Justia Insurance Law Opinion Summaries

A roofing contractor was sued in Illinois state court by the estates of two individuals who died when a building façade collapsed. The estates alleged that the contractor had negligently performed repairs on the building after it was damaged by a windstorm in August 2020. The repairs were completed by December 2020, and the fatal collapse occurred in April 2022. The contractor sought defense and indemnification from its commercial general liability insurer under a policy that began on February 8, 2022. The insurance policy included a “Prior Work Exclusion” that barred coverage for claims arising from work completed before the policy’s inception date.The insurer filed suit in the United States District Court for the Northern District of Illinois seeking a declaratory judgment that it had no duty to defend or indemnify the contractor in the underlying state lawsuit. The contractor counterclaimed for breach of contract and argued that the exclusion rendered coverage illusory. Both parties moved for judgment on the pleadings. The district court granted judgment to the insurer, holding that the exclusion applied because the work at issue was completed before the policy period and that the exclusion did not render the coverage illusory, as some coverage for completed operations remained.On appeal, the United States Court of Appeals for the Seventh Circuit affirmed the district court’s judgment. The court held that, under Illinois law, the Prior Work Exclusion clearly barred coverage for claims arising from work completed prior to February 8, 2022. The court further held that the exclusion did not make completed-operations coverage illusory because the policy still provided coverage for work completed during the policy period. The judgment in favor of the insurer was affirmed. View "Nautilus Insurance Company v Bee Quality Inc." on Justia Law

The case concerns an Alabama resident who was injured by an uninsured motorist while riding his motorcycle. At the time, he held two separate insurance policies: a standard auto insurance policy from GEICO covering his motorcycle, and a specialty policy from Essentia Insurance Company covering his antique truck. The GEICO policy provided uninsured motorist coverage as required by Alabama law, and the insured collected $25,000 under it. Essentia’s policy, which covered only the antique vehicle, excluded uninsured motorist coverage for accidents involving vehicles other than the covered antique truck. The policy also required the insured to maintain a separate insurance policy that satisfied Alabama’s minimum coverage requirements.After Essentia denied his claim for uninsured motorist coverage, the insured brought suit in the United States District Court for the Middle District of Alabama. Essentia moved for summary judgment, arguing that its specialty policy’s coverage exclusion was valid because the insured had other coverage meeting Alabama’s requirements. The district court denied Essentia’s motion in part, holding Essentia liable for uninsured motorist benefits, but limited the liability to the statutory minimum of $25,000, and entered judgment accordingly. Essentia appealed.The United States Court of Appeals for the Eleventh Circuit reviewed the district court’s summary judgment de novo and reversed. The Eleventh Circuit held that Alabama law permits insurers to fulfill mandatory coverage requirements through multiple policies, and that Essentia’s exclusion is enforceable so long as the insured has other coverage meeting statutory requirements. The court remanded the case for further proceedings consistent with its opinion. View "Clayton v. Essentia Insurance Company" on Justia Law

A commercial truck driver was injured in an accident while operating a tractor-trailer in Missouri. The tractor was registered in Michigan and titled to a limited liability company (LLC) solely owned by the plaintiff, while the trailer was owned by a different LLC. Under a lease agreement, the plaintiff’s LLC leased the tractor to the other LLC, and the plaintiff exclusively operated the tractor. Insurance coverage for the tractor was provided by a policy that excluded personal protection insurance (PIP) when the vehicle was used to transport cargo, and the other LLC’s insurance did not cover PIP for the tractor. The plaintiff, who lived with his parents in Michigan, was not a named insured on his father’s auto policy, nor was the tractor listed as a covered vehicle.After the accident, the plaintiff sued several insurers, arguing that one of them should provide PIP benefits under Michigan’s no-fault act. The Wayne Circuit Court denied summary disposition to one insurer and dismissed others from the case. On appeal, the Michigan Court of Appeals affirmed, finding insufficient evidence to classify the plaintiff as the tractor’s owner or registrant. It ruled that the plaintiff’s claim for PIP benefits was not barred and that his father’s insurer was the highest priority insurer.The Michigan Supreme Court, in reviewing the case, held that the plaintiff was an “owner” of the tractor under MCL 500.3101(3)(l)(i) because he had the right to use the vehicle in a manner consistent with ownership for more than 30 days. The Court found that his exclusive, regular use and control of the tractor, as the sole member and agent of the LLC, satisfied the statutory definition of ownership. Because he failed to maintain the required insurance, the plaintiff was excluded from recovering PIP benefits under MCL 500.3113. The Supreme Court reversed the Court of Appeals and remanded the case to the trial court. View "Abdulla v. Progressive Southeastern Insurance Company" on Justia Law

