DHL’s insurers must face damage claims after fatal crash: Court

New York’s highest court on Monday reinstated a case seeking up to $6.2 million in damages from insurers of DHL Worldwide Express Inc. stemming from a fatal accident involving a DHL contractor in western New York driving a van for personal use.

The Court of Appeals of New York  found in Michael J. Carlson, Sr., &c. v. American International Group, Inc., et al, that the state’s Appellate Division had erred in dismissing the plaintiff’s case against units of AIG and Munich Reinsurance Co.

On July 7, 2004, according to court records, Claudia D'Agostino Carlson suffered severe injuries in an accident in Wheatfield, New York, when her vehicle was hit head on by a commercial delivery van driven by William Porter as he was trying to avoid colliding with another vehicle. Ms. Carlson died on July 20 as a result of her injuries.

Mr. Porter was driving a van for MVP Delivery and Logistics Inc. in Depew, New York, which used its fleet of trucks and employees to perform package delivery services for DHL Worldwide Express Inc.

Mr. Porter, was an employee of MVP, but Mr. Porter was on a personal errand at the time of the accident. A jury awarded Ms. Carlson’s husband, Michael J. Carlson, Sr. $20 million against MVP, Mr. Porter and DHL. The Appellate Division set aside the verdict against DHL and dismissed the complaint against it concluding that Mr. Carlson could not state a claim against DHL and its insurers because DHL did not “hire” the vehicle in question and could not have given MVP permission to use MVP's own vehicle.

The court also found damages to be excessive, and Mr. Carlson agreed to a reduced judgment of $7.3 million. MVP’s insurer paid Mr. Carlson about $1.1 million, and Mr. Porter assigned to Mr. Carlson whatever rights Mr. Porter had to any other insurance coverage.

Mr. Carlson brought suit against DHL, AIG and its subsidiary National Union Fire Insurance Co. of Pittsburgh, Pa., which provided primary and umbrella coverage, and Princeton, New Jersey-based American Alternative Insurance Co., a unit of Munich Re that provided excess coverage to DHL.

The Court of Appeals majority ruling noted that Mr. Carlson cited evidence supporting the proposition that DHL exercised substantial control over MVP. Among other things, MVP’s fleet was used exclusively for DHL deliveries; DHL prescribed the make and model of the vehicles to be used by MVP; and MVP’s vehicles were garaged in DHL’s facility.

Writing for the minority,  Judge Michael Garcia said: “MVP exercised meaningful control over its vehicles, thereby precluding ‘hired auto’ coverage, as a matter of law, under the relevant insurance policies.”

An attorney representing AIG declined to comment on the case. DHL, Mr. Carlson’s attorney, and AAIC did not respond to requests for comment.