Lloyd's of London Sues To Stop Payment on Wrongful Death of Uzi Wielding 8-Year Old

The Bad Lawyer wrote about this story's various twists and turns.  In sum, an 8-year old boy was at at a gun show with his dad, a physician.  The boy's father permitted the boy to handle and shoot a Uzi.  The child lost control of the weapon and accidentally shot himself in the head.   A wrongful death followed, now the club's insurer wants to deny coverage.  This is from Jessica Van Sack's article at the Boston Hearld website:

"Two years after an 8-year-old boy fatally shot himself at a gun show in western Massachusetts, an insurer for the Westfield Sportsman’s Club claims it isn’t obligated to pay a wrongful-death settlement to his family. A federal suit filed late last week by underwriters at Lloyd’s of London alleges the club’s policy doesn’t cover claims arising out of “criminal activity” - and also cites an exemption for all liability related to gun shows.  In October 2008, Christopher Bizilj of Ashford, Conn., was allowed to try out a fully automatic Micro Uzi machine pistol at the club’s annual Machine Gun Shoot and Firearms Expo. As his father, Dr. Charles D. Bizilj, stood several feet away with a camera, Christopher lost control, fatally shooting himself in the head.

In March, officials from the club pleaded no contest in Hampden Superior Court to charges of involuntary manslaughter and of providing the boy a gun.  The Bizilj family filed a $4 million wrongful-death suit in November, alleging that the machine gun jammed twice, was defective and inspected by an unqualified 15-year-old before the child attempted to fire it.

The Lloyd’s suit claims the club’s policy excludes coverage for bodily injury arising out of  'activities performed by or on behalf of the insured, and/or operations necessary to the promotion and holding of gun or firearm shows.'

The Bizilj family’s attorney, Bruce Melikian, declined comment on the notion that the gun club may have lacked insurance coverage. 'We’re not surprised by the filing of a declaratory judgment action by Lloyd’s of London,' he said."
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Read the comments at the link under Jessica Van Sack's article at the link.  Funny?  Also somewhat ignorant, and this is not a defense of the father's conduct, or of the underlying claim.  It's about the illusory nature of insurance contracts.

If you can get past the part where the father and everyone in creation is called (and probably are ...) factually stupid--a more interesting principle is being tested that relates to contracts.  You see, Lloyd's of London accepted premiums from the club owners to provide coverages in probably eye-popping sums in the event of an "occurrence."  What often happens after an occurrence, is that the insurance company through its attorneys come forward and file lawsuits disclaiming coverage because these lawyers will claim, "no occurrence" under the contractual language, the laws of the state, or some other reason.  Those of us who have dealt with such lawsuits are left to wonder, what did the "insured" get for their premiums besides the illusory promise of coverage?

This situation happened to me at a particular vulnerable point in my sordid career.  I had built a reputation for obtaining large verdicts and settlements on behalf of victims of child sex abuse vis-a-vis the perpetrators and the negligent co-custodial adult, i.e. mom, grandma, aunt, neighbor spouse and so forth.  The insurance companies seemed to be on the hook, but, just when I had gone all-in financially in my devotion to this practice, the OurState Supreme Court handed down a decision saying that the plain language of the applicable home owner's insurance policies did not provide coverage for the negligence of the adult who should have protected the child from their pedophile spouse, son, relative.   We did not expect that insurance companies had undertaken to insure against intentional acts of pedophiles, but the policy language written by the insurance companies themselves said they would provide coverage for negligent insured's which meant the other family member who had a duty to the vulnerable child. 

"No way," the insurers claimed.  The act of the perpetrator was not "an occurrence" and since the liability of the other insured, mom et al.,  flowed from this non-occurrence, there was no coverage.  No money for the victim of the outrages. As I said, the OurState Supremes agreed.  Got that? 

One of the greatest scams, is the legal insurance scams.  The customer pays premiums, you get nothing.

Now let's think about what's really going on in the claim arising out of the idiotic death of Christopher Bizilj?  His heartbroken relatives (forget the father) have said that the child's death was wrongful and that there should be a financial consequence.  The gun club operators tried to insure against risks of operating a facility where lethal weapons are used.  Now the carrier that took the gun club's money is saying, "hey pals, you're on your own."  Not only are the insurers not insuring but they are suing their insureds to avoid defending the insureds under their contract of insurance and the are seeking an order saying that no matter the outcome, they don't have to pay. Nice.

No, Insurance Companies Don't Commit Fraud Do They?

When you throw around the word, fraud, you should be very careful.  Fraud or fraudulent at law is different than saying so-and-so is a fraud, or "that's fraudulent."  If you can easily see that something is fraud, by definition it isn't.  Admittedly, when we think about and talk about fraud we think and talk about precisely the same thing, something phony.

