Justia Insurance Law Opinion Summaries

The Supreme Court answered in the negative a certified question regarding whether a provision in a commercial insurance policy, governed by Ohio law, providing coverage for a "direct 'loss'" to certain property covers a claim based on business shutdowns caused by COVID-19 (Covid), holding that the term "direct loss" did not include Plaintiff's Covid-related loss of the use of its offices for business purposes.Plaintiff, which owned and operated an audiology practice in northeast Ohio, held an all-risk commercial-property insurance policy issued by Defendant. Plaintiff filed suit alleging that Defendant had breached the contract by refusing to provide coverage for its Covid-related claim on the ground that there was no "direct physical loss or damage" to covered property. The federal court granted Defendant's motion for certification. The Supreme Court answered (1) the term "direct 'loss'" requires that there be some loss or damage to covered property that is physical in nature, and any potential exception to this rule did not apply in this case; and (2) therefore, the term "direct 'loss'" did not include Plaintiff's Covid-related loss of the ability to use covered property for business purposes. View "Neuro-Communication Services v. Cincinnati Insurance Co." on Justia Law

Appellants, who were maimed in a hot air balloon accident in southeastern Pennsylvania in 2015, pursued appellate challenges to the District of Maryland’s rulings against them and in favor of T.H.E. Insurance Company (the “Insurer”) in an insurance coverage dispute. In federal court proceedings initiated in Maryland, Appellants sued certain of the Insurer’s named insureds, and a business called New Horizon Balloon Team (collectively, the “Insureds”) — for the gruesome injuries Appellants’ sustained in the balloon accident (the “damages lawsuit”). While the damages lawsuit was pending, the Insurer initiated these insurance coverage proceedings in the Eastern District of Pennsylvania, naming as defendants the three Insureds, plus Appellants. The district court awarded summary judgment in favor of the Insurer’s contention with respect to a $100,000 coverage limit for each balloon passenger. The Memorandum Opinion also rejected both of Appellants’ bad faith claims. Appellants appealed those rulings.   The Fourth Circuit affirmed. Applying Maryland principles of res judicata in this dispute, the court was satisfied that the coverage issue presented by the Insurer in these proceedings is not barred by the settlement agreement in the damages lawsuit. As such, the court agreed with the district court that Appellants are not entitled to a summary judgment award on the coverage issue on res judicata grounds. Further, the district court thus did not err in ruling Appellants were inside the balloon’s basket at the time of their injuries. As such, Appellants were “passengers” under the Policy and Coverage B’s limit of $100,000 per passenger applies. View "T.H.E. Insurance Company v. Melyndia Davis" on Justia Law

This dispute over UM coverage arose from a motor vehicle accident wherein an uninsured motorist struck and killed Macy Lee Alvey, III, who was in the course and scope of his employment with Rony’s Towing & Recovery, LLC (“Rony’s Towing”). The Louisiana Supreme Court granted this writ to determine whether the failure to include the insurer’s name on an uninsured/underinsured motorist (“UM”) coverage selection form rendered it invalid. Because inclusion of the insurer’s name was an express requirement on the face of the UM form itself, the Supreme Court agreed with the court of appeal that the failure to include such information resulted in an invalid waiver of coverage. View "Berkeley Assurance Co. v. Willis, et al." on Justia Law

GWG DLP Funding V, LLC was the policy owner and beneficiary of a life insurance policy issued by PHL Variable Insurance Company. After GWG transferred beneficiary rights and ownership to Wells Fargo, PHL terminated the policy. GWG and Wells Fargo disputed the termination, and the parties attempted to settle the dispute. After some negotiations, the insured died, and PHL refused to honor the alleged agreement the parties had reached. GWG and Wells Fargo sued PHL for breach of contract and breach of the covenant of good faith and fair dealing and sought a declaratory judgment that prevents PHL from terminating the policy. Plaintiffs appealed the district court’s dismissal of their claims.   The Eighth Circuit affirmed. The court concluded that the alleged agreement in early February was incomplete and that Plaintiffs have failed to state a claim for breach of contract. Further, the court wrote that Plaintiffs have failed to state a claim for breach of the covenant of good faith and fair dealing. First, there is no enforceable agreement based on the email exchange. Thus, there was no contract under which PHL could have breached the duty of good faith. Second, even if the parties were bound by the early February communications, Plaintiffs alleged no dishonest motive on PHL’s part. View "GWG DLP Funding V, LLC v. PHL Variable Insurance Co." on Justia Law

In this insurance coverage dispute the Supreme Court held that State Farm Fire and Casualty Company was not required to cover repair costs to masonry under either Minn. Stat. 65A.10, subd. 1 or the State Farm policy at issue.Before the Supreme Court was the interpretation and application of Minn. Stat. 65A.10, subd. 1, which generally requires replacement cost insurance to cover the cost of repairing damaged property in accordance with state or local authorities' minimum code. Specifically in question was whether State Farm must cover the cost of repairing cracks in masonry that preexisted a storm that damaged the property of St. Matthews. Because the cracks violated the City of St. Paul's building code, the City would not allow St. Matthews to replace the drywall without also repairing the masonry. The district court granted summary judgment to State Farm, determining that because the storm did not damage the masonry, which led to the code upgrade requirements, no coverage existed. The Supreme Court affirmed, holding that, while State Farm was responsible for providing replacement cost coverage to the damaged drywall, it was not required to cover repair costs to the masonry. View "St. Matthews Church of God & Christ v. State Farm Fire & Casualty Co." on Justia Law

