SHOOTING A PERSON IN THE BACK TWICE IS NOT AN ACCIDENT
Barry Zalma
Read the full article at https://lnkd.in/gBtSDCgE, see the full video at https://lnkd.in/g8DjCtNq and at https://lnkd.in/gUaRAN8c and at https://zalma.com/blog plus more than 4300 posts.
Great American Alliance Insurance Company (“GAAIC”) was granted summary judgment when the trial court determined that a GAAIC umbrella insurance policy did not cover an insurance claim made by Star Residential, LLC (“Star”), and Terraces at Brookhaven, LLC (“Terraces,” collectively, the “Insureds”), based on a shooting injury suffered by Manuel Hernandez (collectively with the Insured, the “Claimants”).
In Hernandez v. Great American Alliance Insurance Company Star Residential, LLC et al. v. Great American Alliance Insurance Company, Nos. A22A1147, A22A1211, Court of Appeals of Georgia, Third Division (October 4, 2022) the Court of Appeals resolved the dispute.
The Issue
The Claimants argued that the trial court erred by ruling that the umbrella policy did not cover the Insureds’ claims because:
GAAIC’s conduct waived its policy defenses, and
the GAAIC umbrella policy did not “follow form” to certain underlying insurance that excluded coverage for events using firearms.
Facts
The undisputed record showed that Star and Terraces own and/or operate an apartment complex where Hernandez lived. In May 2017, Hernandez was shot twice in the back by two assailants as he approached the door to his apartment one night.
Within days, Star generated an incident report, notified Terraces about the shooting, and notified its primary insurance carrier, Associated Industries Insurance Company, Inc. (a/k/a AmTrust North America, herein “AIIC”). Two weeks after that, counsel for Hernandez notified the Insureds that he represented Hernandez. At that time, the Insureds did not notify GAAIC about any potential claim.
In early December 2017, primary carrier AIIC received a formal demand letter from Hernandez seeking $1.5 million in compensation. The Insureds gave GAAIC notice of the claim on February 2, 2018. A few days later, GAAIC acknowledged the notice and stated that it had logged the matter as “incident only,” and it did not expect to take any further action at this time, reminding the Insureds to report the claim to their primary insurance carrier if they had not already.
Hernandez sued the Insureds and served them in April 2018. In May 2018, AIIC sent the Insureds a letter denying coverage and declining to represent the Insureds in the litigation. In June 2018, GAAIC began paying for legal representation for the Insureds. Within a day of initiating representation, on June 20, 2018, GAAIC sent the first of three reservation of rights letters to the Insureds.
Among other things, GAAIC’s June 2018 reservation of rights letter noted AIIC’s denial of primary insurance coverage of bodily injury because: AAIC only covered injury due to “accident,” as opposed to intentional conduct, and AAIC’s primary policy also excluded coverage for bodily injury arising from the use of firearms.
The GAAIC policy defines it as an accident, as opposed to intentional conduct, similar to the AIIC policy. In May 2020, GAAIC sent a second supplemental reservation of rights letter. In that letter, GAAIC explained that for the Insureds, “the [GAAIC] policy states that ‘coverage applies only if the organization is included under coverage provided by the [underlying policies] . . . and then for no broader coverage than is provided under such ‘underlying insurance.'” Therefore, the letter explained, the AIIC exclusions “apply equally to bar coverage in the [GAAIC] policy,” including the firearms exclusion in the AIIC policy.
THE DECLARATORY RELIEF ACTION
GAAIC sued seeking declaratory judgment resolving the coverage issue with respect to GAAIC’s policy. The trial court granted GAAIC’s motion for summary judgment and denied the Insured’s cross-motion for summary judgment. The Claimants now appeal.
It is undisputed that within 24 hours of a discussion about assuming the Insured’s defense, GAAIC sent the Insureds its first reservation of rights letter. This letter was sufficiently prompt and quoted the firearms exclusion in the underlying AIIC policy, as well as GAAIC’s umbrella coverage provision triggered by an “occurrence,” which is defined in GAAIC’s policy as “an accident.”
