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ACE Fire Underwriters v. Romero – Fatal Tractor-Trailer Crash

In many Orlando car accidents, the amount of insurance money available is contingent upon the language of the policy. The language must always be clear, as any ambiguity will be interpreted in favor of the insured.

Closeup of yellow line on cracked asphalt.

That said, insurers do have the right to limit their payouts in the event of a crash, so long as they do so clearly and upfront.

In the recent case of ACE Fire Underwriters v. Romero, a dispute over the language of the policy would mean the difference between a $1 million wrongful death payout and one that could be as much as $2 million (or at least $1.55 million under the terms of a partial pre-trial settlement). 

According to court records, defendant driver was operating a tractor-trailer rig in the early morning hours in March 2011. When he pulled out onto the highway, the trailer suddenly became detached from the trailer. Driver drove the truck off the road and back to the farm. He wanted to simply re-attach the trailer and be back on his way. However, as he was trying to do this, another driver approached from behind, struck the unlit trailer and died as a result of the impact.

His survivors, as representatives of his estate, filed a wrongful death lawsuit against the owner of the tractor-trailer (a farm) and the driver.

Plaintiffs reached a settlement with the insurance company that provided liability coverage to the farm (and, by extension, the farm’s employee/ driver). The insurer conceded liability and that it would pay the policy limits. However, the dispute that remained was with regard to what exactly that policy limit was.

The insurer insisted that the policy limit was $1 million per accident, regardless of how many insured vehicles were involved. Plaintiff, meanwhile, asserted that because the insurer provided a maximum of $1 million in coverage to both the tractor and the trailer separately, the total amount available should be $2 million.

Insurer agreed in the settlement to pay $1 million upfront. However, it would not agree to the remaining $1 million demanded by plaintiff. However, it did say that in exchange for paying its policy limit of $1 million, it would agree to pay an additional $550,000 if the trial court sided with plaintiff in the dispute.

In accordance with the settlement agreement, defendant insurer sought a declaratory judgment regarding its policy limits. Initially, the district court did side with the insurer, finding the policy unambiguously allowed for $1 million in coverage per accident. However, upon granting plaintiff’s motion to reconsider, the court reached the opposite conclusion. The court ruled the “Limit of Insurance” provision did not apply when more than one covered auto was involved in the same crash. Further, even if the provision did apply, the policy itself was ambiguous, the court ruled.

However, the U.S. Court of Appeals for the Tenth Circuit reversed upon appeal by the insurer. In large part, the district court had relied on a New Mexico Supreme Court decision, Lucero v. Northland Ins. Co. Upon review, the state high court reversed an earlier holding – specifically that a policy with language similar to that in the Romero case, was ambiguous.

That means plaintiffs in this case are limited to receiving $1 million, instead of $1.55 million.

Call Freeman Injury Law — 1-800-561-7777 for a free appointment to discuss your rights. Now serving Orlando, West Palm Beach, Port St. Lucie and Fort Lauderdale.

Additional Resources:

ACE Fire Underwriters v. Romero, Aug. 1, 2016, U.S. Court of Appeals for the Tenth Circuit

More Blog Entries:

Khoury v. Seastrand – Asking Car Accident Jurors About Specific Damages, Aug. 11, 2016, Orlando Car Accident Lawyer Blog

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