Justia Insurance Law Opinion Summaries

Mark Cookson purchased two homeowner's insurance policies from Liberty Mutual, one to cover his primary residence in West Newfield and another to cover property in Acton, where he was constructing a house. Cookson would drive his tractor along public roads between the properties. Cookson's tractor was subsequently destroyed by fire. Cookson filed a claim for loss of the tractor, which Liberty Mutual denied based on a personal property exclusion in both policies. Cookson filed a complaint seeking, in part, a declaratory judgment that the Liberty Mutual policies provided coverage for his tractor. The superior court granted summary judgment in favor of Liberty Mutual, concluding that Cookson's policies excluded the tractor from loss coverage. The Supreme Court affirmed, holding (1) Cookson's tractor was not the type of vehicle that fell within the limited exception for "vehicles not subject to motor vehicle registration" to the otherwise broad personal property exclusion of all "motor vehicles or all other motorized land conveyances," and (2) Cookson's tractor was not the type a homeowner would commonly purchase and employ simply to service his or her residence.

This case concerned an arbitration provision that allowed each party to appoint one arbitrator to a panel, subject to certain requirements. At issue was whether Americo wavied its objection to the removal of the arbitrator it selected. The underlying dispute concerned the financing mechanism for Americo's purchase of several insurance companies from Robert Myer. Pursuant to the financing agreement, Americo and Myer submitted their dispute to arbitration under American Arbitration Association (AAA) rules. The arbitrators found in favor of Myer, and Americo filed a motion to vacate the award. The trial court granted the motion, holding that Americo was entitled to any arbitrator that met the requirements set forth in the financing agreement and that the arbitrator removed by the AAA met those requirements. The court of appeals reversed, holding that Americo had waived these arguments by not presenting them to the AAA. Because the record demonstrated otherwise, the court rejected the court of appeals' judgment and remanded the case to that court for further proceedings.

Appellant Jacob Ennen was seriously injured while he was a passenger in Gordon Shanigan's car. Shanigan's insurer, Integon Indemnity Corporation (Integon), paid $50,000 to cover Shanigan's possible liability to Appellant. Under Alaska insurance statutes, Appellant would also likely have been entitled to underinsured motorist benefits under Shanigan's policy. However, Integon's policy was inconsistent with these statutes, and Integon told Ennen that he was not entitled to any additional money. Six years later, some time after Integon learned that its underinsured motorist provision violated Alaska insurance statutes, Integon paid Appellant underinsured motorist benefits plus interest and fees. Appellant sued Integon for bad faith. Integon filed a third-party complaint against Appellant's attorney, Craig Allen. Before trial, the superior court dismissed Integon’s claims against Allen on the ground that allowing Integon to implead Appellant's attorney would violate public policy. The superior court held that because Appellant did not own the insurance policy, Integon did not owe him a duty of good faith and fair dealing. Accordingly, the superior court concluded that Appellant had no cause of action for bad faith. But, in the event this ruling were to be reversed on appeal, the superior court made an alternate finding that while Integon had committed the tort of bad faith, Appellant had suffered no damages as a result. Upon review, the Supreme Court reversed on both counts. "The superior court was justifiably cautious about extending the bad faith cause of action to a new class of plaintiffs, but we conclude that Ennen, as an insured, is eligible under our existing case law to bring a cause of action for bad faith." The Court concluded that Appellant established facts that would entitle him to damages. Furthermore, the Court affirmed the dismissal of Integon's third-party claim against Allen on the alternative ground that Allen was not a proximate cause of Appellant's harm.

The parents of a child who suffered an injury during an adult softball game sued the United States Specialty Association (USSSA) and several other defendants. At the time of the accident, USSSA was insured by United States Fidelity and Guarantee Co. (USF&G). USF&G assumed the defense of USSSA, and a jury entered a verdict against USSSA. USF&G posted a bond of $4 million to secure the remainder of the judgment and, simultaneously, filed an action in federal court seeking a judicial declaration that it could not be compelled to pay more than the $2 million policy limit. USSSA later moved for partial summary judgment, contending that USF&G had no right to restitution against its insured for the amounts paid in excess of policy limits. The Supreme Court accepted certification to answer questions of law that controlled the parties' motions, answering (1) an insurer may not seek restitution based on the theory of unjust enrichment where there is an express contract governing the subject matter of the dispute; and (2) an insurer's right to reimbursement from an insured affects the parties' risk relationship and therefore may only arise under the express terms of their insurance contract.

Plaintiff, a professional limousine driver, was injured when he was struck by a car while unloading luggage from a limousine at an airport. Plaintiff reached settlements with his employer's insurance company and the driver whose car struck him but remained less-than-fully compensated for his injuries. Plaintiff subsequently filed an underinsured-motorist claim with his Insurer under the terms of his personal automobile policy. Insurer denied the claim, citing two exclusions from the policy's provisions for uninsured-motorist coverage. Plaintiff filed suit, and the superior court ruled that the exclusions were void on grounds of public policy. The Supreme Court vacated the judgment of the superior court, holding that Insurer's denial of coverage was both lawful and not inconsistent with public policy. Remanded.

