Justia Insurance Law Opinion Summaries
United Fire & Casualty Co. v. Prate Roofing & Installations LLC
All Seasons inspected SparrowHawk's warehouse roofs and discovered hail damage. Because All Seasons did not hold an Illinois roofing license, it arranged for Prate to serve as general contractor with All Seasons as subcontractor. All Seasons was to provide materials and labor, maintain safety, and supervise the project. All Seasons purchased a commercial general liability policy and general liability extension endorsement from United, listing Prate as an “additional insured” in a “vicarious liability endorsement.” All Seasons then subcontracted with Century. Ayala, a Century employee was working on a SparrowHawk warehouse when he fell to his death.The Illinois workers’ compensation system provided limited death benefits but precluded tort remedies against his direct employer, Century. Ayala’s estate sued Prate, All Seasons, and SparrowHawk. Prate tendered the defense to United, which declined to defend and sought a declaratory judgment. All Seasons and United reached a settlement with the estate, paying the policy limits.The district court granted Prate summary judgment. The Seventh Circuit affirmed, rejecting United’s argument that because its named insured was an independent contractor, Illinois law would not impose any liability on the additional insured and there was no risk of covered liability. The duty to defend depends on the claims the plaintiff asserts, not on their prospects for success. The settlement of the underlying claims against the named insured, however, removed any possibility that the additional insured might be held vicariously liable for actions of the named insured; the duty to defend ended when that settlement was consummated. View "United Fire & Casualty Co. v. Prate Roofing & Installations LLC" on Justia Law
Utica Mutual Insurance Co. v. Munich Reinsurance America, Inc.
Utica Insurance issued primary and umbrella coverage in 1973 and 1974 and subsequently paid asbestos losses incurred by the manufacturer (Goulds). Utica had ceded parts of its risk to the reinsurers, Munich and Century, in exchange for a share of the premiums, via facultative certificates, i.e., a reinsurance contract particular to that policy. Munich and Century each paid Utica $5 million for their undisputed one-fifth shares of the umbrella policy; but they refused to pay defense costs in addition to limits when Utica billed them an extra $2,760,534 each. Utica sued; in two suits before different judges of the same court, with inconsistent results.On the issue of whether the reinsurers (Munich and Century) were obligated to reimburse Utica for defense costs in addition to policy limits, the Second Circuit held that the 1973 certificates reinsure defense costs within limits, not in addition. A 2007 settlement agreement with Goulds did not independently require Century or Munich to pay defense costs in addition to limits. View "Utica Mutual Insurance Co. v. Munich Reinsurance America, Inc." on Justia Law
Esurance Prop. & Casualty Ins. Co. v. Michigan Assigned Claims Plan
Plaintiff Esurance Property & Casualty Insurance Company (Esurance) paid personal injury protection (PIP) benefits to claimant, Roshaun Edwards (Edwards), pursuant to a no-fault automobile insurance policy, issued to another person, that was later declared void ab initio. Thereafter, Esurance filed this suit against defendants, the Michigan Assigned Claims Plan (MACP) and the Michigan Automobile Insurance Placement Facility (MAIPF), seeking reimbursement under a theory of equitable subrogation for the PIP benefits that Esurance had paid to Edwards under Michigan’s no-fault act before the policy was rescinded. The Michigan Supreme Court held that an insurer who erroneously pays PIP benefits could be reimbursed under a theory of equitable subrogation when the insurer was not in the order of priority and the payments were made pursuant to its arguable duty to pay to protect its own interests. On the facts alleged in this case, Esurance could stand in Edwards’s shoes and pursue a claim for equitable subrogation because it was not in the order of priority and also was not a “mere volunteer” under Michigan law when it paid Edwards’s PIP benefits. Accordingly, the Supreme Court reversed the decision of the Court of Appeals and remanded this case to that court for further proceedings. View "Esurance Prop. & Casualty Ins. Co. v. Michigan Assigned Claims Plan" on Justia Law
Landry’s, Inc. v. The Insurance Company of the State of Pennsylvania
The Fifth Circuit reversed the district court's grant of summary judgment to ICSOP, concluding that the insurance company had a duty to defend its insured, Landry's, in the underlying data-breach litigation with Paymentech. In this case, Paymentech sought to recover amounts it paid to Visa and MasterCard customers, alleging that Landry's was obligated under the parties' agreement to pay the $20,062,206.88 collectively assessed by Visa and MasterCard. Landry's then filed a separate suit against ICSOP.The court applied Texas's eight-corners rule, which compared the four corners of the policy to the four corners of the Paymentech complaint, and concluded that the Paymentech complaint involves a "publication," and that Paymentech's alleged injuries arise from the violations of customers' rights to keep their credit-card data private. Therefore, ICSOP must defend Landry's in the underlying litigation. View "Landry's, Inc. v. The Insurance Company of the State of Pennsylvania" on Justia Law
St. Louis Condominium Association, Inc. v. Rockhill Insurance Co.
