No UM/UIM Coverage Supports Denial & Starts Running of Limitations  

Statute of Limitations Ran From Denial of Claim  

In Glenna L. Novak And Estate Of Jeffery Leonard Novak, A/K/A Estate Of  Jeffery L. Novak By And Through Glenna L. Novak, Executrix v. Mutual  Benefit Insurance Company, No. 1592 MDA 2021, No. J-S23016-22, Superior  Court of Pennsylvania (October 14, 2022) when the plaintiffs lawyer  admitted a letter was a denial of a UM/UIM claim that denial started the  running of the statute of limitations.  Glenna L. Novak and the Estate of Jeffrey Leonard Novak (collectively  "Appellants") appealed from the order granting summary judgment in favor  of Mutual Benefit Insurance Company ("MBIC").  

FACTS  

In June 2011, Jeffrey Leonard Novak ("Decedent") was operating a  motorcycle when a vehicle driven by Roy E. Wright made a left turn  across Decedent's lane of travel, causing the motorcycle to strike the  vehicle. Decedent was thrown from his motorcycle and sustained injuries,  including severe head trauma, which resulted in death.  Appellants sought recovery from Wright, who had an insurance policy  through Progressive Specialty Insurance Company ("PSIG"). Wright's  policy had a bodily injury limit of $50,000, which PSIG tendered.  Appellants also submitted a claim for underinsured motorist ("UIM")  coverage under Decedent's motorcycle policy ("motorcycle policy"). The  motorcycle policy was issued by Progressive Advanced Insurance Company  ("PAIC"). PAIC informed Appellants that Decedent had rejected UIM  coverage. Appellants sued, contending the UIM rejection was ineffective,  and they eventually reached an agreement to resolve the suit for  $20,000.  Appellants' counsel wrote to MBIC, which had issued insurance on two of  Appellants' other vehicles, a car and a truck, seeking consent to settle  the two claims. In a letter dated October 3, 2012, MBIC stated the  motorcycle that Decedent was driving at the time of the accident was not  insured by MBIC. Therefore, MBIC explained, UIM coverage was not  available under its policy and its consent was not required for  settlement.  Appellants later made a claim to MBIC for UIM coverage under the  personal auto policy. MBIC denied UIM coverage, stating it had  previously denied coverage in the October 2012 letter, when it explained  that its consent was unnecessary for the settlements. Appellants sued  in February 2018 (six years after the first denial), and they filed a  complaint in May 2019. They alleged breach of contract, sought a  declaratory judgment, and requested damages for bad faith.

When You Sue & Lose You Can’t Sue the Same Defendants Again  

In DAB Three, LLC, et al. v. Sandra Fitzpatrick, Allen Fischer et al. v.  Lawyers Title Corporation et al., No. AC 44393, Court of Appeals of  Connecticut (October 18, 2022) the plaintiff attempted to avoid the  effect of the doctrine of res judicata. 

FACTS  

After a suit to recover damages for fraudulent concealment the trial  court granted the defendant’s motion for summary judgment in the first  action and the defendant Lawyers Title Insurance Corporation’s motion  for summary judgment in the second action and rendered judgments from  which the plaintiff Alan Fischer appealed. 

OPINION  

Alan Fischer appealed and claimed that the court incorrectly determined  that both of his complaints were barred by the doctrine of res judicata.  The plaintiff was the sole owner, designee, managing partner, and  assignee of DAB Three, LLC (DAB Three), and he was the sole person  acting through and for DAB Three. In August, 2006, DAB Three sued (the  2006 action) against seven defendants.  The gravamen of the 2019 suits is that the defendants are liable for the  $2,049,185.62 judgment rendered in the 2006 action because the  defendants failed to procure adequate insurance coverage with respect to  the property. The plaintiff alleged that, prior to and throughout the  2006 action, the defendants intentionally misrepresented and  fraudulently concealed which of the 2006 defendants was:   1   the broker of the policy,  2   Fitzpatrick’s employer, and  3   the party financially liable to the plaintiff.  The plaintiff alleged that the defendants “withheld” the identity of the  individual or entity that brokered the policy so as to force DAB Three  “to try the case and obtain a judgment in the [2006 action] against a  defendant purportedly without assets.” Both of the complaints in the  2019 actions assert three claims:      fraudulent concealment pursuant to General Statutes § 52-595,     common-law fraud, and     violation of Connecticut Unfair Trade Practices Act (CUTPA)  The defendants moved for summary judgment in the 2019 actions on at  least eight different grounds, including res judicata. The court granted  both motions for summary judgment and overruled the plaintiffs  objections.  

