Insurer cannot force victim's family to compensate other victimsKimberly Stout's husband was killed when a Great Lakes Petroleum tanker truck rear-ended his car, causing a multiple-car crash. Clifford Stout's Estate resolved its wrongful death claims against the company, its driver, and its insurer, Empire Fire & Marine, by accepting payment of $600,000.00 from the company's insurer. The Estate then executed a release and indemnity agreement containing terms dictated by the insurer. The terms included a promise to "indemnify" the Defendants in the event "any further claims were brought against them as a result of the event which occurred...which acts formed the basis of the Estate's claim." It is not unusual for an injury victim or estate to promise to pay any expenses incurred if it files another lawsuit after executing a release, however, the defendants in this case sought to use this somewhat ambiguous language to require the Stout Estate to pay compensation to all of the other victims of the multiple vehicle crash.
The trial court rejected the insurer's claim and unanimously held that Empire Marine and its insureds were violating the "clear intent" of the release language by attempting to shift their burden to compensate other victims of their own negligence to an innocent party. Frankly, the Estate [and its attorneys--presuming they were assisted by counsel] were fortunate that the Court recognized the equity of their claim.
Over the past couple of decades, the "Engler Majority" and other activist judges have refused to analyze the fairness or legitimacy of these kinds of interpretive arguments, and have simply enforced contract and release language "as written" for the benefit of the insurer, regardless of the parties' actual intentions or the reasonableness of the insurer's claim. Empire went too far in this case, but it was emboldened by a history of allowing insurance company to play a game of "gotcha" with injury victims and their counsel.