WWHGD Prevails in Insurance Dispute Bench Trial.

Weinberg Wheeler Hudgins Gunn & Dial partner John Bonnie and associate Lindsay Gatling successfully defended Terex Corporation (“Terex”) in a $1.4 million insurance dispute in an Indiana State Court arising out of the alleged malfunction of a bucket truck.

The case involved an aerial lift manufactured by Terex and purchased by end supply manufacturer DUECO, which attached the lift to a truck pursuant to design specifications of Richmond Power & Light in Richmond, Indiana. After a Richmond Power & Light employee fell out of the bucket truck and was rendered a quadriplegic, he sued DUECO and Terex for his injuries. DUECO settled the claims against it and filed a $1.4 million cross-claim against Terex. Terex moved for summary judgment on DUECO’s cross-claim which was granted on DUECO’s claims for contractual and common law indemnity. This judgment was affirmed by the Indiana Court of Appeals. A fact question remained, however, as to whether Terex had breached an alleged obligation to purchase insurance, as claimed by DUECO.

DUECO contended that Terex was contractually obligated to procure insurance with Vendor’s coverage, and that Terex breached its contract with DUECO by not doing so. The contract required Terex to obtain “a Vendor’s Endorsement” “if generally available.” Terex was self insured for product liabilities up to a particular threshold. A general liability policy excluded product liability but contained a Vendor’s Endorsement. Terex’s excess coverage covered product liability but contained no Vendor’s Endorsement. DUECO contended that Terex breached its obligations by self-insuring a portion of its products liability risk and by not obtaining a Vendor’s Endorsement on its excess policy.

DUECO also contended that a policy of insurance issued to a different entity acquired by Terex prior to the incident afforded coverage to DUECO by way of a Vendor’s Endorsement attached to that policy. Terex showed that a Vendor’s Endorsement was unavailable in each case; that the policy issued to the predecessor entity had been canceled as of the date of injury; and that even if a Vendor’s Endorsement was “generally available,” DUECO’s modifications to the Terex product rendered the Vendor’s coverage inapplicable. Terex also argued that DUECO’s claim for $1.4 million was outside the coverage of any commercially issued policy of insurance because DUECO’s $1.4 million claim was within the threshold of the Terex self-insurance program.

After arguments and the presentation of evidence and witness testimony in a bench trial, the court entered judgment for Terex and against DUECO for each of the reasons stated by Terex.  

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