DISCUSSION  

The doctrine of res judicata provides that a valid, final judgment  rendered on the merits by a court of competent jurisdiction is an  absolute bar to a subsequent action between the same parties upon the  same claim or demand. Res judicata prevents a litigant from reasserting a  claim that has already been decided on the merits. Moreover, claim  preclusion prevents the pursuit of any claims relating to the cause of  action which were actually made or might have been made. Res judicata is  based on the public policy that a party should not be able to  relitigate a matter which it already has had an opportunity to litigate.  In order for res judicata to apply, four elements must be met:    1  the judgment must have been rendered on the merits by a court of  competent jurisdiction;  2   the parties to the prior and subsequent actions must be the same or  in privity;  3   there must have been an adequate opportunity to litigate the matter  fully; and  4   the same underlying claim must be at issue.

Pedestrian's No Fault Claim Belongs to Insurer Assigned  Insurers are professional litigants. 

They are sued and sue often.  Usually they avoid suing other insurer for fear of making precedents  that will effect the entire industry. In Beth Bracy, Plaintiff, and ZMC  Pharmacy, LLC, Riverview Macomb Home & Attendant Care, and Michigan  Spine and Pain, Intervening Plaintiffs v. Yolanda Yvette Nichols,  Defendant, and Farmers Insurance Exchange,  Defendant/Cross-Plaintiff-Appellant, and GEICO Indemnity Company,  Defendant/Cross-Defendant-Appellee, No. 359397, Court of Appeals of  Michigan (October 13, 2022) the insurers involved should have avoided  the litigation against each other and voluntarily resolved the dispute  with the injured.  

FACTUAL BACKGROUND  

On March 7, 2012, Geico issued an automobile insurance policy to Marcus  Nichols (Marcus). Three years later, Marcus added a 1993 Chevrolet  Lumina owned by his mother, defendant, Yolanda Nichols (Nichols), to the  policy. Nichols was identified as a driver on the policy, but she was  not a named insured on the policy. Nichols was driving the Lumina when  she was involved in an automobile accident with plaintiff, Beth Bracy, a  pedestrian, on August 23, 2014. Bracy sought personal protection  insurance (PIP) benefits under the Michigan no-fault act, MCL 500.3101  et seq., through the Michigan Assigned Claims Plan (MACP). MACP assigned  the claim to Farmers, and Farmers paid Bracy PIP benefits for her  accident-related injuries.  Bracy filed a complaint against Farmers and Nichols, alleging bodily  injury liability against Nichols, and alleging Farmers had unreasonably  and unlawfully refused to pay her PIP benefits in accordance with the  no-fault act. Farmers filed a third-party complaint against Geico for  reimbursement under MCL 500.3172. Later, Farmers sought summary  disposition against Geico, contending Geico was highest in priority for  Bracy's benefits. Geico also filed a motion for summary disposition  against Farmers, arguing that Farmers was highest in priority for  Bracy's benefits. The trial court granted Farmers' motion.  Geico appealed to the Michigan Court of Appeal which remanded to the  trial court for entry of an order granting summary disposition in favor  of Geico "because GEICO was not the insurer of the owner, registrant, or  operator of the Lumina and, therefore, had no obligation to pay Bracy's  PIP benefits under MCL 500.3115(1)."  

