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The Eighth Circuit affirmed the district court's grant of summary judgment deferring to an insurance policy interpretation made by the FCIC and a determination regarding the FCIC's authority made by the RMA. The court held that the clear language of the Federal Crop Insurance Act indicated that Congress intended the Corporation to have extensive and broad authority; given the FCIA's broad grant of authority to the Corporation, and the specific authority over the provisions of insurance and insurance contracts found in 5 U.S.C. 1505 and 1506, substantial deference was given to the FCIC's interpretation of the special provision; and, considering the plain language of the insurance contract and the deference given to the RMA in its role of supervisor of the FCIC, the RMA's determination that the FCIC was required to provide an interpretation of the special provision to the arbitrating parties was not clearly erroneous. View "Bottoms Farm Partnership v. Perdue" on Justia Law

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ATC, a Michigan manufacturer, outsources orders, including to YiFeng, a Chinese company. ATC pays vendors in four separate payments, based on manufacturing progress. YiFeng emails ATC invoices. On March 18, 2015, ATC’s vice-president, Gizinski, emailed YiFeng employee Chen requesting all outstanding invoices. An unidentified third party intercepted this email, and impersonating Chen, began corresponding with Gizinski. On March 27, the impersonator emailed Gizinski that, due to an audit, ATC should wire its payments to a different account from usual. YiFeng had previously, legitimately informed ATC it had changed its banking details; ATC had no process for verifying the information. Gizinski wired the money to the new account. On April 3, the impersonator emailed Gizinski, stating that “due to some new bank rules,” the previous transfer was not credited to its account so it would return the payment. The impersonator requested that Gizinski wire the money to a different bank account. Gizinski wired the money to this new account. The impersonator ran this scam twice more. Gizinski wired additional payments of $1575 and $482,640.41. When the real YiFeng demanded payment, ATC paid YiFeng approximately 50% of the outstanding debt; the remaining 50% was contingent on ATC’s insurance claim. ATC sought recovery from Travelers, under the Policy’s “Computer Fraud” provision. Travelers denied the claim. ATC sued for breach of contract. The court granted Travelers summary judgment. The Sixth Circuit reversed. Computer fraud “directly caused” ATC’s “direct loss” and no exclusion applied. View "American Tooling Center, Inc. v. Travelers Casualty & Surety Co." on Justia Law

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Millard Gutter Company’s voluntary dismissal of its civil action against American Family Insurance Company had no effect on the district court’s authority to make further rulings, but the court erred in taxing technology expenses and jury expenses as costs. After Millard Gutter filed a voluntary dismissal without prejudice, the district court entered a judgment of dismissal and taxed costs to Millard Gutter, including expenses incurred by American Family in setting up courtroom technology and expenses incurred by the court in compensation prospective jurors. On appeal, Millard Gutter argued that once it filed a voluntary dismissal, the district court lacked authority to make any further rulings and, alternatively, that the district court erred in taxing technology expenses and jury expenses as costs. The Supreme Court affirmed in part and in part reversed, holding (1) because Millard Gutter had no statutory right to voluntary dismissal at the time it filed its dismissal, the district court’s authority to make further rulings was unaffected by that filing; and (2) the district court abused its discretion in taxing such expenses as costs. View "Millard Gutter Co. v. American Family Insurance Co." on Justia Law

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Cehovic’s employer offered its employees an insurance benefit plan through ReliaStar. Cehovic had two ReliaStar policies: a basic policy with a death benefit of $263,000, and a supplemental policy with a death benefit of $788,000. Both listed his sister, Cehovic‐Dixneuf, as the sole and primary beneficiary. After Cehovic died, his ex‐wife claimed that she and the child she had with Cehovic were entitled to the death benefits from the supplemental policy. The district court granted summary judgment for Cehovic‐Dixneuf. The Seventh Circuit affirmed. The Employee Retirement Income Security Act (ERISA) requires administrators of employee benefit plans to comply with the documents that control the plans, 29 U.S.C. 1104(a)(1)(D). For life insurance policies, that means death benefits are paid to the beneficiary designated in the policy, notwithstanding equitable arguments or claims that others might assert. The supplemental policy is governed by ERISA even though Cehovic paid all of its premiums without any direct subsidy from the employer. Cehovic’s employer performed all administrative functions associated with the maintenance of the policy. The plan description made clear that the supplemental life insurance policy would remain part of the employer’s group policy, but could be converted to an individual policy in certain situations. Nothing in the record shows that Cehovic executed a conversion. View "Cehovic-Dixneuf v. Wong" on Justia Law

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In this insurance dispute brought by Espenschied Transport Corp., the Supreme Court affirmed the judgment of the district court granting summary judgment to Fleetwood Services, Inc. and Wilshire Insurance Company. Espenschied used Fleetwood to procure insurance. In 2003, Fleetwood obtained an insurance policy from Wilshire meant to cover all of Espenschied’s vehicles and trailers, but Fleetwood gave Wilshire an incorrect list not containing all of Espenschied’s insured vehicles. Therefore, Espenschied believed that certain equipment was covered by the insurance policy when, in fact, it was not. One of Espenschied’s trailers that was not on the policy schedule was involved in a deadly accident. In the resulting litigation, Wilshire refused to defend Espenschied, causing Espenschied to incur a consent judgment and attorney fees. Espenschied subsequently sued Fleetwood and Wilshire. In granting summary judgment, the district court concluded (1) Espenschied had suffered no damages; and (2) the trailer was not on Wilshire’s insurance policy and Fleetwood was not Wilshire’s agent, and Wilshire could have no vicarious liability because Fleetwood had no liability. The Supreme Court affirmed, holding (1) Espenschied was unable to raise a dispute of material fact as to damages; and (2) Espenschied failed to argue why Wilshire should have vicarious liability when Fleetwood had no liability. View "Espensched Transport Corp. v. Fleetwood Services, Inc." on Justia Law

