January
31, 2003
ARTHUR
ANDERSEN UM CASE RESULTS IN UNLIKELY $1 MILLION SETTLEMENT
On
January 31, 2003, Cook County Circuit Court Judge John K.
Madden dismissed a declaratory judgment lawsuit involving
an Arthur Andersen employee who settled her Underinsured
Motorist ("UM") claims for $1 Million. The unusual
settlement arose from a car crash on December 9, 1997. The
plaintiff was driving her personal vehicle, in the
scope of her employment with Arthur Andersen, to a local
hospital to meet a corporate client. Her vehicle was struck
on 71st and Kedzie Ave., Chicago, IL by a vehicle driven
by Dulce Casas (age 16). Lloyd & Cavanagh's client sustained
a crush injury to her right ankle that would later require
5 surgeries including an ankle fusion. The plaintiff, through
her attorney, Timothy J. Cavanagh, filed a lawsuit against
Casas in the Circuit Court of Cook County, No. 98 L 1262.
However, in discovery, Casas revealed that she had no insurance
coverage.
The
plaintiff's insurer, GEICO Insurance Company immediately
paid $20,000 pursuant to its UM policy. In 1998, plaintiff
made a demand on Arthur Andersen for any applicable UM coverage.
Arthur Andersen produced a Hartford Fire Insurance Company
Policy that had a provision for UM coverage up to $1 Million.
Hartford claimed that the policy afforded coverage only
for Arthur Andersen owned vehicles. However, the Named Insured
endorsement read as follows:
NAMED
INSURED
ANDERSEN
WORLDWIDE, SOCIETE COOPERATIVE (A COOPERATIVE SOCIETY
ORGANIZED UNDER THE LAWS OF SWITZERLAND), AND THE SEPARATE
LEGAL ENTITIES WITH WHICH IT HAS INTERFIRM OR ASSOCIATED
OR CORRESPONDENT FIRM AGREEMENTS, AND ARTHUR ANDERSEN
LLP AN ANDERSEN CONSULTING LLP (PARTNERSHIPS ORGANIZED
UNDER THE LAWS OF ILLINOIS) AND THE SEPARATE LEGAL ENTITIES
WITH WHICH SUCH PARTNERSHIPS HAVE DIRECT OWNERSHIP INTERFIRM,
CORRESPONDENT, NOMINEE OR ANY OTHER ENTITIES OR EXCLUSIVE
REPRESENTATIVE AGREEMENTS, TOGETHER WITH ANY OTHER
ENTITIES OR PERSONS ASSOCIATED OR AFFILIATED WITH ANY
OF THE FOREGOING AND WHICH ARE PART OF ANDERSEN WORLDWIDE.
On January 13, 1999, the plaintiff filed a Declaratory Judgment
action against Hartford Fire Insurance Company in Cook County
Chancery Court asserting that under the broad terms
of the policy, Lloyd & Cavanagh's client qualified as
a named insured and was, therefore, entitled to UM coverage.
The case was No. 99 CH 525. The case was assigned to Judge
John K. Madden. Each party filed a Summary Judgment Motion.
At hearing, Cavanagh argued that his client qualified as
a named insured because she was associated with Andersen
on the day of the collision. Judge Madden agreed, holding
that while the policy provided coverage only for owned autos,
Lloyd & Cavanagh's client qualified as a named insured
under the unusually broad language of the named insured
endorsement. Hartford Fire Insurance Company timely appealed
but dropped its appeal months later.
After
lengthy discovery on damages and liability, the case settled
days before the UM arbitration for $980,000 which made for
a $1 Million recovery with the $20,000 recovered from GEICO.
Mr.
Cavanagh said: "The Hartford policy, at first reading,
appeared to deny coverage to my client. However, the broad
language of the Named Insured endorsement allowed my
client to receive full and fair compensation for her extensive
injuries."
Hartford
Fire Insurance Company was represented by Jean Golden and
Thomas Boylan of Cassiday Schade & Gloor.
