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Michigan auto accident lawyer calls out insurance company for selling coverage it has NO intention of providing

Lawsuit involving fatal drunk driving crash brings scrutiny on Daimler Chrysler Insurance Company ‘scheme’ that wrongly denies liability coverage to premium-paying insureds

As an auto accident lawyer in Michigan, I’ve witnessed unimaginable amounts of outrageously deplorable conduct by insurance companies. So I can say with confidence that the actions of Daimler Chrysler Insurance Company (DCIC) in Abay v. Daimler Chrysler Insurance Company, et al., rank right up there with the worst auto insurance companies in Michigan.

On December 10, 2003, Mira Abay, a proud mother of three daughters, was killed when a drunken, cocaine-using Kelly Brooks crashed her acquaintance’s car into Ms. Abay’s vehicle.

Ms. Abay’s estate sued Ms. Brooks and won a $3.5 million jury verdict. Then, when Ms. Abay’s estate tried to collect, Daimler Chrysler Insurance Company’s shameful behavior began coming to light.

Relying on a money-saving, liability-evading scheme it had built into its auto insurance policies, Daimler Chrysler Insurance Company, which insured Ms. Brooks’s father, James Trent, refused to pay out on the auto accident verdict against Ms. Brooks.

The scheme was that the Daimler Chrysler Insurance Company’s “liability coverage” only covered the “named insured” on the policy – yet the “named insured” was never the person actually paying the policy premiums. The Abay case, with Mr. Trent, Ms. Brooks, and Mr. Trent’s Daimler Chrysler Insurance Company liability policy, was no exception.

Daimler Chrysler Insurance Company’s explanation for not providing coverage

In its brief to the Michigan Supreme Court, Daimler Chrysler Insurance Company explained it best why, under its “named insured” scheme, Ms. Brooks was not covered by her father’s $5 million liability policy:

“Since Mr. Trent was not the named insured shown in the declaration, [liability coverage] does not apply to him. Because [the policy’s liability coverage] does not apply to him, there was no coverage for Kelly Brooks …”

Mr. Trent, a Daimler Chrysler Corporation retiree, acquired his Daimler Chrysler insurance policy when he leased vehicles through his former employer’s employee/retiree lease program. A condition of the program was that participants like Mr. Trent must purchase all of their auto insurance for the leased vehicles from Daimler Chrysler Insurance Company and only from DCIC.

A brave and wise trial judge, Oakland County Circuit Court Judge Denise Langford Morris, put a stop (at least temporarily) to the auto insurance company’s unscrupulous ways, ruling that its policy was ambiguous and, thus, the scales tipped in favor of coverage for Ms. Brooks. However, a two-judge majority of the Michigan Court of Appeals reversed.

In its March 24, 2010, order agreeing to hear the case, the Michigan Supreme Court said the first issue it wanted to resolve was “whether the insurance policy issued by Daimler Chrysler Insurance Company is ambiguous.”

Any promise of liability coverage suggested by the Daimler Chrysler Insurance Company is an illusion

On first glance, DCIC’s policy, as described in pleadings filed in the Michigan Supreme Court, appears to provide liability coverage for precisely the situation in which Ms. Brooks — and, by association, her premium-paying father — found themselves in Abay.

For instance, the policy contained language promising that “you” and family members related to “you” were covered for any tort liability (pain and suffering damages) incurred while driving “any ‘auto’ you own” or “any ‘auto’ you don’t own.”

But once the policy gets around to defining who “you” is, it becomes clear that any promise of liability coverage suggested by the policy is only an illusion.

According to the policy, “you” is “the named insured shown in the Declarations,” which common sense would suggest is the person paying the premiums on the DCIC policy.

Regrettably, however, it was dollars and cents, not common sense, that guided the drafting of DCIC’s liability coverage policy.

Rather than naming the premium-paying “insured,” which in the Abay case was Ms. Brooks’s father, as the “named insured” in its policy’s Declarations, DCIC named the “Daimler Chrysler Corporation” as the “named insured.”

That gave Daimler Chrysler Insurance Company its “out.”

So what happens when a Daimler Chrysler Insurance Company customer tries to use this coverage?

Now, whenever a premium-paying “insured” tries to invoke the policy’s liability coverage, DCIC can say: “Sorry, the liability coverage is only for the ‘named insured’ and you’re not a ‘named insured.’ We’re quite certain of that.”

The DCIC scheme is scary not only for the way it has jeopardized Ms. Abay’s estate’s ability to recover on the $3.5 million verdict against Ms. Brooks, and deprived Mr. Kent of the ability to protect his family. It is scary for the implications it has beyond the Abay case.

According to briefs filed with the Michigan Supreme Court, the DCIC policy at issue in Abay “is a national policy,” and it applies to approximately 8,000 vehicles leased from Daimler Chrysler Corporation in Michigan alone.

This blog was authored by Steve Gursten and Todd Berg, esq.

Steve Gursten is recognized as one of the nation’s top auto accident lawyers handling serious car and truck accident cases and insurance No-Fault litigation. Steve speaks and writes extensively on Michigan’s auto accident laws and is available for comment.

– Todd Berg is an Illinois lawyer. At Michigan Auto Law, he provides analytical, research and writing support to the firm’s auto accident attorneys. Todd was formerly a trial and appellate attorney in Illinois. He was also a legal news reporter and editor with Michigan Lawyers Weekly.

Related information:

How to read your auto insurance policy

Why the insurance industry in Michigan thinks we’re really dumb

Your Michigan No-Fault insurance rights

Michigan Auto Law is the leading and largest law firm exclusively handling car accident, truck accident and motorcycle accident cases throughout the entire state for more than 50 years. We have offices in Farmington Hills, Ann Arbor, Detroit, Grand Rapids and Sterling Heights to better serve you. Call (800) 777-0028 for a free case evaluation with one of our auto accident lawyers.

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