Medical Clinic Not Responsible For Patient Who Causes An Automobile Accident

An elderly patient was examined during a scheduled appointment with a medical clinic. The patient was observed to be unstable. She advised the doctor's office that she was under a lot of stress due to concern over her daughter being diagnosed with cancer. Upon examination, the doctor did not find any evidence of impairment. She was determined to be alert, could maintain a conversation, and did not exhibit any behavior warranting concern over her ability to drive an automobile.

After the examination, the patient was taken in a wheelchair to her car in the parking lot. The patient then proceeded to drive, striking the back of the Plaintiff's car. The Plaintiff alleged that she was injured in the collision and blamed the clinic for allowing the patient to drive when she was incapable.

The medical clinic filed a motion for summary judgment which was granted by the court. The Oklahoma Court of Civil Appeals affirmed summary judgment stating that simply because a patient is unsteady on her feet did not reasonably give the physicians notice that an accident would occur; that a nurse taking a patient to the parking lot in a wheel chair to prevent the patient from falling is not sufficient for the Plaintiff to bring suit; members of society are perfectly capable of knowing when they can safely operate an automobile and the clinic was not responsible.

No Insurance Coverage Available Because LLC Was Not A Named Insured

No Insurance Coverage Available Because LLC Was Not A Named Insured

No coverage was available to a limited liability company when it was not named as an insured in the liability insurance policy. An individual by the name of Kouk owned multiple businesses. One of the companies, Brown and Kouk Rentals, LLC, owned and rented apartments and mobile homes to people. Another business was Vernon & Sons Construction, LLC, involved in the construction trade. The businesses maintained separate bank accounts and no funds were commingled between the businesses. Vernon & Sons Construction obtained commercial liability insurance coverage through Columbia National Insurance. Vernon & Sons Construction was the only company listed on the insurance policy.

Mr. Kouk went out one evening to a renter's home to collect the rent. When he arrived, there was a party taking place in the front yard and he was invited to share a beer. Kouk joined the gathering around a burning fire and drank a beer with those present. When he finished, he put the bottle into a metal bucket that was in the fire. Several minutes later, the bottle exploded with a piece of the glass striking a young child of the renter causing him to lose sight in one eye. The father of the injured boy filed suit against Kouk for negligence.

Kouk notified Columbia National Insurance who provided an attorney to defend the case. Columbia retained separate counsel to conduct an investigation as to whether or not there would be coverage under the policy for the incident. The coverage investigation showed that Kouk was not conducting any business on behalf of Vernon & Sons Construction when the incident happened. Columbia determined there was no coverage from the loss and withdrew the defense of the injured boy's lawsuit.

Kouk proceeded to defend the lawsuit using his own personal attorney. The jury returned a verdict against Kouk in the sum of $427,000. The minor Plaintiff then filed suit against Columbia to recover the benefits of the insurance policy.

The Oklahoma Court of Civil Appeals ruled:

1. The injured child could proceed directly against the insurer and without the requirement of a garnishment based upon the language in the policy allowing a party to recover a final judgment against an insured;

2. Mr. Kouk was not insured under the policy because he was not conducting business or performing duties as part of the business of the construction company when the accident occurred;

3. Columbia National was not estopped from denying coverage because Mr. Kouk had been timely informed there was a coverage question many months before the lawsuit was even filed.

Perjury

Plaintiff filed a personal injury lawsuit against the Defendant that arose out of a gas pressure vessel explosion on an oil and gas lease. During the discovery phase of the lawsuit, a deposition was conducted of the former co-plaintiff in which the deponent testified he had installed a safety pressure valve three weeks prior to the explosion. Approximately six months after the testimony was given, Plaintiffs’ counsel submitted a correction to the deposition revising the testimony to reflect the valve had actually been installed after the explosion. A second deposition was conducted in which the co-plaintiff admitted to giving false testimony in order to mislead the Defendant, the court, and ultimately the jury. Defendant moved to dismiss the lawsuit based on Plaintiff’s perjury and prevailed. Plaintiff appealed.

The Oklahoma Court of Civil Appeals affirmed the dismissal, holding:

1) the trial court acted properly within its authority to protect judicial process when it dismissed Plaintiff’s claim, and

2) Plaintiff’s rights to due process were not violated when the lawsuit was dismissed as a sanction to Plaintiff’s misconduct.