James Ropicky and Rebecca Leichtfuss discovered significant water damage in their home after a storm in 2018. They held a homeowner’s insurance policy with Cincinnati Insurance Company, which they believed should cover the loss. Cincinnati investigated and determined that rainwater had entered the home over the years through a construction defect—a gap present since the house was built. The insurer also found that this persistent water intrusion allowed fungi to grow, contributing to the damage. Citing policy exclusions for construction defects and fungi, Cincinnati made partial payments to Ropicky, including the policy’s limit for fungi coverage, but denied the full claim.The Waukesha County Circuit Court granted Cincinnati's motion for summary judgment, concluding the insurer had fulfilled its policy obligations. However, the Wisconsin Court of Appeals reversed, finding that factual disputes remained regarding the cause of the damage and the interpretation of policy provisions, including the construction defect exclusion and the fungi exclusion. The appellate court also provided its own reading of the policy language, leading to further debate about the correct interpretation.The Supreme Court of Wisconsin reviewed the case to clarify how the insurance policy should be interpreted and whether summary judgment was appropriate. The court held that, under the policy, losses caused by rainwater constitute an ensuing loss and are therefore covered despite the construction defect exclusion. It further ruled that the fungi additional coverage provision is an exception to the fungi exclusion, not a separate grant of coverage. The court concluded that genuine disputes of material fact exist regarding the existence and extent of construction defects and fungi damage, precluding summary judgment. The court affirmed the appellate decision reversing summary judgment and remanded the case for further proceedings, including reinstatement of the bad faith claim. View "Cincinnati Insurance Company v. Ropicky" on Justia Law

The dispute centers on two decisions by the Massachusetts Commissioner of Insurance regarding proposed statewide workers’ compensation insurance rates. The Workers’ Compensation Rating and Inspection Bureau of Massachusetts, the sole licensed rating organization for such insurance in the state, submitted rate filings for July 1, 2024, proposing a 7.6 percent decrease, and for July 1, 2025, proposing a 7.1 percent increase. The Commissioner disapproved the 2024 proposal, instead ordering a 14.6 percent decrease, and rejected the 2025 proposal, leaving the 2024 rates unchanged. Both decisions followed administrative hearings, with participation from the State Rating Bureau and the Attorney General.After the Commissioner’s 2024 decision, the Bureau sought review in the Supreme Judicial Court for Suffolk County, which was reserved and reported to the full Supreme Judicial Court of Massachusetts. The 2025 decision was similarly reviewed and consolidated with the earlier case. The Bureau’s main challenges were to the Commissioner’s use of a five-year data period for estimating indemnity paid losses (instead of the two years used historically), the methodology for calculating underwriting profit, and a change in data sources for a particular business classification (class code 9033).The Supreme Judicial Court of Massachusetts held that the Commissioner had reasonable support for disapproving the Bureau’s proposed rates, particularly due to the need to account for anomalous data from the COVID-19 pandemic. However, the Court found that the Commissioner failed to provide a reasoned explanation for ordering a specific 14.6 percent rate decrease in 2024 and for the methodology change for class code 9033. The Court affirmed the finding that the then-existing rates were excessive but remanded the case for the Commissioner to provide further explanation for both the rate decrease and the class code methodology. View "The Workers' Compensation Rating and Inspection Bureau of Massachusetts v. Commissioner of Insurance" on Justia Law

