18 | MARCH 2018 | Claims Magazine | PropertyCasualty360.com
The U.S. Court of Appeals for the Seventh Circuit, reversing a dis- trictcourt’s decision, hasruled that
an insured’s 21-month delay in notifying
his insurer about a “minor” accident was
not reasonable and, as a result, the insurer
had no duty to defend him in the lawsuit
that ultimately was filed against him.
On September 6, 2013, Carl Brumit, the
owner of Brumit Services, Inc., a small
business that performed residential concrete construction work, was in the parking
lot of a Phillips 66 gas station in Columbia,
Illinois, with the truck he used for his business. When he backed out of his parking
space, he unwittingly struck 68-year-old
Delores Menard with the truck’s tailgate.
Menard fell and suffered scrape
wounds on her elbow and knee. She was
treated by an EMT and declined a trip to
the hospital, instead choosing to drive
For his part, Brumit was unaware that
he had hit Menard until a bystander
alerted him as he was driving away. He
then came back to the scene, called for
an ambulance, and provided the police
officer at the scene with a statement. He
observed that Menard was sitting down
and “may have had a scratch on her knee.”
After everyone parted ways, Brumit
thought the incident so minor that he
was not required to report it to State Auto
Property and Casualty Insurance Com-
pany, from which he had purchased a
business auto liability insurance policy.
However, on June 22, 2015, Brumit was
served with a lawsuit in connection with
the accident. Menard alleged in her complaint that the accident had caused her to
“sustain severe, permanent and permanently disabling injury; including injuries
to her back and spine and the soft tissue
structures thereof.” She sought damages in excess of $50,000. Her husband
also sued Brumit, alleging, among other
things, loss of consortium.
The next day, Brumit notified State Auto
that he had been sued. State Auto then
sought a declaratory judgment in the U.S.
District Court for the Southern District of
Illinois that it had no duty to defend Bru-
mit in the lawsuit because he had breached
the policy’s notice requirement.
The parties filed cross-motions for
summary judgment. The district court
granted Brumit’s motion and denied State
Auto’s. The district court reasoned that it
would not make sense for State Auto to
want to know about “each and every accident” its insureds were involved in because its “phones would never stop ringing.” The district court then concluded
that Brumit’s 21-month delay in notifying
State Auto about the accident was reasonable as a matter of law.
State Auto appealed.
A LOOK AT SOME OF THE LEGAL DECISIONS IMPACTING INSURANCE ACROSS THE COUNTRY
To see more verdicts like this, visit VerdictSearch ( www.verdictsearch.com), a division of ALM Media LLC.
By Steven A. Meyerowitz, Esq.