Digested from case reports published in the North Eastern Reporter 2d,
West Publishing Co., St. Paul, MN

Can dog bite claim be covered under auto policy?

On August 27, 1994, Tracey White drove to the home of an employee whose car had broken down. He drove into her driveway, stopped but left the motor running, and sounded his horn. The driver's window was rolled down. Within seconds, a dog bolted out of the house, ran to the car, jumped up to the open window and bit White on the hand. The dog was known to be protective but had never bitten anyone before.

White filed a claim for PIP benefits under his auto policy issued by American Casualty Company. His policy defined "accident" as "an unexpected, unintended event that causes bodily injury or property damage arising out of the ownership, maintenance or use of an auto." American denied liability saying his injuries did not arise out of an "accident." White filed this action alleging breach of contract and unfair claims settlement. The trial court entered a summary judgment that the insured was not entitled to benefits under his policy. White appealed.

The higher court believed the only question before it was whether White's auto was "in use" when he drove into the driveway, stopped, and sounded his horn. Within seconds, the dog "bolted from the doorway of the house, ran directly to the car, lunged into the car window and bit White's hand." The court said summary judgment was erroneous, and whether the dog's attack was caused by the honking of the car horn should have been decided in the trial court.

The court further stated that American's denial of liability was in good faith and its interpretation of its policy was not unreasonable. Summary judgment was proper on that issue and was affirmed.

The summary judgment entered in the trial court was affirmed in part, and reversed and remanded for further proceedings to decide whether the dog bite was caused by the honking of the horn.

Tracey S. White v. American Casualty Insurance Company-No. 97-P-1684-Appeals Court of Massachusetts, Plymouth-October 25, 2001-756 North Eastern Reporter 2d 1208.

Insurer allowed to set-off prior payments to injured party

Angela Woolems was injured in an accident on January 10, 1997, when the car in which she was riding was involved in an accident with one driven by Timothy Johnson. Kelli Laymon was driving the car in which Angela was a passenger and had a policy covering her car issued by Shelter Insurance Company. Johnson was insured under a policy issued by Atlanta Casualty with a $25,000 limit, and that amount was paid to Woolems, and Johnson was released from further liability.

Woolems also received from Shelter the $25,000 limit for medical payments. The policy issued by Shelter provided for UIM benefits with a limit of $50,000. The record showed that Woolems had incurred medical expenses in excess of $35,400, and she sought to recover under Laymon's UIM coverage with Shelter. Shelter denied any further liability since Woolems had received a total of $50,000 for her damages. Woolems argued that she was also entitled to recover damages for her pain and suffering and lost income.

The policy stated, under the limits of liability: "(3) Any amount payable under the terms of this Coverage will be reduced by any amount paid or payable for the same damages to or for the insured, (a) by or for any person or organization who is or may be held legally liable for the bodily injury to the insured; ..."

The trial court granted Woolems' motion for partial summary judgment, and Shelter appealed.

The higher court decided the trial court had erred in finding that Woolems was entitled to an additional $25,000. Shelter's UIM limit was $50,000 and Woolems had already received that amount. Furthermore, Shelter was entitled to set-off both $25,000 payments under the set-off clauses in its policy.

The judgment entered in the trial court was vacated, and the action was remanded for further proceedings.

Shelter Insurance Company, Appellant, v. Angela Woolems-No. 53A01-0101-/cv-28-Court of Appeals of Indiana-December 26, 2001-759 North Eastern Reporter 2d 1151.

Statutory UIM coverage under HO policy denied due to late claim filing

Hilda Luckenbill was killed when her car was struck head-on by a car driven by Steven Bolyard. Her estate was paid the $200,000 limits under his two policies. Her husband, Daniel, then sought to recover under their HO policy issued by Midwestern Indemnity Company. Midwestern denied coverage, and her surviving husband filed this action for declaratory judgment.

The accident occurred on July 18, 1997, but Midwestern was not notified of a possible claim under the UIM provision of its HO policy until May 7, 1999. In the meantime, Daniel had already settled his claims against Bolyard and released him from liability.

The HO policy provided UIM coverage, imposed as a matter of law, for injuries sustained while using some types of vehicles. In this case, the trial court found that the coverage was limited to $100,000, the difference between the $300,000 limits of the HO policy and the amount paid to the estate by Bolyard. However, the lower court also found that Daniel could not recover under the Midwestern policy because Midwestern was not notified of the accident until after Daniel had settled with Bolyard and released him.

The court, on appeal, found that Midwestern was prejudiced by the late notice and was deprived of its right of subrogation. The court decided that Daniel's failure to comply with the requirements set forth in his policy terminated the UM/UIM coverage, notwithstanding it was imposed by statute and not by agreement.

The summary judgment entered in the trial court in favor of Midwestern was affirmed.

Luckenbill et al., Appellants, v. Midwestern Indemnity Company-
No. 01-CA-1536-Court of Appeals of Ohio, Second District, Darke County-June 1, 2001-758 North Eastern Reporter 2d 301.

