Justia Insurance Law Opinion Summaries

The City of Richmond Heights, Missouri filed a claim with Mt. Hawley Insurance Company under a commercial property policy for losses of tax revenue due to government-mandated COVID-19 closures. Mt. Hawley denied the claim and sued for a declaratory judgment that it was not obligated to cover the losses. Richmond Heights counterclaimed with five counts: (1) breach of contract, (2) vexatious refusal to pay, (3) fraudulent inducement and misrepresentation, (4) negligent misrepresentation, and (5) breach of fiduciary duty. The United States District Court for the Eastern District of Missouri dismissed the counterclaims, denied amendments to two of them, and granted declaratory judgment to Mt. Hawley. On appeal, the United States Court of Appeals for the Eighth Circuit affirmed the decision of the lower court.The appellate court held that the insurance policy required "direct physical loss of or damage to property" for coverage which was not met by the COVID-19 shutdowns. The court also rejected the city's argument that the Additional Covered Property Endorsement in the policy removed the "physical damage or loss" requirement for losses of sales tax revenues. Furthermore, the court found that the city's claims of fraud, misrepresentation and breach of fiduciary duty were not distinct from its breach of contract claim and thus were properly dismissed by the district court. Lastly, the court affirmed the district court's denial of the city's motion to amend its breach of contract and vexatious refusal claims, concluding that the proposed amendments would not have survived a motion to dismiss. View "Mt. Hawley Insurance Company v. City of Richmond Heights" on Justia Law

In the Supreme Court of Wyoming, an appeal by Ronald Pinther, a former insurance agent, was dismissed. Pinther had worked for American National Property and Casualty Insurance Company (ANPAC) and American National Insurance Company (ANICO). He filed a lawsuit against ANPAC, ANICO, and another agent, Philip Maggard, claiming breach of contract, breach of good faith and fair dealing, fraudulent inducement, promissory estoppel, civil conspiracy, and age discrimination. The district court granted summary judgment in favor of ANPAC and Mr. Maggard. On appeal, the Supreme Court held that the district court had not erred in its decision. The court found that Mr. Pinther's breach of contract claim against ANPAC was governed by the Post-Termination Compensation Schedule outlined in the agent agreement. The court further held that Mr. Pinther's claim of a breach of an implied duty of good faith and fair dealing could not be maintained given the at-will nature of the agency contract. The court also dismissed Mr. Pinther's fraudulent inducement claim against ANPAC, noting that the recruiting brochure did not govern his agreement with ANPAC. The court further held that Mr. Pinther's claim for tortious interference with a contract against Mr. Maggard could not be maintained as the actions of Mr. Maggard, as an agent of ANPAC, were imputed to ANPAC. Lastly, the court held that Mr. Pinther's civil conspiracy claims against ANPAC and Mr. Maggard failed as the underlying tort claims did not survive summary judgment. View "Pinther v. American National Property and Casualty Insurance Company" on Justia Law

In this case, the United States Court of Appeals for the Eighth Circuit affirmed the lower court's decision that the Pacific Life Insurance Company did not owe benefits to Katie Blevins, the beneficiary of a life insurance policy taken out by her late fiancé, Dr. Travis Richardson. Richardson applied for a life insurance policy and paid the first month's premium three days before he died. He did not sign the received policy or any required amendments. Blevins claimed that the policy was in effect at the time of Richardson's death, despite the policy not being physically delivered or formally accepted. Blevins also brought claims of bad faith, promissory estoppel, and apparent authority against the insurance company. In its decision, the court stated the policy was clear in its conditions, which required physical delivery and acceptance before the policy was in force. The court found these conditions were not met, as the policy was neither delivered nor accepted by Richardson before his death. Therefore, no death benefit was owed. As a result, Blevins' bad faith claim was also dismissed, as the insurer could not have acted in bad faith if there was no obligation to pay out the policy. View "Pacific Life Insurance Company v. Blevins" on Justia Law

