CLAIMANT GAVE PROPER NOTICE

David Simons was operating a truck/trailer owned by Kaiser Trucking (Kaiser) when he was struck by an SUV that had crossed a center line. The latter was driven by Bianca Spotted Thunder (Bianca). At the time of the loss, that vehicle was owned by her father and insured under a Liberty Mutual Fire Insurance Company (Liberty) policy.

In 2017, Kaiser and Simons sued Bianca, alleging she was negligent and sought to recover damages. They received a default judgment against her in 2019. Kaiser was awarded $36,977.06 and Simons $146,619.80. Both were also awarded pre- and post-judgment interest.

In late 2020, Kaiser and Simons filed a complaint against Liberty requesting an order that it be paid the judgments levied against Bianca. Later, Liberty sought a dismissal. The insurer asserted that, under the statute relied on by the plaintiffs, an injured party may only seek payment against an insurer under its policy. Its position was, since the complaint did not show that the accident was eligible for coverage, nor that Bianca complied with her policy obligations, it had no obligation to defend and indemnify the claim.

Kaiser rebutted Liberty’s arguments, claiming that the insurer presented issues as being required policy conditions rather than, more appropriately, as policy exclusions. The latter would have to be proven. Kaiser also argued that a default judgment was not subject to a policy’s reporting obligation. After the lower court granted Liberty’s request for dismissal, Kaiser appealed.

On appeal, Kaiser raised an issue of whether the circuit court erred in finding that notice to Liberty Mutual of a claim against its insured was a condition precedent under Liberty Mutual’s insurance policy. The supreme court stated that, to plead a claim on which relief can be granted, Kaiser’s complaint must have been sufficient to “put ‘a person of common understanding’ on notice, ‘with reasonable certainty of the accusations against [them] so [they] may prepare [their] defense.’”

The court stated that a complaint need only contain ”[a] short and plain statement of the claim showing that the pleader is entitled to relief[.]” It added that the complaint fully apprised Liberty of the nature of the Kaiser’s claim. Further, during litigation, Liberty was not limited or prejudiced in its ability to present any alleged conditions precedent to coverage or other defenses that may exist under the policy.

The court determined that Kaiser was not required to plead satisfaction of conditions precedent in the policy to sufficiently state a claim on which relief could be granted and avoid a dismissal of its complaint. For this reason, the court reversed the judgment of the circuit court.

Kaiser Trucking v. Liberty Fire Insurance Company—Supreme Court of the State of South Dakota—October 26, 2022—No. 2022 S.D. 64.