Insurer Says No Coverage Owed for $7.5M Truck Crash Verdict

In March 2022, Wanda Gomez suffered serious injuries when a box truck driven by Keith Claiborne collided with her vehicle. Claiborne was operating the truck on behalf of his employer, City Line Distributors LLC. Following the incident, Gomez filed a negligence suit in January 2023 against Claiborne, City Line, and Penske Truck Leasing Co., asserting claims of both direct and vicarious liability.

City Line was covered under a $10 million commercial umbrella liability policy issued by Everest National Insurance Co., a unit of Everest Re Group. However, Everest claims it was never made aware of the lawsuit during its pendency. While City Line’s primary auto insurer, Old Republic Insurance Co., was notified, Everest contends that it was excluded from all litigation-related communications and decisions.

The Settlement Offer and Resulting Judgment

Gomez extended a settlement offer of $2 million in June 2024. Everest alleges that if City Line had accepted the offer, Everest would not have faced any financial exposure. Instead, City Line declined to settle. A Connecticut jury ultimately awarded Gomez $5.7 million in January 2025. In March, the court entered a final judgment totaling nearly $7.5 million after including costs and interest.

City Line sought to overturn the decision on appeal, but the effort was unsuccessful. According to Everest’s recent filing, it was first made aware of the case in July 2025 — well after the trial had concluded, judgment had been entered, and the appeal had been dismissed.

The Coverage Dispute

On August 25, Everest filed a declaratory judgment action in the U.S. District Court for the District of Connecticut, asserting that it is not obligated to indemnify City Line for the $7.5 million judgment. The insurer argues that City Line breached the policy’s notice provision, which requires insured parties to provide notice of any claim or lawsuit “as soon as practicable.”

“City Line’s belated notification amounts to a clear breach of the conditions of Everest’s policy, which has created obvious and undeniable prejudice to Everest,” the complaint states. “By the time Everest was notified of the lawsuit, there were no realistic remaining avenues to contest City Line’s liability or limit Everest’s exposure through settlement.”

Everest further claims it lost its ability to monitor proceedings, contribute to the defense strategy, assess settlement value, or assert its coverage positions. The insurer maintains that this lack of participation effectively undermined its rights and left it exposed to a judgment it was never given the opportunity to mitigate.

The Policy Conditions and Legal Ramifications

The core issue revolves around compliance with the notice conditions of the umbrella policy. Everest contends that the failure to notify it of the lawsuit until after final judgment — and failed appeal — amounts to more than just a technical violation. The insurer emphasizes that this breach has caused substantial prejudice, even if all the effects are not yet fully known.

“Since Everest has only recently been advised of the lawsuit, it is likely that it has also been prejudiced in other ways of which it is not yet aware,” the complaint adds.

If the court agrees with Everest, City Line could find itself liable for the entire judgment without umbrella policy protection. Such an outcome may also raise questions about the role of City Line’s primary insurer and whether coordination failures occurred between the different levels of insurance coverage.

The Legal Teams Involved

Everest is represented by Eric B. Hermanson and Austin D. Moody of White and Williams LLP.

Information about legal representation for City Line, Claiborne, and Gomez was not immediately available at the time of filing.

Case Information

The case is styled Everest National Insurance Co. v. City Line Distributors LLC et al., case number 3:25-cv-01362, in the U.S. District Court for the District of Connecticut.

What’s Next?

The outcome of Everest’s declaratory judgment action could have significant implications not only for City Line but for broader commercial insurance practices surrounding notice requirements. Courts generally assess both the timing of notice and any resulting prejudice to the insurer when determining whether coverage can be denied. This case will likely focus heavily on those legal standards.

As the litigation unfolds, the question remains whether Everest’s lack of involvement — despite a $10 million umbrella policy — was the result of a critical communication lapse or a more complex breakdown in inter-insurer coordination. Regardless, the consequences could prove costly for City Line.