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                                                                       INSURANCE-RELATED COURT CASES
                              © Rough Notes Co., 2010
            JUNE 2010 • VOLUME 153, No. 6                                     Digested from case reports published in Westlaw,
                              Staff                                                  West Publishing Co., St. Paul, MN
                         Editor in Chief

                                                                        COURT DECISIONS
                       Thomas A. McCoy

                          Senior Editor
                        Nancy Doucette
                          Associate Editor
                     Elisabeth Boone, CPCU

                         Associate Editor
                        Dennis Pillsbury

                         Assistant Editor
                          Elaine Tolen

                        Editorial Assistant                 Mother seeks UIM payment in                 noted that it was enough that Speer
                        Alice A. Roettger                   child’s school bus death                    had shown that she was legally
                    Art Director/Photographer
                                                                                                        entitled to recover damages exceeding
                           Paul B. Riley                        On October 13, 2003, 6-year-old         her portion of the $500,000 cap. The
                            Joseph Gordon was killed in a school        court then concluded that the statutory
                                                            bus accident. Several other children        cap of $500,000 for all damages arising
                         Graphic Designer                   were injured. The bus driver, an            out of the accident did not affect Farm
                          Linda A. Lange
                                                            employee of the school district, was        Bureau’s liability to pay Speer
                                                            found to be solely negligent. The           underinsured motorist benefits for
             Production/Advertising Coordinator             families of the children incurred           damages caused by the bus driver.
                      Georgianna Quinn                      approximately $420,000 in medical              The decision of the lower court
                             and funeral expenses; future medical        was affirmed.
                         Tricia Cutter                      expenses of $100,000 were anticipated.         Speer vs. Farm Bureau Mutual
                                At the time of the accident, the        Insurance Company, Inc.-No. 102,460-
                          Circulation                       school district was insured under a         Court of Appeals of Kansas-March 26,
                        Michelle Mason                      State Farm Mutual Automobile                2010-226 Pacific Reporter 3d 558.
                                Insurance Company policy with
                                                            liability limits of $100,000 per person
                     Contributing Editors
                                                            and $300,000 per accident. The
                                                                                                        Rocky road for auto wholesaler
                          Scott Addis                       Kansas Tort Claims Act limited the               Rocky Greenfield owned a wholesale
                                                            liability of the district and the driver    motor vehicle dealership called G&G
                       Robert L. Bailey                     to a total of $500,000 for all claims.      Liquidation and Auction Company. In
                                                            Joseph’s mother, Cynthia Speer, sued        April 2005, Greenfield entered into an
                         Adam DeGraide                      the district and received a judgment        agreement with Ron Medlen of
                     in the amount of $84,500, her               Silverauto Sales to sell a truck on
                       Kevin P. Hennosy                     allotment of the $500,000 limit.            consignment. Upon sale of the truck,
                                 Speer had a Farm Bureau Mutual          Medlen was to pay Greenfield $15,000,
                    Emily Huling, CIC, CMC                  Insurance Company standard                  and Greenfield was to deliver the title.
                       automobile insurance policy under           Medlen sold the truck for $16,550 and
                         Patrick Linnert                    which she sought underinsured               deposited the customer’s check into his
                            motorist coverage for the portion of        business bank account. Soon thereafter,
                    John Edward Love, CPCU                  her damages that exceeded the               and before Greenfield could deliver
                              $84,500 judgment. Farm Bureau               title, Silverauto’s bank froze the
                 Donald S. Malecki, CPCU                    argued that its policy provided             account. Medlen informed Greenfield of
                       benefits only for damages Speer was         the situation. Medlen deposed that he
                  Michael J. Moody, MBA, ARM                “legally entitled to recover,” and that     did not intend to deprive Greenfield of
                           because the Kansas Tort Claims Act          the vehicle without paying for it. He
                       Sean Neumayer                        limited the school district’s liability     later filed bankruptcy. Greenfield
                          to $500,000, Speer had recovered            remained unpaid.
                          Kim Paterson                      what she was entitled to: her portion            Greenfield had a Western Heritage
                              of the $500,000. Speer filed suit           Insurance Company commercial garage
            Curtis M. Pearsall, CPCU, AIAF, CPIA            against Farm Bureau. The court              policy. The policy provided that Western
                                 found in favor of Speer, awarding her       would cover loss to a “covered auto”
                         Roger Sitkins                      $85,229.06. Farm Bureau appealed.           caused by “theft.” However, in a section
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