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Denial of liability is not a denial of insurance coverage



Why did it obviously go to an appeal?

Juan Brambila appealed against a decision granting a summary judgment in favor of the Great West Casualty Company (“Great West”) in Great West’s action for a declaratory judgment determining the profitability of Brambla’s uninsured motoring language. The appeal presents a question of a first impression of the availability of cover for uninsured motorists when an insured future tortfeasor denies liability. IN Great West Casualty Company v. Juan Brambila and Port To Port, Inc., Juan Brambila, Nr. 1-21-0939, 2022 IL App (1st) 210939, Court of Appeals of Illinois, First District, Fifth Division (May 27, 2022), the Court of Appeal resolved the dispute with logic and common sense.

FACTS

In June 2016, Brambila is said to have suffered injuries when his vehicle was driven by a vehicle driven by John Grygorcewicz, who died in the incident. Brambila applied for compensation via two different routes.

FIRST: a claim for uninsured / underinsured motorist (UM / UIM) with Great West, which he had two insurances with through his employer, Port to Port, Inc. Great West denied Brambila’s UM claim because Grygorcewicz was at it the time of the incident, insured by the State Farm Insurance Company, which excludes the availability of UM benefits.

As Grygorcewicz’s State Farm coverage exceeded $ 100,000, Brambila’s UIM coverage would be reduced to zero under the terms of the UM / UIM policy.

OTHER: In addition to his attempt to recover from the Great West, Brambila also brought a general legal action for negligence against Grygorcewicz’s property. During the course of that trial, Grygorcewicz’s property claimed an “act of God” defense, claiming that Grygorcewicz was not responsible for the accident. Brambila presented that development to the Great West, claiming that Grygorcewicz’s estate’s denial of responsibility through this act of defense was akin to a denial of insurance coverage, making Grygorcewicz an uninsured motorist. Great West rejected this claim and submitted the immediate declaratory action to obtain a declaration that Brambila was not entitled to UM benefits because Grygorcewicz was insured at the time of the accident and that Brambila was not entitled to UIM benefits because Grygorcewicd was not underinsured. .

The Great West sought a summary judgment, arguing that Grygorcewicz did not meet the definition of “uninsured motorist” because, in fact, he was insured at the time of the accident. The Great West further argued that Grygorcewicz’s estate action-of-God defense merely denied liability and was not the same as his insurer denying coverage, which had not happened and would be required to make UM benefits available to Brambila.

The district court agreed with the Great West and upheld its request for a summary judgment.

ANALYSIS

An insurance is an agreement and as such is covered by the same rules of interpretation that regulate the interpretation of agreements. Consequently, when the Court interprets the language of an insurance policy, the main objective of the Court is to establish and enforce the intentions of the parties as expressed in their written agreement. If the terms of the policy are “clear and unambiguous”, they must be given their simple and ordinary meaning.

Although Brambila may be right that he is in a similar situation to someone who has been injured by an uninsured motorist, as he is alleged to have been a faultless victim and otherwise could not receive compensation if Grygorcewicz is not found responsible, his insurances are clearly and unequivocally exclude access to UM coverage in this case.

Brambila’s insurance with Great West both stipulates that the insurer “will pay all sums [Brambila] is legally entitled to recover as compensatory damages from the owner or driver of an “uninsured motor vehicle.” “The police define” uninsured motor vehicle “as, where applicable, a” land motor vehicle “”[f]or as no liability or insurance at the time of an “accident” provides at least the amounts required [by law]”or”[f]or as an insurance or bond company denies coverage or is or becomes insolvent. ” For two reasons, Brambila’s damages in this case are not covered by these UM regulations.

FIRST, it is common ground that Grygorcewicz was insured at the time of the accident. As a result, Grygorcewicz’s vehicles would not meet the definition of “uninsured motor vehicle”, which means that the damages caused by Grygorcewicz to Brambila would not be covered by the insurance regulations of the insurance companies.

The denial of responsibility is not a denial of coverage; the two concepts are clearly separated. A prospective tortfeasor’s denial of liability does not have the same effect as a denial of coverage and that, in the absence of a denial of coverage from the insurer, a denial of liability by the prospective tortfeasor was insufficient to make UM benefits available. Because Grygorcewicz was insured at the time of the accident and his insurer did not deny coverage, Grygorcewicz’s estate denial of liability is in itself insufficient to make Grygorcewicz an uninsured motorist.

SECOND, the policies only provided that the Great West would pay sums that Brambila “legally has the right to recover as compensatory damages” from an uninsured motorist. The Illinois Supreme Court has ruled that “the correct interpretation of the words” legally entitled to recover “means that the plaintiff must be able to prove the parts of her claim that are necessary to give her the right to recourse for damages.” [Allstate Insurance Co. v. Elkins, 77 Ill.2d 384, 390 (1979)] “Legal right to recovery” means that the insured must be able to determine errors on the part of the uninsured motorist that give rise to damages and prove the extent of these damages.

In order to prove his claim for negligence against Grygorcewicz, Brambila would need to prove that Grygorcewicz’s breach of a duty of care towards him was the nearest cause of his injuries. But a defense of God claiming that the victim’s injuries were caused by an unpredictable event beyond the control of human intervention to prevent it eliminates this causal element and absolves the alleged tortfeasor from liability.

In the event that Grygorcewicz’s estate establishes that the accident was caused by an “act of God” beyond Grygorcewicz’s control and is not found liable for Brambila’s damages, Brambila would not have been able to prove his negligence claim and would not have a “legal right to recover from Grygorcewicz any damages”. Furthermore, if Brambila does not have a legal right to recover any damages from Grygorcewicz’s estate, Great West would not be liable to grant UM benefits to Brambila for the accident in question. insurer no obligation to its insured.

The only obstacle for Brambila to recover from Grygorcewicz’s legacy would be the lack of responsibility, and responsibility is a requirement for UM coverage to be available.

Since Grygorcewicz’s denial of liability does not have the effect of making Grygorcewicz an uninsured motorist for UM coverage, the district court’s decision to grant Great West’s claim for summary judgment was upheld.

In order to recover under an uninsured or underinsured motorist cover, the insured must prove two things: (1) that the responsible party caused the damage through negligence and (2) that the responsible party was uninsured or underinsured. In this case, the alleged liable party was insured and was not liable for the damages. It is a no-win situation for the plaintiff Brambila who was brought before an insured who is alleged to be a responsible party who does not claim any liability because he was not negligent and he was insured. A waste of trial time.


(c) 2022 Barry Zalma & ClaimSchool, Inc.

Barry Zalma, Esq., CFE, now limits his internship to the position of insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as a lawyer for insurance coverage and claims management and more than 54 years in the insurance industry. He is available at http://www.zalma.com and zalma@zalma.com.

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