In a case arising from a fee dispute about litigation expenses that an arbitration panel found attorneys had improperly allocated to their clients, the Fifth Circuit affirmed the district court's judgment that there was no coverage under the terms of the excess policy. The court applied Texas law and held that Lexington, the excess carrier, was not liable for any portion of the judgment and for any attorneys' fees as defense costs expended in the underlying litigation. In this case, the excess policy's provisions expressly stated that there was no coverage for the type of breach of contract found by the arbitrators in the underlying action. Furthermore, the definition of "Loss" did not cover the remedy that the arbitration panel imposed as a consequence of the breach of fiduciary duty. View "John M. O'Quinn, P.C. v. Lexington Insurance Co." on Justia Law

American Family filed a declaratory judgment action against Walter and Lisa Krop, contending their homeowner's insurance policy did not cover a tort action pending against their son. The Krops filed a counterclaim against American Family and a third-party claim against Andrew Varga, an insurance agent for American Family. The appellate court reversed the circuit court's dismissal of the Krops' claims as untimely. The Supreme Court of Illinois held that when customers have the opportunity to read their insurance policy and can reasonably be expected to understand its terms, the cause of action for negligent failure to procure insurance accrues as soon as the customers receive the policy. In this case, the complaint was filed over two years after the Krops received their policy and the complaint failed to plead facts that would support any recognized exception to the expectation that customers will read the policy and understand its terms. Therefore, their claim was untimely and the court reversed the appellate court's decision. View "American Family Mutual Insurance Co. v. Krop" on Justia Law

The Court of Appeal reversed the trial court's grant of summary judgment for Farmers in an action filed by the sons of the insured after Farmers denied them benefits under the insured's policy. The court held that the notice of prejudice rule applied to the waiver of deduction rider and Farmers could not make a showing of prejudice from the delayed notice of the insured's disability. The court held that, because Farmers did not assert that it was prejudiced and there was no dispute that the insured was totally disabled within the meaning of the rider, she was entitled to the benefit promised under the rider: to have the deductions charged to her account waived. Furthermore, because the deductions should have been waived and Farmers' denial of coverage was based solely on those deductions, Farmers failed to establish that, as a matter of law, the insured's policy had lapsed or that it was justified in denying her beneficiaries' claim under the policy. The court held that Farmers' arguments to the contrary were unavailing. View "Lat v. Farmers New World Life Ins. Co." on Justia Law

In 2013, while the disputed insurance policy was in effect, several guests at the Siloam Springs Hotel allegedly sustained injuries due to carbon monoxide poisoning stemming from an indoor-swimming-pool heater that had recently been serviced. The hotel sought coverage under the policy, and the insurer denied coverage based on the exclusion for “qualities or characteristics of indoor air.” This case made it back to the Tenth Circuit following a remand in which the district court was directed to determine whether there was complete diversity of citizenship between the parties, which was an essential jurisdictional issue that needed to be decided before it could properly address the merits of this case. On remand, the district court received evidence on this question and determined that diversity jurisdiction was indeed proper. The district court also certified a policy question to the Oklahoma Supreme Court, which held that the exclusion at issue in this case - however interpreted -should not be voided based on public policy concerns. Following the Oklahoma Supreme Court’s resolution of the certified question, the insurer asked the district court to administratively close the case, arguing that “no further activity in this case . . . remains necessary to render the [district c]ourt’s adjudication of the coverage issue which the case concerns a final judgment.” The hotel asked the court to reopen the case to either reconsider its previous order or to enter a final, appealable judgment against the hotel. The district court held that the case had already been administratively closed and it had no need to reopen the case, since “both its finding of diversity jurisdiction and the Oklahoma Supreme Court’s answer to the certified question did not alter in any way” the court’s summary judgment decision on the merits of the coverage dispute. The hotel appealed. The Tenth Circuit determined the hotel was entitled to coverage under the policy at issue, and reversed the district court's denial. The case was remanded for further proceedings on the question of damages. View "Siloam Springs Hotel v. Century Surety Company" on Justia Law

The DC Circuit vacated its previous opinion and substituted the following opinion. Homeowners filed suit against their insurance company for breach of contract when the company refused to cover flood damage to homeowners' residence. Homeowners also filed suit against their cleaning-and-restoration company for failing to adequately remedy the damage and prevent mold. The district court granted summary judgment for the insurance company and transferred the remaining claim to the district court based on lack of personal jurisdiction. The DC Circuit held that it lacked jurisdiction to review the transfer order. The court affirmed the grant of summary judgment, holding that homeowners' claim against the insurance company failed under Delaware law where there was no dispute that homeowners were away from their beach home for over 72 hours, which under the clear terms of the policy means the flooding occurred while the house was "unoccupied." View "Katopothis v. Windsor-Mount Joy Mutual Insurance Co." on Justia Law

