Commonwealth Journal

February 14, 2014

Insurance company: Housing Authority responsible for $2.7 mil

by Chris Harris
Commonwealth Journal

Somerset — The Somerset Housing Authority could have to pay close to $3 million depending on the outcome of a complaint filed in U.S. District Court by an insurance company with which the agency had a policy.

The case relates to a court decision from last October, which dealt with the 2009 death of 17-year-old Kaitlyn Griffin and the child with which she was pregnant when a tree fell on them at the Colonial Village housing facility. Another individual, Josh Thacker, was injured in the incident.

In that ruling, a jury determined that the Housing Authority failed to exercise proper care in maintaining safe conditions, and awarded the family of the victims a total of $3.736,278.

Now, Evanston Insurance Company is filing suit to make the claim that they shouldn’t have to pay the full amount on the Housing Authority’s behalf, but rather only $1 million.

The complaint for declaratory judgment was filed February 11 in U.S. District Court, Eastern Division in London, Ky., by the Illinois-based insurance firm.

The Housing Authority of Somerset, as well as the Kentucky Housing Authorities Self-Insurance Fund, and Rhonda Kay Griffin, Derel Griffin, Jason Steele, and Robin Mullins, the family of the victims, are all listed as defendants in the complaint.

The suit states that the Housing Authority is part of a risk management pool which is self-insured up to a retained limit of $150,000, and that members of the fund, including the Housing Authority, have excess insurance coverage through Evanston — but only up to $1 million.

“‘Coverage Part A’ provides excess insurance for ‘bodily injury’ for which the Housing Authority becomes liable,” reads the complaint. “The limits of excess insurance under ‘Coverage Part A’ are $1,000,000.00 per occurrence and $2,000,000.00 in the aggregate. ... By contrast, ‘Coverage Part B’ provides excess coverage for ‘Wrongful acts’ for which the Authority becomes liable. ... The limits of excess insurance under ‘Coverage Part B’ are $1,000,000.00 per occurrence and $2,000,000.00 in the aggregate.

“Claimants have asserted that the Housing Authority has become liable for both ‘bodily injury’ within the meaning of the policy and ‘wrongful acts under the Policy ... such that coverage is available for both Coverage Part A and Coverage Part B. Claimants have also asserted that the single falling tree constitutes three separate occurrences, since the single falling tree injured three different persons,” continues the complaint. “Claimants have taken the position, therefore, that there is $4,000,000.00 in coverage available to satisfy the judgment ...”

However, states the complaint, the policy held by the Housing Authority states that the same claim or suit cannot give rise to coverage under both “Part A” and “Part B,” and that only the coverage part with the higher limits for each occurrence would apply.

The insurance firm contends that the falling tree constitutes a single occurrence under the policy and that Part B would not apply in this particular case.

“Since Evanston contends that coverage under the Policy is limited to $1,000,000.00, while Claimants contend that available coverage is $4,000,000.00, there is an actual controversy between the parties,” reads the complaint.

As such, Evanston Insurance is seeking a declaration of rights under the terms of the policy that they’re limited to paying out $1 million to satisfy the judgment, and that they are not required to indemnify the Housing Authority beyond that amount.

Wendi Conley, executive director of the Somerset Housing Authority, referred all comments to the agency’s legal counsel Charles Cole of Lexington, who was unavailable for comment on Friday.

On December 9, 2009, Griffin was unloading a car with her cousin, Thacker, at Colonial Village in Somerset, which is operated by the Housing Authority.

A large red maple tree, approximately 39 inches in diameter, toppled over and struck the victims, resulting in the deaths of Griffin and Steele and injuries to Thacker.

Damages award distribution included: $1,261,486 to compensate the extent of Kaitlyn Griffin, half a million dollars combines to compensate plaintiffs Rhonda Kay Griffin and Darel Griffin for loss of affection and companionship of their daughter,  $1,254,792 to compensate the estate of Nicholas Ayden Steele, $500,000 to Steele’s father Jason Steele, and $220,000 to compensate Thacker.