Another deadly crash in North Texas
Early on Sunday morning, the life of a beautiful 21-year-old woman who had just moved to Dallas was cut short on Central Expressway. She was a passenger in a car driven by her best friend when they were struck by a driver, possibly drunk.
After they got out on the median, an Audi hit the young woman. That driver fled the scene but police found the abandoned Audi and arrested another 21-year-old. Here’s the article from the Dallas Morning News about this tragic intoxication manslaughter crash.
What happens if the family of the deceased woman has to file a lawsuit against driver to recover the estate’s damages and she refuses to cooperate with her insurance company or her liability carrier claims that she is excluded from coverage based on a technicality?
New wrongful death decision raises the bar
The Texas Supreme Court answered this question on Friday in Seger v. Yorkshire Insurance. The case arose out of the death of a young oil driller who was working on a hydraulic-lift drilling rig in West Texas back in 1992 when it collapsed and killed him. After being rebuffed in their attempts to settle the case out-of-court, his parents sued his employer. However the drilling company had created another company to circumvent the workers compensation statutes and the young man was not officially its employee.
The offshore insurance commercial general liability (CGL) carriers refused to investigate, provide a defense, or settle. The trial court entered a $15 million judgment against the drilling company after it failed to put on a defense.
The company assigned its rights against the insurance company to the parents, who then filed a Stowers Doctrine lawsuit against the insurers for their failure to settle within the policy limits of $500,000. After a trial, an enormous verdict in the amount of $37 million was rendered. After the case was remanded, a second jury verdict increased the award to an astonishing $71 million.
But on appeal, an appellate court ruled that the family could not collect from the insurance company based upon an apparent exclusion in the CGL policy. And in a rather convoluted decision, Supreme Court affirmed the appeals court decision and overturned the verdict 24 years after the death of Mr. Seger
The court found that the decedent was a leased-in worker, not an independent contractor or employee, and that coverage was excluded. This was despite the insurance policy’s failure to officially exclude or even define leased-in employees except in a side note as well as evidence that the employee was a covered independent contractor. The court also found that the plaintiff failed to submit a separate jury question regarding coverage but instead relied on a ruling form the trial judge.
Pursuing damages in a Dallas-Fort Worth wrongful death claim
Insurance companies have a duty to act of good faith and fair dealing and defend their policyholders. The ruling potentially lets insurance companies off the hook by allowing them to claim phantom exclusions, argue employment relationships that are murky, and shift the burden of proof of coverage to plaintiffs.
Unfortunately this case may indirectly cause a tougher battle for families pursuing their right to compensation after a loved one is killed.