Justia Insurance Law Opinion Summaries

The Travelers Indemnity Company of Connecticut appealed a judgment in which it was ordered to pay $251,913.91 to Willie A. Miller. Smith House Movers, Inc. (Smith), was hired was hired to move houses located in the path of road construction to be performed. Miller entered into a contract with Smith to purchase one of the houses and to move it from Red Bay to Vina. The contract provided that Smith was to move the house, pour a foundation, and place the house on the new foundation. Smith cut the house into two pieces and delivered the first piece. However, the foundation was improperly poured and did not fit, and the house had been damaged in the move. Ultimately Miller had to hire another company to complete the move and repair the damage. Miller then sued Smith alleging breach of contract, negligence and wantonness. Smith did not answer or appear, and Miller moved to a default judgment against Smith. In an attempt to collect the amount of the default judgment, Miller sent a copy to Smith's general liability insurer, Travelers. As Miller tried to get Travelers to respond to its demand, Miller learned that Smith had declared bankruptcy. Two years following the default judgment, the bankruptcy trustee lifted its stay on Smith's affairs to allow him to collect on the default judgment to the extent that the insurance coverage would allow. Travelers subsequently denied the claim. Miller then sued Travelers for payment. Travelers moved for summary judgment to dismiss Miller's claim, arguing that the general liability policy did not provide coverage based on the terms in the policies. The trial court denied the motion, and eventually entered judgment against the company. Travelers then appealed to the Supreme Court. The issue before the Court was whether the notice of the original lawsuit was timely. The Court found that because Miller's knowledge of Smith's certificate of insurance from the underlying lawsuit put Miller on notice that he should have notified Travelers of the default judgment. As such, the Court concluded that Miller was barred from recovering under Smith's policies. The Court reversed the trial court and remanded the case for further proceedings.

Plaintiff brought suit seeking declaratory judgment and asserted claims for breach of contract and bad faith when its insurers asserted that certain sublimits in plaintiff's policy capped reimbursement for damages caused by flood and that those sublimits applied to both property damage and business interruption losses. Plaintiff claimed that the sublimits only applied to property damage. The court concluded that there was no factual dispute regarding whether an insurance brokerage employee shared the same understanding as the underwriters and whether that understanding bound plaintiff. Consequently, the interpretation of the contract did not depend "on the credibility of extrinsic evidence or on a choice among reasonable inferences that can be drawn from the extrinsic evidence," and thus the district court did not err when it granted insurers' judgment as a matter of law on the declaratory judgment and breach of contract claims.

At issue in this case was the interpretation of approximately sixty collective bargaining agreements (CBAs) between the City of Duluth and its employees. Subject to certain conditions and exceptions, the CBAs guaranteed retired City employees health insurance benefits "to the same extent as active employees." The dispute in this case centered on the meaning of that phrase, specifically, whether the phrase guaranteed health insurance benefits to retirees to the same extent as employees who were active at the time of a retiree's departure, or to the same extent as current City employees. Several retired City employees filed a lawsuit, alleging that the City had wrongfully changed or threatened to change their health insurance benefits and claiming that CBAs guaranteed that health insurance benefits for retirees would be frozen as of the time of retirement. The district court held for the City. The court of appeals affirmed the district court's interpretation of the active-employees clause. The Supreme Court affirmed, holding that the CBAs unambiguously guaranteed health insurance benefits to retirees to the same extent as current City employees.

Travelers Insurance Company brought suit in circuit court alleging that Blackstone Mining Company had underpaid premiums under two separate workers' compensation policies issued by Travelers. Blackstone counterclaimed, alleging that it had overpaid the premiums due under the policies and was entitled to a refund. The circuit court granted summary judgment to Blackstone. The court of appeals reversed. The Supreme Court reversed the court of appeals and reinstated the judgment of the circuit court, holding (1) the court of appeals incorrectly applied well-established burden of proof principles applicable to summary judgment motions; and (2) the circuit court correctly determined that Blackstone was entitled to summary judgment.

