In society right now there is an ongoing discussion about “Main Street v. Wall Street.” So many innocent individuals are losing their rights because of the power of big business.
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Gulf Underwriters Ins. Co. v. Burris is a Minnesota case between an injured plaintiff and an insurance company over injuries sustained due to a defective product. Burris (“plaintiff”) fell off a ladder manufactured by Versa and sustained serious injuries. Versa had a commercial general liability insurance policy and a “Self Insured Retention” (“SIR”) endorsement with Gulf Underwriters Insurance Company (“Gulf”). Because of this policy, Burris sued Gulf for the policy limits they had in coverage for Versa.
The problem in this case arose when Gulf filed a motion for summary judgment claiming that because Versa had not complied with their obligations under the SIR potion of the policy, the plaintiff was not entitled to any benefit as a third party.
Upon examining the evidence the court did find that Versa dissolved after expiration of the policy. However, the question was whether this was a material breach of the contract for coverage under this policy. Furthermore, the court was charged with analyzing how the effects of a material breach on the insurance coverage available to third parties.
Insurance policies are often extremely confusing and full of vague terms. And Gulf’s policy was not any different in this case. The court actually printed this policy in the decision to show the way key terms were used interchangeably to contradict each other. Also, the court noted that portions of this policy that were inconsistent with Gulf’s contentions were left out of their previous court briefs and memorandums.
In the policy involved in this case, there was a provision that stated that regardless of compliance with obligations of the SIR, all of the provisions of the general insurance policy apply. Therefore, the court found that the amount of the coverage could be affected by non-compliance with SIR, but not the fact that coverage was available would remain a constant.
A central concept in most cases is contract law. Establishing the type of contract at question is critical in determining what law applies. A contract consists of an offer and acceptance. In order to have acceptance, there needs to be a meeting of the minds. A contract is considered executory where a contract is created but not executed because further performance by one or both of the parties is still required. Gulf argued that because Versa was not up to date with payments, this policy was an executory contract and Gulf was released from coverage obligations in accidents associated with Versa’s defective products. The court here classified this as a “futile attempt” to avoid liability, and cited case law which is followed by “every court” in the county.
In Vandeveer, the court held that , “insurance policies for which the policy periods have expired and the premium has been paid are not executory contracts.” In re Vanderveer Estates Holding, LLC, 328 B.R. 18, 26 (Bankr. E.D.N.Y 2005).
For the reasons stated above, this court found that this policy was not an executory contract and Gulf did not provide the court with any evidence that the contract was breached by Versa. Therefore, the defendant motion for summary judgment was dismissed and the case was remanded to the lower court.
It is very important to understand that all attorneys are responsible for the work they submit to the court. There is an obligation for attorneys to present relevant state and federal statute as well as case law that supports and contradicts their contentions. In this case the court found that the attorney was withholding information that could be detrimental to their case and they found that an award of attorney fees for the plaintiff’s attorney was a proper punishment.