Justia Insurance Law Opinion Summaries
Ernst & Haas Management Co., Inc.. v. Hiscox, Inc.
Hiscox sold Ernst a commercial crime insurance policy in 2012. In 2019, an Ernst clerk, in response to a fraudulent email, wired payments to a fraudulent actor she believed to be Ernst's founder and managing broker. In 2019, Ernst submitted a $200,000 claim under the policy. Hiscox denied Ernst’s claim, stating that Ernst’s policy did not cover the fraud because an employee had taken action to initiate the wire transfer. Two provisions of the parties’ 2012 insurance policy were disputed: the “Computer Fraud” and “Funds Transfer Fraud” provisions.The Ninth Circuit reversed the dismissal of Ernst’s suit. The district court incorrectly interpreted the Computer Fraud provision by wrongly relying on precedent with dispositively different facts and improperly relying on an embezzlement-based analysis. Here, Ernst immediately lost its funds when the funds were transferred as directed by the fraudulent email, and there was no intervening event. Taking the pleaded facts as true, Ernst suffered a loss resulting “directly” from the fraud, arguably entitling Ernst to coverage under the policy. The Funds Transfer provision also covered Ernst’s loss resulting directly from the fraudulent email instruction. The district court erred when it reasoned that Ernst’s alleged loss did not result directly from fraudulent instructions. View "Ernst & Haas Management Co., Inc.. v. Hiscox, Inc." on Justia Law
Omega Protein, Inc. v. Evanston Insurance Company
An explosion at the Omega Protein Plant in Moss Point, Mississippi killed one man and seriously injured several others. Multiple lawsuits were filed against Omega in federal district court. Colony Insurance Company filed a declaratory judgment action in state circuit court seeking a declaration that it did not cover bodily injuries arising out of the Moss Point facility explosion. Evanston Insurance Company intervened also seeking a declaration of no coverage for the same injuries: Evanston provided a $5 million excess liability policy, which provided coverage after Colony’s $1 million policy was exhausted. Because Colony settled one of the underlying personal injury cases for $1 million (the limits under its policy), Omega sought excess coverage from Evanston for the injuries that occurred at its plant. A special master was appointed, and the trial court granted Evanston’s motion for summary judgment, finding that the pollution exclusion in the insurance contract barred coverage. Omega appealed that grant of summary judgment. The Mississippi Supreme Court found that a pollution exclusion in the insurance contract was ambiguous, and should have been construed in favor of the insured, allowing coverage. Further, the Court found the question of whether coverage was triggered was governed by the language of the contract, and that Evanston failed to prove there could be no coverage under the excess liability policy. Therefore, the Supreme Court reversed the trial court’s grant of summary judgment as to all issues and remanded the case for further proceedings. View "Omega Protein, Inc. v. Evanston Insurance Company" on Justia Law
Shaw v. Farm Bureau Property & Casualty Insurance Co.
The Eighth Circuit affirmed the district court's grant of summary judgment in favor of plaintiffs in an action brought against their insurance company, seeking payment of the policy limit in full on the claim for the second of two fires that destroyed their house. Because the plain language of the Total Loss Valuation provision, the context of the rest of the policy, and Minnesota's background common-law principles all support plaintiffs' result-based interpretation, the court concluded that the second fire alone caused a total loss. Therefore, plaintiffs were entitled to the full policy limits over and above what the insurer had paid for damages caused by the first fire. View "Shaw v. Farm Bureau Property & Casualty Insurance Co." on Justia Law
Munoz v. Bulley & Andrews, LLC
Munoz sued general contractor, Bulley & Andrews, for injuries he sustained while an employee of its subcontractor, Bulley Concrete. Bulley & Andrews had paid workers’ compensation insurance premiums and benefits for the subcontractor and its employees. Each company has its own distinct federal tax identification number and files separate federal and state income tax returns. The companies have different presidents and employ different workers.The circuit court dismissed, finding that the genderal contractor was immune from the lawsuit under the exclusive remedy provisions of the Workers’ Compensation Act (820 ILCS 305/5(a). The appellate court affirmed.The Illinois Supreme Court reversed. The exclusive remedy provisions do not extend to a general contractor who is not the employee’s immediate employer. Immunity does not hinge on the payment of benefits. Bulley & Andrews had no legal obligation to provide workers’ compensation insurance for Bulley Concrete employees. The fact that Bulley Concrete was a subsidiary of Bulley & Andrews is of no import. If a parent company and its subsidiary are operated as separate entities, only the entity that was the immediate employer of the injured worker is entitled to immunity. The Act bars an employee from bringing a civil suit directly against his employer but does not limit the employee’s recovery from a third-party general contractor. View "Munoz v. Bulley & Andrews, LLC" on Justia Law
Benson v. Casa De Capri Enterprises, LLC
The Supreme Court accepted certified questions from the United States Court of Appeals for the Ninth Circuit in this arbitration dispute, holding that direct benefits estoppel cannot be invoked in a garnishment action to bind the judgment creditor to the terms of the contract because applying the doctrine in this context would contravene Arizona's statutory garnishment scheme.Specifically, the Court answered that in a garnishment action by a judgment creditor against the judgment debtor's insurer claiming that coverage is owed under an insurance policy where the judgment creditor is not proceeding on an assignment of rights, the insurer cannot invoke the doctrine of direct benefits estoppel to bind the judgment creditor to the terms of the insurance contract. View "Benson v. Casa De Capri Enterprises, LLC" on Justia Law
Payne v. State Farm Fire & Casualty Co.
