Potential of Coverage is Enough to Require an Insurer to Defend
Post 4765
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When two or more insurance companies issue When two or more insurance companies issue policies with a potential for coverage of a claim of bodily injury they should work together to protect their mutual insured rather than litigate with the insured and the other insurers. Litigation is expensive and may result in a case and result they did not wish to have.
In Admiral Insurance Co. v. Track Group, Inc. f/k/a Securealert, Inc., and Jeffrey Mohammed Abed, and Certain Underwriters At Lloyd’s, London Subscribing To Policy No. CJ10028219, No. 1-23-1210, 2024 IL App (1st) 231210-U, Court of Appeals of Illinois, First District, Third Division (March 27, 2024) the Illinois Court of Appeals looked to protect the interests of the insured other than the interest of the insurers.
FACTS
This appeal concerned an insurance coverage dispute between a general liability carrier and a professional liability carrier. Certain Underwriters at Lloyd’s, London Subscribing to Policy No. CJ10028219 (Underwriters) and Admiral Insurance Co. (Admiral) both insured Track Group, Inc., a company in the business of electronically monitoring individuals using ankle monitors. Track Group was sued after a person wearing the ankle monitor sustained severe injuries while driving his vehicle. Underwriters had paid the costs of Track Group’s defense up to the time of the decision but it argued that Admiral should share in the costs, as it believes both insurance policies provide coverage in this case. The circuit court held that Admiral did not owe coverage under the terms of its insurance policy with Track Group.
BACKGROUND
Underwriters issued Track Group a general liability insurance policy, while Admiral issued a professional liability insurance policy. Track Group sought coverage under both policies in connection with a personal injury lawsuit filed against it in Los Angeles, California. The plaintiff in that suit, Jeffrey Mohamed Abed, alleged that his leg was torn from his body after his foot, on which he was wearing the ankle monitor, became lodged between the gas and brake pedals in the vehicle he was driving. Admiral denied coverage and filed a declaratory action, contending that it does not owe coverage under these circumstances.
The circuit court granted Admiral’s motion for summary judgment and denied Underwriters’ motion for summary judgment.
ANALYSIS
On appeal, Underwriters argued that the circuit court erred in granting summary judgment in favor of Admiral, contending that the court’s interpretation of the Admiral policy was overly narrow. Underwriters argued that Admiral policy covers the injury at issue.
Where policy language is susceptible to more than one reasonable interpretation, it is considered ambiguous and will be construed strictly against the insurer. Courts construe the policy as a whole, giving effect to each provision where possible because the court must assume that the provision was intended to serve a purpose.
According to the plain language of the policy Admiral is potentially liable for wrongful acts arising out of the provision of “professional services” and “technology products.” The policy includes a general exclusion for bodily injury and property damage. However, that exclusion does not apply to bodily injury arising out of the provision of “professional services.” In other words, Admiral’s policy could potentially cover bodily injury arising out of the provision of “professional services.”
One of the four components of the ankle monitor is an internal central processing unit. The ankle monitor can make and receive calls, generate alarms, receive radio frequency transmissions, and communicate movements to Track Group. Because the ankle monitor is an electronic device that can store, retrieve, and process data it is potentially a computer. Moreover, the ankle monitor likely constitutes “hardware.” Because the ankle monitor is potentially computer hardware, the Court of Appeals held that it is potentially covered by Admiral’s policy and potential coverage is all that is required to trigger an insurer’s duty to defend its insured.
Because the facts of Abed’s lawsuit against Track Group potentially fell within the terms of the policy the decision of the Circuit Court was reversed.
ZALMA OPINION
The court did what the insurers should have done – it read the policy which covered claims resulting from professional services or technology products. Since the ankle monitor was clearly a technology product and was claimed to be the cause of the injury that ripped off Mr. Abed’s leg, there was a potential of coverage and all of the insurers owed Track Group a defense. Working together both insurers could have saved money and served their insured fairly.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Concealing a Weapon Used in a Murder is an Intentional & Criminal Act
Post 5002
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In Howard I. Rosenberg; Kimberly L. Rosenberg v. Chubb Indemnity Insurance Company Howard I. Rosenberg; Kimberly L. Rosenberg; Kimberly L. Rosenberg; Howard I. Rosenberg v. Hudson Insurance Company, No. 22-3275, United States Court of Appeals, Third Circuit (February 11, 2025) the Third Circuit resolved whether the insurers owed a defense for murder and acts performed to hide the fact of a murder and the murder weapon.
