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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

ACE AMERICAN INSURANCE COMPANY v. BAKER et al

ATTENTION: It is possible that this information may no longer be current and therefore may be inaccurate. The index contains both open and closed cases and is not a complete list of cases in which an ACE Insurance Group company is involved. This information is provided to give interested persons an idea of the issues disputed in the indexed cases. For a full understanding of a case, one should read the rest of the court file, including the response. For the most up-to-date and complete information on a case, visit www.pacer.gov or contact the clerk of the relevant court.

Case Number: 
4:12-cv-00290 Search Pacer
ACE Group party(s): 
Opposing Party: 
Mario Baker
Court Type: 
Federal
US District Court: 
Northern District of Texas
Date Filed: 
May 9 2012

"FACTUAL BACKGROUND
A. Ace Insurance Policy at Issue
9. Ace issued an excess business auto policy no. SCA H0824134A to Enterprise for the policy period March 1, 2008 to August 1,2010 (“the excess policy”). See attached Exhibit A.
B. Underlying Lawsuit

10. The Baker suit arises out of an automobile accident that occurred on December11, 2009. The vehicle driven by Sonia Baker was hit by the vehicle driven by Jesus Cisneros. Sonia Baker was killed as a result of the accident.

11. According to Peace Officer Wangler’s Crash Report, Cisneros’s blood alcohol analysis showed blood alcohol concentration of .17%, which is more than twice the legal limit for intoxication in the state of Texas.

12. On or about August 4, 2011, the Baker suit was filed. Cisneros is the sole defendant. According to the Baker suit: Jesus Cisneros was driving a Toyota Highlander, west in the 3800 block of Columbus Trail. Speeding down the residential neighborhood street at grossly excessive speeds, Cisneros' vehicle collided with Sonia Baker's PT Cruiser, leaving Sonia Baker dead at the scene.

13. The Baker suit asserts causes of action of negligence and negligence per se, gross negligence, and exemplary damages.
C. Relevant Insurance Provisions

14. Section I - Covered Autos provides that “only those autos or the policy exposure basis identified on the declarations page for which this policy was rated are covered.” The excess policy provides coverage for: Any “auto” provided on a short term rental to an “eligible renter(s)” of the Named Insured for which an executed written “master agreement” is in place between a Named Insured and such “eligible renter.” Such “master agreement” must specify that the Named Insured will provide Liability Coverage to the “eligible renter” for the same Limit of Insurance as stated in the Declarations. “Eligible renters” will be on file with the Named Insureds.

15. The insuring agreement under Section II - Liability Coverage provides:
1. Coverage
“We” will pay the “insured for the “ultimate net loss” in excess of the “retained limit” shown in the Declarations that the “insured” legally must pay as damages because of “bodily injury” or “property damage” to which this policy applies, caused by an “accident” and resulting from the ownership, maintenance, or use of a covered “auto”.  This policy does not apply to defense, investigation, settlement, or legal expenses, or prejudgment interest arising out of any “accident” but we shall have the right and opportunity to assume from the insured the defense and control of any claim or “suit”, including any appeal from a judgment, seeking payment of damages covered under this policy arising out of such “accident” that we believe likely to exceed the “retained limit”. In such event we and the insured shall cooperate fully.

16. The excess policy contains the following relevant definitions: “Accident” includes continuous or repeated exposure to the same condition resulting in “bodily injury” or “property damage.” “Auto” means a land motor vehicle, “trailer” or semi-trailer designed for travel on public roads but does not include “mobile equipment.” “Bodily injury” means bodily injury, sickness or disease sustained by a person including death resulting from any of these. “Insured” means any person or organization qualifying as an insured in the Who Is An Insured provision of the applicable coverage. Except with respect to the Limit of Insurance, the coverage afforded applies separately to each insured who is seeking coverage or against whom a claim or “suit” is brought “Loss” means direct and accidental loss or damage.’ “Property damage” means damage to or loss of use of tangible property. “Ultimate net loss” means the total amount the insured is legally obligated to pay as damages for a covered claim or “suit” either by adjudication or a settlement to which we agree in writing, and includes deductions for recoveries and salvages which have or will be paid. “Ultimate Net Loss” does not include any of the expenses incurred by the insured or us in connection with defending the claim or “suit.”

17. Pursuant to endorsement #6, the definition of “retained limit” is deleted and replaced  with the following:
K. The “retained limit” will be equal to the minimum financial responsibility limit required by state. “Retained limit” does not include any prejudgment interest, interest that accrues after entry of the judgment, nor any expenses incurred by the insured in the defense of any claim or “suit”.  Further, the following relevant definitions are added:
“Authorized driver” means only those individuals who have a valid driver's license and are either:
a. named on the “rental agreement” or
b. are authorized drivers under a written agreement with one or more Named Insureds.  All other drivers are unauthorized, except where required by law. “Occupying” means in, upon, getting in, on or off the rental vehicle. “Master agreement” means any written executed agreement entered into by the Named Insured and an Eligible Renter, which specifies that the Named Insured will provide liability coverage to the Eligible Renter.  “Rental agreement” means a signed agreement to rent or lease an “auto” that is entered into:
a. within the coverage territory and
b. with a covered date of loss within the policy period. “Rental auto” means an “auto” furnished by the Named Insured under a “rental agreement.” “Eligible renter” means authorized renters of a corporate or other account of the named Insured.

