Darner Motor Sales v. Universal Underwriters

Darner Motors Sales (Plaintiff) purchased umbrella coverage and a “U-Drive” policy from Universal Underwriters (Defendant). The U-Drive policy insured Plaintiff and the lessees of its cars for liability risk of up to $100,000 for any one injury and $300,000 for all injuries arising out of one accident (100/300). Lessees were covered to $15,000 for one injury and $30,000 for all injuries to themselves (15/30). Plaintiff claimed that it had informed Defendant that its rental contracts specified a higher amount of insurance for lessees and that Defendant had assured it that injuries exceeding the lessee insurance would be covered under the “all-risk” clause of the umbrella policy. Plaintiff rented a car to Dwayne Crawford. The rental agreement specified 100/300 coverage. While driving the vehicle, Crawford negligently injured a pedestrian and caused severe injuries. The pedestrian sued Crawford, and Crawford made an insurance claim to Defendant, which stated that its coverage was limited to 15/30. When Crawford then sued Plaintiff under the terms of the rental agreement providing coverage of 100/300, Plaintiff called upon Defendant to provide coverage under the umbrella policy, but Defendant claimed that lessees were not parties “insured” under the policy, and declined to provide coverage in excess of 15/30. Plaintiff then filed a third party complaint, naming Defendant as a third party defendant. Plaintiff appealed the grant of summary judgment to Defendant.