The Association sought to recover for the damage caused by Hurricane Irma from its insurer, Rockhill. After Rockhill denied coverage and the parties went to trial before a jury, the Association received a little over $2.6 million—a fraction of the $16 million it initially asked for. Both parties appealed, Rockhill challenged the final judgment entered in favor of the Association, and the Association challenged the damages award.The Eleventh Circuit affirmed, concluding that it need not discuss the merits of Rockhill's summary judgment challenge because the court's precedent clearly bars review of an order denying summary judgment after a full trial and judgment on the merits. In regard to the three remaining issues on appeal, the court concluded that the district court did not abuse its discretion by striking Rockhill's expert; the district court did not abuse its discretion by denying Rockhill's Daubert motion; and Rockhill did not preserve its challenge to the denial of its motion for judgment as a matter of law.In regard to the Association's cross-appeal, the court concluded that the evidence is sufficient to support the jury's preexisting damage finding. The court also concluded that Rockhill's failure to comply with Florida Statute 627.701(2) does not render the hurricane deductible unenforceable. View "St. Louis Condominium Association, Inc. v. Rockhill Insurance Co." on Justia Law
California ex rel. Allstate Ins. Co. v. Rubin
Allstate Insurance Company et al. (Allstate) filed a complaint on behalf of itself and the People of California (qui tam) against Dr. Sonny Rubin and related medical providers (Rubin). Allstate generally alleged Rubin prepared fraudulent patient medical reports and billing statements in support of insurance claims. Rubin filed an anti-SLAPP motion, arguing the preparation and submission of its medical reports and bills were protected litigation activities. The trial court denied Rubin’s motion. "Litigation is not 'under [serious] consideration' - and thereby protected activity under the anti-SLAPP statute - if the ligation is merely a 'possibility.'" The Court of Appeal found that Rubin failed to show its medical reports and bills were prepared outside of its usual course of business in anticipation of litigation that was “under [serious] consideration.” Thus, the Court affirmed the trial court’s order denying Rubin’s anti-SLAPP motion. View "California ex rel. Allstate Ins. Co. v. Rubin" on Justia Law
Sciarratta v. Foremost Insurance Co. Grand Rapids Michigan
The Supreme Court affirmed the order of the district court finding that an exclusion in a personal umbrella liability insurance policy expressly excluding coverage for damages that are "payable to any insured" was valid and precluded coverage, holding that the district court did not err.Plaintiff sought coverage for injuries he incurred as the passenger on a motorcycle that crashed. At the time of the crash, Plaintiff's wife was the named insured on a personal umbrella policy directly underwritten by Farmers Insurance Exchange. Farmers denied coverage under the umbrella policy under the exclusion at issue. Because Plaintiff was an insured under the umbrella policy, argued Farmers, he was not entitled to payment under the policy. The district court granted summary judgment for Farmers. The Supreme Court affirmed, holding (1) Nev. Rev. Stat. 687B.147 does not apply to umbrella policies; (2) an insured who alleges that an exclusion was not disclosed must make that allegation in an affidavit rather than rely solely on the arguments of counsel; and (3) there was no other error on the part of the district court. View "Sciarratta v. Foremost Insurance Co. Grand Rapids Michigan" on Justia Law
Oral Surgeons, P.C. v. The Cincinnati Insurance Co.
Oral Surgeons submitted a claim to Cincinnati for losses it suffered as a result of the suspension of non-emergency procedures due to the COVID-19 pandemic. Oral Surgeons maintains that the COVID-19 pandemic and the related government-imposed restrictions on performing non-emergency dental procedures constituted a "direct 'loss' to property" because Oral Surgeons was unable to fully use its offices.The Eighth Circuit affirmed the district court's grant of Cincinnati's motion to dismiss, concluding that the policy unambiguously requires direct physical loss or physical damage to trigger business interruption and extra expense coverage, which Oral Surgeons did not allege. Therefore, the policy clearly does not provide coverage for Oral Surgeons' partial loss of use of its offices, absent a showing of direct physical loss or physical damage. View "Oral Surgeons, P.C. v. The Cincinnati Insurance Co." on Justia Law
Brazil v. Auto-Owners Insurance Co.
Plaintiffs filed a declaratory judgment action against Auto-Owners after their family members were killed in an auto accident, alleging that they were entitled to more under Auto-Owners' Policy. After both sides filed motions for summary judgment, the district district court granted in part and denied in part each motion and disposed of all claims.The Eighth Circuit agreed with Auto-Owners that the district court erroneously interpreted the policy to provide $3 million in total coverage. The court explained that there is no reasonable interpretation of the policy that avoids surplusage. In this case, because sections 4.a and 4.b of the policy specify at "most" how much an insured may recover, those sections are properly read as limitations to coverage, not promises to provide a certain amount of coverage. Because there is only one reasonable interpretation of the policy and because 4.a and 4.b do not conflict with each other, the policy is not ambiguous. Accordingly, the court reversed, vacated, and remanded. View "Brazil v. Auto-Owners Insurance Co." on Justia Law
B. Thomas and Co. v. Universal Warranty Corp.
National filed suit against Universal and its parent company, Ally, for breach of contract and other claims after Universal terminated National's non-exclusive right to represent Universal's vehicle warranty program. The district court granted summary judgment in favor of Universal and dismissed National's claims.The Eighth Circuit affirmed, concluding that the termination provision and the representative-fee provision in the 2003 Universal Rep. Agreement unambiguously ended National's entitlement to post-termination representative fees. The court also rejected National's attempt to prove its entitlement to ongoing post-termination representative fees under the 2003 Universal Rep. Agreement via extrinsic evidence—Universal's continued payment of post-termination representative fees under the 2003 VehicleOne Rep. Agreement. The court further concluded that National's fraudulent concealment and negligent misrepresentation claims fail where the terms of the contracts created non-exclusive, limited grants of authority to National, as an independent contractor, that could be terminated at will by either party with sixty days' notice. Therefore, to the extent the alleged statements contradicted these terms, National could not reasonably rely on them under Nebraska law. Finally, National's claims for unjust enrichment and breach of duty of good faith and fair dealing failed because they both depend on its assertion that the district court misinterpreted the effect of termination of the 2003 Universal Rep. Agreement. View "B. Thomas and Co. v. Universal Warranty Corp." on Justia Law