A federal appeals court on Wednesday overturned a lower court ruling in favor of a Markel Corp. entity trying to recover a $1 million settlement from a policyholder in a car death.
The case was referred back to the lower court for further determination of the facts.
Markel unit United Specialty Insurance Co. issued an auto dealership policy to San Jose, Calif.-based Bani Auto Group Inc. and Sia Bani & Co. LLC in 2016, as set forth in the lawsuit in United Specialty Insurance Co. v. Siavosh Banihashemi emerges. also known as Sia Bani and Bani Auto Group Inc. et al.
In 2016, San Jose-based club Sportiva Inc., which promotes exotic car tours, rented a Ferrari for a tour. David Wright was driving the car when he lost control and was fatally injured.
Mr. Wright’s family sued Club Sportiva, Bani Auto Group and Siavosh Banihashemi, United Specialty accepted the defense of Bani Auto and Mr. Banihashemi, subject to a legal reservation.
United Specialty settled the case for $1 million and then sued Bani Auto Group, Mr. Banihashemi and others, seeking cancellation of the policy and recovery of their defense and indemnity payments. They stated that they had not applied for coverage for leasing, lending or renting vehicles.
The U.S. District Court in San Jose ruled in favor of the insurer in November 2021, holding that United Specialty had no obligation to indemnify in the underlying Wright lawsuit and that Bani Auto, Club Sportiva and Mr. Banihashemi United Specialty collectively and individually the 1 US -dollars should reimburse millions plus interest on prejudice.
Mr. Banihashemi and Bani Auto Group appealed the decision, which was overturned by a three-judge appeals court.
“According to the records in the district court, United Specialty was not entitled to summary judgment under California law. … The burden of proof for the assignment lies ‘solely with the insurers who assert claims for reimbursement,'” says the judgment, citing an earlier case.
“Although a finding of joint and several liability may ultimately be appropriate for all three Bani Defendants, the records available to us reflect the existence of a material issue of fact as to the allocation of the Settlement Amount among the insured,” the district court’s decision, granting summary judgment, reads in favor of United Specialty and remitting the case for further proceedings.
Lawyers in the case did not respond to requests for comment.
