Policy Does Not Cover Damages Caused by In-Ground Trampoline
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Post 4824
United Casualty Insurance Company ("United" ) refused to defend James Snell, a landscaper, in a civil lawsuit alleging that Snell had negligently installed a ground-level trampoline in a client's backyard. Snell sued, contending that United had breached its insurance contract with him in bad faith and seeking a declaratory judgment that United had a duty to defend and indemnify Snell. The district court granted summary judgment for United, holding that the accident did not "arise from" Snell's "landscaping" work within the meaning of his commercial general liability policy.
The Eleventh Circuit resolved the dispute in James Snell, d.b.a. Outdoor Expressions v. United Specialty Insurance Company, No. 22-12581, United States Court of Appeals, Eleventh Circuit (May 28, 2024).
BACKGROUND
Snell's landscaping company is named "Outdoor Expressions," and it is located in Fairhope, Alabama. Snell was hired by the Westons to turn an above ground trampoline into a ground level trampoline.
Snell's site work included excavation of a pit, installation of a drain and drainage sand, excavation of a trench to install a drainage pipe, installation of the drainage pipe and of a drain pump, and, most relevant here, construction of concrete block retainer walls and installation of a wood cap on the retainer walls. The retaining walls aimed to prevent erosion and collapse of the structure; the wood cap was for aesthetics. Then, after all that, Snell unboxed the trampoline, assembled it, and lowered it into the pit.
A few years later, Matthew Burton sued the Westons for injuries his daughter suffered on the Westons' trampoline. Burton alleged that Snell "wantonly assembled, constructed and installed the trampoline in the backyard of the Weston[s]'s home," creating "an unreasonably dangerous condition and structure on the property." Snell's advised his insurer of the lawsuit only to have United that it would not defend him in the lawsuit because it policy’s obligations were limited to the specified operations that Snell, as insured performs landscaping. It concluded that the injury from the assembly and installation of a Trampoline did not arise from Snell's performance of landscaping, and that there was no coverage for such claims.
In addition the application which predated the policy specifically asked Snell: "do you do any recreational or playground equipment construction or erection?" In response, Snell checked the "No" box.
DISCUSSION
Snell Has The Burden To Show Coverage.
Under Alabama law the party seeking coverage under a policy bears the burden of proving that coverage exists. In short, the Specified Operations provision (fitting into the gap left by the general coverage provision) describes the contours or boundaries of coverage-it does not purport to take away coverage already granted.
Thus, the Specified Operations provision is a limitation of coverage-not an exclusion.
Snell Has Not Shown That United Had A Duty To Defend Him.
Because Snell's insurance application-which Alabama law requires the Eleventh Circuit to consider part of the policy-expressly disclaims the work he did here. Under Alabama law, insurance contracts are subject to the same rules of interpretation as any other contract. It was undisputed that the trampoline is "recreational equipment."
Accordingly, the Eleventh Circuit concluded that the information Snell provided in his insurance application conclusively established he was not entitled to coverage. The Eleventh Circuit concluded that Snell's insurance application forecloses any duty to indemnify for the same reason it forecloses any duty to defend.
Bad Faith
Generally, to prove a claim for bad faith refusal to pay an insurance claim, the plaintiff has the burden to prove
1. the existence of an insurance contract;
2. an intentional refusal to pay the claim; and
3. the absence of any lawful basis for the refusal and the insurer's knowledge of that fact or the insurer's intentional failure to determine whether there is any lawful basis for its refusal.
The District Court, having found that United had a lawful basis for denying Snell's claim and that Snell's breach of contract claim fails, his claim for bad faith denial also fails. Snell did not show it was error to grant summary judgment on his bad faith claim.
ZALMA OPINION
The Commercial General Liability insurance policy issued to Mr. Snell, insured Snell against many risks of loss as long as they occurred as a result of his occupation as a landscaper that has no act that did not include any recreational or playground equipment construction or erection. Since the trampoline he installed was clearly an item of recreational or playground equipment thee was no potential for coverage to exist to defend or indemnify Snell for the injuries incurred when a child using the trampoline injured herself.
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Notice of Claim Later than 60 Days After Expiration is Too Late
Post 5089
Injury at Massage Causes Suit Against Therapist
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Hiscox Insurance Company (“Hiscox”) moved the USDC to Dismiss a suit for failure to state a claim because the insured reported its claim more than 60 days after expiration of the policy.
In Mluxe Williamsburg, LLC v. Hiscox Insurance Company, Inc., et al., No. 4:25-cv-00002, United States District Court, E.D. Missouri, Eastern Division (May 22, 2025) the trial court’s judgment was affirmed.
FACTUAL BACKGROUND
Plaintiff, the operator of a massage spa franchise, entered into a commercial insurance agreement with Hiscox that provided liability insurance coverage from July 25, 2019, to July 25, 2020. On or about June 03, 2019, a customer alleged that one of Plaintiff’s employees engaged in tortious ...
ZIFL – Volume 29, Issue 11
The Source for the Insurance Fraud Professional
Posted on June 2, 2025 by Barry Zalma
Post 5087
See the full video at and at
Read the full article and the full issue of ZIFL June 1, 2025 at https://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-06-01-2025.pdf
Zalma’s Insurance Fraud Letter – June 1, 2025
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ZIFL – Volume 29, Issue 11
The Source for the Insurance Fraud Professional
Read the full article and the full issue of ZIFL June 1, 2025 at https://lnkd.in/gTWZUnnF
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 ...
No Coverage if Home Vacant for More Than 60 Days
Failure to Respond To Counterclaim is an Admission of All Allegations
Post 5085
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In Nationwide Mutual Insurance Company v. Rebecca Massey, Civil Action No. 2:25-cv-00124, United States District Court, S.D. West Virginia, Charleston Division (May 22, 2025) Defendant Nationwide Mutual Insurance Company's (“Nationwide”) motion for Default Judgment against Plaintiff Rebecca Massey (“Plaintiff”) for failure to respond to a counterclaim and because the claim was excluded by the policy.
BACKGROUND
On February 26, 2022, Plaintiff's home was destroyed by a fire. At the time of this accident, Plaintiff had a home insurance policy with Nationwide. Plaintiff reported the fire loss to Nationwide, which refused to pay for the damages under the policy because the home had been vacant for more than 60 days.
Plaintiff filed suit ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.
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...