NO-FAULT COVERAGE  Farmers contended that Nichols' vehicle was insured under Marcus's Geico  automobile insurance policy, and thus, Bracy was entitled to recover  no-fault benefits under that policy.  LAW AND ANALYSIS  An uninsured pedestrian who suffers accidental bodily injury must seek  PIP benefits from insurers in the following order of priority:  (a) Insurers of owners or registrants of motor vehicles involved in the  accident.  (b) Insurers of operators of motor vehicles involved in the accident.  When no such insurer exists, the uninsured pedestrian may seek PIP  benefits through the MACP.

Trade Dress Infringement is Different From Trademark Infringement 

In State Farm Fire And Casualty Company v. Jason Hines, Individually and  doing business as Dedicated Business Systems International LLC;  Dedicated Business Systems International, LLC; Tri-State Communication  Services LLC, doing business as U.S. Voice and Data, LLC Jason Hines;  Dedicated Business Systems International, LLC, No. 21-2354, United  States Court of Appeals, Third Circuit (October 14, 2022) an insurer  found no duty to defend because of a trade mark infringement exclusion.  

FACTUAL BACKGROUND  

An insurance coverage dispute arose concerning the scope of two  commercial liability insurance policies was presented to the Third  Circuit. The policies cover advertising injuries arising out of  infringement upon another's trade dress, but they exclude injuries  arising out of trademark infringement.  When the insured was sued for trademark infringement, the insurer  initially agreed to defend the insured with reservations, but now the  insurer wishes to withdraw from that representation. The insurer sued,  seeking a declaratory judgment, and the District Court entered summary  judgment in its favor: the policies' coverage of trade dress  infringement claims did not extend to the suit for trademark  infringement. 

The Insurance Policies  

The two commercial insurance policies at issue were issued by State  Farm. In 2013, both policies used the same language in providing  coverage for "personal and advertising injury." That coverage included  the obligation to defend against suits arising out of infringement "upon  another's copyright, trade dress or slogan in your 'advertisement.'"  (emphasis added). But that advertising injury coverage excluded claims  "[a]rising out of the infringement of copyright, patent, trademark,  trade secret or other intellectual property rights." (emphasis added).  Under both policies, that exclusion did not apply to infringement in an  advertisement "of copyright, trade dress or slogan." (emphasis added).  Dedicated Business Systems International ('DBSI') purchased those  policies from State Farm for itself and its officers when conducting  DBSI business.  The Underlying Lawsuit  For a time, DBSI was an authorized reseller of Avaya communications  technology. The authorized-reseller arrangement terminated in 2013, but  DBSI and one of its officers allegedly continued to access Avaya  software license portals afterwards - without Avaya's authorization. By  doing so, they were allegedly able to distribute pirated licenses to  customers for a handsome profit, all the while using Avaya's trade name  and marks to falsely represent that the software was "valid and  authorized by Avaya."  Believing that DBSI engaged in a "massive illegal software piracy  operation," Avaya sued DBSI and its officer. Avaya's eight-count  complaint included federal claims for trademark infringement and  copyright infringement.   

Consistent with that reservation of rights, State Farm sued for a  judgment declaring that it did not have to defend or indemnify DBSI and  its officer in the Avaya lawsuit.

No Duty to Defend or Indemnify Intentional Acts or Person not Insured  

Norma Hudson and the Hudson Revocable Trust (the Trust) appealed from a  summary judgment entered in favor of Farm Bureau Mutual Insurance  Company of Arkansas, Inc. (Farm Bureau). In the summary-judgment order,  the trial court found as a matter of law that Farm Bureau had no duty of  defense or indemnification to the appellants arising from a lawsuit  filed against the Trust by Dewayne Evans, Mark White, and Billy Taylor.  In Norma Hudson And Hudson Revocable Trust v. Farm Bureau Mutual  Insurance Company Of Arkansas, Inc., No. CV-21-396, Court of Appeals of  Arkansas, Division II (October 5, 2022) the Court of Appeal resolved the  coverage dispute.  