This case involves a dispute between a homeowner, Mario Rodriguez, and his insurance company, Safeco Insurance Company of Indiana. After a tornado damaged Rodriguez's home, Safeco issued a payment of $27,449.88, which Rodriguez accepted. Rodriguez's counsel then informed Safeco that it owed an additional $29,500 and threatened to sue. Rodriguez sued Safeco, bringing several claims, including breach of contract and statutory claims under the Insurance Code. Safeco invoked the insurance policy’s appraisal provision and subsequently issued a check to Rodriguez for $32,447.73, which it viewed as full payment of the appraisal amount due under the policy. Safeco also paid an additional $9,458.40, which it claimed would cover any interest possibly owed on the appraised amount.The Supreme Court of Texas was asked to answer a certified question from the United States Court of Appeals for the Fifth Circuit: “In an action under Chapter 542A of the Texas Prompt Payment of Claims Act, does an insurer’s payment of the full appraisal award plus any possible statutory interest preclude recovery of attorney’s fees?” The Supreme Court of Texas held that the answer is yes. When an insurer has fully discharged its obligations under the policy by voluntarily paying the appraised amount, plus any statutory interest, in compliance with the policy’s appraisal provisions, section 542A.007 of the Insurance Code prohibits an award of attorney’s fees. This is because there is no remaining “amount to be awarded in the judgment to the claimant for the claimant’s claim under the insurance policy,” which means no attorney’s fees are available under section 542A.007(a)(3)’s formula. View "RODRIGUEZ v. SAFECO INSURANCE COMPANY OF INDIANA" on Justia Law

In this case, a woman was severely injured while moving an inoperable airplane owned by her husband. She sought recovery from her husband's homeowner's insurance policy. The insurance policy, however, excluded injuries "arising out of" the ownership, maintenance, use, loading or unloading of an aircraft. The woman argued that the policy should cover her injury because, in her view, the aircraft had become mere "parts" after her husband removed the wings, elevators, and tail rudder. The lower court disagreed and concluded that her injuries were not covered by the policy. The woman appealed this decision.The Supreme Court of the State of Alaska agreed with the lower court’s interpretation of the homeowner's insurance policy exclusion. The court maintained that regardless of whether the airplane was considered an aircraft or a collection of airplane “parts” when it injured the woman, the injury arose out of the husband’s ownership of the airplane. This interpretation was supported by the clear language of the policy which excluded coverage for bodily injury arising out of ownership or maintenance of an aircraft. As a result, the court affirmed the lower court’s decision. View "Thompson v. United Services Automobile Association" on Justia Law

In this case heard by the Supreme Court of the State of Wyoming, the plaintiff, Scherri Hacker, made a conversion claim against Hacker Oil, Inc., which had paid premiums on a whole life insurance policy on her husband, James Hacker. The policy was executed as a split-dollar arrangement, with the intention that upon Mr. Hacker's death, Hacker Oil would be reimbursed for the paid premiums, and the remaining death benefits would be distributed to Mrs. Hacker. After Mr. Hacker's death, Hacker Oil received $125,000 and half the interest accrued under the policy, which exceeded the $55,048 it had remitted in premium payments.The defendant, Hacker Oil, appealed the district court's decision, arguing that Mrs. Hacker had failed to mitigate her damages by withholding her signature from a letter agreement and by asserting a conversion claim against Hacker Oil. The court, however, upheld the district court's ruling, finding that Mrs. Hacker did not have a duty to mitigate her damages. The court determined that Mrs. Hacker's failure to sign the letter agreement prior to Hacker Oil's signing and submission of a claim to the insurance company did not constitute a failure to mitigate damages. The court further concluded that once Hacker Oil committed the conversion, Mrs. Hacker rightfully brought a claim and asserted her rights. Thus, the Supreme Court of the State of Wyoming affirmed the district court's decision, holding that Hacker Oil had wrongfully converted $70,372.68, the difference between the amount it received and the amount it was entitled to receive. View "Hacker Oil, Inc. v. Hacker" on Justia Law

In this case, Defendant-Appellee Martin Andersson purchased an insurance policy for his vessel from Plaintiff-Appellant Great Lakes Insurance SE. The vessel ran aground off the coast of the Dominican Republic, and Great Lakes brought a declaratory judgment action to determine coverage under the policy. Andersson filed counterclaims for breach of contract and equitable estoppel. Great Lakes' motion for summary judgment was denied, and Andersson was granted partial summary judgment on his breach of contract claim. Great Lakes appealed, claiming the district court erred in refusing to apply the policy's definition of seaworthiness.The United States Court of Appeals for the First Circuit held that under the absolute implied warranty of seaworthiness, the insured vessel must be seaworthy at the policy's inception, and if not, the policy is void. The court affirmed the district court's ruling, stating that Great Lakes' argument that the absolute implied warranty required the vessel to carry up-to-date charts for all geographic areas covered by the policy in order to be considered seaworthy was unsupported by admiralty case law and was unreasonable.Additionally, the court held that Great Lakes' argument that the express terms of the policy required updated paper charts for every location that could be navigated under the entirety of the policy coverage area was unsupported by the express language of the policy itself. The court found no precedent supporting the claim that updated paper charts for every location covered by the policy were required to be onboard the vessel at the inception of the policy. As a result, the Court of Appeals affirmed the district court's decision in favor of Andersson. View "Great Lakes Insurance SE v. Andersson" on Justia Law

