Markel not obligated to defend, indemnify ambulance firm

A Markel Corp. unit is not obligated to defend or indemnify an Indiana ambulance company that failed to list one of its ambulances, which was later involved in a fatal accident, on its policy, a federal appeals court ruled in affirming a lower court’s decision.

In 2016, Chester Stofko was driving his car when an ambulance owned by Cedar Lake, Indiana-based United Emergency Medical Services LLC collided with it, fatally injuring him, according to Thursday’s ruling by the 7th U.S. Circuit Court of Appeals in Chicago in Markel Insurance Co. v. Lillian Marlene Rau, as personal representative of the estate of decedent, Chester Stofko.

At the time of the accident, United was insured by Markel Insurance Co., a unit of Glen Allen, Virginia-based Markel Corp. In 2015, United’s administrative director asked his agent to remove the ambulance from its list of insured vehicles because of motor problems, which was done.

United later decided to put the ambulance back on the policy, and on March 30, 2015, the administrator sent an email to the agent making the request, but the agent said he did not see it before the accident, and it was never added to the policy.

Markel filed suit in U.S. District Court in Hammond, Indiana, seeking a declaration that it had no duty to defend or indemnify the ambulance company or its driver. The district court ruled in Markel’s favor and was affirmed by a unanimous three-judge appeals court panel.

Lillian Marlene Rau, representing Mr. Stofko’s estate, insisted that “as a matter of law” United’s email seeking to have the ambulance added to the policy was “sent” by United and “received” by Markel, and Markel is responsible for the agent’s failure to forward the email to Markel, according to the ruling.

The panel disagreed. “It is a well-settled principle of Indiana law that courts ‘may not rewrite an insurance contract,’” the ruling said, citing an earlier case.

“The Policy states that its ‘terms can be amended or waived only by endorsement issued by (Markel) and made a part of this policy.’

“Regardless of whether or not the March 30 email was sent or received, it is undisputed that neither (the agent) nor Markel accepted or responded in any way to reinstate coverage” for the ambulance. “Markel did not endorse any such change to the policy, and so (the ambulance) was not covered,” the panel said in affirming the lower court’s decision.