FACTS 

Benjamin Hudson (Norma's adult grandson) shot and killed two coon dogs  and allegedly traumatized a third on property owned by the Trust. The  dog owners sued Benjamin Hudson (Benjamin) and the Trust, raising claims  for destruction of property, negligence, and tort of outrage and  seeking compensatory and punitive damages. The allegations in the  complaint against the Trust were that Benjamin was employed to oversee  the Trust property, that he was acting in a scope of that authority, and  that his outrageous conduct was ratified by the Trust.  Norma has two insurance policies with Farm Bureau. One policy is a  homeowner's policy that insures the property where the shootings  occurred, and the other is a property owner's policy. After the dog  owners' sued Norma and the Trust made a claim with Farm Bureau for  coverage under the insurance policies. Farm Bureau subsequently sued  seeking a declaratory judgment that it owed no duty to defend or  indemnify Benjamin, Norma, or the Trust based on exclusionary language  in the policies relating to bodily injury or property damage arising out  of intentional acts.  

The policies provided that Farm Bureau provided that there is no  coverage for "bodily injury or property damage caused intentionally by  you or any covered person or at the direction of you or any covered  person" and that "[t]he expected or unexpected results of such acts are  not covered." (Emphasis added.)  Farm Bureau asserted that the dog owners' complaint alleged that  Benjamin was acting as an agent of the Trust when he shot the dogs. Farm  Bureau argued that because the insurance policies expressly excluded  liability coverage for damage arising out of an intentional act, it had  no duty to defend or indemnify Norma or the Trust and that it should be  granted summary judgment.  The trial court agreed and entered an order granting Farm Bureau's  summary-judgment motion. Specifically, the trial court found:  Liability insurance coverage is expressly and unambiguously excluded  under both the Homeowner Policy and the Property Owners Policy for  bodily injury or property damage arising out of the intentional conduct  of an insured.  ANALYSIS  Once the moving party has established a prima facie entitlement to  summary judgment, the opposing party must meet proof with proof and  demonstrate the existence of a material issue of fact. On appellate  review, the appellate court must determine if summary judgment was  appropriate based on whether the evidentiary items presented by the  moving party in support of the motion leave a material fact unanswered.

137 Years in Prison for Insurance Fraud & Arson  

How to Deter Insurance Fraud  

A prisoner seeking relief from a lengthy sentence failed after multiple  efforts as a pro se applicant. In Ali Darwich v. Warden Lewisburg USP;  Attorney General United States Of America, No. 22-2280, United States  Court of Appeals, Third Circuit (October 14, 2022), Ali Darwich, a  federal prisoner currently confined at the United States Penitentiary in  Lewisburg, Pennsylvania (“USP Lewisburg”), appealed pro se from the  District Court’s order dismissing his petition for a writ of habeas  corpus under 28 U.S.C. § 2241. 

FACTS  In 2013, a jury in the Eastern District of Michigan convicted Darwich of  thirty-three counts related to arson and insurance fraud, including  seven counts of using fire to commit fraud in violation of 18 U.S.C. §  844(h)(1). He was sentenced to a total term of 1647 months or 137 years  of imprisonment.  He tried multiple times to avoid the sentence only to have the United  States Court of Appeals for the Sixth Circuit affirmed, and the United  States Supreme Court denied Darwich’s petition for a writ of certiorari  in United States v. Darwich, 574 Fed.Appx. 582 (6th Cir. 2014), cert.  denied, 574 U.S. 1200 (2015). Darwich then moved to vacate, set aside,  or correct his sentence under 28 U.S.C. § 2255. The District Court  denied the motion, in United States v. Darwich, No. 2:10-CR-20705, 2016  WL 146662 (E.D. Mich. Jan. 13, 2016), and the Sixth Circuit denied  Darwich’s request for a certificate of appealability, in Darwich v.  United States, No. 16-1151 (6th Cir. August 5, 2016) (order). Darwich  continued to file numerous unsuccessful motions for authorization to  file second or successive § 2255 motions.  In 2022, Darwich filed a petition for relief under § 2241, which the  District Court construed as raising three claims: (1) that Darwich’s  conviction and sentence are unlawful under United States v. Davis, 588  U.S.__, 139 S.Ct. 2319 (2019), Bailey v. United States, 516 U.S. 137  (1995), and Deal v. United States, 508 U.S. 129 (1993); (2) that he was  subjected to selective prosecution because of his race or ethnicity; and  (3) that the sentencing court erred by imposing consecutive sentences.  The District Court dismissed the petition, concluding that Darwich  failed to show that § 2255 was an “inadequate or ineffective” remedy so  that his claims could be considered under § 224. 

