Insurer must defend property owner in guard drowning

An RSUI Group Inc. unit is obligated to defend a property owner in a security guard’s 2016 drowning, said an appeals court panel Wednesday, agreeing with a lower court that its policy’s auto exclusion does not apply.

Security guard Calvin Marcus McCullers Jr. was working as a private security guard, “sitting post” inside his vehicle, when a thunderstorm passed through, causing a nearby stream to rise and flood, according to Wednesday’s ruling by the 5th U.S. Circuit Court of Appeals in New Orleans in Covington Specialty Insurance Co. v. USAI LP, Lara Briggs-Tafel, JD.

After his vehicle became inundated, Mr. McCullers called for help, but could not safely move to higher ground. His vehicle was engulfed in floodwater and, when Mr. McCullers escaped it, floodwaters swept it and him over an embarkment and into a creek, the ruling said. His body was not found until almost two months later.

The property Mr. McCullers was guarding was allegedly owned by Dallas-based USAI, which had a policy issued by RSUI unit Manchester, New Hampshire-based Covington Specialty Insurance that had an exclusion for any injuries arising out of the use of an auto, according to the ruling.

After Mr. McCullers’ survivors sued USAI in state court, it asked Covington to defend it, which the insurer denied based on the auto exclusion. USAI filed suit against the insurer in U.S. District Court in Dallas, which held the exclusion did not apply.

It was upheld by a unanimous three-judge appeals court panel. The district court “correctly concluded that Covington failed as matter of law to establish either that the incident occurred within the territorial limits of the vehicle, or that the vehicle was a producing cause of McCullers’s death,” the panel said, in holding the insurer must defend the property owner.

USAI attorney Douglas P. Skelley, a member of the Shidlovsky Law Firm PLLC in Austin, said in a statement, “We are pleased with the result and believe the district court and 5th Circuit reached the right decision.” Covington’s attorneys did not respond to a request for comment.

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