The Eighth U.S. Circuit Court of Appeals Affirms District Court's Judgment on the Pleadings in Favor of Allstate Indemnity Company
Jul 14 14
The Eighth U.S. Circuit Court of Appeals affirmed a district court's judgment on the pleadings in favor of a personal umbrella insurer who sued its insured seeking a declaration as to whether coverage existed under the policy for injuries sustained by a passenger of an insured vehicle driven by the brother-in-law of the insureds. The driver was not an 'insured person' under the policy. On Oct. 10, 2010, Levina Rice suffered significant injuries as a passenger in a one-vehicle accident that occurred when Rice's son-in-law, Howard Wiebe, was driving. Rice's daughter and another son-in-law, Sherry and Timothy Underwood, owned the vehicle. Both Wiebe and the Underwoods were covered by auto liability policies, and the insurers for each of those policies paid Rice their respective policy limits, totaling $350,000. The Underwoods also maintained a personal umbrella insurance policy issued by Allstate Indemnity Co. Pursuant a settlement agreement among Allstate, Rice, Wiebe and the two primary auto insurers, Allstate sought a declaration delineating its duties under the umbrella policy, if any, to Weibe. The district court granted summary judgment in Allstate's favor, concluding that Wiebe was not an "insured person" under the umbrella policy. Rice appealed. The Eighth Circuit noted the Allstate policy defined an 'insured person" to mean 'a) you, and any other person who is named on the policy declaration, b) any person related to by blood, marriage or adoption who is a resident of household, or c) any dependent person in care, if that person is a resident of household." The Eighth Circuit further noted that, on appeal, Rice conceded Weibe was not an "insured person" under the umbrella policy, and instead focused on Weibe's status as a permissive user. The Eighth Circuit held that although Wiebe was a permissive user of the Underwoods' vehicle and the accident arose out of such permissive use, those conditions were not sufficient to establish coverage. Allstate was obligated only to pay damages that an "insured person" became legally obligated to pay because of bodily injury arising from an occurrence. While the Underwoods were insured persons, there was no allegation of negligence or fault on their part. As a result, the Eighth Circuit affirmed the district court's judgment in favor of Allstate.