ANALYSIS  Motions pursuant to 28 U.S.C. § 2255 are the presumptive means by which  federal prisoners can challenge their convictions or sentences. A habeas  corpus petition under § 2241 accordingly “shall not be entertained”  unless a § 2255 motion would be “inadequate or ineffective to test the  legality of [petitioner’s] detention.” A § 2255 motion is inadequate or  ineffective only where the petitioner demonstrates that some limitation  of scope or procedure would prevent a § 2255 proceeding from affording  him a full hearing and adjudication of his wrongful detention claim.  The Third Circuit agreed with the District Court’s determination that  Darwich failed to make the showing necessary to meet the safety-valve  exception.

It is Frivolous to File Same Suit Against Another Defendant After First  is Dismissed  

Dimitri Enterprises, Inc. ("Dimitri") and its attorney, Richard J.  Flanagan, appealed from the district court's June 24, 2021 order  imposing $24,675.00 in sanctions pursuant to Federal Rule of Civil  Procedure 11. Dimitri, a roofing contractor, filed this lawsuit in  connection with a dispute regarding insurance coverage for an employee's  injuries on a construction project.  In Dimitri Enterprises, Inc. v. Spar Insurance Agency LLC, NIF Services  of New Jersey, Inc., and Scottsdale Insurance Company, No. 21-1722-cv,  United States Court of Appeals, Second Circuit (October 6, 2022) the  complaint asserted claims against defendant Scottsdale Insurance Company  ("Scottsdale"), which was Dimitri's commercial general liability  insurance carrier, and defendant NIF Services of New Jersey, Inc.  ("NIF"), which was originally alleged to be Dimitri's broker. 

ORIGINAL CLAIM DISMISSED AS TIME BARRED  The district court granted NIF's motion to dismiss both claims against  it, reasoning that the negligence claim was time-barred, and the breach  of contract claim was inadequately pled because Dimitri did not allege  any contractual terms that NIF breached. Dimitri then filed a second  amended complaint (the "SAC") against an additional defendant, Spar  Insurance Agency, LLC ("Spar"), which was the retail insurance broker  for Dimitri's policy.  In its SAC, Dimitri brought claims against Spar for negligence and  breach of contract that were identical to the negligence and breach of  contract claims that the district court already dismissed against NIF.  The district court granted Spar's Motion to dismiss.  In addition, the district court granted Spar's subsequent motion for  sanctions, explaining that "plaintiff's counsel knew or should have  known that the claims against Spar were likewise subject to dismissal"  because "identical claims against NIF were previously dismissed as  either time-barred or inadequately pled." 