In this case, the United States Court of Appeals for the Fifth Circuit considered an appeal by Colony Insurance Company against First Mercury Insurance Company related to a settlement agreement for an underlying negligence case. Both companies had consecutively insured DL Phillips Construction, Inc. (DL Phillips) under commercial general liability insurance policies. After the settlement, Colony sued First Mercury, arguing that First Mercury needed to reimburse Colony for the full amount of its settlement contribution, as it contended that First Mercury's policies covered all damages at issue. The district court granted summary judgment in favor of First Mercury, prompting Colony's appeal.In the underlying negligence case, DL Phillips was hired to replace the roof of an outpatient clinic in Texas. Shortly after completion, the roof began leaking, causing damage over several months. The clinic's owner sued DL Phillips for various claims, including breach of contract and negligence. A verdict was entered against DL Phillips for over $3.7 million. Both Colony and First Mercury contributed to a settlement agreement, and then Colony sued First Mercury, arguing it was responsible for all the property damage at issue.The appellate court held that under the plain language of First Mercury's policies and relevant case law, First Mercury was only liable for damages that occurred during its policy period, not all damages resulting from the initial roof defect. The court also found that Colony failed to present sufficient evidence to create a genuine dispute of material fact about whether there was an unfair allocation of damages, which would be necessary for Colony's contribution and subrogation claims. As such, the court affirmed the district court's decision to grant summary judgment in favor of First Mercury and denied summary judgment for Colony. View "Colony Insurance Company v. First Mercury Insurance Company" on Justia Law

A car dealership, Broadway Ford Truck Sales, Inc., in St. Louis, Missouri, suffered a significant fire damage to its business premises and filed claims under its insurance policy provided by Depositors Insurance Company. However, disputes arose over the coverage and Broadway Ford sued Depositors for breach of contract and vexatious refusal to pay. The United States District Court for the Eastern District of Missouri granted summary judgment favoring Depositors.At the time of the fire, Broadway Ford had an insurance policy that covered loss or damage to its Building and Business Personal Property (Building/Property) and loss of Business Income and Extra Expenses (BI/EE) due to a suspension of operations. Broadway Ford and Depositors later entered into a Limited Settlement Agreement and Release of Disputed Property Damage Claims (LSA), in which Depositors agreed to pay a certain amount for the fire damage and Broadway Ford released Depositors from any claims related to the property damage. BI/EE claims were not included in this agreement and remained open.Broadway Ford’s complaint against Depositors alleged that Depositors breached the policy's implied covenant of good faith and fair dealing and that Depositors’ conduct amounted to vexatious refusal under Missouri law. The district court granted Depositors' motion for summary judgment, finding that Broadway Ford’s complaint was foreclosed by the LSA. On appeal, the United States Court of Appeals for the Eighth Circuit reviewed the grant of summary judgment de novo.The appellate court affirmed the judgment of the district court. The court found that Broadway Ford had released its claims related to the Building/Property coverage in the LSA and could not pursue litigation for additional compensatory damages in the form of the “business income” it lost and the “extra expenses” it incurred due to Depositors’ alleged mishandling of its Building/Property coverage claim. View "Broadway Ford Truck Sales, Inc. v. Depositors Insurance Company" on Justia Law

Plaintiff Team Industrial Services, Inc. (Team) suffered a $222 million judgment against it in a wrongful-death lawsuit arising out of a steam-turbine failure in June 2018 at a Westar Energy, Inc. (Westar) power plant. Team sought liability coverage from Westar, Zurich American Insurance Company (Zurich), and two other insurance companies, arguing that it was, or should have been, provided protection by Westar’s Owner-Controlled Insurance Program (OCIP) through insurance policies issued by Zurich and the two other insurers. Team’s claims derived from the fact that its liability for the failure at the Westar power plant arose from work that had previously been performed by Furmanite America, Inc. (Furmanite), which had coverage under Westar’s OCIP. The district court granted summary judgment to Defendants, and Team appealed. Not persuaded by Team's arguments for reversal, the Tenth Circuit affirmed the district court. View "Team Industrial Services v. Zurich American Insurance Company, et al." on Justia Law