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Insurer must defend trucking firm in lawsuit filed by injured passenger


Castle Point National Insurance Co. is obligated to defend a trucking company in connection with an accident because there is no evidence the person injured in the incident was an employee and would therefore fall under its policy’s exclusions, says a federal appeals court, in reversing a lower court ruling.

New York-based Castle Point had issued a commercial auto liability policy with a $1 million limit to El Paso, Texas, based B.S. Trucking that covered the period Aug. 29, 2009, to Aug. 29, 2010, according to court papers in Thursday’s ruling by the 5th U.S. Circuit Court of Appeals in New Orleans in Castle Point National Insurance Co. v. Everado Chuca Lalo Jr.

On Dec. 8, 2009, Mr. Lalo allegedly sustained injuries when a semitractor-trailer leased by B.S. Trucking in which he was a passenger overturned in Seminole, Texas, according to court papers.

Mr. Lalo sued the trucking company and other defendants in state court in Texas in connection with his accident. Castle Point filed suit in U.S. District Court in Lubbock, Texas, seeking a ruling that it had no duty to defend or indemnify the parties in Mr. Lalo’s litigation.

The District Court overturned the lower court’s ruling and held that Castle Rock is required to defend B.S. Trucking and the truck’s driver, Daniel Estrada, in the case.

The District Court “had determined that both Mr. Lalo and Mr. Estrada were employees of B.S. Trucking at the time of the accident, and that policy exclusions relating to work-related injuries negated Castle Point’s duty to defend either of them,” said the ruling.

But, contrary to the District Court’s determinations, Mr. Lalo does not allege he was a B.S. Trucking employee. As a result, he did not fall under the policy’s exclusions related to work-related injuries, said a unanimous three-judge panel of the 5th Circuit, which held also that Mr. Estrada was not excluded from coverage under the policy.

In remanding the case for further proceedings on the defense issue, the ruling said also it was premature at this time to decide whether Castle Point had a duty to indemnify either the firm or Mr. Estrada.

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