No Coverage for Loss After Policy Cancelled
Barry Zalma
Dec 8, 2023
Read the full article at https://lnkd.in/gRug68D7 and see the full video at https://lnkd.in/gcCGDTft and at https://lnkd.in/gHej2r9m and at https://zalma.com/blog plus more than 4650 posts.
Post 4685
In an action for declaratory judgment to determine whether the plaintiffs had a duty to defend and indemnify the defendants under certain insurance policies for injuries sustained in a motor vehicle accident, where the trial court granted the plaintiffs’ motion for summary judgment the dispute was moved to the Court of Appeals.
In Liberty Insurance Corporation et al. v. Theodore Johnson et al., No. AC 45933, Court of Appeals of Connecticut (December 5, 2023) the Court of Appeals resolved the dispute.
FACTS
The defendants, Theodore Johnson (Theodore) and Kim Johnson (Kim), appealed from the judgment rendered by the trial court following its granting of a motion for summary judgment filed by the plaintiffs, Liberty Insurance et al and Safeco Insurance Company of Illinois (Safeco). The primary issue is duty to defend a separate action that stemmed from a motor vehicle accident in which the defendants’ son, Aaron Johnson (Aaron), was driving a motor vehicle owned by Theodore when he lost control of the vehicle and struck a telephone pole, causing serious injuries to a passenger in the vehicle, Jordan Torres.
At some point prior to 1:33 a.m. on December 26, 2019, Aaron left the defendants’ house and operated a 1997 Audi A4 2.8 Quattro (Audi) owned by Theodore. Torres was a passenger in the Audi at the time. As Aaron attempted to navigate a curve, he lost control of the Audi, crossed into the westbound lane of traffic, and left the roadway, striking a telephone pole.
Torres sustained personal injuries in the accident and sued a bar in Newington and its backer, as well as Theodore, Kim and Aaron. In the Torres action, Torres alleged that, on December 25, 2019, Aaron, a minor, consumed alcohol at the bar, after which he went to the defendants’ house in Glastonbury, where he was visibly intoxicated and consumed more alcohol.
Following the commencement of the Torres action, the defendants sought coverage from the plaintiffs for Torres’ claims under three policies of insurance:
1 a homeowners insurance policy issued to the defendants by Liberty Insurance (homeowners policy);
2 an automobile insurance policy issued to the defendants by Safeco (automobile policy); and
3 an umbrella insurance policy issued to the defendants by Liberty Mutual (umbrella policy).
Thereafter, the insurer plaintiffs sued seeking a judgment declaring that the plaintiffs are not obligated to defend or indemnify the defendants with respect to Torres’ action.
Specifically, the insurers based that argument on an exclusion in the homeowners policy that excludes coverage for” ‘bodily injury’ or ‘property damage’ . . . arising out of (1) [t]he ownership, … of motor vehicles … operated by or rented or loaned to an ‘insured’ [motor vehicle exclusion] . . . .” Therefore, according to the plaintiffs, because the claims asserted against the defendants in the Torres action arose out of Theodore’s ownership of the Audi, as well as Aaron’s negligent operation of that vehicle, the motor vehicle exclusion barred coverage under the homeowners policy.
With respect to the automobile policy, the plaintiffs asserted that the policy’s coverage for bodily injury for the Audi had been cancelled prior to the date of the accident, at the request of the defendants which, obviously, eliminated the case against the auto insurer.
The trial court granted the plaintiffs’ entire motion for summary judgment.
The Court of Appeal noted that the policy explicitly and unambiguously provided that bodily injury arising out of the use of motor vehicles owned by an insured shall be excluded from policy coverage. On the basis of the record, including comparison of the allegations of the complaint in the Torres action with the language of the homeowners policy and the motor vehicle exclusion contained therein, the Court of Appeal concluded, as a matter of law, that the plaintiffs had no duty to defend the defendants in the Torres action.
Because there was no coverage on the auto policy pursuant to an underlying policy, Liberty Mutual had no duty under the umbrella policy to defend or indemnify the defendants with respect to the Torres action.
Therefore, the trial court properly granted the plaintiffs’ motion for summary judgment and determined, as a matter of law, that the plaintiffs have no duty to defend the defendants in the Torres action.
ZALMA OPINION
Insurance never covers every possible risk of loss. A homeowners policy with an auto exclusion cannot defend or indemnify an insured who injured someone while operating a motor vehicle. In addition, there can never be coverage on an auto policy that was cancelled, and not in effect, at the time of the loss. Although the opinion and arguments were lengthy, the case was simple on the facts of the policy wording and the facts of the accident.
c) 2023 Barry Zalma & ClaimSchool, Inc.
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Policy Limits Demand Accepted Settles Claim
Post 5434
Posted on August 26, 2026 by Barry Zalma
See the full video at https://lnkd.in/g-ZtsSgK and at https://lnkd.in/ghMBdYWR
A Contingent Offer Accepted Ends the Dispute
In Farmers Insurance Exchange, a California Reciprocal Insurance Exchange, The Superior Court For The County Of San Bernardino, Kathleen Ann Wood, E087128, California Court of Appeals, (July 9, 2026) Farmers Insurance Exchange insured Doyle Archer under an automobile policy with bodily injury limits of $15,000 per person and $30,000 per accident.
