Forklift parade not a 'stunt' court finds, reversing win for AXA insurer

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A forklift operator loads a stack of finished series 6 solar panels during a tour of a First Solar plant in Walbridge, Ohio, U.S., October 6, 2021. Picture taken October 6, 2021. REUTERS/Dane Rhys/File Photo
  • A bar owner ran over a parade-goer's foot with a forklift
  • Lower court said parade was a stunt that precluded insurance coverage

(Reuters) - An insurance policy exclusion for injuries caused by stunts did not apply to a bar owner’s “forklift parade” in downtown Los Angeles in honor of his wife’s 50th birthday, a federal appeals court held Friday.

The 9th U.S. Circuit Court of Appeals found the exclusion ambiguous, reversing a lower-court win for Indian Harbor Insurance Co in a coverage dispute with Resident bar and its co-owner, Timothy Krehbiel.

Krehbiel had decorated a forklift like a parade float for the May 2016 celebration, with his wife perched on a swing and partygoers marching alongside as he piloted the vehicle through the Arts District at a sedate 1.5 miles per hour.

Unfortunately, Krehbiel ran over the foot of one of the guests, who filed a personal injury lawsuit in state court.

Indian Harbor, an AXA Assurance company, filed a separate action in federal court in Los Angeles to establish that it had no duty to defend or indemnify its insureds.

U.S. District Judge John Walter last year agreed with Indian Harbor based on the policy’s exclusion of injuries arising out of the use of “mobile equipment,” including forklifts, for “any prearranged racing, speed, demolition, or stunting activity.”

The policy did not define “stunting activity,” so Walter looked at dictionaries that defined “stunt” as an interesting or unusual event “designed to attract attention.”

Reversing, the 9th Circuit said another dictionary defines a stunt as a display of “spectacular skill or daring.”

“Krehbiel’s actions were clearly done to attract attention to his wife’s birthday celebration. Yet, it does not require much skill or daring to ride around on a slow-moving forklift that is dressed as a parade float,” the panel wrote in the per curiam, unpublished memorandum decision.

“At the very least, the competing definitions and the words preceding ‘stunting activity’ make it ambiguous whether Krehbiel’s activity comes within the exclusion,” and ambiguities in policy exclusions must be read in favor of coverage, the 9th Circuit said.

Attorneys for Indian Harbor did not immediately respond to requests for comment on Friday.

Krehbiel and Resident’s attorney, Mark Israel of Daniels, Fine, Israel, Schonbuch & Lebovits, said the decision is “very significant” to his clients, who “have had to contend with the insurance company’s federal coverage case” in addition to the underlying personal injury lawsuit.

“We agree with the Court’s analysis and are pleased with the result,” Israel added.

The case is Indian Harbor Insurance Co v. Group SHS LLC, DBA Resident, et al, 9th U.S. Circuit Court of Appeals, No. 21-56078.

For Indian Harbor Insurance: Elizabeth Holt Andrews, Michael Cassata, and Terrence McInnis of Troutman Pepper

For Group SHS DBA Resident et al: Mark Israel of Daniels, Fine, Israel, Schonbuch & Lebovits

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