A Virgin Islands Supreme Court ruling has revived key contract claims in a rental car insurance dispute, spotlighting insurer obligations and litigation procedures.
On August 20, 2025, the Supreme Court of the Virgin Islands issued a decision in Clark et al. v. Fidelity and Guaranty Insurance Underwriters d/b/a Travelers and Crawford (V.I.) Inc., a case examining how insurers handle coverage denials and litigation.
The dispute stems from a 2013 car accident on St. Thomas, where several passengers were injured in a vehicle operated by Kaseem Turnbull. The car was rented from Budget Rent-A-Car by James Jones, but Turnbull was not listed as an authorized driver on the rental agreement. At the time, Jones had an automobile insurance policy issued by Fidelity and Guaranty Insurance Underwriters, doing business as Travelers, covering his personal vehicle in New Jersey.
After the accident, Jones submitted a claim to Travelers. Travelers referred the claim to Crawford (V.I.) Inc., a claims adjuster, for evaluation. On March 10, 2014, Crawford, on behalf of Travelers, denied coverage for property damage and bodily injuries, stating that Jones was not operating the rental vehicle and that Turnbull did not meet the policy’s definition of an “insured” because he was neither related to Jones nor resided in his household.
The injured parties later filed a lawsuit in the Virgin Islands, eventually adding Jones as a defendant and alleging that Turnbull had Jones’ consent to drive. Travelers was not named as a party in that action. In a separate New Jersey lawsuit, Travelers again denied coverage to Jones.
In 2018, the parties in the Virgin Islands case reached a mediated settlement, and Jones assigned any legal claims he had against Travelers to the injured parties. In 2020, the appellants filed a new lawsuit against Travelers and Crawford, alleging breach of contract, bad faith, breach of the duty of good faith and fair dealing, breach of fiduciary duty, and seeking declaratory judgment.
Travelers moved to dismiss the complaint, arguing that the claims were barred by the statute of limitations and failed to state a claim. Crawford also sought judgment on the pleadings. The Superior Court granted both motions, dismissing all claims.
On appeal, the Supreme Court found that the Superior Court erred in dismissing the breach of contract and good faith claims. The high court determined that the lower court improperly relied on documents not attached to the complaint, such as a handwritten affidavit and a denial letter, without converting the motion to one for summary judgment or giving the plaintiffs notice and an opportunity to respond. The Supreme Court emphasized the Virgin Islands’ notice-pleading standard, which requires only a short and plain statement of the claim.
The Supreme Court affirmed the dismissal of the bad faith and fiduciary duty claims as time-barred, holding that the two-year statute of limitations applied and that the limitations period began when Travelers first denied coverage.
The case was sent back to the Superior Court for further proceedings on the breach of contract and good faith claims, with instructions to address the statute of limitations issue for those counts. The decision highlights the importance of following proper procedures in insurance litigation and the need for clear communication when denying coverage.
This outcome is notable for insurance professionals, as it underscores the procedural standards that must be followed in coverage disputes and claims litigation. The decision serves as a reminder of the importance of clear policy language and timely, documented communication in claims management.
