CASE STUDIES Tell Our Clients' Stories

Defense judgment in convoluted coverage case involving a car, a "good Samaritan" and an exercise in “mental gymnastics”

Problem

Encompass sued our clients, Coast National Insurance Company and Mid-Century Insurance Company, for equitable contribution/subrogation arising from a motor vehicle accident. Encompass was the homeowner and umbrella insurer for a purported third party good Samaritan , who pulled the victim from the car, and ended up paying $4M in settlement to the accident victim. Encompass wanted reimbursement of the fees and costs it spent defending its insured, a portion of the settlement monies it paid on behalf of its insured and interest, for a total damages claim of over $800,000. Coast, who insured the driver of the car, and Mid-Century, who provided auto insurance for the purported good Samaritan, disclaimed coverage on the grounds that her liability did not arise out of the use of an auto.

Solution

Encompass argued that under the Insurance Code, “use” of a vehicle includes its unloading, and the “unloading” of the victim should be covered under permissive user coverage for non-owned autos. The Archer Norris team of Limor Lehavi and Mariyetta Meyers-Lopez argued, among other things, that the removal of an accident victim by a stranger to the car does not constitute "use" of the car.

Result

The judge ultimately found in our clients’ favor, describing Encompass’s argument that the purported good Samaritan “used” the driver’s car by lifting the victim out of it, therefore becoming an “insured” individual under the automobile policy, as "an exercise in mental gymnastics." Encompass’s last demand, while the case was under submission, was $550,000.