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The United States District Court for the District of South Carolina certified a question of law to the South Carolina Supreme Court. Jack Poole and his wife, Jennifer, were riding in a vehicle owned by Doris Knight, Jennifer's mother, when a drunk driver crossed the center line and struck them. The Pooles were both seriously injured in the collision; although Jack survived, Jennifer's catastrophic injuries resulted in her death several days later. In contrast with the substantial bodily injuries, the Pooles sustained minimal property damage because they did not own the vehicle. The at-fault driver's liability carrier tendered its policy limits. Farm Bureau, the insurer on Knight's vehicle, then tendered its underinsured motorist (UIM) policy limits for bodily injury to Jack individually and to Jack as the representative of Jennifer's estate. The Pooles then sought recovery from their own insurer, Government Employees Insurance Company (GEICO), which provided them a split limits UIM policy with bodily injury coverage of up to $100,000 per person and $50,000 for property damage. GEICO tendered the UIM bodily injury limits of $100,000 each for Jack and Jennifer's estate. The Pooles requested another $50,000 from the UIM policy's property damage coverage in anticipation of a large punitive damages award, but GEICO refused. GEICO then initiated a declaratory judgment action with the federal district court to establish that it was not liable to pay any amounts for punitive damages under the property damage provision of the UIM policy because the source of the Pooles' UIM damages was traceable only to bodily injury. The federal court asked the South Carolina Supreme Court whether, under South Carolina law, when an insured seeks coverage under an automobile insurance policy, must punitive damages be apportioned pro rata between those sustained for bodily injury and those sustained for property damage where the insurance policy is a split limits policy? The Supreme Court answered the question, "No." View "Government Employees Insurance Company v. Poole" on Justia Law

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The Supreme Court affirmed the circuit court’s grant of Progressive Northern Insurance Company’s renewed motion for summary judgment on Nicole Harvieux’s claims for bad faith and barratry. Harvieux filed an action under her uninsured motorist insurance coverage (UM) with Progressive for injuries she suffered in a car accident and also filed claims of bad faith and barratry against Progressive. The UM claim was bifurcated from the other claims. Following a trial, the circuit court entered judgment on the UM claim. Thereafter, the circuit court granted Progressive’s motion for summary judgment on the bad faith and barratry claims. The Supreme Court affirmed, holding that the circuit court properly granted summary judgment on the bad faith and barratry claims and did not err in denying Harvieux’s application for taxation of costs. View "Harvieux v. Progressive Northern Insurance Co." on Justia Law

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The circuit court erroneously declared the law when it concluded that an employee’s violation of employer’s rules regarding vehicle operation were sufficient to preclude coverage under the omnibus clause of the employer’s insurance policy. James Campbell, an employee of BNSF Railway Company, rear-ended Ricky Lee Griffitts while driving a BNSF company vehicle. Campbell was intoxicated at the time of the collision. Numerous lawsuits ensued. This appeal was from an equitable garnishment action that Griffitts filed against BNSF and its insurer, Old Republic (collectively, Respondents), to collect on an unsatisfied judgment entered against Campbell in an earlier action. In this action, Griffitts claimed that Campbell was a permissive user under the omnibus clause of the insurance policy Old Republic issued to BNSF. The circuit court concluded that Campbell did not have permission to use the company vehicle at the time of the accident due to his violation of BNSF’s policy on the use of alcohol and drugs, and therefore, Campbell was not a permissive user under the omnibus clause. The Supreme Court reversed, holding that Campbell had permission to use the company vehicle at the time of the accident and that it did not matter, for purposes of insurance coverage, that Campbell was drunk. View "Griffitts v. Old Republic Insurance Co." on Justia Law

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The Eighth Circuit affirmed the district court's grant of summary judgment to State Farm on plaintiff's bad faith tort claim and on an evidentiary ruling on the underinsured motorist coverage claim. The court held that the district court applied the proper legal standard of Arkansas substantive law, and that there was no genuine issue of material fact that State Farm's conduct did not constitute bad faith. The court also held that the district court did not err in excluding plaintiff's proposed evidence regarding State Farm's practice of denying claims as that evidence had no bearing on the amount of damages on plaintiff's underinsured motorist claim. View "Sims v. State Farm Mutual Automobile Insurance Co." on Justia Law

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This appeal involved questions about the insurance coverage available to defendant Honeywell International, Inc. (Honeywell) for thousands of bodily-injury claims premised on exposure to brake and clutch pads (friction products) containing asbestos. The New Jersey Supreme Court granted certification to address two issues: (1) whether the law of New Jersey or Michigan (the headquarters location of Honeywell’s predecessor when the disputed excess insurance policies were issued) should control in the allocation of insurance liability among insurers for nationwide products-liability claims; and (2) whether it was error not to require the policyholder, Honeywell, to contribute in the allocation of insurance liability based on the time after which the relevant coverage became unavailable in the marketplace (that is, since 1987). The Supreme Court determined New Jersey law on the allocation of liability among insurers applied in this matter, and the Court set forth the pertinent choice-of-law principles to resolve this dispute over insurance coverage for numerous products-liability claims. Concerning the second question, on these facts, the Court also affirmed the determination to follow the unavailability exception to the continuous-trigger method of allocation set forth in Owens-Illinois, Inc. v. United Ins. Co., 138 N.J. 437 (1994). View "Continental Insurance Company v. Honeywell International, Inc." on Justia Law