
BACKGROUND
Great Northern refused to pay the full claim amount and paid Madelaine Chocolate only about $4 million. In disclaiming coverage, Great Northern invoked the Policy’s flood-exclusion provision, which excludes, in relevant part, “loss or damage caused by ....
Failure to Name a Party as an Additional Insured Defeats Claim
Post 5104
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Contract Interpretation is Based on the Clear and Unambiguous Language of the Policy
In Associated Industries Insurance Company, Inc. v. Sentinel Insurance Company, Ltd., No. 23-CV-10400 (MMG), United States District Court, S.D. New York (June 16, 2025) an insurance coverage dispute arising from a personal injury action in New York State Supreme Court.
The underlying action, Eduardo Molina v. Venchi 2, LLC, et al., concerned injuries allegedly resulting from a construction accident at premises owned by Central Area Equities Associates LLC (CAEA) and leased by Venchi 2 LLC with the USDC required to determine who was entitled to a defense from which insurer.
KEY POINTS
Parties Involved:
CAEA is insured by Associated Industries Insurance Company, Inc. ...
Exclusion Establishes that There is No Duty to Defend Off Site Injuries
Post 5103
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Attack by Vicious Dog Excluded
In Foremost Insurance Company, Grand Rapids, Michigan v. Michael B. Steele and Sarah Brown and Kevin Lee Price, Civil Action No. 3:24-CV-00684, United States District Court, M.D. Pennsylvania (June 16, 2025)
Foremost Insurance Company (“Foremost”) sued Michael B. Steele (“Steele”), Sarah Brown (“Brown”), and Kevin Lee Price (“Price”) (collectively, “Defendants”). Foremost sought declaratory relief in the form of a declaration that
1. it owes no insurance coverage to Steele and has no duty to defend or indemnify Steele in an underlying tort action and
2. defense counsel that Foremost has assigned to Steele in the underlying action may withdraw his appearance.
Presently before the Court are two ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
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Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
Post 5073
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This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
A Heads I Win, Tails You Lose Story
Post 5062
Posted on April 30, 2025 by Barry Zalma
"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime."
Immigrant Criminals Attempt to Profit From Insurance Fraud
People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.
The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...
