Existence of insurance ruled irrelevant to determination ofagency relationship

A boat collision resulted in the death of a girl and injuries toher sister. The girl's estate filed a wrongful-death action againstthe driver of the other boat, while the mother also sought damagesfor injuries sustained by the surviving daughter. Each claimasserted that the driver was negligent in the accident and that hewas acting as an agent of a bass-fishing club at the time.

The defendant was a director of the club's western NorthCarolina district. As such, he oversaw the administration oftournaments in the district. He wasn't an employee of the club,however, and received no salary nor had full-time duties.

The accident took place during the bass-fishing club's nationalchampionship tournament. The defendant was the event's principalorganizer. He arranged for sponsorships, as well as for food andlodging for contestants. However, once the tournament began, thedefendant participated only as a contestant and had paid aregistration fee. He had no duties related to tournamentregistration, received no compensation, and did not participate asa club official during the weighing of the caught fish at the endof each day of the tournament. Furthermore, he was not authorizedto answer any questions that arose during the contest concerningthe rules and procedures of the tournament. Rather, the club'snational director was in charge.

After the contest fish were weighed at the end of one day of thetournament, the national director asked the defendant and anotherperson to return the fish to the lake. After releasing the fish,the defendant returned to a dock where his wife was waiting. Thetwo then got into the defendant's personal boat and departed for anaccess point where their boat trailer was located. While they wereen route to the access point, they collided with the boatcontaining the sisters.

At the conclusion of a 10-day trial, the jury found that thedefendant's negligence was the sole cause of the accident andawarded substantial damages to the plaintiffs. The jury, however,concluded that the defendant did not act as an agent for thebass-fishing club, a decision the plaintiffs appealed.

In the appeal, the plaintiffs contended that the trial courterred in sustaining the bass-fishing club's objections to twoproffers made by the plaintiffs outside of the presence of thejury. One was that the defendant had had no personal insuranceapplicable to the accident. The other concerned how much insurancethe club had. During the trial, the plaintiffs sought to introduceanswers to interrogatories disclosing the club's insurancecoverage, and to also introduce a copy of its insurance policy. Theplaintiffs argued the existence of the insurance policy “goes tothe issue” of whether the defendant was in fact the club'sagent.

On appeal, the plaintiffs contended that the “mere fact thealleged principal obtained insurance which covered 'executiveofficers and directors' was evidence enough to weigh and influencethe jury's decision on this issue.” The definition of an insured inthe club's policy included the organization's executive officersand directors “but only with respect to their duties as yourofficers and directors.”

The appeals court said that in North Carolina the existence ofliability insurance is not admissible to show a party actednegligently or wrongfully, although it is admissible for otherpurposes, including proving the existence of an agencyrelationship. The court held, however, that “while plaintiffs'first proffer is encompassed in their first assignment of error, itis not argued in their brief, and is therefore deemedabandoned.”

Even had the plaintiffs properly argued this matter, whether onnot the defendant had his own insurance is irrelevant to the issueof agency, the court said. Furthermore, the court added, the amountof coverage provided by the club's insurance policy, standingalone, in no way establishes that the defendant was the club'sagent. “Such evidence could only serve to induce the jury to decidethe case on improper grounds…and was properly excluded by the trialcourt,” the appeals court said.

The next issue was whether the trial court abused its discretionin excluding the evidence about the defendant's status. The issuewas not whether the defendant was a director of the bass-fishingclub; the uncontradicted evidence was that he was. Rather, thecourt said, the issue to be decided by the jury was whether thedefendant was acting as a director or agent of the club at the timeof the boat collision.

The court said neither the existence of the insurance policy norits terms made the existence of agency more or less probable. Theinsurance policy was not relevant to the issue of agency, andtherefore the trial court properly excluded this evidence.

While the club's policy stated that directors are insured, thecourt noted that coverage was subject to the express limitation:“but only with respect to their duties as your officers anddirectors.” This limitation eliminates any possible relevance ofthe insurance policy to the issue of agency, the court said.“Instead, this provision merely restates the issue to be decided bythe jury.” The appeals court upheld the trial court's decision tosustain the bass-fishing club's objection.

The plaintiffs also said the trial court erred in denying theirmotion for judgment, notwithstanding the verdict, and for a newtrial. The appeals court disagreed, saying that the plaintiffsfailed to argue in their brief that the trial court erred indenying their motion for a new trial, and that contention wasdeemed abandoned.

The appeals court also said the trial court acted properly indenying the plaintiff's motion for judgment. There was ampleevidence from which the jury could have found that the defendant'sactivities on behalf of the fishing club terminated once he gotinto his personal boat with his wife and departed for their boatingtrailer.

Williams vs. Bell, No. COA03-1538 (N.C.App. 01/04/2005)2005.NC. 0000005 (www.versuslaw.com).

Forcible-entry exclusion upheld in auto-theft claim

The insured in this Alabama case and his family were at aChristmas gathering at a restaurant. At the end of the party, hiswife moved the insured's minivan to the front of the restaurant topick up the family. She left the minivan running and unlocked whileshe went inside to get the family. Before she returned, the minivanwas stolen. It later was recovered, after it had been wrecked andabandoned.

The insured reported the incident to his carrier and requestedpayment under his policy for the $4,747 in damage, less the $500deductible. The insurer refused to pay, based on policy languageexcluding theft of a covered vehicle if “forcible entry” was notrequired to access it. The insurance policy did not define“forcible entry.”

In the subsequent litigation, a trial court entered a summaryjudgment for the insured, finding that the exclusion did not applybecause it was ambiguous. There was an appeal.

The appellate court found that the ordinary meaning of“forcible” is to use “force.” It noted that at his disposition theinsured testified that he understood “forcible entry” to mean“somebody forcing his way into the vehicle.”

“Thus, 'forcible entry' was reasonably understood both by thecarrier and by the insured to include the use of force to gainaccess to his minivan,” the appellate court said. “In this case,the insured's wife left the minivan unattended, unlocked, with thekey in the ignition, and with the motor running. Under thosecircumstances, 'forcible entry' was not required to gain access tothe minivan, and (the insured) admitted that no one forced his wayinto the minivan because '(his wife) started the car.'”

The appellate court concluded that the forcible-entryexclusionary provision applied in this case and that the trialcourt erred by denying the carrier's summary-judgment motion on thecoverage issue and by entering a summary judgment in favor of theinsured.

Safeway Insurance Co. of Alabama vs. Herrera, No. 1031115(Ala. 02/ 18/2005) 2005.AL.0000074 (www.versuslaw.com).

Readers can contact Don Renau via e-mail [email protected].