Insurer failed to prove driver violated policy clause

Because a drug test failed to show conclusively when a driver last used marijuana before a fatal crash, an insurer cannot deny payment based on an exclusionary clause in the policy, the Court of Appeals determined.

In Shawn A. Keckler, Kari Felda, Special Admin. to the Estate of Ryan S. Holloway, Janice Norman, Dewayne Scott, Timothy J. Boganwright, et al. v. Meridian Security Insurance Company, No. 43A03-1112-PL-551, a grant of summary judgment in favor of Meridian Security Insurance Company on its declaratory judgment action was appealed.

In 2008, Nathan Creighton was driving, with passengers Shawn Keckler, Bryant Scott and Ryan Holloway as passengers. Creighton attempted to pass a car that stopped in his lane and crashed head-on into a truck driven by Timothy Boganwright. Scott and Holloway were pronounced dead at the scene; Creighton and Keckler sustained brain injuries and have no memory of the crash. Boganwright also was injured.

Police investigating the crash scene discovered that Holloway was in possession of several bags of marijuana and that Creighton was in possession of one bag of marijuana. Police also stated in a crash report that Creighton “also had glassy eyes and appeared very disorderly,” although Creighton was unconscious when police arrived on the scene.

At the time, Creighton’s primary insurer, through his father, was Progressive, with a global policy limit of $500,000. Creighton also was insured under his father’s umbrella policy with Meridian, with a coverage limit of $1 million.

Keckler filed a motion for summary judgment against Meridian, and the other plaintiffs joined in. But Meridian claimed that the crash was not covered, due to an exclusionary clause in the policy that precludes payments for injuries that arise out of the use, sale, manufacture, delivery, transfer or possession of drugs. In support of that claim, Meridian submitted testimony from a toxicologist, but the toxicologist could not determine from a post-crash blood draw when Creighton might have last used marijuana before the crash.

The Court of Appeals concluded that Meridian did not meet its burden on summary judgment of establishing that the exclusionary clause for injuries arising out of the use of marijuana applied in this case. It held that denying insurance coverage would have drastic consequences not only for Creighton, but also for injured parties seeking recompense for the injuries he caused. The COA reversed summary judgment in favor of Meridian and remanded for further proceedings.