This prompt reservation of rights letter was sufficient to notify the Insureds that even though GAAIC had initiated its coverage of a legal defense, it would still rely on the terms, definitions, and provisions of the umbrella policy; that the underlying insurance (quoted in the reservation of rights letter) likely did not cover injuries caused by firearms; and that GAAIC was not waiving its policy defenses implicated by the terms of the GAAIC policy or the underlying AIIC policy, which policy GAAIC quoted in the reservation of rights letter.
In sum, the record showed that GAAIC was acting in good faith to provide a defense under a reservation of rights, and in light of the specific language in the initial reservation of rights letter, the court of appeal declined to penalize GAAIC for further clarifying those positions in supplemental reservations of rights.
The Court of Appeal concluded that the trial court correctly concluded that:
the Insureds are properly identified as members of the DPUM risk purchasing group covered by the umbrella policy,
the Insureds purchased AIIC as underlying insurance for purposes of the umbrella policy, and
the umbrella policy coverage is no broader than the underlying AIIC insurance purchased.
Otherwise, according to the GAAIC’s definition of “Insured,” if the AIIC policy is not included as underlying insurance, then the umbrella policy does not apply.
Accordingly, in light of the controlling language and structure of the GAAIC insurance contract, the trial court did not err by holding that GAAIC’s umbrella coverage could not be expanded beyond the underlying coverage and the trial court correctly granted summary judgment to GAAIC and denied the Insureds’ motion for partial summary judgment.
ZALMA OPINION
Insurance policies are contracts whether primary or umbrella/excess policies. Since the claim was based on the fact that Hernandez was shot in the back twice the firearms exclusion applied and since it applied in the underlying coverage it did not apply in the umbrella. A Reservation of rights letter, even if it doesn’t cover every possibility against coverage, especially when covered by supplemental reservations, cannot act as a waiver of the insurer’s rights and obligations since its intent is the opposite: preventing waiver.
(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] and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe.Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome.
Now available Barry Zalma’s newest book, The Tort of Bad Faith, available here. The new book is available as a Kindle book, a paperback or as a hard cover.
Write to Mr. Zalma at [email protected]; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com.
Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library
Convicted Criminal Seeks to Compel Receiver to Protect his Assets
Post number 5291
See the video at and at and at https://www.zalma.com/blog plus more than 5250 posts.
The Work of a Court Appointed Receiver is Constitutionally Protected
In Simon Semaan et al. v. Robert P. Mosier et al., G064385, California Court of Appeals, Fourth District, Third Division (February 6, 2026) the Court of Appeals applied the California anti-SLAPP statute which protects defendants from meritless lawsuits arising from constitutionally protected activities, including those performed in official capacities. The court also considered the doctrine of quasi-judicial immunity, which shields court-appointed receivers from liability for discretionary acts performed within their official duties.
Facts
In September 2021, the State of California filed felony charges against Simon Semaan, alleging violations of Insurance Code section 11760(a) for making...
When There are Two Different Other Insurance Clauses They Eliminate Each Other and Both Insurers Owe Indemnity Equally
Post number 5289
In Great West Casualty Co. v. Nationwide Agribusiness Insurance Co., and Conserv FS, Inc., and Timothy A. Brennan, as Administrator of the Estate of Pat- rick J. Brennan, deceased, Nos. 24-1258, 24-1259, United States Court of Appeals, Seventh Circuit (February 11, 2026) the USCA was required to resolve a dispute that arose when a tractor-trailer operated by Robert D. Fisher (agent of Deerpass Farms Trucking, LLC-II) was involved in a side-impact collision with an SUV driven by Patrick J. Brennan, resulting in Brennan’s death.
