Missouri Injury Lawyer Blog

As a Missouri auto accident attorney, I know uninsured motorist benefits are some of the hardest to get from an insurance company, even if the facts are clearly on the driver’s side. Insurance companies like collecting premiums for uninsured motorist claims, but after an accident, they will often use a hit-and-run or other facts that are hard to verify as an excuse to deny coverage. That was the claim made by Larry Squires in Allstate Property & Casualty Insurance Co. v. Squires, a decision by the Third U.S. Circuit Court of Appeals. Squires was injured after swerving to avoid a box left in the road; the parties stipulated that an unidentified vehicle dropped the box. Allstate received a declaratory judgment in Pennsylvania state court that it did not owe Squires a settlement. The Third Circuit reversed, finding that direct contact with the uninsured vehicle was not necessary under the policy.

Squires put in a claim for uninsured motorist benefits after his accident. The relevant part of the disputed policy says Squires may recover for bodily injury “aris[ng] out of the ownership, maintenance or use of an uninsured auto.” Pennsylvania state law defines an uninsured vehicle to include “an unidentified vehicle that causes an accident resulting in injury,” provided that the victim report it to authorities and his or her insurance company. Allstate filed for a declaratory judgment that it did not owe benefits under the policy; Squires filed counterclaims for insurance bad faith and breach of contract. The trial court granted judgment on the pleadings to Allstate and dismissed the claims by Squires, finding that the sole issue was whether the box-related accident arose out of the “ownership, maintenance or use” of an automobile. It did not, the court said, and found that the policy only applied to accidents caused directly by a vehicle.

Squires appealed, arguing that contact with a vehicle was not necessary under the language at issue. The Third U.S. Circuit Court of Appeals ultimately agreed. Seeking to understand what the Pennsylvania Supreme Court would do, it examined Pennsylvania caselaw and concluded that under the “arising out of” language in his policy, Squires can avoid summary judgment by alleging that the unidentified vehicle’s use caused his injuries. The court cautioned that more may be needed to ultimately make a recovery. It also rejected a case heavily relied on by the district court, in which uninsured motorist benefits were denied to a boy who suffered injures as he bicycled, when another boy intentionally threw hay from the back of a truck. In that case, the injury was caused by the hay-throwing boy, the court said, but in this one, the falling box was a direct consequence of the use of the unknown vehicle to transport cargo. The appeals court noted that Pennsylvania’s auto insurance statute is to be construed liberally and in favor of the insured in close cases. Thus, it reversed and remanded the case.

This ruling is good news for Squires and other Pennsylvania drivers. This decision clears the hurdle of whether the policy language applies to his case. Though the appeals court correctly noted that Squires must still prove his breach of contract and bad faith claims, he can now say his claim for insurance is valid. Thus, he may be able to collect the settlement and move on without worrying about proving the bad faith and breach of contract claims. It’s common, in my experience as a southern Illinois car accident lawyer, for insurers to narrow in on specific policy language as a reason to deny coverage. That’s why it’s important for accident victims to come to a St. Louis car crash attorney like me as soon as possible after realizing they’re not being dealt with fairly. Though negotiations and, when necessary, litigation, we can sometimes reach a fair settlement without the hassle of a trial.

Continue reading "Third Circuit Permits Lawsuit Claiming Uninsured Motorist Benefits for Accident Involving Road Debris – Allstate v. Squires" »

Insurance coverage disputes come up frequently in my work as a St. Louis car crash lawyer. Insurance companies exist to make money, like all businesses, and part of the way they do that is by limiting the amount of money they pay to their insureds after an accident creates an insurance claim. Sometimes, this even leads to the insurance company denying coverage it’s required to provide under its own policy. This is a form of breach of contract called insurance bad faith, and insurance clients can and should protect their rights with a lawsuit when they are unfairly denied coverage. Lero v. State Farm Fire and Casualty Co. was an insurance bad faith claim that found its way to the Missouri Court of Appeals. The Leros sought to collect for an uninsured motorist claim on an umbrella insurance policy, but the appeals court found no right to coverage.