18. The Who is An Insured section of the excess policy provides: The following are “insureds”:...
b. Anyone else while using with your permission a covered “auto” you own, hire or borrow.... This section is amended as per endorsement 5, which provides that the Who Is An Insured (Section II) is amended to include any person(s) or organization(s) for whom you have agreed in a written contract to provide insurance but only for damages which are covered by this insurance; and which Enterprise has agreed to provide in such contract.

19. The Who Is An Insured section is also amended by endorsement 12, which provides:
Section II- Liability Coverage, A - Coverage, 1. - Who Is An Insured, is amended to add “Renters” and “Authorized Drivers” as additional insured as long as the following criteria are met:
a. the “Renter” or “Authorized Driver” is “Occupying” the “Rental Auto” while the “Rental Auto” is being operated by the “Renter” or “Authorized Driver”; and
b. coverage has been afforded through and on file with Enterprise Rent-A-Car Company or any Named Insured acting as an “auto” rental facility, including, but not limited to the entities listed in the “SCHEDULE OF NAMED INSUREDS” endorsement to this policy; and
c. all terms and conditions of the “Rental Agreement” and any master agreement governing the terms of rental have been met.

20. The excess policy excludes coverage for any “renter” or “authorized driver” for “bodily injury” or “property damage” which results from the use of the “rental auto” in a manner which is prohibited by the “rental agreement.”

21. The rental agreement provides that a “vehicle shall not be driven by any person impaired by the use of narcotics, alcohol, intoxicants, or drugs, used with or without a prescription.”

CAUSE OF ACTION FOR DECLARATORY JUDGMENT
22. Ace is providing Cisneros a defense in the Baker suit subject to a reservation of rights under the excess policy. Accordingly, a controversy exists regarding the extent, if any, of Ace's duties and obligations in or as to the Baker suit. Ace seeks a declaration from this Court that it has no duty to defend or indemnify Cisneros in or as to the Baker suit and does not have a duty to pay any judgment against Cisneros on the grounds that:
a. The Baker suit does not contain allegations falling within the insuring agreement of the excess policy;
b. Cisneros does not qualify as an insured under the terms of the excess policy;
c. Cisneros was operating the vehicle illegally under the influence of alcohol;
d. Cisneros was not authorized to drive the vehicle at the time of the accident;
e. Ace has no duty to defend or indemnify Cisneros in the Baker suit; and
f. Ace has no duty or obligation to pay any judgment against Cisneros and in favor of the underlying plaintiffs in the Baker suit.

23. Ace is entitled to recover its reasonable and necessary attorney's fees and expenses incurred in the filing and prosecution of this action, pursuant to Texas Civil Practice and Remedies Code §38.001(8).

WHEREFORE, PREMISES CONSIDERED, Plaintiff Ace American Insurance Company prays that Defendants Mario Baker, individually, as next friend of Amarion Baker and Tayshawn Baker, and as personal representative of the estate of Sonia Baker, Stella Lopez, and Jesus Cisneros be served and answer herein, and that upon final trial hereof, judgment will be rendered declaring that:
1. Plaintiff Ace American Insurance Company has no duty to defend Jesus Cisneros in Mario Baker, Individually, as Next Friend of Amarion Baker and Tayshown Baker and as Personal Representative of the Estate of Sonia Baker, and Stella Lopez v. Jesus Cisneros, currently pending in the 17th District Court of Tarrant County, Texas;
 
2. Plaintiff Ace American Insurance Company has no duty to indemnify Jesus Cisneros in Mario Baker, Individually, as Next Friend of Amarion Baker and Tayshawn Baker and as Personal Representative of the Estate of Sonia Baker, and Stella Lopez v. Jesus Cisneros, currently pending in the 17th District Court of Tarrant County, Texas;

3. Plaintiff Ace American Insurance Company has no duty or obligation to pay any judgments which may be rendered in favor of Mario Baker, individually, as next friend of Amarion Baker and Tayshawn Baker, and as personal representative of the estate of Sonia Baker, and Stella Lopez, and against Defendant Jesus Cisneros in Mario Baker, Individually, as Next Friend of Amarion Baker and Tayshawn Baker and as Personal Representative of the Estate of Sonia Baker, and Stella Lopez v. Jesus Cisneros, currently pending in the 17,h District Court of Tarrant County, Texas; and

4. Such other and further relief to which Ace American Insurance Company is entitled or will ever pray."

The provided text is an excerpt from a document filed in this case. For a full understanding of the case, one should read the complete court file, including the response.

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