UM coverage doesn't apply to "drive-by" shooting

State Farm Mutual Automobile Insurance Company had issued to Randy Williams its auto liability policy covering a Buick Regal. On October 30, 1997, the insured was driving in Gary, Indiana; and Sharmeika Moons, her son Quincy, and Taranee Lewis were passengers. As Williams was stopped at the intersection of Fifteenth Avenue and Clark Road, a car driven by Calvin Keith drove up beside him. Keith rolled his window down and fired a total of 17 shots into the Williams car, injuring the occupants. There was no contact between the cars.

The policy issued to Williams provided for uninsured motorist coverage "for bodily injury an insured is legally entitled to collect from the owner or driver of an uninsured motor vehicle. The bodily injury must be caused by accident arising out of the operation, maintenance, or use of an uninsured motor vehicle."

State Farm denied liability because the injuries did not arise out of the "operation, maintenance, or use of an uninsured motor vehicle." The trial court entered summary judgment in favor of State Farm, and the insured and his injured passengers appealed.

In affirming the judgment in favor of the company entered in the trial court, the higher court said: "Keith did not chase Moons and Williams in his car. The shooting was not the result of road rage. The cars did not touch. The facts of this case ... do not establish a causal relationship between the vehicle and the injuries sufficient to invoke coverage under the uninsured motorist provision...."

One Justice dissented and filed a separate opinion.

Sharmeika Moons and Randy Williams, Appellants, v. Calvin Keith and State Farm Mutual Automobile Insurance Company-No. 45A03-0102-CV-53-Court of Appeals of Indiana-November 20, 2001-758 North Eastern Reporter 2d 960.

Illinois statute trumps auto policy exclusion

On September 21, 1995, Maurice Barnes, accompanied by Ruby Smith, drove to Harrah's Casino in Joliet, Illinois. Upon their arrival, Barnes' car was taken by the valet service and parked. When it was time for Barnes and Smith to leave, one of the employees of the valet service drove the car to the entrance and left it. As Smith attempted to enter the passenger door, the car rolled backwards and knocked her to the ground, causing injuries. She filed suit against Barnes, the valet (Fiaher) and Harrah's. Barnes had an auto policy issued by State Farm Mutual Automobile Insurance Company and he referred the claim to it. State Farm denied liability.

The policy excluded coverage while any insured vehicle is "being repaired, serviced or used by any person employed or engaged in any way in a car business."

The lower court entered judgment against State Farm, and it appealed.

The higher court affirmed the judgment on the basis of Illinois Vehicle Code section 7-317(b)(2) which states that a motor vehicle liability policy issued to the owner of a vehicle must cover the named insured and any other person using the vehicle with the named insured's permission. In the decision in State Farm Mutual v. Universal Underwriters, 695 North Eastern Reporter 2d 848 (1998), the appellate court ruled that the "automobile business exclusion" violated the public policy of Illinois and could not be enforced. The Illinois statute requires any automobile owner's policy to cover any person using that vehicle with the express or implied consent of the owner, and the policy exclusion violated that statute. The higher court concluded that the exclusion could not be enforced by State Farm.

The action was remanded for entry of summary judgment in favor of Fisher and Harrah's. The court also found that State Farm did not act in bad faith in denying coverage.

State Farm Mutual Automobile Insurance Company, Appellant, v. Ruby Smith et al.- No. 90388-Supreme Court of Illinois-September 20, 2001-757 North Eastern Reporter 2d 881.

"Independent witness" does not exclude witnesses who might have a claim

Progressive Insurance Company had issued to Safiya Hassan an auto policy that included UM/UIM coverage. On January 2, 1999, Safiya was a passenger in a car driven by her sister, Ayan Hassan, when their car was forced off the road by an unidentified truck. There was no physical contact between the vehicles, but both women were injured when their car struck a pole. Safiya filed a claim under the UM/UIM coverage of her own policy, and Progressive denied liability. There were no witnesses.

The trial court granted the company's motion for summary judgment, basing its decision on the fact there was no physical contact between the cars, and no independent witnesses.

On appeal, the higher court pointed out that since there was no contact between the cars, the testimony of an independent witness should be required. It then found that the question before it was whether the insured's sister would qualify as an "independent witness." Progressive contended that the insured's sister could not be an "independent witness" since she had a possible claim under the policy.

The court concluded that "independent" did not exclude witnesses who had a potential claim and, in this case, the insured's sister qualified as an "independent" witness. The trial court erred in granting the company's motion for summary judgment, and the issues should have been resolved in the lower court.

The summary judgment entered in the lower court in favor of Progressive was affirmed in part and reversed in part, and was remanded for further proceedings.

Hassan, Appellant, v. Progressive Insurance Company et al.-No. 00AP-1137-Court of Appeals of Ohio, Tenth District, Franklin County-June 21, 2001-756 North Eastern Reporter 2d 745. *