Petitioners sought review of the decision of the First District Court of Appeal in Geico Indemnity Co. v. Shazier on the basis that it conflicted with the decisions of the court in Susco Car Rental System of Florida v. Leonard and Roth v. Old Republic Insurance Co. In Shazier, the district court resolved a question regarding an insurer's duty to defend and indemnify its insured in favor of the insurer. In doing so, the First District relied on a very constricted definition of "consent" and employed an unauthorized driver provision in contradiction of the court's clear precedent to the contrary under Florida's dangerous instrumentality doctrine to defeat coverage. Accordingly, the court quashed the First District's decision and directed that judgment be entered in favor of the insureds and injured parties.

Amerisure appealed the district court's summary judgment ruling determining that Louisiana law prohibited the consideration of extrinsic evidence to prove mutual mistake; ranking Amerisure as the primary insurer; and allowing another third-party insurer to bring a cross-claim for defense fees. The court held that because the district court erred in refusing to consider extrinsic evidence to prove the theory of mutual mistake, the court reversed and remanded without considering ranking or standing.

Employee submitted a claim for workers' compensation under Employer's policy with Insurer, which claim was paid in full. Employee also filed a deliberate intent lawsuit against Employer. After assuming the attorney's fees and costs associated with defending and settling the action, Employer filed a complaint against Insurer, alleging various claims related to Insurer's denial of coverage in the defense of the deliberate intent action. The circuit court granted Employer's motion for partial summary judgment on its bad faith claim against Insurer and awarded damages to Employer. The Supreme Court reversed, holding (1) Insurer met its obligation under W. Va. Code 23-4C-6 to make deliberate intent coverage available to Employer upon the Employer's voluntary request; and (2) because the language of the policy was plain, and the exclusion of deliberate intent coverage was clear, the circuit court erred in concluding that the policy was ambiguous and therefore resulted in deliberate intent coverage being included in the policy under the doctrine of reasonable expectations.

Defendant National Security Fire & Casualty Company appealed a circuit court order that certified a class for a class action lawsuit. Plaintiff Maurice DeWitt's mobile home was damaged by Hurricane Katrina, and at the time of his loss, Plaintiff was insured by National Security. In 2007, Plaintiff filed suit in circuit court against National Security and other insurance companies alleging that the Defendants breached his insurance policy when they did not include a 20% "general contractor overhead and profit" (GCOP) amount in its loss payment. Specifically, Plaintiff alleged the insurance companies did not take into account Plaintiff's loss and the need for additional general contractor services in rebuilding his home. Plaintiff sought to represent similarly situated policyholders whose claims were allegedly miscalculated in the same fashion. Upon review, the Supreme Court concluded that Plaintiff did not satisfy his burden of establishing the predominance and superiority requirements to certify his class action. Accordingly, the Court held that the trial court exceeded its discretion in cerfifying the class.

In separate petitions, the Hampton Insurance Agency and Ginger Spencer, Acceptance Indemnity Insurance Company and Ashland General Agency all defendants in an action filed by Mary Alice Patton, d/b/a Hole in the Wall Lounge, petitioned the Supreme Court for a writ of mandamus to direct the trial court to transfer the action to the Tuscaloosa Circuit Court. Ms. Patton purchased insurance for her lounge from Ms. Spencer, an independent insurance agent for Hampton. At issue was the nature and extent of the coverage Ms. Patton sought. The lounge was destroyed by fire in 2009. Upon filing her insurance claim, Ms. Patton was informed that her policy did not include coverage for property damage. Accordingly, Ms. Patton sued because "defendants were negligent and/or wanton in their procurement of full coverage insurance for [Patton] on her lounge building and its contents." Hampton responded with a motion to dismiss or in the alternative, to transfer the case on grounds that the case was filed in an improper venue. Upon review, the Supreme Court found that the defendant insurance companies met the requirements for the writ of mandamus. The Court directed the trial court to vacate its order denying defendants' motions to transfer, and to enter orders granting those motions to transfer to the Tuscaloosa Circuit Court.

This case stemmed from a controversy between the insured and their insurer over whether the insurer breached its obligations under a commercial general liability insurance policy that the insureds had with the insurer at the time of the accident. The coverage dispute arose out of a personal injury lawsuit filed against the insured by an injured homeowner. Because the case involved unanswered questions of Florida law that were central to the appeal and because these questions were determinative of the cause in this case and there were no controlling precedents from the Supreme Court of Florida, the court certified these questions for resolution.