Agrawal v. Duke Energy Field Services, LP, 2013 OK CIV APP 61.

Insurance - Automobiles

A vehicle insured by Shelter Mutual Insurance Company was permissively being driven by an individual who was insured by American Farmers and Ranchers Mutual Insurance Company . The driver was involved in a collision that occurred when he turned left in front of another vehicle which resulted in injuries to the passengers of the second vehicle. The passengers of the other vehicle made claims for property damage and personal injury against the driver for his negligence and submitted claims to both insurance companies.

American Farmers’ policy contained an "other insurance" clause that stated: "provided, however, the insurance with respect to a . . . non-owned automobile shall be excess insurance over any other valid collectible insurance. . . ."

Shelter’s policy also contained an "other insurance" clause which stated: "if there is other insurance which covers the insured’s liability with respect to a claim also covered by this policy, coverages a and b (i.e., bodily injury and property damage liability) of this policy will apply only as excess to other insurance."

The two insurance companies jointly settled the claims and prorated the amount of the settlement based on the liability limits in the respective insurance policies. The Shelter insurance policy contained an "other insurance" exclusion which limited insurance coverage only to claims only in excess of other insurance which covered an insured’s liability. American Farmers reserved the right to recover from Shelter in the event Shelter’s "other insurance" clause was deemed invalid.

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Evidence Is Necessary For Products Liability Case To Survive Summary Judgment

Plaintiff purchased an aluminum ladder at his local Home Depot in September 2003. In 2006, Plaintiff fell while using the ladder when one of the legs "folded." In 2008, Plaintiff filed suit against Home Depot and Warner Company.

Plaintiff alleged that the ladder was defective and unreasonably dangerous. The ladder company, Warner, filed a motion for summary judgment, asserting that the ladder was not defective in design, manufacture or materials. Home Depot also filed a motion for summary judgment and attached evidentiary materials from an expert stating that there was no defect in the ladder.

In response to the motions for summary judgment, Plaintiff said he was competent to express an opinion concerning the allegedly defective design of the ladder. Plaintiff asserted that he was not obligated to produce expert testimony in support of his opinion concerning the existence of a defect.

The trial court granted summary judgment for the ladder company and Home Depot, finding that Plaintiff failed to file sufficient evidentiary material to rebut the expert reports submitted by the Defendants. Plaintiff appealed.

The Oklahoma Court of Civil Appeals affirmed the summary judgment for the Defendants:

1) when Warner and Home Depot came forward with expert testimony to demonstrate no defect in the ladder, Plaintiff was required to come forward with some evidence to rebut this expert opinion;

2) Plaintiff had no special engineering or other expertise to express an opinion on the issue of design or manufacturing defects;

3) Plaintiff’s bald assertion that the ladder failed because of an alleged defect was insufficient to overcome the expert evidence provided by the defendants.

Doyle v. New Warner Holding Company, Inc., 2013 OK CIV APP 66, ___ P.3d ___

Insurance - Liquor Liability

A golf course was insured by an insurance policy which included "Liquor Liability Coverage". The parents of a 17-year-old girl working at a golf course brought a lawsuit against the golf course and its manager for allegedly providing alcohol to their daughter following a golf tournament. The girl attempted to drive after consuming a substantial amount of alcohol, crashed her vehicle into a tree, and sustained serious injuries to her spinal cord resulting in paraplegia.

The insurance policy provision obligated the insurance company to pay sums owed by the golf course if they were incurred "by reason of the selling, serving or furnishing of any alcoholic beverage." The insurance policy liability limits were set at $2 Million for the "Aggregate Limit" and $1 Million for "Each Common Cause Limit".

The insurance company subsequently filed a declaratory judgment action in Federal court asking the court to establish the maximum insurance coverage available to the golf course. A summary judgment was filed requesting the court rule that $1 Million was the applicable limit since all claimed damages arose from the injuries to one person and fell under "Each Common Cause". The girl’s parents argued the limit should be $2 Million.

The Federal court granted summary judgment in favor of the insurance company finding the maximum limit of liability was established at $1 Million for the pending county district court case and reasoned that an insurance policy is considered a contract governed by the rules for interpretation of contracts. The plain language of the policy set the limit in this circumstance at $1 Million. The court further declared that, since it did not have the ability to rewrite the policy, it must proceed based on the agreement therein. American Economy Ins. Co. v. Rutledge, et al., 833 F.Supp.2d 1320 (W.D. Okla. 2011).

