COURT OF APPEALS - CANCELLATION / NOTICE / REQUIREMENTS

Black v. Ryan (11th Dist., 3-5-12), 2012-Ohio-866.

CANCELLATION, O.R.C. 3937.33, NOTICE TO POLICYHOLDER, INTERPRETATION OF OHIO CANCELLATION NOTICE REQUIREMENTS   

     

The Court discussed at length which insured(s) was entitled to receive notice of  cancellation  pursuant to Ohio Revised Code  Sec. 3937.33.  The policyholder argued that the insurer was required to provide notice not only to the "Named Insured," but  also, to each "Listed Insured"  or "Additional Insured Driver."  

The Court ruled that O.R.C. 3937.33 requires that the insurer is only required to provide notice of cancellation to the "Named Insured."  The Court stated three reasons  for its decision.

     

First, the Court interpreted the language of O.R.C. 3937.33  and found that it supported a finding that only the policyholder (i.e. "Named Insured") must receive notice.  Second, the Court determined that the other additional insured under the policy was a minor residing in  the "Named Insured's" household and was not a person intended to receive notice of cancellation.  Third, The Court held that the provisions of O.R.C. 3937.33 were meant to protect insureds against ineffective notice.  Since the only party involved in the accident was the "Named Insured" the intent of the statute had been met and the notice was effective. READ THE CASE 

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COURT OF APPEALS - MCS-90 / STATUTORY EMPLOYEE

United Fin. Cas. Co. v. Abe Hershberger & Sons Trucking Ltd., (10th Dist., 2-14-12), 2012-Ohio-561.

TRUCKING, MCS-90, 49 C.F.R. 390.5, PASSENGER AS STATUTORY EMPLOYEE

   
The Court interpreted the term "employee" in the federal motor carrier safety regulations, which is found in 49 C.F.R. 390.5 as it pertained to a passenger/instructor in the vehicle at the time of loss.

The Court found that nothing in section 390.5 limits an independent contractor's status as a statutory employee to times when the individual is actually operating a commercial motor vehicle. The regulatory language referring to an independent contractor "in the course of  operating a commercial motor vehicle" must relate to the second requirement under that section-that the employee directly affects commercial motor vehicle safety.  If he does so, then he is a statutory employee under 390.5. 

The plain language of the regulation requires only that the individual directly affects commercial motor vehicle safety while in the course of his or her employment, a requirement that may be satisfied by operation of a commercial motor vehicle.  Satisfaction of that  requirement, however, is not limited to actually driving a commercial motor vehicle. In fact, a myriad of courts have held that a passenger in a commercial vehicle may qualify as an  employee under 390.5.  READ THE CASE

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COURT OF APPEALS - CGL / DEFECTIVE WORKMANSHIP

Myers v. United Ohio Ins. Co. (5th Dist., 1-26-12), 2012-Ohio-340 

CONSTRUCTION, FAULTY WORKMANSHIP, OCCURRENCE, "YOUR WORK" EXCLUSION, MOLD EXCLUSION, CONSEQUENTIAL DAMAGES 

Citing Environmental Exploration Company v. Bituminous Fire & Marine Insurance Co., the Court held that defective workmanship does not constitute an accident or occurrence under a commercial general  liability policy. If the policy is construed as  protecting a contractor against defective workmanship, the insurer becomes a guarantor of  the insured's performance under the contract, and the policy becomes a performance bond.   (citations omitted.) The policy does not insure an insured's work itself, but rather insures the consequential risks that stem from the insured's work. (citations omitted.)  

     

General commercial liability policies are not intended to insure the normal, frequent or  predictable costs of doing business. Such policies are intended to insure the risks of an  insured causing damage to other persons and their property, but are not intended to insure  the risks of an insured causing damage to the insured's own work. Id. We found that there was no "occurrence" within the meaning of the policy, and therefore, no coverage.  READ THE CASE 

COURT OF APPEALS - REINSTATEMENT AFTER CANCELLATION

 Johnson v. Encompass Ins. Co (10th Dist., 1-10-12), 2012-Ohio-59.   

REINSTATEMENT AFTER CANCELLATION 

    

Two elements are required in order to show that an insurance policy was  reinstated based upon the acceptance of an untimely premium.  Clearly,  the  premium must be accepted. But the acceptance of the premium must accompany an insurer's assent to reinstate the insured's policy.  Indeed, a meeting of the minds is necessary on this issue.   READ THE CASE  

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COURT OF APPEALS

Sheely v. Sheely (3rd Dist., 1-9-12), 2012-Ohio-43. 

FURNISHING ALCOHOL TO MINOR RESULTING IN DEATH, NOT AN "ACCIDENT" UNDER INSURANCE POLICY

The Court determined that there wass no genuine issue of material fact  upon which reasonable minds could conclude that a minor's death was an unexpected,  unforeseeable  event under the circumstances.  Therefore, there was no "occurrence" under  a policy issued by Lightning Rod Mutual Insurance Co.  

A father knowingly engaged in a repeated pattern of conduct over several months in which he    permitted his sixteen-year-old daughter and her minor friends to consume alcohol in his  home. The father also admitted that even though he permitted his daughter to consume liquor, he never cautioned her against alcohol abuse.

On the night of his daughter's death, he purchased a large bottle of 80-proof Vodka, at her  request, and that her consumption of the liquor resulted in her dying from acute alcohol  toxicity.

The Court held that the unintended harm resulting from an adult furnishing alcohol to a     minor is not an "occurrence" covered by an insurance policy, where an "occurrence" is defined as an "accident."  A  homeowner's insurance policy defining 'occurrence' as 'an  accident, including continuous or repeated exposure to substantially the same general  harmful conditions, which results, during the policy period in bodily injury or property  damage,' does not provide coverage where the injury or damage is allegedly caused by the  homeowner's conduct in knowingly permitting an underage adult to consume alcoholic beverages on the homeowner's property.  READ THE CASE