 DISCUSSION  The Second Circuit reviewed the district court's imposition of sanctions  pursuant to Rule 11 of the Federal Rules of Civil Procedure for an  abuse of discretion. This deferential standard is applicable to the  review of Rule 11 sanctions because the district court is familiar with  the issues and litigants and is thus better situated than the court of  appeals to marshal the pertinent facts and apply a fact-dependent legal  standard. An abuse of discretion only occurs if the district court based  its ruling on an erroneous view of the law or on a clearly erroneous  assessment of the evidence or rendered a decision that cannot be located  within the range of permissible decisions.  RULE 11 SANCTIONS  Rule 11 explicitly and unambiguously imposes an affirmative duty on each  attorney to conduct a reasonable inquiry into the viability of a  pleading before it is signed. The standard for triggering the award of  fees under Rule 11 is objective unreasonableness and is not based on the  subjective beliefs of the person making the statement.  Under Rule 11, a litigant's obligations with respect to the contents of  filings are not measured solely as of the time they are filed with

ZIFL - 10/15/2022 available at  http://zalma.com/blog/wp-content/uploads/2022/10/ZIFL-10-15-2022-1.pdf  

Short teases about the articles in this issue can be read at  ZIFL-10-15-2022   Ethics & Insurance Fraud  Insurance fraud is a crime in most jurisdictions. In California it is a  felony subject to five years in prison upon conviction. By definition a  person who commits the crime of insurance fraud is not acting ethically.  In State v. Whitaker, 175 P.3d 136, 117 Hawai'i 26 (Haw. App.  12/31/2007) 

Whitaker, after presenting a claim to his insurer, was  indicted, convicted, and sentenced for Insurance Fraud in violation of  Hawaii Revised Statutes (HRS) ' 431:10C‑307.7(a)(1) and (b)(2) (2005),  and Attempted Theft in the Second Degree (Attempted Theft 2) in  violation of HRS ' 708‑831(1)(b) (Supp. 2000) and HRS ' 705‑500 (1993).  

RICO Judgment Allows Disgorgement Damages

Fraudsters Must Disgorge Profits of Crime - In Diane Creel and Lynn Creel v. Dr. Says, LLC, et al., Civil Action No. 4:18-CV-00615,  United States District Court, E.D. Texas, Sherman Division (September  27, 2022) the plaintiffs obtained a verdict against Defendants Dr. Yupo  Jesse Chang; MD Reliance, Inc.; Universal Physicians, PA; Dr. Says, LLC;  Office Winsome, LLC; and Yung Husan Yao (aka Angela Yao) for violations  of the civil Racketeer Influenced and Corrupt Organization Act (“RICO”)  and RICO conspiracy. The Court, after the verdict, needs to enter its  findings of fact and conclusions of law regarding equitable  disgorgement.  New California Fraud Statutes  SB 1040, authored by Senator Susan Rubio, authorizes the Insurance  Commissioner to order restitution from persons who sell insurance  without the necessary license from the Department of Insurance,  including “extended vehicle warranties” sold illegally through robocalls  and misappropriation of consumers’ and businesses’ premiums, among  other insurance scams.  Good News From the Coalition Against Insurance Fraud  Dead patients couldn’t stop Thomas G. O’Lear from billing taxpayers  $3.7M for fraudulent X-rays in the Indianapolis area. O’Lear ran a  portable-X-ray firm that zapped patients in nursing homes, skilled  nursing facilities and long-term care facilities. He billed for  thousands of X-rays that he and his business did not perform. That  included 151 X-rays on dates after the patients had died. He also billed  Medicare and Medicaid for services at nursing facilities on dates when  patients were either hospitalized and not on-site at the facilities.  O’Lear took multiple X-rays in one visit and falsely claimed that each  was done on a different day, requiring separate reimbursement for  transporting the portable equipment on each date. And he falsely billed  for multiple images of patients when only one image was done — thus  requiring a higher reimbursement. O’Lear covered up his scheme by  forging medical records, falsifying X-ray images and forging signatures  of his employees and the doc he said had ordered X-rays.

Insurance Coverage Dispute Alone Not Bad Faith  

The tort of bad faith requires, for an insured to recover, that the  insurer act intentionally to deprive the insured of the benefits of the  policy of insurance.   Garo Alexanian (d/b/a) Vet Mobile and Companion Animal Network, Inc.  (“CAN,” and together with Alexanian, “Plaintiffs”) sued GEICO and  Travelers  seeking a declaration that Defendants have a duty to defend  and indemnify Alexanian against counterclaims filed against him New  York, plus tort damages for the insurers bad faith denial of his claim  for defense. 

