Cooperating With Your Own Insurance Company

A case decided in Fort Worth, Texas on June 11, 2009, is important to understand. The result of this case is the same in Weatherford, Grand Prairie, Arlington, or Dallas.
The style of this case is Garry Jenkins v. State and County Mutual Fire Insurance Company. The facts in this case are undisputed. Garry Jenkins foot was crushed when a tank skid fell off a truck driven by Mark Lemmon. The accident happened when Mark applied the brakes too quickly, causing the skid to break free and fall on Garry’s foot. Both Garry and Mark were working as independent contractors for L & G Pipe. L & G Pipe was owned by two people, Deborah Grisamer and Richard Lemmon.
At the time of the accident, State and County Mutual Fire Insurance Company had a policy of insurance with Deborah as the named insured. The policy was in effect on the date of the accident and the policy listed the truck as a “covered auto.” The wording in the policy is important in this case and provided as follows:
2. DUTIES IN THE EVENT OF ACCIDENT, CLAIM, SUIT OR LOSS …
b. … you and any other involved insured must … immediately send us copies of any demand, notice, summons or legal paper received concerning the claim or suit and cooperate with us in the investigation, settlement or defense of the claim or suit.
3. LEGAL ACTION AGAINST US No one may bring a legal action against us under this Coverage Form until:
a. There has been full compliance with all the terms of this Coverage Form; and b. Under Liability Coverage, we agree in writing that the insured has an obligation to pay or until the amount of that obligation has been fully determined by judgment after trial.
Mark was also listed as a “driver” on the policy.
Garry sued Mark, Deborah, Richard, and L & G Pipe for negligence. Garry obtained service of legal process on Deborah, Richard, and L & G Pipe, but not Mark. State and County obviously knew that Mark had been sued and in fact defended Deborah, Richard, and L & G Pipe. The case went to trial and the jury placed 100% responsibility for Garry’s injury on Mark.
Garry then sued State and County, seeking to collect the judgment he had obtained against Mark. It is clear that Mark had not fulfilled the policy requirements set out above. Garry argued that State and County had actual knowledge of what was happening and the fact that Mark had not handed any legal papers to State and County did not make a difference in this situation.
The Court ruled in favor of State and County. The Court’s reasoning was the policy language was clear and that prior Court rulings in the State of Texas, supported the wording of the policy. The policy makes clear what is required for an insured to do before the insurance company has to defend or pay claims made. One sentence the Court said was: “Put simply, there is no duty to provide a defense absent a request for coverage.”
The Court explained that notice and delivery of suit papers provisions in insurance policies serve two essential purposes: (1) they facilitate a timely and effective defense of a claim against the insured and, more fundamentally, (2) they trigger the insurer’s duty to defend by notifying the insurer that a defense is expected. The Court went on to say that mere awareness of a claim or suit does not impose a duty on the insurer to defend under the policy; there is no unilateral duty to act unless and until the insured first requests a defense – a threshold duty that the insured fulfills under the policy by notifying the insurer that the insured has been served with process and the insurer is expected to answer the lawsuit on its insured’s behalf. The insurer does not have to assume such.
This case is important in making one realize the duties under an insurance policy. It is vital for a party involved in issues concerning insurance policies contact an experienced Insurance Law Attorney. The attorney will understand what needs to be done to get protection under the policy at issue. And the attorney will understand other constraints that might become relevant in these situations.