For something phony to be legal fraud there must be:  a material misrepresentation by words or conduct through active holding out or through concealment (of something that should have been revealed), which deceives and is intended to deceive another so that they reasonably rely and act upon the misrepresentation to their legal detriment.  My experience is that when clients have sought my assistance in redressing "fraud" the laying out of the elements has usually deterred further action.  The carnival midway is not a place where fraud is found, . . . fools, but not fraud.  Fraud in a generic sense covers all sorts of human sin where one takes advantage of another without rising to the level of "actionable fraud."  The defrauded in general are usually co-conspirators in their own injury, via the full panoply of psychic impulse including envy, denial, gluttony, pride, you get the picture.  Fraud is an alibi, an excuse when we get burned again.

My Cleveland friend, Patrick Perotti, has created a lucrative law practice out of bringing actions against insurance companies, title companies, banks, and businesses who engage in the real deal.  Real fraud happens all the time and it is often intended to surreptitiously scam nickels on top of legitimate profit margins or genuine cost.  Let me give you an example, Grange Mutual Insurance Company (yes, we name names when it suits us) charged a legitimate premium for a certain type of coverage under family auto insurance policies that they offered; but some bright executive at the company decided that the amount they collecting could be double, triple, and more than the law allowed. While the amounts involved were minuscule per family the net effect was millions and millions of dollars for Grange's bottom line without incurring any commensurate risk.  Patrick Perotti figured out how this scam worked and  brought a lawsuit.   After a two day trial a jury near Cleveland awarded $48 million in compensatory damages.  Punitive damages were pending submission to the same jury when Grange agreed to pay $51 million in settlement.

Mercury Insurance of Illinois just got hit by a demand for punitive damages for courthouse fraud.  According to the news account Steven Thomas Kirk was struck by a truck driven by  Mercury's "insured," Enver Hamiti. Kirk.  Hamiti fled the scene, even though " [Kirk's] leg was detached by the accident." Get this gothic detail, somebody walks by and steals a diamond stud earring from Kirk's earlobe as he lay inert at the scene. Kirk sued Hamiti in Madison County, seeking damages.  Apparently Kirk had been drinking, but Kirk's use of alcohol did not play a role in the accident, the jury found Mercury's insured Hamiti fully responsible for causing the accident awarding $1.37 million to Kirk.  


Attorney Chris Kolker is asking the Court to award an additional $500,000. directly against Mercury Insurance Company because he suspects the Mercury Insurance adjuster, claims people and although it doesn't say so, I suspect the defense attorney invented a eyewitness who at trial testified that Steven Kirk was driving his motorcycle erratically, weaving in and out of traffic.  This testimony was offered and intended by Mercury to be relied upon by the jury to the detriment of Steven Kirk.  The only problem with this eyewitness, she testified to seeing the accident happen from her apartment window--she didn't live in the apartment according to lease documents until six months after the accident.   Hmmmmmmm?  Sure sounds like fraud, or at least attempted fraud.  


Bear with me for a sec, reading between the lines it may be that the fraud claim is about "collecting."  Unless Mr. Hamiti was driving a commercial truck, it'improbable that Hamiti's Mercury Insurance policy carried million dollars worth of insurance.  In fact it's probable that the amount of insurance available to pay the jury verdict awarded to Mr. Kirk is in the tens-of-thousands so the only prayer Mr. Kirk has of collecting against Mercury is if the court imposes a direct sanction for fraud against the insurance company and it's claims people.  Other obstacles make it unlikely that Mr. Kirk and his counsel are going to succeed, including jurisdiction of the court to impose such a sanction.  I've talked about the concept of jurisdiction, before in the purest sense--jurisdiction refers to the power of a court, either geographically defined or over the subject matter of an action.  In the motorcycle-car crash the court's jurisdiction is over the parties, Mr. Stevens and Mr. Hamiti and any company Mr. Hamiti was working for at the time of the accident. It will be a matter of Missouri law whether Mr. Steven's fraud claim against Mercury can be heard as part of the underlying lawsuit.  Typically, Mr. Stevens has no claim against Mercury because he has no contract of insurance with them, his remedy is to sue Mr. Hamiti which he did.  Mercury's liability to Mr. Stevens is only for the amount of coverage purchased by Mr. Hamiti.  If Mercury only covered Mr. Hamiti to the tune of $12,500 which is not unheard of--that's all Stevens and his attorney will collect from Mercury.  The balance of the $1.37 million verdict comes out of Mr. Hamiti's pocket, if Mr. Hamiti is like most folks, Mr. Stevens is out of luck.  


Good luck on that fraud claim.  For more:


http://columbus.bizjournals.com/columbus/stories/2007/09/03/daily12.html


http://www.bnd.com/372/story/1028154.html