The 5th US Circuit Court of Appeals on Friday relieved Kinsale Insurance Co. of defending a drag racing event organizer against a lawsuit over a fatal crash that occurred in October 2021.
The three-judge panel of the New Orleans-based court said Kinsale Insurance Company v. Flying Diesel Performance & Offroad LLC et al. A federal judge in Texas erred in finding that Kinsale’s commercial general liability policy was vague, so the insurer was required to provide a defense.
A 1990 Ford Mustang driven by a participant veered off the raceway and struck spectators during Race Wars 2 in Kerrville, Texas, killing three people, including two children. The families of the injured and the deceased sued the event organizer Flying Diesel and others in Texas state court. Court records show that Flying Diesel sued Kinsley, who agreed to provide a defense under reservation of rights.
Kinsale’s policy included a motor vehicle endorsement that prevented coverage for any claim or lawsuit associated with the operation, maintenance or use of any motorized vehicle.
Kinsley sued Flying Diesel in federal court in San Antonio, seeking a declaration that it was under no obligation to defend or indemnify the lawsuits. The parties filed competing motions for summary judgment, and the trial judge agreed with Flying Diesel that the policy was vague.
The appeals court reversed, ruling that Flying Diesel was setting aside parts of the policy to find ambiguity.
Representatives of the parties did not respond to requests for comment.
