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State Farm Fire and Casualty Co. v. Darsie12/16/2003
PUBLISHED
This case arises from an order estopping State Farm from denying coverage of its Personal Liability Umbrella Policy (PLUP) to the Estate of Bernard Leinfelder for Mrs. Leinfelder's claims for injuries and damages sustained in a car accident occurring 29 October 1996. The following facts were found without exception by the trial court issuing the order. Beginning in 1984 and continuing at least through 1996, Mr. and Mrs. Leinfelder (the "Leinfelders" collectively) considered Mr. Larry High (Mr. High) their insurance agent. During that time, Mr. High was an agent for State Farm. The Leinfelders continuously carried their homeowner's and automobile insurance coverage with State Farm.
In 1994, the Leinfelders altered their insurance coverage. At that time, they were in their midsixties and were the sole employees of their own electronics business run out of their basement. Before the alteration to their coverage, they carried automobile insurance with State Farm which provided them with liability and UM (uninsured motorist)/UIM (underinsured motorist) coverage limits of $500,000 per person and $500,000 per accident (500/500). The limits of this policy applied to both first-party claims (claims brought by an insured or family member against another insured or family member) and third-party claims (claims brought by all others). In 1993 or early 1994, the Leinfelders were solicited by Mr. High to consult with him for an insurance "check-up." In February of 1994, Mrs. Leinfelder met with Mr. High while Mr. Leinfelder stayed at home to run their business. At that meeting Mrs. Leinfelder took notes of Mr. High's recommendations of a better coverage scheme and so reported to her husband. As a result of the meeting and Mr. High's recommendations, the Leinfelders reduced their automobile liability coverage to $100,000 per person/$300,000 per accident (100/300) and purchased a $1,000,000 PLUP.
Included in the PLUP was a first-party exclusion or "intra-family" exclusion that read:
10. For bodily injury or personal injury to the named insured, spouse, or anyone within the meaning of Part A. or Part B. of the definition of insured. This exclusion also applies to any claim or suit made against you to share damages with or repay someone else who may be obligated to pay damages because of the bodily injury or personal injury.
Thereafter, for first party claims, rather than increase the Leinfelders' liability coverage up to $1,000,000, because the underlying automobile limits were reduced from 500/500 to 100/300, the intrafamily exclusion of the PLUP actually reduced the coverage limit that they had before the 1994 alteration by 80% (500 to 100).
On 29 October 1996, the Leinfelders were involved in a serious automobile accident, resulting in the death of Mr. Leinfelder. Mrs. Leinfelder sustained substantial injuries with ensuing medical expenses exceeding $500,000. The wreck was caused by the negligence of Mr. Leinfelder when he drove on the wrong side of a divided highway. On that day, both the State Farm PLUP and automobile policy were in effect.
Mrs. Leinfelder instituted a claim against her husband's estate for damages on 5 October 1999. State Farm contended the extent of her husband's automobile liability coverage was $100,000, and the $1,000,000 coverage purchased in 1994 did not cover the liability of first-party claims pursuant to the intra-family exclusion. Being the wife and one of the insured, she thus had no claim beyond $100,000 as of the 1994 alterations to their coverage.
The action now before this Court was originally instituted by State Farm on 4 February 2000 for determination of the respective partie
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