The U.S. Court of Appeals for the Ninth Circuit has affirmed a district court's decision that an insurer that paid for the insured's husband's funeral did not waive its right to assert that an exclusion in its policy precluded coverage for an accident allegedly involving the insured's husband, an ATV, and a sandrail.
The Case
Travis Walker was riding an ATV on sand dunes in Nevada when it stalled. He kneeled beside the ATV to inspect the problem, and allegedly was hit by a sandrail. Mr. Walker died at the scene.
Mr. Walker's widow, Jennifer Walker, opened a claim under her own policies with State Farm Mutual Automobile Insurance Company because the driver of the sandrail (which is like a dune buggy) was uninsured.
State Farm authorized payment for Mr. Walker's funeral costs, but it denied coverage for uninsured motorist benefits based on the policy's off-road vehicle exclusion.
Ms. Walker sued State Farm for breach of contract, violation of Nevada's Unfair Claims Settlement Practices Act, breach of the covenant of good faith and fair dealing, breach of fiduciary duty, misrepresentation, and punitive damages.
The U.S. District Court for the District of Nevada granted summary judgment in favor of State Farm, and Ms. Walker appealed, asserting among other things that State Farm had waived its right to rely on the off-road vehicle exclusion in her policies based on its payment of her husband's funeral costs.
The Ninth Circuit's Decision
The Ninth Circuit affirmed.
In its decision, the circuit court ruled that State Farm had not waived its right to rely on the off-road vehicle exclusion “because it did not intentionally relinquish a known right.”
From the outset, the Ninth Circuit said, State Farm questioned whether the sandrail qualified as an uninsured motor vehicle under its policies because it appeared to be an off-road vehicle and the accident occurred off public roads. Indeed, the circuit court continued, State Farm issued a letter reserving its rights to deny coverage because it had a concern regarding the nature of the sandrail.
The Ninth Circuit concluded that State Farm had conducted a reasonable investigation before it decided that Mr. Walker was involved in an accident with an off-road vehicle while on a sand dune and, therefore, that his widow was not entitled to recover uninsured motorist benefits.
The case is Walker v. State Farm Mutual Automobile Ins. Co., No. 17-16102 (9th Cir. Feb. 22, 2019). Attorneys involved include: For JENNIFER M. WALKER, Individually and as Surviving Spouse and as Administrator and Heir; and as Parent and Natural Guardian on behalf of Estate of Travis J. Walker on behalf of Carter Walker on behalf of Nolan WalkerIndividually and as Surviving Spouse and as Administrator and Heir; and as Parent and Natural Guardian on behalf of Estate of Travis J. Walker on behalf of Carter Walker on behalf of Nolan Walker, Plaintiff – Appellant: Peter Christiansen, Esquire, Kendelee Works, Attorney, Christiansen Law Offices, Las Vegas, NV. For STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant – Appellee: Robert Wilson Freeman, Jr., Esquire, Attorney, Priscilla L. O'Briant, Attorney, Lewis Brisbois Bisgaard & Smith, LLP, Las Vegas, NV.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].