Facts
Deerpass Trucking, an interstate motor carrier, leased the tractor from Deerpass Farms Services, LLC, and hauled cargo for Conserv FS, Inc. under a trailer interchange agreement. The tractor was insured by Great West Casualty Company with a $1 million policy limit, while the trailer was insured by Nationwide Agribusiness Insurance Company with a $2 million ...
Opiod Producer Seeks Indemnity from CGL Insurers
Post number 5288
Read the full article at https://lnkd.in/guNhStN2, see the full video at https://lnkd.in/gYqkk-n3 and at https://lnkd.in/g8U3ehuc, and at https://zalma.com/blog plus more than 5250 posts.
Insurers Exclude Damages Due to Insured’s Products
In Matthew Dundon, As The Trustee Of The Endo General Unsecured Creditors’ Trust v. ACE Property And Casualty Insurance Company, et al., Civil Action No. 24-4221, United States District Court, E.D. Pennsylvania (February 10, 2026) Matthew Dundon, trustee of the Endo General Unsecured Creditors’ Trust, sued multiple commercial general liability (CGL) insurers for coverage of opioid-related litigation involving Endo International PLC a pharmaceutical manufacturer.
KEY FACTS
Beginning as early as 2014, thousands of opioid suits were filed by governments, third parties, and individuals alleging harms tied to opioid manufacturing and marketing.
Bankruptcy & Settlements
Endo filed Chapter 11 in August 2022; before bankruptcy it ...
Passover for Americans
Posted on February 19, 2026 by Barry Zalma
“The Passover Seder For Americans”
For more than 3,000 years Jewish fathers have told the story of the Exodus of the enslaved Jews from Egypt. Telling the story has been required of all Jewish fathers. Americans, who have lived in North America for more than 300 years have become Americans and many have lost the ability to read, write and understand the Hebrew language in which the story of Passover was first told in the Torah. Passover is one of the many holidays Jewish People celebrate to help them remember the importance of G_d in their lives. We see the animals, the oceans, the rivers, the mountains, the rain, sun, the planets, the stars, and the people and wonder how did all these wonderful things come into being. Jews believe the force we call G_d created the entire universe and everything in it. Jews feel G_d is all seeing and knowing and although we can’t see Him, He is everywhere and in everyone.We understand...
Passover for Americans
Posted on February 19, 2026 by Barry Zalma
Read the full article at https://www.linkedin.com/pulse/passover-americans-barry-zalma-esq-cfe-5vgkc.
“The Passover Seder For Americans”
For more than 3,000 years Jewish fathers have told the story of the Exodus of the enslaved Jews from Egypt. Telling the story has been required of all Jewish fathers. Americans, who have lived in North America for more than 300 years have become Americans and many have lostthe ability to read, write and understand the Hebrew language in which the story of Passover was first told in the Torah.
Passover is one of the many holidays Jewish People celebrate to help them remember the importance of G_d in their lives. We see the animals, the oceans, the rivers, the mountains, the rain, sun, the planets, the stars, and the people and ...
You Get What You Pay For – Less Coverage Means Lower Premium
Post number 5275
Posted on January 30, 2026 by Barry Zalma
See the video at and at
When Experts for Both Sides Agree That Two Causes Concur to Cause a Wall to Collapse Exclusion Applies
In Lido Hospitality, Inc. v. AIX Specialty Insurance Company, No. 1-24-1465, 2026 IL App (1st) 241465-U, Court of Appeals of Illinois (January 27, 2026) resolved the effect of an anti-concurrent cause exclusion to a loss with more than one cause.
Facts and Background
Lido Hospitality, Inc. operates the Lido Motel in Franklin Park, Illinois. In November 2020, a windstorm caused one of the motel’s brick veneer walls to collapse. At the time, Lido was insured under a policy issued by AIX Specialty Insurance Company which provided coverage for windstorm damage. However, the policy contained an exclusion for any loss or damage directly or indirectly resulting from ...