FACTUAL BACKGROUND
Adam Rosenberg and Christian Moore-Rouse befriended one another while they were students at the Community College of Allegheny County. On December 21, 2019, however, while at his parents’ house, Adam shot twenty-two-year-old Christian in the back of the head with a nine-millimeter Ruger SR9C handgun. Adam then dragged...
Renewal Notices Sent Electronically Are Legal, Approved by the State and Effective
Post 5000
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Washington state law allows insurers to deliver insurance notices and documents electronically if the party has affirmatively consented to that method of delivery and has not withdrawn the consent. The Plaintiffs argued that the terms and conditions statement was not “conspicuous” because it was hidden behind a hyperlink included in a single line of small text. The court found that the statement was sufficiently conspicuous as it was bolded and set off from the surrounding text in bright blue text.
In James Hughes et al. v. American Strategic Insurance Corp et al., No. 3:24-cv-05114-DGE, United States District Court (February 14, 2025) the USDC resolved the dispute.
The court’s reasoning focused on two main points:
1 whether the ...
Rescission in Michigan Requires Preprocurement Fraud
Post 4999
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Lie About Where Vehicle Was Garaged After Policy Inception Not Basis for Rescission
This appeal turns on whether fraud occurred in relation to an April 26, 2018 renewal contract for a policy of insurance under the no-fault act issued by plaintiff, Encompass Indemnity Company (“Encompass”).
In Samuel Tourkow, by David Tourkow v. Michael Thomas Fox, and Sweet Insurance Agency, formerly known as Verbiest Insurance Agency, Inc., Third-Party Defendant-Appellee. Encompass Indemnity Company, et al, Nos. 367494, 367512, Court of Appeals of Michigan (February 12, 2025) resolved the claims.
The plaintiff, Encompass Indemnity Company, issued a no-fault insurance policy to Jon and Joyce Fox, with Michael Fox added as an additional insured. The dispute centers on whether fraud occurred in...
Insurance Fraud Leads to Violent Crime
Post 4990
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CRIMINAL CONDUCT NEVER GETS BETTER
In The People v. Dennis Lee Givens, B330497, California Court of Appeals, Second District, Eighth Division (February 3, 2025) Givens appealed to reverse his conviction for human trafficking and sought an order for a new trial.
FACTS
In September 2020, Givens matched with J.C. on the dating app “Tagged.” J.C., who was 20 years old at the time, had known Givens since childhood because their mothers were best friends. After matching, J.C. and Givens saw each other daily, and J.C. began working as a prostitute under Givens’s direction.
Givens set quotas for J.C., took her earnings, and threatened her when she failed to meet his demands. In February 2022, J.C. confided in her mother who then contacted the Los Angeles Police Department. The police ...
Police Officer’s Involvement in Insurance Fraud Results in Jail
Post 4989
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Von Harris was convicted of bribery, forgery, and insurance fraud. He appealed his conviction and sentence. His appeal was denied, and the Court of Appeals upheld the conviction.
In State Of Ohio v. Von Harris, 2025-Ohio-279, No. 113618, Court of Appeals of Ohio, Eighth District (January 30, 2025) the Court of Appeals affirmed the conviction.
FACTUAL BACKGROUND
On January 23, 2024, the trial court sentenced Harris. The trial court sentenced Harris to six months in the county jail on Count 15; 12 months in prison on Counts 6, 8, 11, and 13; and 24 months in prison on Counts 5 and 10, with all counts running concurrent to one another for a total of 24 months in prison. The jury found Harris guilty based on his involvement in facilitating payments to an East Cleveland ...
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To Dispute an Arbitration Finding Party Must File Dispute Within 20 Days
Post 4988
EXCUSABLE NEGLECT SUFFICIENT TO DISPUTE ARBITRATION LATE
In Howard Roy Housen and Valerie Housen v. Universal Property & Casualty Insurance Company, No. 4D2023-2720, Florida Court of Appeals, Fourth District (January 22, 2025) the Housens appealed a final judgment in their breach of contract action.
FACTS
The Housens filed an insurance claim with Universal, which was denied, leading them to file a breach of contract action. The parties agreed to non-binding arbitration which resulted in an award not
favorable to the Housens. However, the Housens failed to file a notice of rejection of the arbitration decision within the required 20 days. Instead, they filed a motion for a new trial 29 days after the arbitrator’s decision, citing a clerical error for the delay.
The circuit court ...
