Duty To Defend

An Arlington insurance attorney will have someone come into their office and show the attorney lawsuit papers that have been filed against them and then will show a copy of an insurance policy that is suppose to defend against the lawsuit. The problem will be that the insurance company is refusing to honor the policy. This is the situation in a recent 5th Circuit opinion. The style of the case is, Castle Point National Insurance Company v. Everado Chuca Lalo, Jr.
Castle Point National Insurance Co. is obligated to defend a trucking company in connection with an accident because there is no evidence the person injured in the incident was an employee and would therefore fall under its policy’s exclusions, says the 5th Circuit Court of Appeals in New Orleans, in reversing a lower court ruling.
New York-based Castle Point had issued a commercial auto liability policy with a $1 million limit to El Paso, Texas, based B.S. Trucking that covered the period Aug. 29, 2009, to Aug. 29, 2010, according to court papers in Thursday’s ruling.
On Dec. 8, 2009, Mr. Lalo allegedly sustained injuries when a semitractor-trailer leased by B.S. Trucking in which he was a passenger overturned in Seminole, Texas, according to court papers.
Mr. Lalo sued the trucking company and other defendants in state court in Texas in connection with his accident. Castle Point filed suit in U.S. District Court in Lubbock, Texas, seeking a ruling that it had no duty to defend or indemnify the parties in Mr. Lalo’s litigation.
The District Court overturned the lower court’s ruling and held that Castle Rock is required to defend B.S. Trucking and the truck’s driver, Daniel Estrada, in the case.
The District Court “had determined that both Mr. Lalo and Mr. Estrada were employees of B.S. Trucking at the time of the accident, and that policy exclusions relating to work-related injuries negated Castle Point’s duty to defend either of them,” said the ruling.
But, contrary to the District Court’s determinations, Mr. Lalo does not allege he was a B.S. Trucking employee. As a result, he did not fall under the policy’s exclusions related to work-related injuries, said a unanimous three-judge panel of the 5th Circuit, which held also that Mr. Estrada was not excluded from coverage under the policy.
In remanding the case for further proceedings on the defense issue, the ruling said also it was premature at this time to decide whether Castle Point had a duty to indemnify either the firm or Mr. Estrada.