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Doneson v. Farmers Ins. Exch. - 10/3/2018

Arizona Court of Appeals Division Two holds that an insurance policy exclusion for injuries that “require” workers’ compensation benefits applies when the injured party is entitled to such benefits, even if he ultimately repays the benefits.


A motorist was injured in an automobile accident.  He received workers’ compensation benefits, which paid for some of his medical expenses.  He then recovered money from a third-party tortfeasor and, as required by law, repaid his workers’ compensation insurer.

The motorist also submitted a claim for medical payments under his automobile insurance policy.  But the automobile insurer denied his claim, based on an exclusion in the policy that eliminated coverage for injuries for which workers’ compensation benefits are “required.”

The motorist sued the automobile insurer for breach of contract.  But the superior court dismissed the lawsuit, holding that the exclusion in the policy applied to the situation at hand.  The court did not consider parol evidence when interpreting the policy.

The Court of Appeals affirmed that the exclusion applied.  Workers’ compensation benefits were indeed “required” for the motorist’s injury because he was entitled to receive such benefits.  The fact that he later had to repay those benefits made no difference.  Further, the policy language was unambiguous, so parol evidence did not need to be considered.

Chief Judge Eckerstrom authored the opinion.  Judge Brearcliffe and Judge Espinosa concurred.

Posted by: Josh Whitaker

Posted On: 10/23/2018