After the victim incurred injury inflicted by an insured party, the Alaska Supreme Court determined that the insurer owed no duty to the injured party. Martinez v. Government Employees Ins. Co., 2020 Alaska LEXIS 111 (Alaska Sept. 4, 2020).
Joshua Martinez lost control of his truck and crashed into Charles Burnett's cabin. The cabin's heating fuel tank was damaged, and fuel drained onto the property and under the cabin. Burnett further alleged he suffered bodily injuries.
Martinez was insured by GEICO under an auto policy. Two days after the accident, the state Department of Environmental Conservation (DEC) advised GEICO to hire a qualified environmental consultant and crew to clean up the fuel spill. Burnett told GEICO he wanted to do the cleanup himself and offered to do so for $25,000, the approximate amount of the consultant retained by GEICO. DEC did not consider Burnett qualified to handle the cleanup.
The parties were at an impasse for over a year. The fuel spread further across Burnett's property, but was finally cleaned up by GEICO's consultant.
Burnett sued Martinez and GEICO while his property was still awaiting cleanup. After the cleanup was completed, GEICO paid Burnett the limits of Martinez's policy to settle and release all claims against Martinez, though he reserved his claims against GEICO. The trial court then granted summary judgment to GEICO on Burnett's remaining claims, finding that GEICO owed him no duty. On appeal, the Supreme Court reversed, holding that GEICO may owe Burnett an independent duty as defined by Restatement (Second) of Torts sec. 323 (Negligent Performance of Undertaking to Render Services).
The trial court held an evidentiary hearing on the single issue of whether GEICO owned Burnett an independent duty in its conduct of the fuel oil cleanup. The court found there was no such duty and entered final judgment for GEICO.
Burnett appealed again. The Supreme Court noted that the basis of Burnett's claim was not failure or wrongful conduct during GEICO's normal adjusting activities on behalf of its insured, but rather whether there was an independent and separate agreement between GEICO and Burnett. The trial court found there was no such duty. There was no proof that GEICO undertook a duty to Burnett to clean up the fuel spill on his property through an agreement with him, separate and independent of its duties to Martinez. The trial court also found that GEICO never represented to Burnett that it was proposing to clean up the spill as an independent service or benefit to him. Further, Burnett never believed that GEICO was proposing to clean up the spill as an independent service or benefit to him.
Therefore, the trial court did not err when it found that Burnett and GEICO never reached an independent agreement regarding spill cleanup.