The Supreme Court affirmed the judgment of the circuit court denying Plaintiffs' declaratory judgment action against State Farm seeking payment of $2 million under Florida's uninsured motorist (UM) statute, holding that Florida law did not require State Farm to provide UM coverage.State Farm denied Plaintiffs UM coverage under their personal liability umbrella insurance policy after a motorcycle accident with an uninsured vehicle in South Dakota because the policy did not include UM coverage. Thereafter, Plaintiffs, who resided in Florida at the time of the accident, filed this declaratory action. The circuit court concluded that Florida law applied to the dispute, that State Farm did not violate Florida's UM statute, and that Plaintiffs were not entitled to UM coverage. The Supreme Court affirmed, holding that Florida law did not require State Farm to provide UM coverage. View "Payne v. State Farm Fire & Casualty Co." on Justia Law
Johnson v. Johnson
The First Circuit affirmed the decision of the district court granting summary judgment for Defendants in this personal injury action, holding that the district court properly granted summary judgment as to all claims.This case arose from a car accident in Rhode Island involving Horace Johnson, the driver, and Carlton Johnson, a passenger. Carlton and his mother sued to recover damages for Carlton's injuries. The district court granted summary judgment for Defendants - Horace, his insurer, and the company from which Horace had leased the vehicle. The First Circuit ultimately certified to the Rhode Island Supreme Court a question regarding the definition of "civil action" in Rhode Island's Rejected Settlement Offer Interest Statute, R.I. Gen. Laws 27-7-2.2. After the Rhode Island Supreme Court supplied its answer, this Court affirmed the district court's judgment in its entirety, holding that the district court (1) correctly concluded that section 27-7-2.2 was inapplicable; (2) properly concluded that an enforceable settlement agreement existed; and (3) was right to grant summary judgment as to Carlton's insurer bad faith claims. View "Johnson v. Johnson" on Justia Law
Estate of Greenwood v. Montpelier US Insurance Company, et al.
William Greenwood was in the business of salvaging valuable materials from old buildings. Greenwood was insured by Mesa Underwriters Specialty Insurance Company through a policy sold by Dixie Specialty Insurance. Greenwood was later sued by adjoining building owners who complained he had damaged their property, and Mesa denied coverage based, in part, on a policy exclusion for demolition work. Greenwood later brought suit against his insurers alleging breach of contract and bad-faith denial of coverage. Greenwood averred that his business was actually “deconstruction” rather than demolition, but the trial court granted summary judgment to the insurers. Finding no reversible error in that judgment, the Mississippi Supreme Court affirmed the trial court. View "Estate of Greenwood v. Montpelier US Insurance Company, et al." on Justia Law
O’Brien’s Response Management, L.L.C. v. BP Exploration & Production, Inc.
BP retained the Responders (O’Brien’s and NRC) for nearly $2 billion to assist with the cleanup of the Deepwater Horizon oil spill. Thousands of the Responders' workers filed personal injury lawsuits against BP, which were consolidated and organized into “pleading bundles.” The B3 bundle included “all claims for personal injury and/or medical monitoring for exposure or other injury occurring after the explosion and fire of April 20, 2010.” In 2012, BP entered the “Medical Settlement” on the B3 claims with a defined settlement class. The opt-out deadline closed in October 2012. The Medical Settlement created a new type of claim for latent injuries, BackEnd Litigation Option (BELO) claims. After the settlement, plaintiffs could bring opt-out B3 claims if they did not participate in the settlement, and BELO claims if they were class members who alleged latent injuries and followed the approved process. Responders were aware of the settlement before the district court approved it but neither Responder had control over the negotiations, nor did either approve the settlement.In 2017, BP sought indemnification for 2,000 BELO claims by employees of the Responders. The Fifth Circuit held that BP was an additional insured up to the minimum amount required by its contract with O’Brien’s; the insurance policies maintained by O’Brien’s cannot be combined to satisfy the minimum amount. O’Brien’s is not required to indemnify BP because BP materially breached its indemnification provision with respect to the BELO claims. View "O'Brien's Response Management, L.L.C. v. BP Exploration & Production, Inc." on Justia Law
Jordan v. Evanston Insurance Co.
Braylon Jordan swallowed small magnets when he was two years old. The magnets shredded his internal organs and necessitated surgery to remove most of his intestines, leaving him severely disabled. At issue in this appeal is whether there is insurance coverage for M&O's defense and for a partial settlement of the Jordans' claims.The Fifth Circuit concluded that, because no claim arising from Braylon Jordan's injuries was timely made against M&O during Evanston's policy period, Evanston is not obligated to provide M&O costs of its defense or coverage for the partial settlement between the Jordans and its then-CEO Craig Zucker. Accordingly, the court affirmed the district court's judgment that Evanston was not obligated to indemnify Zucker. However, the court reversed the district court's denial of Evanston's motion for summary judgment and rendered judgment in Evanston's favor. View "Jordan v. Evanston Insurance Co." on Justia Law