A federal appeals court has upheld a lower court decision in favor of a Travelers Cos. Inc. unit in a dispute with a truck rental company that focused on the attorney that the insurer had hired.
A mechanic was injured while working on the rim assembly of a semi-trailer chassis in Charleston, South Carolina, owned by Kenilworth, New Jersey-based Flexi-Van Leasing Inc., according to Monday's decision by the 4th U.S. Circuit Court of Appeals in Richmond , Virginia, Flexi-Van Leasing Inc. v. The Traveling Indemnity Co.
Flexi-Van had entered into a major maintenance and repair agreement with Florence, Kentucky-based InterStar North America Inc., which provides emergency breakdown services, requiring InterStar to maintain and repair a pool for a Flexi-operated pool. Van. According to the insurance, I made sure of its coverage with the travelers.
The mechanic brought an action against Flexi-Van, which submitted the defense of the lawsuit to travelers. The insurer sent Flexi-Van a reservation of rights, but gave the company a lawyer, Mark Wall, during the investigation.
Flexi-Van became concerned that it would not be covered by the travel policy if there was a judgment against it in the mechanics' lawsuit and asked Wall to file a third-party complaint against InterStar.
Mr. Wall said he was willing to do so but that Flexi-Van would have to pay him to make a third-party complaint because travelers would not do so.
In response, Flexi-Van claimed that Wall had a conflict of interest and could no longer protect his interests. It ended Wall's representation and hired a replacement.
After the travelers sent a letter to Flexi-Van stating that it would not pay for the compensation agent, the company filed a lawsuit against the insurer in the U.S. District Court in Charleston.
Its trial sought a declaratory judgment that it was entitled to defense and compensation from travelers for the allegations arising from the accident, and prosecuted policy violations and violations of the implied duty of good faith and fair trade.
The district court ruled in favor of the insurer on all points, and was upheld by a unanimous three-judge appellate court. “The district court correctly found that the booking on reservations about rights did not create a conflict of interest. Consequently, Flexi-Van's dismissal of Wall was premature, ”the decision states.
Flexi-Van also claimed that there was a conflict of interest based on Wall's alleged failure to lodge a third party complaint against InterStar, according to the decision. . "But the minutes show that Wall did not refuse to file a third-party complaint against InterStar. In fact, he explicitly stated that he would do so.
"Wall only insisted on Flexi-Van paying him to do so, as travelers would not do so because they did not believe it had any obligation to pay for Flexi-Van's third party claims under Policy and South Carolina- the law ", it was stated in the conclusion of the district court's granting of a summary judgment to travelers was correct.
Travel's lawyer, William Pearce Davis, Baker, Ravenel and Bender in Columbia, South Carolina, said the decision was self-explanatory. Flexi-Van's lawyers did not respond to a request for comment.
The disputes of the mechanics were settled according to a footnote to the decision. The disputes from Flexi-Van through its new lawyer against InterStar resulted in a jury that ruled against Flexi-Van, said the footnote. Catalog