 In Garo Alexanian d/b/a Vet Mobile and Companion Animal Network, Inc. v.  Government Employees Insurance Company and Travelers Casualty Insurance  Company Of America. No. 21-CV-05427 (LDH) (TAM), United States District  Court, E.D. New York (September 30, 2022) dealt with both the claims  for defense and the allegations allowing extracontractual damages.  

BACKGROUND  The Travelers Policy excluded from coverage, however, personal injury to  a person “arising out of . . . employment-related practices, policies,  acts or omissions, such as coercion, demotion, evaluation, reassignment,  discipline, defamation, harassment, humiliation or discrimination  directed at that person.” Alexanian also purchased an umbrella policy  from GEICO (the “GEICO Policy”).  On January 15, 2021, Alexanian sued Rosa Morales claiming back rent, and  alleged that Morales was “an employee of [Alexanian] and [Alexanian's]  business from September 2015 until October 2019.” It also referred to  Morales as a tenant.  Morales filed a counterclaim alleging that Alexanian defamed her.  Travelers refused to defend Alexanian since Morales was an employee. 

 DISCUSSION

The duty to defend is exceedingly broad and an insurer will be called  upon to provide a defense whenever the allegations of the complaint  suggest a reasonable possibility of coverage.   The Court must determine only whether, assuming Alexanian's allegations  are true, the defamation claim is solely “within the policy exclusion.”  The answer to that question is no. Thus, the breach of contract claim  cannot be dismissed.  

In short, Travelers failed to establish that the Underlying Action falls  within the employment practice related exclusion or is otherwise  outside the Travelers Policy, and therefore, the motion to dismiss  Alexanian's breach of contract claim must be denied.  Breach of the Covenant of Good Faith and Fair Dealing, Common Law Bad  Faith, and Common Law Fraud

Hitting Plaintiff on Head with Metal Pole is a Battery & Even With  Assault & Battery Coverage Exclusion Applies  

Paul Semien ("Semien"), appealed the district court's dismissal of his  breach of contract claim for defense and indemnity against the  Burlington Insurance Company ("Burlington") after he was injured by a  convenience store employee who hit him on the head with a metal pole. In  Paul Semien v. The Burlington Insurance Company, No. 22-20195, United  States Court of Appeals, Fifth Circuit (October 3, 2022) the Fifth  Circuit applied the Eight Corners Rule and resolved the dispute in favor  of the insurer.  

BACKGROUND

Semien, a customer at a convenience store became embroiled in a dispute  with the store's clerk, Tam Truong, over Semien's entitlement to store  credits based on awards that he won from the store's video poker  machines. Truong left his post behind a glass-enclosed counter and hit  Semien on the head with a metal pole, causing Semien severe injuries.  Semien sued T&T and Truong in Texas state court (the "Underlying  Lawsuit") for negligence and assault against both Truong and his  employer.  T&T had a general commercial liability insurance policy issued by  Burlington (the "Policy.) "Coverage D" of the Policy provides for  coverage up to $100,000 for assault and battery. But, Coverage D also  excluded coverage when the assault or battery is "committed by any  insured or agent of any insured." The Policy defines "insured" to  include T&T's employees, but "only for acts within the scope of  their employment by [T&T] or while performing duties related to the  conduct of [T&T's] business."  Burlington denied that it had a duty to defend or indemnify T&T and  Truong in the Underlying Lawsuit. Semien subsequently entered into a  settlement agreement with T&T and Truong. As part of the settlement  agreement, they assigned Semien "all rights they have jointly or  separately to pursue claims and remedies under [their] insurance  contract with The Burlington Company."  Semien then sued Burlington. The district court granted the motion.  Plaintiff timely appealed.