The First Circuit affirmed the conclusion of the district court conclusion that the insurance policy issued by Motorists Commercial Mutual Insurance Company to the dealership that owned a motor vehicle that killed and injured several people did cover the accident at issue in this case, holding that the district court did not err.This dispute arose from an auction at which a motor vehicle being displayed for bidding suddenly accelerated into a group of auction attendees, killing five people and injuring several more. Motorists brought this action seeking a declaration that its policies did not provide coverage for the victims' claims against the auctioneer or its employee who was behind the wheel of the vehicle when it struck the victims. The district court granted summary judgment for Motorists. The First Circuit affirmed, holding that the policies at issue did not provide coverage for the accident. View "Motorists Commercial Mutual Insurance Co. v. Hartwell" on Justia Law

The First Circuit reversed the ruling of the district court granting summary judgment in favor of a general liability insurer (Insurer) and dismissing Insured's complaint seeking full coverage of its defense when the company faced a trade secrets lawsuit brought by a competitor, holding that Insured was entitled to summary judgment on the duty to defend.Insured brought this action after Insurer only paid for some of Insured's defense. Insurer counterclaimed seeking a declaratory judgment of absolution from policy coverage. During discovery, both parties moved to compel responses. A magistrate judge denied Insurer's request for information exchanged between Insured and its lawyers and then stayed discovery until it ruled on cross-motions for summary judgment. The district court then granted summary judgment for Insurer. The First Circuit held (1) the district court erred in granting summary judgment for Insurer, and Insured was entitled to summary judgment on the duty to defend; (2) on the reasonableness of the defense, the case is remanded for further proceedings; and (3) the district court correctly granted Insurer's motion to compel. View "Lionbridge Technologies, LLC v. Valley Forge Insurance Co." on Justia Law

The Supreme Court answered a certified question from the United States Court of Appeals for the Fourth Circuit concerning the amount of motor vehicle liability insurance coverage, if any, that Insurer must provide to a non-employee permissive user of an insured vehicle who caused personal injuries to an employee of a named insured under a standard commercial automobile insurance policy.The Fourth Circuit determined that an employee indemnification and employer's liability's exclusion in the policy at issue was void and unenforceable under the mandatory omnibus requirements of W. Va. Code 33-6-31(a). The Supreme Court answered (1) the void exclusion may not be invoked to limit the amount of coverage available to a permissive user of a vehicle insured by Insurer's policy; and (2) Insurer must afford the permissive user with liability coverage up to the full limits available under the insurance policy for any proven damages. View "Ball v. United Financial Casualty Co." on Justia Law

The Supreme Court reversed the circuit court's grant of summary judgment in favor of Allstate Vehicle and Property Insurance Company's decision to rescind an insurance policy purchased for a derelict house Homeowner intended to remodel, holding that questions of material fact existed precluding summary judgment.After a fire occurred, damaging the house and some of its contents, Allstate announced that it was rescinding the homeowners' insurance policy issued to Homeowner, asserting that Homeowner digitally signed an application in which he falsely answered a request as to whether he would occupy the house within thirty days. Plaintiffs, including Homeowner, sued Allstate for breach of contract and unfair trade practices. The circuit court granted Allstate's motion to rescind the policy, concluding that there was no factual dispute that Homeowner had made false statements on his insurance application. The Supreme Court reversed and remanded the case for further proceedings, holding that questions of material fact existed regarding whether Plaintiff's answer to Allstate's thirty-day-occupancy question was false and whether the question was material to Allstate's issuance of the policy. View "McDowell v. Allstate Vehicle & Property Insurance Co." on Justia Law

After Defendant’s Arkansas home burned to the ground, her insurer, Hiscox Dedicated Corporate Member Limited (a "capital provider" to an underwriting syndicate doing business within the Lloyd's of London insurance marketplace), declined to pay her for her loss and instead rescinded the insurance policy because she had made material misrepresentations in her insurance application. Hiscox then sued Defendant in federal court, seeking a declaratory judgment that it had properly rescinded the policy and had no obligation to Defendant. The district court agreed with Hiscox and granted it summary judgment.   The relevant question is whether Defendant "had a foreclosure, repossession, bankruptcy or filed for bankruptcy during the past five (5) years." Defendant maintains that the district court erred in concluding that the phrase "had a foreclosure" meant the initiation of foreclosure proceedings.   The Eighth Circuit reversed and remanded. The court agreed with Defendant that the question is ambiguous. Under Arkansas law, the court read the question in its "plain, ordinary, and popular sense," as "the common usage of terms should prevail". Further, the court wrote it sees no indication in any case that the parties meant to adopt Arkansas statutes as the standard to determine the meaning of the words in the application question. View "Hiscox Dedicated Corp Member v. Suzan Taylor" on Justia Law