Insurer held liable for judgment despite alleged misrepresentation

The Missouri Court of Appeals Western District ruled May 31 that an insurer is on the hook for part of a $4.5 million judgment despite its claim that the underlying policy was obtained fraudulently.

The case stems from a 2017 collision in Jackson County that injured Josiah Wright. The at-fault driver, Phillip Nash, was driving a Kia Optima owned by his daughter, Takesha Nash.

At the time of the crash, Takesha Nash’s relationship with her insurer, Key Insurance Company, was complicated. In late 2016, her father had been involved in a different accident. Key’s investigation led it to believe that Phillip Nash was a part-owner of the Kia, that he used the car on a regular basis and that it was kept at his home in Missouri rather than at his daughter’s home in Kansas City, Kansas.

Key also found that the elder Nash had a revoked driver’s license. Deeming him an unacceptable risk and alleging that Takesha Nash had made material misrepresentations regarding his use of the car, the insurer said it was canceling the policy effective Jan. 23, 2017.

Shortly before that policy expired, an independent insurance broker that was unaware of the cancelation notice obtained a new auto policy for Takesha Nash, which also was through Key Insurance. When the insurer learned of the second policy, it canceled that one as well and said it would cease coverage on Feb. 27. Nash’s crash with Wright had occurred on Feb. 1.

Arbitration of the case resulted in a $4.5 million judgment. Wright then filed an equitable garnishment claim against Key. Last year, Judge Marco Roldan ruled in favor of Wright and ordered the insurer to pay its policy limits.

Key argued that, during a recorded phone call with a Key employee shortly after the 2017 accident, Takesha Nash had appeared to admit that her father was on the Kia’s title and kept it at his home. But the Nashes denied that version of events in later depositions, which Roldan deemed to be credible. On appeal, the Western District said the insurer failed to show that the trial court’s determination was wrong.

Tom Hershewe of Dollar, Burns, Becker & Hershewe, an attorney for Wright, and James Maloney of Foland, Wickens, Roper, Hofer & Crawford, who represented the insurer, couldn’t be reached for comment.

The case is Wright v. Nash and Key Insurance Company, WD84602.