A young man was seriously injured in a car accident while riding as a passenger. His expenses exceeded the amount covered by the at-fault driver’s insurance. He held an underinsured motorist (UIM) policy through State Farm on his own car, and his family (parents and sister) held four additional State Farm policies insuring other household vehicles, all with similar UIM coverage. State Farm paid him the UIM limit under his personal policy and under one of the family’s household policies, but denied his request to collect UIM benefits (“stack”) from the remaining three household policies. State Farm relied on an anti-stacking provision in all policies, which limited recoveries to one policy “purchased by one insured.” The company argued that his parents, as joint purchasers, counted as “one insured,” so stacking across their jointly purchased household policies was not permitted.The Superior Court in Maricopa County granted summary judgment for State Farm, finding the anti-stacking language valid and applicable. The Arizona Court of Appeals affirmed the result but reasoned that the young man’s parents, although married, were two insureds, and the anti-stacking provision still applied because they jointly purchased the policies. The appeals court also rejected the argument that the sister was an additional purchaser due to her reimbursing a parent for premium payments.The Supreme Court of the State of Arizona reviewed the statutory interpretation at issue. It held that, under Arizona’s UM/UIM statute, “purchased by one insured” refers to the named insured or insureds who jointly procure coverage, regardless of who pays premiums or community property considerations. When multiple named insureds (such as spouses) act together to purchase policies, they are treated as “one insured,” and anti-stacking provisions may limit recoveries accordingly. The Supreme Court vacated part of the appellate decision and affirmed summary judgment for State Farm. View "STATE FARM v BALZAN" on Justia Law

After being injured in a car accident caused by Andrew Clark, who was driving a vehicle owned by his mother Tracy Clark, Nadia Marin sued Andrew for negligence and Tracy for negligent entrustment. Marin suffered multiple injuries and eventually was diagnosed with complex regional pain syndrome after undergoing extensive medical treatment and surgeries. Before trial, Marin made a $2 million offer of judgment, which the Clarks did not accept. At trial, the Clarks conceded liability, and the jury was left to determine damages, ultimately awarding Marin over $2 million.In the Eighth Judicial District Court, the Clarks challenged the outcome on several grounds. They argued that the court did not allocate enough trial time for their defense, improperly allowed Marin to withdraw deemed admissions, and issued an unsupported jury instruction. The Clarks also moved for a new trial on the basis of alleged attorney misconduct. The district court denied their motion for a new trial, upheld the jury verdict, and awarded Marin expert and attorney fees, including the full amount of her contingency fee agreement. The court also granted Marin’s motion to assign the Clarks’ claims against their insurer to her in execution of the judgment.The Supreme Court of Nevada reviewed the case and affirmed the trial court’s judgment, denial of a new trial, award of expert fees, and the assignment of the Clarks’ claims against their insurer. The court concluded that the Clarks had a meaningful opportunity to present their defense and that the district court had not abused its discretion regarding the deemed admissions, jury instructions, or expert fee award. However, the Supreme Court reversed the attorney fee award, holding that post-offer attorney fees under NRCP 68 must be limited to work performed after the offer of judgment, not the entire contingency fee. The court remanded for reconsideration of attorney fees consistent with this clarification and overruled prior precedent to the extent it was inconsistent. View "Clark v. Marin" on Justia Law

