| Q&A of the Week |
The Insured under the Care, Custody, or Control Exclusion
An Ohio subscriber recently asked the following question:
Employee A rented a vehicle with the permission of the insured. Employee B was driving the rented vehicle and damaged a personal auto owned by Employee A. Employee B is an insured for liability by definition under the terms of the BAP.
Would the care, custody, or control exclusion apply and preclude payment for the damages to Employee A's vehicle under the liability section of the BAP even though Employee A was not driving the vehicle at the time of the accident? That exclusion reads as follows: "property damage to or covered pollution cost or expense involving property owned or transported by the 'insured' or in the 'insured's' care, custody or control."
ANSWER: Since the exclusion uses the word "the" as opposed to "an," we are of the opinion that the exclusion does not apply in this instance since "the" insured (employee B) in this instance was not "the" insured that owned the car or had it in his care, custody, or control. The word "the" should be considered as applying to a particular insured and not as applying to any or all insureds.
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| Litigation Watch |
Damages Determined by Jury Are Binding on the Insurance Company
The insured filed a bad faith claim against the insurer based on the insurer's attempt to require the insured to again prove her damages even after the jury had determined that point. This case is GEICO General Ins. Co. v. Paton, No. 4D12-4606,.2014 WL 4626860 (Fla. App. 4th Sept. 17, 2014).
Paton was a passenger in a car and was injured in a crash due to the negligence of the underinsured driver. The driver's insurer, GEICO, paid Paton the $10,000 policy limit. Paton's mother maintained uninsured/underinsured (UM/UIM) coverage with GEICO with $100,000 of coverage. Paton's attorney demanded the $100,000 policy limit from GEICO, but the insurer declined to pay that amount. GEICO offered $1,000 although GEICO's expert reviewed Paton's MRI that showed she had two lumbar herniations.
The dispute ended up in a trial, and the jury returned a verdict in Paton's favor and awarded her $469,247 in total damages. The judge limited the award to the $100,000 policy limit, and GEICO paid the final judgment.
Paton then filed a claim of bad faith against GEICO, and the trial court ruled in her favor. GEICO appealed.
GEICO argued that the trial court erred by treating the verdict from the UM trial as conclusive evidence of Paton's damages in the bad faith trial. The District Court of Appeal of Florida, Fourth District, did not agree. The court noted that the legislature, by statute, firmly established that the damages in a first-party bad faith case include the total amount of the plaintiff's damages that were caused by the original third-party tortfeasor, even an amount in excess of policy limits. Moreover, case law reiterated the fact that the initial action for first-party benefits that sets the plaintiff's damages arising from an accident determines the extent of the plaintiff's damages in a first-party bad faith case. Thus, said the court, the initial action between the insurer and the insured fixes the amount of damages in a first-party bad faith action. |
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