case brief assignment

Rodney Rodney RabitoRabito v. State Farm.v. State Farm. CIVIL ACTION NO. 06CIVIL ACTION NO. 06--1584 SECTION B(3)1584 SECTION B(3)

Accounting 2701-02 Instructor: Raymond Clark, JD, MBA, CPA

By Carter, Clinton NetID FJ3642

Extra Credit Brief

IssuesIssues • This action arises out of a motor vehicle bicycle

collision. While driving personal vehicle in the course and scope of employment Ervin Nordmann struck Plaintiff Rodney Rabito on his bicycle while Nordmann was backing up in his pick-up truck.

• The truck being driven by Nordmann was owned by him and insured by State Farm with a policy of $250k. Nordmann also had a personal umbrella policy for an additional 1 million in liability coverage.

Extra Credit Brief

IssueIssue

• A dispute exists between State Farm and Pilot Catastrophe Services, Inc as to what coverage are provided by the respective polices, to whom and the order in which they apply.

• The parties agree to tentatively settle the matter for $385k. St. Paul Fire & Marine Ins. Co collecting for Pilot Castastrophe would pay the remaining $135k of the settlement.

• The parties do not dispute that State Farm should pay its primary limits of $250k as the primary policy holder but St. Paul contends that State Farm should pay the remaining up the limits of the umbrella policy for the tortious acts of its insured, Ervin Nordmann.

Extra Credit Brief

RuleRule • The ranking of an excess policy for a non-owned

vehicle and a personal umbrella policy has been decisively resolved by the Alabama Supreme Court and that umbrella policies in Alabama are considered policies of “last resort” and are always ranked behind all other collectible insurance.

• St. Paul may have inadvertently waived its rights to seek reimbursement under the “voluntary payment doctrine under Alabama law..

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AnalysisAnalysis • The St. Paul policy expressly provides

coverage only to Pilot, Nordmann’s employer, and that it expressly excludes Nordmann himself. Therefore, Nordmann was acting in the scope of employment but State Farm policy is the only policy that provides coverage for the incident.

Extra Credit Brief

Related BriefsRelated Briefs • Independent Fire Insurance Co. V. Mutual Assurance (Ala. 1989)

The primary insurer filed a declaratory judgment action against the excess insurer seeking a determination as to which insurer was primary in the underlying boating accident case. The court affirmed the trial court's holding that the majority rule that as between a non-owned vehicle policy and an umbrella policy was that the umbrella policy will be excess over all other policies, both excess and primary. The court further held that the trial court's application of the majority rule was sound and supported by the intent of the parties, as reflected in their respective policies. Accordingly, the primary insurer was primarily liable on its policy of insurance with the operator of the boat.

• Carrabba, et al., Appellants v. Employers Casualty Company, et al., Appellees Appellant insureds brought an action against appellee insurers for declaration of the priority of insurance coverage. After appellants were required to contribute to a wrongful- death settlement even though their combined insurance coverage was in excess of the settlement, appellants moved for partial summary judgment against insurer Y

• State Farm Fire & Cas. Co. V. Hartford Acc. & Indem. Co., (Ala. 1977) It was determined that a policy with pro-rata clause must exhaust its limits before any payment is required by an "excess" policy

Extra Credit Brief Carter, C. NetID FJ3642

ConclusionConclusion

OUTCOME:

St. Paul Fire and Marine Insurance Company’s Motion for Summary Judgment is GRANTED and State Farm Mutual Automobile Insurance Company’s Motion for Summary Judgment is DENIED.

Extra Credit Brief Carter, C. NetID FJ3642

Thank youThank you

Extra Credit Brief Carter, C. NetID FJ3642