In this case, a trust was established by Frank Garrett, Jr. in South Dakota in 2006, naming his wife as the beneficiary and a South Dakota bank as trustee. The trust applied for and obtained a $10 million life insurance policy on Frank's life, funded by a nonrecourse premium finance loan. After several years, the policy was surrendered to the lender, which then sold the policy in the secondary market. Eventually, Viva Capital Trust acquired the policy, paid the premiums, and received the death benefit after Frank died in 2019. Frank’s estate, administered by his son, challenged the transaction, claiming it was part of a stranger-originated life insurance (STOLI) scheme, violating South Dakota’s insurable interest statute and public policy against wagering on human life.The Circuit Court of the Second Judicial Circuit, Minnehaha County, reviewed cross-motions for summary judgment. The court granted summary judgment to Viva, finding that the trust was validly established, the insurance policy was properly issued and delivered to the trust, and the policy complied with South Dakota insurable interest requirements. The court also determined that the estate’s counterclaims, challenging the trust’s validity and seeking recovery of death benefits, were barred by the statute of repose, which prohibits such actions more than one year after the settlor’s death. The court awarded litigation costs to Viva.On appeal, the Supreme Court of the State of South Dakota affirmed the circuit court’s grant of summary judgment to Viva, holding that the estate’s counterclaims regarding the trust’s validity were barred by the statute of repose, and that the insurance policy complied with South Dakota’s insurable interest statutes. The Supreme Court also found no error in denying summary judgment to the estate. However, it reversed in part the award of costs and remanded for further proceedings to ensure only authorized costs were included. View "Viva Capital Trust V. Garrett" on Justia Law

A food manufacturing company purchased commercial general liability insurance policies from an insurer, with each policy providing coverage against bodily injuries from bacterial contamination. The policies defined “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions,” and required the company to pay a $250,000 retained limit per occurrence before coverage would be triggered. In 2022, the company recalled certain peanut butter products due to potential salmonella contamination, resulting in thousands of consumer claims for bodily injury and property damage. The insurer denied coverage, asserting that each claimant’s exposure counted as a separate occurrence, but aggregated these exposures by production “lot,” meaning the company would need to pay the retained limit for each lot before the insurer’s obligation began.The United States District Court for the Northern District of Ohio reviewed cross-motions for summary judgment. The district court sided with the company, finding that the salmonella contamination constituted a single occurrence and deeming the Lot Endorsement ambiguous. The court granted summary judgment for the company and denied the insurer’s motion, then certified its order for interlocutory appeal and stayed the case.The United States Court of Appeals for the Sixth Circuit reviewed the district court’s decision de novo. The court held that, under the insurance policies’ definition of occurrence and Ohio’s “cause” test, the salmonella contamination was the single occurrence. It also determined that the Lot Endorsement did not clearly create multiple occurrences and was ambiguous, requiring interpretation in favor of the insured. The court affirmed the district court’s judgment in favor of the company, holding that only one retained limit applied for all claims arising from the salmonella contamination. View "J.M. Smucker Co. v. Ace American Insurance Co." on Justia Law

A carpenter who managed his own construction business was involved in a multi-vehicle accident in September 2013, while driving a car owned by another individual. The accident, caused by another driver, resulted in significant injuries and financial losses for the plaintiff, who claimed over $75,000 in medical expenses and more than $250,000 in lost income. The plaintiff had a business insurance policy with Main Street America Assurance Company (MSAA) during the relevant period. The driver and owner of the vehicle that struck the plaintiff were insured by GEICO General Insurance Company.Previously, the plaintiff sued the at-fault driver and owner (the Mathieus) in Kent County Superior Court and later settled that case. In the present suit, the plaintiff brought claims against both GEICO and MSAA for breach of contract, breach of the implied covenant of good faith and fair dealing, and statutory bad faith refusal to settle. Both defendants moved to sever the bad faith and implied covenant claims and to stay discovery on those claims, which the Superior Court granted. The court also denied the plaintiff’s motion to compel additional document production from GEICO, pending resolution of summary judgment motions. Ultimately, the Superior Court granted summary judgment for both defendants.On appeal, the Supreme Court of Rhode Island affirmed the Superior Court’s judgments. The Court held that MSAA’s business insurance policy expressly excluded coverage for injuries arising from automobile use, so the plaintiff’s contract and related claims failed as a matter of law. As to GEICO, the Court found that Rhode Island law prohibits direct actions against an insurer under these circumstances, and the plaintiff had no contractual or third-party rights under the GEICO policy. The Court also concluded that the issues related to severance and discovery were moot given the disposition of the contract claims. View "Menge v. GEICO General Insurance Company" on Justia Law