Paul and Carolyn Lero are the parents of Denise Greene, who died in October of 2008 when a drunk driver crossed a median and hit her car head-on. They successfully sued the owner of the driver’s car and received a $2 million judgment, but that insurance company denied coverage. The Leros then turned to Greene’s uninsured motorist coverage, which paid the policy limit of $50,000. They attempted to also collect on an umbrella policy Greene had, but State Farm denied that the policy covered accidents with uninsured motorists. The Leros sued State Farm for breach of contract, arguing that the umbrella policy was intended to provide excess coverage over Greene’s auto insurance and also that the uninsured motorist coverage was a prerequisite to the umbrella coverage. After striking several defenses State Farm raised as new defenses, the trial court granted summary judgment to the Leros, and State Farm appealed.

The Court of Appeals reversed, ruling that the stricken defenses were ultimately determinative of whether there was uninsured motorist coverage available. The trial court had found State Farm was estopped from arguing that its only coverage was that listed in a specific place, and that the Leros were impermissibly attempting to shift the burden of proof when they argued that uninsured motorist coverage was not excluded. On the first point, State Farm argued on appeal that estoppel was inappropriate; on the second, that striking the defense essentially created the coverage the Leros sought. The appeals court found that the Leros failed to establish true inconsistency between the initial denial and the later defenses, and therefore that State Farm should not have been estopped from using them. State Farm cited the policy in its denial letter and enclosed the relevant section of the policy. The company consistently asserted this later, it added. Because estopping this defense was inappropriate and created new coverage, the appeals court reversed the summary judgment for the Leros and entered it for State Farm.

As a southern Illinois auto accident attorney, I am disappointed by this ruling. When a family member dies through no fault of her own, families are understandably upset, and pursuing justice through the civil court system may be their only option. It’s disappointing that after the Leros pursued their case through at least three different courts, they were ultimately able to collect only a small part of their $2 million judgment. It would be interesting to know why the family did not pursue coverage from the insurance companies of the at-fault driver and that car’s owner (different people). As an experienced Missouri car wreck lawyer, I would not be surprised to discover that the at-fault driver, who was drunk, was not insured in the first place. This underscores why it’s so vital to buy uninsured motorist coverage — so in the event of a catastrophic crash, you have at least some compensation.

Continue reading "Missouri Court of Appeals Reverses Uninsured Motorist Decision in Fatal Auto Accident – Lero v. State Farm Fire and Casualty Co." »

As a St. Louis personal injury lawyer, I was interested to read a court decision voiding certain limitations in insurance contracts as contrary to Missouri public policy. The Eighth U.S. Circuit Court of Appeals made that decision in Carolyn Schubert v. Auto Owners Insurance Policy, a case about an insurance payout for a home destroyed by fire. Carolyn Schubert and her husband’s stepdaughter, Deborah Lee Weiss, stipulated to each owning half of the home after Schubert’s husband, Thomas Schubert, died. Because of this, and because of a provision in the insurance contract, Auto Owners maintained that it owed Schubert only half of the total value of the policy, or $62,250 instead of $124,500. The U.S. District Court for the Western District of Missouri found that this was voided as against public policy, and the Eighth Circuit agreed.

The Schuberts married in 2005 and Thomas Schubert died in 2006. Because he left no will, Carolyn Schubert and Weiss, who was Thomas’s stepdaughter from his first marriage, agreed in probate proceedings that each owned 50 percent of the home. Weiss was living there at the time. After the death, Carolyn Schubert continued making premium payments regularly and renewed the home’s insurance policy twice, although she had also told Auto Owners that she was not sure whether she legally owned the house. However, three months after the probate agreement, Weiss intentionally set the home on fire, causing it to be completely destroyed. Schubert made an insurance claim after the fire. Auto Owners agreed to pay only half, citing a provision in the policy saying it would pay no more than the “insurable interest” the insured had in the property. Schubert filed a lawsuit seeking the full amount, alleging breach of contract and vexatious refusal to pay. The district court ultimately found for Schubert on breach of contract, finding that the provision was both ambiguous and against Missouri’s valued policy statute. Auto Owners appealed.

