Kentucky trucking accident insurance case unusually complicated

by Mandy Hicks

Lawsuits arising from 18-wheeler accidents can be very complex. One reason for this is that the tractor and trailer may be owned by or insured by different entities. This greatly complicates the path to recovery of a fair settlement or judgment for a person injured in a semi-truck wreck.

In a recent case, a rather unique issue arose. The owner of a certain tractor-trailer requested liability insurance on both the tractor and the trailer, but the insurance agent accidentally left the tractor off of the list of the trucking company’s vehicles when she sent the application to the insurance company.

Facts of the Case

In the case of Liberty Mutual Insurance Company v. Raymond Nelson Insurance Agency, Inc., the plaintiff was an insurance company that filed suit against the defendants, an insurance agency and an insurance agent, seeking equitable subrogation. As grounds, the insurance company stated that, in 2011, a certain customer had contacted the defendants and requested a comprehensive insurance policy for its fleet of vehicles, and the insurance company had approved the application and issued a policy, including $1 million of liability coverage for each tractor or trailer covered by the policy, based on the information submitted by the defendants.

Although a certain 2005 tractor and 2009 trailer were included on the list of vehicles submitted to the insurance agent, the agent inadvertently failed to include the tractor on the schedule of vehicles submitted to the insurance company. In 2012, the tractor-trailer was involved in an automobile accident. The case ultimately settled, with the insurance company paying out $1 million to the victims of the accident. The insurance company then joined in a lawsuit filed by the customer against the agency and agent, arguing that it was forced to expend sums in the defense and resolution of the injured party’s claim and seeking equitable subrogation for the sums paid to settle the case.

The Perry County Circuit Court dismissed the plaintiff’s complaint on the basis that, weighing the equities, the plaintiff was not entitled to equitable subrogation.

Decision of the Kentucky Court of Appeals

After reviewing the issues, the court of appeals affirmed the lower court’s decision. The insurance company insisted that it was entitled to subrogation from the insurance agency and agent because they “endeavored to procure insurance on behalf of the customer but failed in that effort.” The insurance company also took issue with the trial court’s finding that, had the tractor involved in the accident actually been insured, it would have been insured on the same policy as the trailer.

The court disagreed, noting that the insurance company was the customer’s only liability insurer at the time of the accident and that the policy on the trailer provided that it was in excess to any policy on the tractor. Since the tractor was uninsured, the trailer’s policy “dropped down” and became primary.

As this case illustrates, insurance companies have a seemingly endless number of arguments to avoid liability, even attempting to shift the responsibility to the agency and agent that brought them the business of a particular customer. The good news in this particular case is that the trailer was clearly insured, meaning that the people who were hurt in the truck crash resulting from the negligence of the customer’s truck driver eventually received compensation for their injuries. Sadly, the result could have been very different had the trailer also been left off the list.

Experienced Kentucky Truck Accident Attorneys

If you or a loved one has been hurt in a truck accident and need to talk to a lawyer about filing a claim against the responsible trucker or trucking outfit, the seasoned Kentucky truck accident attorneys at English, Lucas, Priest & Owsley are here for you. Call us at (270) 782-6500 to schedule an appointment. There is no charge for the case evaluation, and most cases are accepted on a contingency fee contract. We represent people injured in truck accidents throughout the state, including in Bowling Green, Franklin, Hopkinsville, and Glasgow.

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