Justia Insurance Law Opinion Summaries

Gulf Underwriters Insurance issued a general liability policy to United Foundries with an endorsement for employer's liability coverage, known as a stop-gap endorsement. David Ward filed a complaint against his employer, United, alleging claims for employer intentional tort and seeking damages. While the case was pending, United filed an action against Gulf for a declaration that Gulf had a duty to defend and indemnify United for the claims asserted by Ward. The trial court granted summary judgment to United. The court of appeals reversed. The Supreme Court affirmed the judgment of the court of appeals, holding (1) an exclusion in a stop-gap endorsement stating that the insurance does not apply to bodily injury resulting from an act that is determined to have been committed by an insured with the belief that an injury is substantially certain to occur does not require a final determination by either a judge or jury before the insurer can refuse to defend a claim alleging a substantial-certainty employer intentional tort: and (2) that the claims stated in the underlying complaint were neither potentially nor arguably covered under the terms of the policy, and thus, Gulf had no duty under the policy to defend United.

Respondent, on behalf of the estate of her deceased sister, filed suit against petitioner, a nursing home, alleging that while the sister was being cared for by petitioner, she was bitten by a brown recluse spider and died. At issue was whether the claims were healthcare liability claims that required an expert report to be served. The court held that the claims fell within the statutory definition of a health care liability claim and therefore, the statute required the suit to be dismissed unless respondent timely filed an expert report. Accordingly, the court granted the petition for review and reversed and remanded.

Plaintiff Mark Peak broke his leg while helping Ellis and Rachel Adams move furniture using a rented U-Haul truck. The liability insurer for U-Haul paid its policy limits of $20,000 to Peak in exchange for a release that specifically named Ellis and arguably covered Rachel. When Peak sought additional compensation from another of insurer for the Adamses, the insurer denied coverage based on the release. Peak filed a negligence action against Adamses, alleging they were liable for negligence in their operation of the rental truck and their failure to remove snow from their driveway. The district court granted defendants' motion for summary judgment, concluding the release barred Peak's claims against both Ellis and Rachel. The court of appeals reversed. At issue was whether the release covered Ellis and Rachel as well as U-Haul and its insurer. On further review, the Supreme Court held that the district court correctly granted summary judgment for Ellis based on the release, while fact questions precluded summary judgment for Rachel. The Court vacated the decision of the court of appeals and affirmed in part and reversed in part the district court judgment.

This case involved the construction and application of a combined professional and general liability insurance policy issued by appellant to appellee where appellee requested a defense from appellant under the policy for a civil lawsuit. In that underlying suit, plaintiff alleged that while her mother was terminally ill, she consented to appellee's harvesting of some of her mother's organs and tissues after her mother's death and consented to the harvesting because appellee was a non-profit corporation. Appellee, instead, transferred the tissues to a for-profit company, which sold the tissues to hospitals at a profit. Appellee subsequently sought coverage under its general liability insurance with appellant and appellant denied coverage because the conduct alleged was outside the scope of the insurance policy's coverage. The court certified the following questions to the Supreme Court of Texas: (1) "Does the insurance policy provision for coverage of 'personal injury,' defined therein as 'bodily injury, sickness, or disease including death resulting therefrom sustained by any person,' include coverage for mental anguish, unrelated to physical damage to or disease of the plaintiff's body?" (2) "Does the insurance policy provision for coverage of 'property damage,' defined therein as 'physical injury to or destruction of tangible property, including consequential loss of use thereof, or loss of use of tangible property which has not been physically injured or destroyed,' include coverage for the underlying plaintiff's loss of use of her deceased mother's tissues, organs, bones, and body parts?"

The Federal District Court for the Northern District of Alabama certified a question to the State Supreme Court. The Court was asked whether the failure of an insured to give notice of a proposed settlement to an insurance company causes the insured to forfeit underinsured motorist coverage (UIM), regardless of the insuredâs actual knowledge of that coverage, and regardless of prejudice to the insurance company if the insured has a copy of the policy that contains the coverage. In 2007, Delbert and Lou Ann Downey were stopped at an intersection on their motorcycle when a vehicle driven by Wyndell Thompson failed to stop and hit them. At the time of the accident, multiple insurance policies were in force. The Downeys had underinsured motorist coverage. The Downeys, in consideration of $10,000 and while represented by counsel (but without having notified Travelers Property Casualty Insurance Company that they were doing so), executed a general release to discharge Mr. Thompson and his insurance company from all liability arising out of the accident. Subsequently, and with different counsel, the Downeys notified Travelers of the accident for the first time and that they were making a claim under their underinsured motorist policy. Travelers denied the claim and the Downeys sued. The Supreme Court found that the Downeys were at all relevant times in possession of the policy, and it clearly provided UIM coverage. However, the Downeys did not meet the threshold of showing any condition under which their lack of notice could be excused. "In other words, the Downeys have âforfeit[ed]â UIM coverage."

This case arose from certain hurricane damage claims made by respondent under a 2004 insurance policy issued by respondent's original insurer. When the original insurer became insolvent, the Florida Insurance Guaranty Association (FIGA) then became obligated to respond to certain claims made under that insurance policy. At issue was the proper test to be utilized by a court when determining whether a statute could be applied retroactively, in this case to a contract of insurance. The court held that the court's precedents both before and after the Fourth District's decision required the court to engage in a two-pronged inquiry to determine if the 2005 amendments to section 627.7016, Fla. Stat., were to be applied retroactively. Thus, the Fourth District misapplied this precedent when it omitted the first inquiry into whether the Legislature clearly expressed an intent that the statute be applied retroactively and moved directly to the second inquiry, whether retroactive application would be constitutional. For this reason, and because there was no clear evidence of legislative intent for retroactivity, the court quashed the decision of the Fourth District to the extent it was inconsistent with the opinion and remanded for further proceedings.

