Insurance is an agreement that is interpreted by its clear meaning. An insured person is bound by the insurance terms and conditions. IN Progressive Mountain Insurance Company v. Mobile Maintenance On The Go, LLLP, Helene Julien and Jesse EspinozaCivil Action No. 1:20-CV-1665-JPB, United States District Court, ND Georgia, Atlanta Division (June 17, 2022), an insured cannot claim that the insurance provides coverage that was not agreed upon by the parties to the insurance contract.
The parties disputed whether an insurance policy issued by the Petitioner to Mobile Maintenance on the Go, LLLP (“Mobile Maintenance”), provided coverage for damages incurred by Helene Julien (“Julien”) after a 2018 car accident involving an uninsured motorist. The petitioner, the insurer, sued to request a declaratory judgment against mobile maintenance, Julien and Jesse Espinoza that it did not owe Uninsured Motorist, Underinsured Motorist or Med Pay coverage. The insurer has submitted a request for a preliminary ruling. Jesse Espinoza and Julien (together, “Respondents”) then filed a motion to withdraw confessions – some of which formed the basis of the petitioner’s motion for summary judgment.
ACTUAL HISTORY
Mobile Maintenance is a family cleaning company run by Julien, Jesse Espinoza (Julien’s daughter) and Javier Espinoza (Jesse Espinoza’s husband). In March 2015, the United Services Automobile Association (“USAA”) issued car insurance to Jesse Espinoza, who covered two vehicles.
Later, in 2016, Jesse Espinoza completed a supplier agreement for Mobile Maintenance to clean apartments owned by AMLI, and listed Mobile Maintenance as a supplier. That agreement required Mobile Maintenance to provide at least $ 1,000,000 in auto liability insurance. Jesse Espinoza therefore asked the USAA to raise the coverage limits for the insurance issued in 2015. USAA could not raise the insurance limits and referred Jesse Espinoza to the petitioner, who issued a commercial car policy with the necessary coverage.
On October 15, 2018, a Honda Civic driven by Brandon Donald, an uninsured motorist, drove over Julien as she walked from the grocery store to her daughter’s house. Julien suffered serious injuries in the accident. On October 2, 2020, Julien filed a lawsuit against Brandon Donald at Gwinnett County State Court, serving the petitioner as the alleged underinsured motorist.
The insurance was called Mobile Maintenance as the insured, and the premium payments for the insurance were made via electronic transfers from Mobile Maintenance’s bank account. When Jesse Espinoza applied for the insurance, he certified that the vehicle to be insured was only used for business purposes.
ANALYSIS
The insurer claimed that it is entitled to a summary judgment because Julien is not an “insured” under the terms of the insurance and therefore is not entitled to coverage under either the Uninsured Motorist Coverage Endorsement or the Medical Payments Coverage Endorsement. The respondents agree that Mobile Maintenance is the insured listed on the insurance. However, they claim that this was a mistake and that they intended to obtain personal insurance in the name of Javier Espinoza (who is not a party to this action) or Jesse Espinoza – in which case Julien, as a relative of the insured, would get coverage – rather than a commercial car insurance that insures mobile maintenance.
Under Georgia law, “insurance is a matter of contract, and the parties to an insurance policy are bound by its simple and unambiguous terms.” [Richards v. Hanover Ins. Co., 299 S.E.2d 561, 563 (Ga. 1983).]
The parties in this case do not dispute that Mobile Maintenance is the insured listed on the insurance, nor do they dispute that only one “insured” party is entitled to uninsured motorist coverage and medical payment protection. The parties also do not question the language of the insurance: in order to qualify as an “insured” for the purposes of the recommendations when the named insured is a partnership (such as Mobile Maintenance), an injured party must have “occupied an insured car” or temporary replacement car ” at the time of the injury.
Julien was undeniably a pedestrian when she was hit by an uninsured motorist and therefore falls outside the applicable definition of “insured”. The simple terms of the insurance – which the court is bound by – prevent her from claiming any benefits according to the recommendations. Since the policy language is clear and unambiguous, the agreement must be executed according to its simple terms. It is well established that if there is no ambiguity in an insurance policy, the courts must follow the agreement made by the parties even if it is beneficial to the insurer and to the detriment of the insured. The language of insurance clearly and unequivocally dictates that Julien is not an “insured” and therefore not entitled to coverage.
Although the respondents admit that the policy exists, that it was issued to Mobile Maintenance and that it contains the language above, they still claim that they intended to obtain personal insurance in the name of Jesse Espinoza or Javier Espinoza. If they had done so, the defendant claims, Julien would be covered by the insurance as a “relative” of the “named insured”.
The respondents’ arguments on this point are invalid. As facts show, the insurance was issued to Mobile Maintenance, premiums were paid from Mobile Maintenance’s account and Jesse Espinoza certified that the vehicle (a 2007 Dodge Ram) according to the insurance would only be used for business purposes. The law weighs against the defendants’ position on their presumed intention. The general rule is that insured persons are obliged to know the content of their insurance policies.
Jesse Espinoza was assumed to know the terms of the insurance, including who qualifies as “insured” according to its provisions. The clear language of the insurance dictates that Julien is not entitled to cover under the certificate of cover for uninsured motorists or the support for medical payments.
As a result, the insurer is not liable to the respondents any coverage obligation with respect to any claim arising from the accident on October 21, 2018 because Helene Julien is not an “insured” under the terms of the insurance. Consequently, the applicant’s claim for summary judgment was upheld.
Equity makes it possible for an insured person to change the wording of an insurance policy if it has been issued by mistake due to a factual error or fraud. In this case, the alleged error was unilateral on the part of the insured who purchased a commercial insurance policy that only insured those who drove the vehicle described. As the injured person was a pedestrian, she was not insured and the delayed “intention” could not convince the court that the fault was not discovered afterwards.
(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 misconduct and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an attorney 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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