Named Driver Exclusion From Coverage

As a result of a collision between a car and a motorcycle, a lawsuit was filed in which a judgment was rendered in favor of the motorcycle driver and his passenger and against the driver of the car for bodily injuries and property damage. A garnishment action was subsequently filed against the car driver’s insurance company for liability insurance policy limits in the amount of $25,000.00 for each of the two people riding on the motorcycle.

The driver of the car was precluded from coverage under the car owner’s insurance policy which contained a named driver exclusion. As a result of the exclusion, the insurance company claimed exemption from garnishment. The trial court awarded summary judgment to the motorcycle passenger for the minimum amount of liability coverage required by law finding that the named driver exclusion left an innocent third-party without insurance coverage, thereby violating Oklahoma public policy. The insurance company appealed.

The Oklahoma Court of Civil Appeals reversed the trial court’s ruling holding that the Oklahoma insurance statutes allow named driver exclusions and that the Oklahoma Supreme Court continuously expresses the validity of the named driver exclusion. Therefore, based on the validity of the named driver exclusion, no coverage was available to the motorcycle passenger under the car owner’s insurance policy. Rodriguez, et al. v. Gutierrez-Perez, et al., 273 P.3d 69, 2012 OK CIV APP 14.

This area of law continues to evolve and change as the legislature revises and changes the Oklahoma statutes and the courts continue to interpret and articulate Oklahoma law.

Foster Care Liability Insurance Coverage

The State of Oklahoma requires liability insurance for licensed or certified foster parents. In 2002, the Oklahoma Department of Human Services ("DHS") placed a six-month-old baby in a foster home and liability insurance was provided to the foster mother by two insurers at the expense of the State. Less than one month later, the baby was found lying in her crib dead as a result of child neglect, specifically untreated illnesses and lack of personal care. In 2003, the Estate of the deceased child filed a wrongful-death lawsuit against the foster mother, the Oklahoma DHS, and two employees of the DHS.

During the litigation of the wrongful-death suit, the Estate filed an insurance claim with the liability insurer for benefits which was subsequently denied due to an exclusion for injuries resulting from physical abuse.

Just days before the trial, the insurance companies proposed a combined settlement offer which was rejected by the Estate. The case proceeded to trial and a $20 Million verdict was returned in favor of the Estate. The foster mother appealed.

In 2007, one of the two insurance companies filed a declaratory judgment action in Federal court requesting the court to find it had no responsibility to defend the foster mother or pay the damages under the liability coverage of the insurance policy. The other parties filed numerous cross-claims and counterclaims including breach of contract and bad faith. Most of the claims were settled in a compromise resolution. However, following the partial settlement, two issues remained to be decided by the Federal court.

The court ruled that:

1. the Estate of the deceased child did not demonstrate a contractual relationship existed in such a way that the foster child as a third-party claimant could assert a claim against the insurance policy. Likewise, the insurance company did not owe a duty to the Estate as a third-party claimant, and

2. the Estate could not seek garnishment against the foster mother in excess of the available liability policy limits.

The Estate appealed the rulings of the Federal court. On appeal, the Tenth Circuit Court of Appeals affirmed the District Court. Colony Ins. Co. v. Burke, 698 F.3d 1222 (10th Cir. 2012).

Liquor Liability Exclusion

An insurance company provided liquor liability coverage to a restaurant/tavern including coverage for injuries "imposed" on the insured resulting from "selling, serving or furnishing of any alcoholic beverage".

The club was sued in an underlying state court action by the parent/guardians of three minor Plaintiffs who were purportedly injured as bystanders to a fight which broke out in the insured bar. As part of the state court lawsuit, the minors never presented evidence that showed their injuries resulted from "selling, serving or furnishing alcoholic beverages", nor were any allegations made that alcohol was a factor in the injuries sustained.

The insurance company filed a declaratory action in Federal court requesting the court to determine if the insurance policy covered the injuries in the state court action and required the insurance company to defend in the underlying lawsuit.