Kurt R. Ward, Attorney at Law, LLC, appealed the district court's order denying its motion for judgment on the pleadings and granting the Plan Parties' (the Bert Bell/Pete Rozelle NFL Player Retirement Plan, the Retirement Board of the Plan, and the Bank of New York Mellon Corporation) cross-motion for judgment on the pleadings. Both parties' motions sought a declaration about whether the Plan Parties had to pay the disability benefits of two of the Ward Firm's retired NFL player clients into the firm's client trust account pursuant to state court jurisdiction for unpaid attorney's fees despite a provision in the Plan prohibiting any "benefit under the Plan" from being assigned or reached by creditors through legal process. The court held that its prior panel precedent held that bargained-for provisions barring assignments in ERISA welfare benefits were valid and enforceable and that the Ward Firm had not directed the court's attention to any such intervening en banc or Supreme Court decision. Accordingly, the court affirmed the judgment and held that the district court did not err in declaring that the spendthrift provision in the Plan prevented the Plan Parties from depositing the disability benefits owned by two retired NFL players into the Ward Firm's trust account.

Plaintiffs Michael Ashby and Randy O'Brien, inmates at the state department of correction, asserted professional malpractice complaints against attorney C. Bruce Davidson to The Bar Plan Mutual Insurance Company, Davidson's professional liability carrier. Bar Plan then intervened in consolidated actions for damages filed on behalf of plaintiffs against Davidson, asserting a cross-claim that it was not obligated to indemnify Davidson for the claims of plaintiffs because Davidson had failed to notify Bar Plan of any claims against him pursuant to Bar Plan's policy. The trial court granted summary judgment to Bar Plan. The Supreme Court held that Davidson's failure to comply with Bar Plan's policy was not dispositive because plaintiffs opposed summary judgment on grounds of waiver and estoppel. The Court then reversed summary judgment, holding that genuine issues of fact remained regarding whether Bar Plan's misrepresentation of valid coverage resulted in plaintiffs sustaining actual detriment. Remanded.

BancInsure, Inc. appealed a declaratory judgment in favor of Columbian Financial Corporation and a former director, Carl McCaffree (collectively the Insureds). The insurance policy at issue here was a "claims-made" policy covered any claim made to BancInsure against any Columbian officer or director for a "Wrongful Act" as defined by the policy. A disputed provision of the policy pertained to the scope of coverage if Columbian was placed in receivership or otherwise ceased to engage in active banking business. The parties interpreted the provision differently. The Insureds contended that if Columbian went into receivership, the policy covered all claims made through the end of the original policy period, although only for Wrongful Acts committed before the receivership. BancInsure contended that the policy covered only claims made before the receivership. The operation of the disputed provision became relevant in August 2008 when the Kansas State Bank Commissioner declared Columbian insolvent and appointed the FDIC as its receiver. Soon thereafter, Columbianâs management sent BancInsure a letter to notify it of potential claims by the FDIC and others. The parties disputed many of the claims against Columbian which led to Columbian filing suit to the district court to determine which claims were covered under the policy. The sole issue on appeal to the Tenth Circuit was whether the district court had jurisdiction. Though no party disputed jurisdiction, the Tenth Circuit found that there was no actual controversy between the parties when the district court below rendered its judgment. The court therefore lacked jurisdiction. The Tenth Circuit reversed the lower courtâs decision and remanded to case with instructions to the court to vacate its judgment.

Petitioner Brady Farr appealed a circuit court judgment in favor of Respondents The Gulf Agency, Orange Beach Insurance Agency and Lexington Insurance Company. Mr. Farr finished renovating his house in 2003. In 2004, he decided to sell his property to a developer who wished to turn the property into condominiums. In anticipation of the sale, Mr. Farr obtained a $1 million loan, secured by a mortgage. As part of the loan process, the mortgage company ordered an appraisal of the property. The property was appraised at $1.3 million and the improvements were valued at $313,000. In 2004, Mr. Farr contacted Orange Beach to insure the property against "total loss." Lexington, acting as Orange Beach's agent, submitted an insurance application for policy limits based on the appraisal to The Gulf Agency, who ultimately served as underwriter for the policy. In the fall of 2004, Mr. Farr was concerned that the policy limits were not sufficient to adequately cover a total loss of the property. In September, Mr. Farr's concerns were realized when Hurricane Ivan destroyed the property. He filed a claim with Orange Beach. In November, Mr. Farr sold his property for $1.18 million. The sales agreement was amended to reflect the total loss he suffered as a result of the hurricane. Lexington's adjuster visited the property to determine the cause of Mr. Farr's loss. The adjuster found the hurricane was the "proximate cause". Lexington subsequently paid Mr. Farr $50,000 for the damage. Alleging that the policy did not provide adequate coverage and that Lexington failed to pay the proper benefits under the policy, Mr. Farr sued the insurance companies for breach of contract, fraud, misrepresentation, negligence, conspiracy, and bad-faith failure to pay an insurance claim. The trial court granted the companies' motion for summary judgment, finding that some of Mr. Farr's claims were barred by a two-year statute of limitations. Upon review of the trial court record, the Supreme Court affirmed the lower court's judgment pertaining to Mr. Farr's tort claims. The Court found that those claims were indeed barred by a statute of limitations. The Court however found that the breach of contract and bad faith claims should not have been dismissed through summary judgment. The Court affirmed part and reversed part of the lower court's order and remanded the case for further proceedings.