Plaintiff Mead Vest contended defendant Resolute FP US Inc. breached its fiduciary-duty obligations set forth in the Employee Retiree Income Security Act when it failed to notify her late husband of his right to convert a group life insurance policy to an individual life insurance policy after he ceased employment and began drawing long-term disability benefits. The district court ruled plaintiff did not adequately plead a breach-of-fiduciary-duty cause of action. After review, the Sixth Circuit agreed and affirmed. View "Vest v. Resolute FP US Inc." on Justia Law

At issue was whether a general contractor’s commercial general liability (CGL) policy that is nearly identical to the one considered in Westfield Insurance Co. v. Custom Agri Systems, Inc., 979 N.E.2d 269 (Ohio 2012), covers claims for property damage caused by a subcontractor’s faulty work. The Supreme Court resolved the issue by applying the holding of Custom Agri which provides that property damage caused by a subcontractor’s faulty work is not an “occurrence” under a CGL policy because it cannot be deemed fortuitous. The Court then reversed the judgment of the court of appeals, which reversed the trial court’s conclusion that the insurer in this case had no duty to defend the CGL policy owner, a general contractor. The Supreme Court held that the insurer was not required to defend the insured against suit by the property owner or indemnify the insured against any damage caused by the insured’s contractor. View "Ohio Northern University v. Charles Construction Services, Inc." on Justia Law

Borsheim Builders Supply, Inc., doing business as Borsheim Crane Service, ("Borsheim") appealed a declaratory judgment granting summary judgment to Mid-Continent Casualty Company and dismissing Borsheim's claims for coverage. After review of the facts presented, the North Dakota Supreme Court concluded the district court erred in concluding Construction Services, Inc. ("CSI"), and Whiting Oil and Gas Corporation were not insureds entitled to defense and indemnity under the "additional insured" endorsement in the commercial general liability ("CGL") policy Mid-Continent issued to Borsheim. Furthermore, the Court concluded the court erred in holding Mid-Continent had no duty to defend or indemnify Borsheim, CSI, and Whiting under the CGL policy for the underlying bodily injury lawsuit. View "Borsheim Builders Supply, Inc. v. Manger Insurance, Inc." on Justia Law

In August 2013, the trial court entered a judgment against respondents Janet and Richard Buhler following a traffic accident in which appellant Mark Jones was seriously injured. By stipulation, the judgment awarded Mark $1,350,000 and his wife Melanie Jones $150,000 for loss of consortium. The Buhlers had an automobile insurance policy with IDS that provided coverage of $250,000 for bodily injury for each person and $500,000 for each occurrence. The issue this case presented for the Court of Appeal's consideration implicated the consortium claim: when a wife sues for loss of consortium after her husband is seriously injured in an automobile accident that is the defendant’s fault, was her claim subject to the same per person limit of the defendant’s insurance policy as her husband’s claim for bodily injury? The Court determined the language of the policy at issue here made clear that the damages for bodily injury include loss of consortium. Further, the policy language provided that so long as only one person suffered bodily injury, the per person limit applied. Although the plaintiffs here argued the language “to one person” modified “the maximum we will pay” rather than “bodily injury,” the Court disagreed. The Court affirmed the judgment in favor of defendant IDS Property Casualty Insurance Company (IDS). View "Jones v. IDS Property Casualty Ins. Co." on Justia Law

The Supreme Court reversed the decision of the Court of Appeals affirming the judgment of the trial court ruling in favor of Peters Farms, LLC, which sued Ikerd Mining, LLC and Ikerd’s insurer, American Mining Insurance Company (AMIC), holding that Ikerd’s unauthorized removal of coal from Peters’ property was not an accident and therefore not covered under the insurance policy. The trial court concluded that Ikerd’s removal of coal from Peters’ property were “accidents,” which meant each “mistake” was an “occurrence” that unintentionally caused “property damage” as defined by Ikerd’s commercial general liability (CGL) policy. Therefore, the court concluded that the mineral removal was covered under the CGL policy. The Supreme Court disagreed, holding that the intentional removal and conversion of coal is not an “accident” constituting an “occurrence,” regardless of whether the trespass was willful or innocent. View "American Mining Insurance Co. v. Peters Farms, LLC" on Justia Law