On appeal, the Eighth Circuit first decided that it did indeed have jurisdiction, because the entire amount in controversy, $124,500, exceeded the $75,000 legal threshold. It then turned to the question of whether the Auto Owners contract provision did indeed violate Missouri law. The valued contract statute says the value of the property, as listed in the contract, is conclusive unless there was fraud or other wrongdoing. In the case of a total loss, the statute expressly says the settlement should be the amount for which the property was insured. To receive a settlement, the person should have an insurable interest — that is, suffer a financial loss from the property’s destruction or a financial gain from its preservation. This is true regardless of who has title to the property. Furthermore, it noted that Missouri law has generally granted full payments to part owners, absent substantial changes in ownership or strict definitions of interest. The Eighth also agreed that the clause at issue is ambiguous because it failed to define “insurable interest.” Thus, it upheld the district court’s decision and called for Schubert to recover the full policy amount.

This is good news for Missouri plaintiffs and Missouri personal injury attorneys like me, because it allows plaintiffs to recover more money to help them deal with their serious physical and financial injuries. I most often deal with insurance through auto accident cases, where insurance companies can be notoriously unwilling to pay claims, even when the language of their policies makes it clear that they must. Insurance companies routinely offer less than the claim is worth, relying on injured people not to understand their rights. Some insurers deny that the victims are as badly injured as they say, but they may also undervalue the vehicle or the cost of repairs. My job as a southern Illinois car accident lawyer is to fight for a full settlement, through negotiations or, if necessary, in court.

Continue reading "Eighth Circuit Upholds Voiding of Insurance Provision Limiting Recovery as Contrary to Public Policy – Schubert v. Auto Owners Ins. Co." »

The failure to respond to a settlement offer arising out of an auto accident demonstrated bad faith on the part of Allstate Insurance Co. and justified a $16 million verdict against it, a Missouri Court of Appeals has ruled.

Allstate was the insurance carrier for Wayne Davis Jr. On March 24, 2000, Davis crossed the center line on U.S. 54 in Camden County and crashed head-on into a compact car. Davis’ blood alcohol content was twice the legal limit.

Edward Johnson was driving the compact car, his wife, Virginia, was a passenger. They both suffered life-threatening injuries but survived.

Edward spent 35 days in the hospital, 21 of them were in the neuro-intensive care unit. He was in a coma for part of that time. He also suffered a broken arm, crushed pelvis, his left hip was torn from its socket, a crushed sternum and his thumb had to be amputated. His hospital bills totaled $185,000.

Virginia also spent time in the NICA and was hospitalized for a total of 40 days. Her injuries included a crushed right ankle and kneecap, a fractured femur, a dislocated ankle and a cut eyelid. Virginia’s hospital bills totaled $135,000.

After the accident, the Johnsons offered to settle their claim against Davis for $50,000, the limit of his auto insurance policy. However, Allstate did not respond within the 60-day time limit.

The Johnsons then sued Davis. He consented to a judgment in excess of $5 million. In return, the Johnsons agreed not to execute on the judgment. Instead, it sued Allstate for bad faith in refusing to settle in a timely manner.

A Jackson County jury sided with the Johnsons and awarded the couple $5.8 in compensatory damages plus 9 percent interest and $10.5 million in punitive damages.

On July 29, the Missouri Court of Appeals for the Western District upheld the verdict in Johnson, et al. v. Allstate Insurance Company. Appellate Court Judge Paul Spinden wrote:

“Allstate’s failure to recognize the severity of the Johnsons’ injuries and the probability that the claim would far exceed Davis’s policy limits; its failure to investigate the claim and respond to the demand in accordance with insurance industry standards and its own good faith claim handling manual; and its failure to retain counsel, are all circumstances supporting a reasonable inference that Allstate’s refusal to settle was in bad faith.”

The time limits are an important safety net for injured victims. During their hospitalization, the Johnsons were unable to work and support their family. Though not much, $50,000 would have helped them.

This case also underscores the importance of hiring an experienced auto accident attorney. The lawyers of The Lowe Law Firm are experienced in helping people who have been hurt as a result of the negligence of another. We will seek compensation for past and future medical expenses, past and future wages, pain and suffering, disability and other damages. We also represent family members in wrongful death cases.

Contact the lawyers at The Lowe Law Firm today by calling 877-678-3400.