The U.S. District Court for the District of Pennsylvania has ruled that a commercial auto insurer was obligated to indemnify an ambulance company for a settlement it reached with a plaintiff who alleged that he was injured when he fell out of the back of its wheelchair accessible ambulance van because the van driver forgot to secure him. The court also found that the commercial auto insurer and the ambulance company's professional liability carrier had an equal responsibility for the defense costs.
The case
John Stratton, a wheelchair-bound resident of Bala, Pa., alleged that Nancy Ortiz, an employee of Medex Ambulance Inc., loaded him into a wheelchair accessible ambulance van but failed to secure him with a lap belt or securing straps. He alleged that his wheelchair moved towards the open rear of the vehicle, that his wheelchair tipped over out of the rear of the vehicle, and that he was injured.
Stratton sued Medex and Ortiz. Medex tendered the defense to Knightbrook Insurance Co., which had issued a commercial auto insurance policy to Medex. Medex also tendered the defense to Northfield Insurance Company, which had issued a general liability and professional liability insurance policy to Medex.
Knightbrook defended Medex and Ortiz under a reservation of rights. Stratton and Medex reached a settlement, and Knightbrook paid $187,500 of the settlement. Knightbrook also claimed that it paid $21,782.78 in fees and costs to counsel to defend Medex.
Knightbrook then sued Northfield, seeking to recover its indemnity and defense cost payments of $209,282.78.
The insurers moved for summary judgment.
(Photo: Shutterstock)
The policies
The Knightbrook auto policy provided:
We will pay for the benefit of insureds, up to the applicable limit of liability [ +] shown in the Declarations, those sums that insureds become legally liable to pay as damages because of bodily injury or property damage insured in this policy that is caused by an accident and results from the maintenance, ownership, or use of a covered auto.
The auto policy insurance was primary to any other in the event of an accident involving a covered auto owned by Medex.
The Northfield policy provided general liability coverage but contained:
exclusion g [as amended by the exclusion endorsement]:
This insurance does not apply to … Bodily injury or property damage arising out of the ownership, maintenance, use, or entrustment to others of any aircraft, auto, or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and loading and unloading.
The Northfield policy also stated:
Loading or unloading means the handling of any person or property:
a. After it is moved from the place where the person or property is accepted for movement into or onto an aircraft, watercraft, or auto
b. While in or on an aircraft, watercraft, or auto; or
c. While being moved from an aircraft, watercraft or auto to the place where the person or property is finally delivered.
The definition excepted:
the movement of any person or property by means of a mechanical device, other than a hand truck, that is not attached to the aircraft, watercraft or auto.
A woman in wheelchair accessible van with wheelchair secured correctly. (Photo: iStock)
The court's decision
The court ruled that a person falling off the back of a wheelchair accessible ambulance van because the operator did not secure the passenger or ensure the proper location of the van lift primarily stated a claim arising under the ambulance company's auto liability policy because the use of the vehicle constituted a "but-for cause of the injuries," and that the auto carrier had to indemnify Medex.
It added that because Mr. Stratton's complaint sounded both in professional negligence and in auto liability, the professional liability carrier equally shared in the obligation to defend Medex. The court, therefore, granted the professional liability insurer's motion for summary judgment on the duty to indemnify but found that it shared an equal responsibility for the defense costs.
The case is Knightbrook Ins. Co. v. Northfield Ins. Co., No. 15-2929 (E.D. Penn. Jan. 26, 2016).
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