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Insured v. Insured exclusion is effective



The Navigators Insurance Company tried to resist defending its insured, Joshua Donald Tarter, in a 2018 lawsuit filed in the U.S. District Court for the Eastern District of Kentucky. The Navigators relied on what is known as "insured versus insured exclusion" in their liability policy for directors and officials, claiming that they had no obligation to defend Joshua in what can only be described as a high-stakes family feud. Joshua then sued the Navigators, both alleging that the company had breached its contract with him and requesting a declaration that the Navigators were obligated to defend and indemnify him in the underlying litigation. I Joshua Donald Tarter v. Navigators Insurance Company No. 21-5129, United States Court of Appeals, Sixth Circuit (October 25, 2021)

The district court concluded that the Navigator's position in the dispute was sound and approved the company's motion to dismiss the lawsuit.

BACKGROUND

[1945grundademedlemmaravfamiljenTarterTarterGateettföretagsomgjordeochsåldeträportaricentralaKentuckyUnderårenharföretagetexpanderatochdiversifieratgenomatttillverkabådelantbruks-ochranchutrustningFråndenrelativtödmjukastartenfinnsdetnu"ettantalenheterundergemensamtägandeochkontrollsomkombinerasmedandraenheterförattdrivafamiljeföretaget"[19659006] Eventually consolidated ownership of Tarter companies in the hands of two tarts. brothers, David and Donald, and their respective wives. Together, three family members own 50% of the Tarter companies, three others own the remaining 50%, while Anna Lou owns the largest individual share with 25%. Anna Lou also works as head of C-Ville Fabricating and Tarter Management, as well as head of Tarter Gate and Tarter Tube. Joshua "also had managerial responsibilities in relation to all Tarter companies."

However, all semblance of family cooperation ended when Joshua, along with Thomas Gregory and Xiaofeng Chen, formed a Chinese shell company, Hong Kong QMC Industry Company, Ltd. According to a lawsuit in a lawsuit that C-Ville Fabricating, Anna Lou, LuAnn and Douglas eventually filed against Joshua, Gregory and QMC, the shell company was not only responsible for selling supplies to the Tarter companies from China at inflated prices, but also

Specifically, the complaint alleges that Joshua "used [his] position [ ] with Tarter Companies to overcharge Tarter Companies by at least $ 20,000, the validity of the system. supplier. " Joshua and Tarter Companies and their officers and directors were all insured by the Navigators policy.

Joshua called on the Navigators to defend him. Navigators declined and argued that the liability policy of the board and officials explicitly excluded from coverage (including the insurer's obligation to defend) all claims directed against anyone insured by or on behalf of any insured or any security holder in the company.

Largely, Navigators based their decision on the broad policy definition of the word "Claim", which, in the relevant part, was defined as "a civil… proceeding brought against an insured person applying for monetary or non-monetary relief and initiated by service of a complaint.. . ” Since at least Anna Lou, an insured party, had initiated civil proceedings against another insured party (Joshua) by serving a complaint, the Navigators claimed that it had no obligation to defend Joshua at trial despite the presence of an uninsured party as an additional

ANALYSIS

In connection with the fact that one of the named plaintiffs in the C-Ville Fabricating measure did not [1945] insure that026] Johua stated that026] an insured The "insured versus insured exclusion" of the insurance was not applicable. Instead, he claimed that the "distribution provision" was included in the insurance to cover just such a situation and demanded that the Navigators provide him with a defense of the lawsuit.

District Court cases from other jurisdictions that have resolved similar disputes over insurance coverage.

A claim to s not its usual meaning according to the insurance policy. The policy rather defines claims as a civil procedure that is initiated by service of a complaint, ie. the whole trial. The insurer only needs to show that the exclusion clause applied to the lawsuit filed. It did. The sixth district had no room under the term in the exemption clause to apply the allocation provision to certain parts of a trial but not others.

the reasons why they should be given in favor of the Navigators.

Given the relatively unique confluence of factors that led to the submission of this lawsuit, the issuance of a full written opinion would be twofold and would not serve any useful precedent. The district court's judgment was upheld for the reasons stated in the court's decision and opinion submitted on January 15, 2021. Tarter v. Navigators Ins. Co. No. 5: 20-240-KKC, 2021 WL 149302 (ED Ky. Jan. 15, 2021).

Insured Vs. Insured foreclosure, like family foreclosure, is a key method used by insurers to avoid the potential collusion between insured persons to resolve their disputes by claiming the insurer. When one insured sues another insured, it is difficult, if not impossible, to avoid collusion and are as claims as the harmful part-wall goals where no one really wins and where the insurers always lose. The sixth district read the policy in its entirety and agreed that the district court's decision was obviously correct.


© 2021 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his internship to the position of insurance consultant specializing in insurance coverage, insurance claims handling, bad faith and insurance fraud almost equally for insurers and policyholders.

He also acts as an arbitrator. insurance-related disputes. 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.

Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome.

He is available at http://www.zalma.com and zalma@zalma.com. Zalma is the first recipient of the first annual Claims Magazine / ACE Legend Award. For the past 53 years, Barry Zalma has devoted his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurers and their claimants to become professionals in insurance claims.

Go to training available at https://claimschool.com; articles at https://zalma.substack.com, the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr Zalma on Twitter at https://twitter.com/bzalma ; Go to Barry Zalma videos at https://www.rumble.com/zalma; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ T the last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud- letter -2 / podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4


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