A state appellate courtroom handed a win to a serious insurance coverage provider looking for to overturn a $29 million judgment in opposition to it over claims that it breached its obligation to defend and settle a consumer’s wrongful loss of life lawsuit.
The North Carolina Court docket of Appeals issued an opinion Dec. 17 discovering that Penn Nationwide Safety Insurance coverage Co. didn’t have an obligation to defend its consumer, Kitchen and Lighting Designs Inc., for wrongful loss of life claims in opposition to its worker Luis Ortez. The courtroom’s 2-1 resolution reversed a trial courtroom’s grant of a movement for judgment on the pleadings by Ortez, who argued Penn Nationwide’s alleged misconduct resulted in $9.5 million awarded in opposition to him within the wrongful loss of life case.
Decide John Tyson wrote the appellate courtroom’s opinion, whereas Judges Michael Stading and Carolyn Thompson concurred.
Evaluating the allegations of Ortez’s criticism in opposition to Penn Nationwide and the plain language of its business auto insurance coverage coverage, Tyson discovered that the insurer didn’t have an obligation to defend or settle the swimsuit due to “unambiguous exclusions” for bodily accidents to “fellow workers,” just like the decedent.
The claims stemmed from a 2017 accident through which Ortez was driving an organization car, leading to passenger and fellow worker Darren Drake Estes shedding his life. Estes’ spouse, Theresa Estes, as head of his property, introduced the wrongful loss of life case in opposition to Ortez for gross negligence, willful and reckless conduct, and sought punitive damages.
Based on the opinion, Ortez didn’t make calls for to Kitchen and Lighting Designs or Penn Nationwide to defend him in opposition to Estes’ wrongful loss of life claims. Nevertheless, after a Craven County Superior Court docket choose entered a $9.5 million judgment in opposition to him for Estes’ property, Ortez and the property sued Penn Nationwide, arguing it breached its obligation to defend the wrongful loss of life declare.
Ortez and the property additionally filed one other lawsuit in Onslow County in opposition to Penn Nationwide, alleging it breached its obligation to defend the claims and that it violated the state’s Unfair and Misleading Commerce Practices Act. A choose granted Ortez’s movement on the pleadings in that case. The choose awarded $9.6 million as compensatory damages, after which trebled the entire to greater than $29 million in opposition to Penn Nationwide.
On attraction, the insurer claimed the Onslow County courtroom erred to find that it had an obligation to defend and settle the wrongful loss of life swimsuit.
Particularly, Tyson mentioned the insurance coverage coverage said that whereas Penn Nationwide would offer protection to an “insured,” it additionally contained “unambiguous exclusions” for “bodily accidents to fellow workers” stemming from job duties. Whereas the Estes Property alleged Ortez was answerable for primarily based on case legislation establishing the legal responsibility of 1 worker in the direction of an injured co-worker, Tyson discovered these claims might solely be asserted for accidents ensuing from intentional acts.
Tyson famous that the property had accused Ortez of intentional and willful misconduct, which triggered the exclusions underneath Penn Nationwide’s coverage. The $9.5 million judgment was entered correctly in opposition to Ortez with out the insurer, he added, as a result of it was primarily based on claims of “reckless, willful and wanton conduct between co-employees, not easy negligence.”
Nevertheless, Tyson famous that each employees’ compensation protection and Penn Nationwide’s categorical “Fellow Worker” exclusion would exclude protection for intentional or grossly reckless acts.
“Requiring the insurer to defend Ortez would defeat the aim of the Fellow Worker exclusion, which exists to protect the employer and insurer from being required to cowl claims rooted in excessive recklessness or willful misconduct, conduct which aligns extra carefully with intentional hurt, than with unintended harm,” he continued.
Ortez was represented by attorneys J. David Stradley and Nicole D. McNamara of White & Stradley in Raleigh, North Carolina, whereas Noah B. Abrams of Abrams & Abrams in Raleigh represented Estes. Penn Nationwide was represented by David L. Brown and John I. Malone Jr. of Goldberg Segalla in Raleigh. Not one of the attorneys might be instantly reached for remark.
