In a dispute between two insurers, a federal appellate court ruled that GEICO is solely liable for the cost of replacing a Lamborghini worth more than $100,000 that was totaled in a collision with another vehicle.
A panel of the 1st Circuit Court of Appeal rejected GEICO’s argument that Ameriprise Auto & Home Insurance should share in the cost because it insured the other vehicle involved in the crash near Tampa, Fla. and had improperly rescinded coverage. In an opinion written by Chief Judge Jeffrey R. Howard, the court found that Philip and Claudia Feldberg — “snowbirds” who split their time between Massachusetts and Florida — had violated the terms of their insurance contract by failing to notify the carrier that their Toyota Highlander had been left behind in Florida, where it was regularly operated by a relative.
Howard wrote that “the undisputed facts show Ameriprise provided plenty of notice in its renewal cover letter and renewal form that the company required the Feldbergs to check the accuracy of the policy’s information regarding the Highlander’s principal place of garaging and its customary drivers.”
GEICO and Ameriprise squared off after their daughter-in-law collided with a Lamborghini in Wesley Chapel, Fla. while driving the Feldmans’ Highlander on July 24, 2018. The driver of the Lamborghini was cited for speeding and the daughter-in-law was ticketed for failure to yield.
The Ameriprise policy required the Highlander to stay in Massachusetts, where the policy was issued, at least six months of the year. The Feldbergslived primarily in Peabody, Mass., but they owned a condominium in Naples, Fla. where they stayed approximately half the year. In 2018, however, Philip Feldberg was suffering health problems, so he left the car in Florida and told his daughter-in-law that she could use the car anytime.
Ameriprise was aware that the Feldbergs split their time between Florida and Massachusetts because they had filed a claim in January 2018 after their Toyota RAV4 was damaged in a Florida parking lot. A few months later, their grandson was involved in an accident while driving the couple’s Honda Accord back in Massachusetts.
After the Feldbergs filed a claim for damaged caused by the collision with the Lamborghini, Ameriprise initially provided five days of rental car coverage for the Feldbergs and paid for medical care rendered to their daughter-in-law. But the carrier also started an investigation to find out where the Highlander was customarily garaged and who usually drove it. After learning that the vehicle has been left behind and that the daughter-in-law was driving it two or three days a week, Ameriprise rescinded the Feldberg’s coverage.
GEICO insured the Lamborghini. The carrier filed suit, alleging that Ameriprise was liable for a share of the cost of replacing the car because it had improperly rescinded coverage.
The U.S. District Court in Massachusetts granted summary judgment in favor of Ameriprise.
GEICO appealed, arguing that a jury might decide that the Feldbergs had no duty to inform Ameriprise that the car was garaged in Florida because the annual renewal notice was unclear. In insurance law, any ambiguous language is decided in favor of the policyholder, so average would be owed if that argument prevailed.
The 1st Circuit didn’t find any ambiguity.
“Ameriprise used language as precise as a GPS tracker: it told the Feldbergs to report any changes to the Highlander’s principal place of garaging and to its customary drivers,” the opinion says.
The appellate panel affirmed the District Court ruling granting summary judgment to Amerprise.
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