Click here for the appellant's reply brief.
Click here for AIG's brief, and the first page is unreadable, sorry, but keep scrolling down for the rest of a very long document.
This blog has followed developments in this convoluted case for more than half a decade. John Foster and his wife Melony Michaels were the victims of a mortgage fraud at 1564 Hillside Avenue North. John Foster's identity and perfect credit was stolen by a crackhead named Jerome KingRussell, as part of a fraud cooked up by Larry Maxwell and others.
Maxwell went to prison over the fraud. The victims sued in civil court and won a judgment of $849,000 but the money has proven hard to collect because the insurance company doesn't want to pay. (Well, I guess that's understandable) The house was demolished a long time ago. Here's a link to a blog article about the lawsuit which has yet more links and traces a lot of the story to date.
Now both sides have filed briefs in Minnesota's State Court of Appeals, made their arguments, and wait. The question is not whether the $849,000 judgment is valid.
The question is whether the plaintiffs can collect from the defendant's insurance company...
The defendant's argument seems to rest upon the idea that since their insured hid the facts from them, (or, at any rate, didn't inform the insurance company in a timely way) then the insurance company doesn't have to pay.
The argument of the plaintiff is, well, that's ridiculous.
The insurance companies for hit-and-run drivers have to pay, right? It's not like hit-and-run drivers call their insurance and say, "I ran somebody over with my minivan and I'm hiding out from the police, hoping they don't figure out it's me from the bloody headlight glass at the scene and any security cameras which might have caught the incident. But you're my insurer, after all, and you'll have to pay if the coppers find me...so I'm notifying you."
("You'll never take me alive, copper" movie tribute link)
But maybe I'm making things too simple. I guess we'll see what the Court of Appeals has to say. I would like to think this case could set a positive precedent but does the law REALLY need to determine whether insurance coverage applies to incidents the insured didn't properly report?
If the court rules against the plaintiff, then what kind of perverse incentives would that provide to both insureds and insurance companies to cover up incidents?