Advice Sought on Auto Crash Insurance coverage Problem
(CN) – Soon after an Arizona woman’;s daughter crashed the auto just bought from a co-employee, the 9th Circuit referred an ensuing insurance coverage query to the Arizona Supreme Court.
Norma Bojorquez had agreed to acquire a 1994 Jeep Cherokee from her co-employee, Carol Cox, on Jan. 9, 2008.
Though Bojorquez’;s daughter, Iliana, took possession of the Jeep quickly, Cox planned to preserve the title until finally Norma produced 8 monthly installments totaling $ 3,000.
Cox’;s family members also had an insurance coverage policy on their automobiles, like the Jeep, with State Farm Mutual Car Insurance Co.
Within 2 weeks of taking possession of the Jeep, Iliana got into an accident. The other driver, Yolanda Quihuis, sued Iliana for negligence and the Coxes for negligent entrustment.
A $ 350,000 settlement among the households integrated a statement that the Coxes owned the Jeep at the time of the accident.
The Quihuises then sued State Farm for indemnification and failure to defend.
State Farm won a summary judgment after a federal judge ruled that the Bojorquez family, not the Cox family members, owned the Jeep at the time of the accident.
Facing an appeal by the Quihuises, the 9th Circuit mentioned Friday that the case turns on whether the families’; agreement that the Cox family owned the Jeep prevented State Farm from denying coverage.
“Based mostly on the uncertainty of Arizona law in this area, we feel it is proper to defer to the Arizona Supreme Court on this important issue of state law: no matter whether a default judgment pursuant to a settlement agreement that incorporated the stipulation of a factual situation that is determinative of both liability and coverage in a tort liability action has a collateral estoppel effect, precluding litigation of that situation in a subsequent coverage action,” the buy states.
A clear response from the Arizona Supreme Court would “have far-reaching effects on automobile insurers and policyholders in Arizona,” the judges wrote.