The Federal court ruled that since the injuries did not arise out of "selling, serving or furnishing of any alcoholic beverage", coverage did not exist, and, as such, there was no duty to defend the lawsuit. The court also noted that although there was an "assault and battery" endorsement in the insurance policy, the endorsement did not apply since the loss was not covered under the liquor liability policy. Mount Vernon Fire Ins. Co. v. Olmos, 808 F.Supp.2d 1305 (Okla. 2011).

Exclusion For Inverse Condemnation Held Valid

An insurer sold a liability insurance policy to a municipality which specifically excluded coverage for inverse condemnation. The municipality was sued in an inverse condemnation action and filed a claim under the insurance policy after a verdict was returned against the municipality. The claim was denied under the insurance policy exclusion for inverse condemnation. As a result of the denial of the claim, the municipality sued the insurer seeking coverage under the policy.

The trial court granted summary judgment for the insured and the insurance company appealed.

The Oklahoma Supreme Court reversed and remanded the summary judgment entered by the trial court and instructed the trial court to enter summary judgment in favor of the insurer holding that: (1) the insurance policy contained an exclusion for claims of inverse condemnation; (2) the insurance company was not estopped from denying coverage; and (3) the municipality only obtained coverage for losses under the Governmental Tort Claims Act, and (4) a "cause of action grounded on inverse condemnation is not governed by the Governmental Tort Claims Act." City Of Choctaw v. Oklahoma Municipal Assurance Group, 2013 OK 6.

Don't Dump The UM Coverage

In September, 2010, a commercial auto insurance policy was issued to a county commissioner including uninsured motorist coverage for county vehicles. The liability limits of the policy included $125,000 per person and a maximum of $1 Million per accident.

A county worker was injured on the job while performing road-resurfacing duties and filed a claim for personal injury under the policy requesting coverage under the uninsured motorist portion of the policy contending he was operating a covered vehicle. The insurance company denied the claim and filed a declaratory judgment action stating the claimant could not be considered an insured as he was not occupying a covered vehicle and asked the court to rule there was no coverage. The claimant filed a counterclaim asserting he was entitled to policy limits of $1 Million in coverage for injuries sustained.

The claimant, as well as at least five other members of the road crew, were operating three vehicles as part of a chip-sealing method used to resurface the road; the oil distributor truck, chipper, and a dump truck. The injured claimant was riding on the back of the chipper being pushed by the dump truck when the chipper was pushed into the oil distributor truck and the claimant’s leg was pinned between the two pieces of equipment.

The parties agreed the dump truck was considered a covered vehicle under the insurance policy whereas the chipper was considered "mobile equipment". However, according to the insurance policy, mobile equipment is considered a covered auto when being "carried" or "towed" by a covered auto. These terms were not specifically defined in the insurance policy.

Plaintiff and the insurer both filed motions for summary judgment in the United States District Court for the Northern District of Oklahoma. The court held that the chipper was being towed by the dump truck when the accident occurred and was therefore considered a covered auto under the policy. However, the court ruled under the circumstances there was $125,000 in uninsured motorist coverage, not $1 Million, because the amount of uninsured motorist coverage could not exceed the amount of liability coverage, i.e., $125,000.  Argonaut Ins. Co. v. Earnest, 861 F.Supp.2d 1313 (N.D. Okla. 2012).

Insurance Agent Responsible For Failing To Obtain Coverage

An insurance agent was held responsible for failure to obtain workers' compensation coverage.  In a blog post by Tred Eyerly, a summary of the decision is set forth.  Essentially, the agent held herself out as an expert on insurance for certain types of automotive dealerships.  The plaintiffs purchased insurance without specifying any particular type of coverage needed and allowed the agent to select the coverages purchased.

Although the agent was aware California required mandatory workers' compensation coverage, the initial policy provided no such coverage.  One year later, the policy was renewed with another insurer and again no workers' compensation coverage was obtained.

Later, an employee was severely burned in a fire at the dealership.  When he learned there was no workers' compensation coverage available, he sued and obtained a judgment for $11 Million, $6.8 Million of which the dealership was responsible.

The dealership then sued the insurance agent for negligence.  There was a factual dispute over whether or not workers' compensation coverage was discussed and the documentary evidence tended to show the conversation never happened.  Judgment was entered against the insurance agency for $5.8 Million, the outstanding amount of the judgment after one insurer tendered payment of $1 Million in partial satisfaction simply to extricate itself from the situation.