Lawyers’ Corner – Third Party Insurance in Farm Bureau v Wagner

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After a car crash, the auto accident victim and the at-fault driver often don’t agree on much. They do both want the Defendant’s third party insurance policy to cover the damages. But when an accident happens while the Defendant was on the clock, both of them might be out of luck.

In Farm Bureau Mutual Insurance Co v Wagner, an unpublished opinion, the Michigan Court of Appeals cut off a defendant’s third party insurance coverage because he was working at the time of the accident.

On May 17, 2010, Defendant Conor Lewis rear-ended Michelle Wagner as she was waiting to turn left. Conor was delivering pizzas in his father’s car, which was insured by Farm Bureau Mutual Insurance Co. He told Michelle he had been looking down confirming the delivery directions when he hit her.

Michelle sued Conor, his father, and the pizza company in a Third Party lawsuit. Conor’s attorney asked the court to determine that Farm Bureau was required to cover his liability under his father Greg’s auto insurance policy. But Farm Bureau disagreed.

Greg’s auto insurance policy included an exclusion for professional drivers:

“We do not provide Liability Coverage for any Insured . . . for liability arising out of the ownership or operation of a vehicle while it is being used to carry persons or property for a fee. Reimbursement of reasonable mileage expenses incurred by the insured is not considered a fee.”

Conor received mileage expenses per pizza delivery, but he was also paid hourly for his work.

The Court of Appeals ruled that the exclusion policy unambiguously cut off any obligation of Farm Bureau to provide Third Party insurance defense because the insured driver was working for compensation at the time of the accident.

Because plaintiff was carrying property for a fee at the time of the accident and because the policy excluded from coverage damage arising from a vehicle used to carry property for a fee, plaintiff cannot be held liable for the risk it did not assume.

The court’s decision makes it essential for trial attorneys to add a worker’s employer to any Third Party lawsuit involving a professional driver. Whether the at-fault driver is a pizza delivery driver or an over-the-road trucker, a one-sentence exclusion in the driver’s policy could leave the plaintiff without access to the driver’s insurance to pay for his or her damages.

A judgment against an at-fault driver is only as good as the defendant’s ability to pay. Without insurance, the plaintiff could be left without a recovery unless the trial attorney includes the employer in the suit. If your client is facing a Third Party case against a professional driver, contact Christensen Law today for a referral.