FACTUAL BACKGROUND
Archer rear-ended Kathleen Ann Wood at a red light, causing Wood to assert a bodily injury claim against him. Wood’s counsel sent Farmers a pre-litigation settlement demand offering to resolve Wood’s claim for the available policy limits, stating that if the $100,000 demand exceeded the policy, the offer was for the policy limits.
Farmers timely responded in writing, agreed to pay Wood the $15,000 per-person policy limit, and provided the requested ...
Policy Limits Demand Accepted Settles Claim
Post 5434
Posted on August 26, 2026 by Barry Zalma
See the full video at https://lnkd.in/g-ZtsSgK and at https://lnkd.in/ghMBdYWR
A Contingent Offer Accepted Ends the Dispute
In Farmers Insurance Exchange, a California Reciprocal Insurance Exchange, The Superior Court For The County Of San Bernardino, Kathleen Ann Wood, E087128, California Court of Appeals, (July 9, 2026) Farmers Insurance Exchange insured Doyle Archer under an automobile policy with bodily injury limits of $15,000 per person and $30,000 per accident.
FACTUAL BACKGROUND
Archer rear-ended Kathleen Ann Wood at a red light, causing Wood to assert a bodily injury claim against him. Wood’s counsel sent Farmers a pre-litigation settlement demand offering to resolve Wood’s claim for the available policy limits, stating that if the $100,000 demand exceeded the policy, the offer was for the policy limits.
Farmers timely responded in writing, agreed to pay Wood the $15,000 per-person policy limit, and provided the requested ...
The Largest Residential Burglary of All Time
Post 5407
Fraud & the Fear of Bad Faith Suits
Posted on July 22, 2026 by Barry Zalma
See the full video at https://lnkd.in/gWQQEySW and at https://lnkd.in/gyhdK6wv
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help 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.
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help 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.
After ...
Crime Requires 121-151 Months of Imprisonment
Post 5486
Posted on September 9, 2026 by Barry Zalma
Mr. Baiyewu Is Liable For The Loss Resulting From Acts Directly Attributable To Him And For The Loss Resulting From The Reasonably Foreseeable Acts Of Others Taken In Furtherance of the Criminal Activity
In United States Of America v. Oluwasegun Baiyewu, CRIMINAL No. 21-395 (RAM), United States District Court, D. Puerto Rico (August 26, 2026) the court dealt with a case after on October 20, 2021, a grand jury in the District of Puerto Rico returned a single-count Indictment charging Mr. Baiyewu with conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h). About a year and a half later, on March 31, 2023, a grand jury returned a single-count Superseding Indictment charging Mr. Baiyewu and four co-defendants with conspiracy to commit money laundering, in violation of 18 U.S.C.
CONVICTION
Baiyewu was convicted by a jury of conspiracy to commit money laundering under 18 U.S.C. § 1956(h). The charged conspiracy, ...
Insurance Requires Fortuity to be an Insured Risk
Post 5485
Posted on September 8, 2026 by Barry Zalma
In Industrial Park Center, LLC, doing business as Mainspring Capital Group v. Great Northern Insurance Company, a foreign insurer, No. CV-25-0330-CQ, Supreme Court of Arizona (September 1, 2026).
The United States Court of Appeals for the Ninth Circuit certified the following question to this Court:
"Is damage to property a “fortuitous” loss when, based on the insured’s knowledge at the time the insurance policy issued, it was reasonably foreseeable that such damage was almost certain to occur if certain preventative measures were not taken?"
FACTUAL BACKGROUND
Mainspring owned commercial property leased to Star Fisheries for decades. Star Fisheries’ use of water and salt allegedly caused structural damage over time. In 2010, Mainspring learned of damage and made some repairs but did not implement all recommended preventive measures. In 2021–2022, additional similar structural damage was discovered, and ...
Insurance Requires Fortuity to be an Insured Risk
Post 5485
Posted on September 8, 2026 by Barry Zalma
In Industrial Park Center, LLC, doing business as Mainspring Capital Group v. Great Northern Insurance Company, a foreign insurer, No. CV-25-0330-CQ, Supreme Court of Arizona (September 1, 2026).
The United States Court of Appeals for the Ninth Circuit certified the following question to this Court:
"Is damage to property a “fortuitous” loss when, based on the insured’s knowledge at the time the insurance policy issued, it was reasonably foreseeable that such damage was almost certain to occur if certain preventative measures were not taken?"
FACTUAL BACKGROUND
Mainspring owned commercial property leased to Star Fisheries for decades. Star Fisheries’ use of water and salt allegedly caused structural damage over time. In 2010, Mainspring learned of damage and made some repairs but did not implement all recommended preventive measures. In 2021–2022, additional similar structural damage was discovered, and ...