Petitioner-Appellant Lyle Hollingsworth, as personal representative of the Estate of Audrey Hollingsworth, appeals from a district court judgment determining the distribution of insurance proceeds. Jerry Hollingsworth, Petitioner's brother had lived in a house he shared with their mother Audrey and continued to live there after her death. The house was insured under a farm and ranch policy issued by Nodak Mutual Insurance Company (Nodak) which listed Jerry Hollingsworth as the primary insured, with Audrey Hollingsworth listed as an additional insured. After Audrey Hollingsworth's death, the Estate was listed as the additional insured. The house was destroyed by fire in 2006. Nodak issued several checks made payable to Jerry Hollingsworth and the Estate for the loss. Disputes arose over the various heirs' rights in the insurance proceeds, and Lyle Hollingsworth, as personal representative of the Estate, began proceedings in the informal probate requesting that the district court order a division of the insurance proceeds. Following an evidentiary hearing, the district court issued its findings of fact, conclusions of law, and order for judgment directing division of various components of the insurance proceeds between Jerry Hollingsworth and the Estate. The court concluded that the portion of the insurance proceeds paid for loss of the dwelling should be divided on the basis of the relative percentage value of Jerry Hollingsworth's life estate and the Estate's remainder interest, as calculated by actuarial tables. Finding that there was an "unsupervised probate" of the case, it could not be appealed without a Rule 54(b) certification. Because the district court's judgment resolved some but not all of the disputed between the parties in this case, the disbursement of the insurance proceeds was not a final, appealable judgment. The Supreme Court determined it did not have jurisdiction to hear the case further, and dismissed the appeal.

Players on a local youth soccer team sought to recover under the state youth soccer governing association's business auto-insurance policy for injuries sustained when the van in which they were riding was involved in an accident. The trial court granted summary judgment in favor of the association's insurance carrier. The court of appeals affirmed, holding that under the relevant insurance policy language, the rented van was not being used in the business of the association at the time of the accident. The Supreme Court granted transfer and affirmed the trial court, holding that because Castro was not using the automobile "in the business" of the association, a condition for coverage under the insurance policy at issue, the policy provided no coverage to the injured players.

Ohio Casualty insured Cloud Nine from 2001 to 2002. Unigard Insurance insured Cloud Nine from 2002 to 2005. Edizone, LC sued Cloud Nine in federal district court, alleging injuries that began during the last three months of Ohio Casualty's policy period and continued throughout Unigard's policy period. The federal district court ruled that the insurers must equally share the total defense costs they incurred in defending Cloud Nine against the Edizone suit. The Supreme Court accepted certification to answer whether the defense costs in Edizone should be allocated between Ohio Casualty and Unigard under the "equal shares" method set forth in the "other insurance clause" of Ohio Casualty's policy, or, in the alternative, because the policies were issued for successive period, whether those defense costs should be allocated using the time-on-risk method described in Sharon Steel Corp. v. Aetna Casualty and Surety Co. The Court concluded that the "other insurance" clauses did not apply to successive insurers. Accordingly, defense costs should be apportioned using a modified version of the Sharon Steel method that divides responsibility for defense costs between the two insurers in proportion to their time on the risk.

In 2000, a fire destroyed a business location of Stone Flood and Fire Restoration Inc., spurring years of litigation with its insurer, Safeco Insurance Company of America. After Stone Flood and its two shareholders, James and Patrice Stone, sued Safeco in 2007, the district court dismissed all claims against Safeco. The court concluded (1) Stone Flood's claims on the insurance policy were filed three days beyond the applicable statute of limitations and were therefore barred; (2) the Stones were not insureds and lacked standing to bring individual claims under the policy; and (3) the Stones lacked standing to bring a claim of intentional infliction of emotional distress (IIED) because their alleged injuries were merely derivative of the corporation's. The Supreme Court reversed in part and affirmed in part, holding (1) the district court's calculation of the tolling of the limitations period was incorrect and a correct calculation saved Stone Flood's claims under the insurance policy; and (2) the district court properly concluded the Stones were not insureds and lacked standing to sue under the policy, and their claim of IIED failed for lack of a distinct, non-derivative injury. Remanded.

In 2003, the Trust sought group accident and life insurance policies as a benefit for its union members. Consistent with the Trust's request, the broker's RFP specifically sought a policy where the "Trust is the owner of the policy and also [a] beneficiary." Defendant's proposal contained only a summary of proposed terms, expressly cautioned that it was not a contract, and omitted reference to the Trust’s desired beneficiary provision. The policy drafts sent to the Trust did not contain the beneficiary provision the Trust wanted and stated that payment of the required premium after delivery of the policies would constitute acceptance. The Trust's chairman signed and paid the first premium in 2003 In May, 2004, the Trust made a claim on the group life policy. Defendant responded that the terms of the policy required it to pay the full benefit to the decedent's beneficiaries. The Trust terminated the policy, stopped paying premiums, and filed suit seeking a declaratory judgment and rescission of the contract. The district court dismissed the Trust's claims and entered judgment for defendant for $95,059.99 in unpaid premiums. The Seventh Circuit affirmed, finding that the parties had an enforceable contract.