Justia Insurance Law Opinion Summaries

Plaintiff sued to obtain two insurance benefits that she believes Hartford Insurance Company owes her: (1) long-term disability payments and (2) a waiver of life insurance premiums. Although it concedes that Plaintiff was covered by its policy, Hartford contends that she was ineligible for those benefits.The Eleventh Circuit affirmed the district court’s order granting Hartford summary judgment, concluding that Hartford’s determinations were permissible. The court explained that Plaintiff was not entitled to disability payments because Hartford’s interpretation of the disability exclusion was reasonable, and its conflict of interest didn’t lead it to make an arbitrary or capricious decision. Likewise, Plaintiff was not entitled to a waiver of life insurance premiums because she wasn’t disabled within the meaning of Hartford’s life insurance policy. View "Carol H. Stewart v. Hartford Life and Accident Insurance Company" on Justia Law

The issue this appeal presented for the New Jersey Supreme Court’s review centered on an exclusionary clause in a commercial general liability insurance policy issued by Admiral Insurance Company (Admiral) to Richfield Window Coverings, LLC (Richfield). Richfield sold window coverage products, including blinds, to national retailers like Home Depot and provided retailers with machines to cut the blinds to meet the specifications of the retailers’ customers. Colleen Lorito, an employee of a Home Depot located in Nassau County, was injured while operating the blind cutting machine. She and her husband filed a civil action against Richfield, asserting claims for product liability, breach of warranty, and loss of spousal services. Admiral denied any obligation to defend or indemnify, asserting the claims were not covered under the policy based on the Designated New York Counties Exclusion of the insurance policy. Richfield filed a declaratory judgment action seeking to compel Admiral to defend it in the Lorito case and, if necessary, indemnify it against any monetary damages awarded to the plaintiffs. The Law Division granted summary judgment in favor of Admiral. The Appellate Division reversed, finding that “Richfield’s limited activities and operations have no causal relationship to the causes of action or allegations.” The Supreme Court found that the policy’s broad and unambiguous language made clear that a causal relationship was not required in order for the exclusionary clause to apply; rather, any claim “in any way connected with” the insured’s operations or activities in a county identified in the exclusionary clause was not covered under the policy. Richfield’s operations in an excluded county were alleged to be connected with the injuries for which recovery was sought, so the exclusion applied. Admiral had no duty to defend a claim that it is not contractually obligated to indemnify. View "Norman International, Inc. v. Admiral Insurance Company " on Justia Law

After disputes arose between a general contractor and two of its subcontractors, an arbitrator awarded the subcontractors money for the labor and material they had provided the general contractor along with associated costs, attorneys' fees, interest, and other sums. The general contractor declared bankruptcy before paying up, and the surety company that issued a bond guaranteeing the subcontractors would be paid tendered amounts representing only the part of the awards that compensated for labor and material (and some interest). But the subcontractors (or in one case, the subcontractor's assignee) wanted the whole of the awards and sued in federal court to get it.   The district court sided with the surety and granted it summary judgment. The Eighth Circuit reversed and remanded the district court’s decision granting summary judgment to the surety. The court held that the bond at issue obligates the surety to pay not only for labor and material but also for other related items to which Plaintiffs’ subcontracts entitle them (or their assignees). The court explained that the bond provided that if the subcontractors were not paid in full, which is the case here, they were entitled to sums "justly due," which included costs, attorneys' fees and interest. View "Owners Insurance Company v. Fidelity & Deposit Company" on Justia Law

Rock Dental Arkansas PLLC and Rock Dental Missouri LLC (Rock Dental) operate dental clinics in Arkansas and Missouri. After Rock Dental’s insurer, Cincinnati Insurance Company (Cincinnati), denied coverage for Rock Dental’s claims for losses related to the COVID-19 pandemic, Rock Dental sued for breach of contract. The district court granted Cincinnati’s motion to dismiss for failure to state a claim.   The Eighth Circuit affirmed. The court explained that Rock Dental has failed to plausibly allege that COVID-19 physically damaged its properties or that removal of any virus from its properties was required. Further, Rock Dental has not shown that it is entitled to coverage under the Civil Authority Coverage. The court explained that coverage requires allegations of physical loss of or damage to properties other than Rock Dental’s clinics. Rock Dental’s complaint contains no such allegations. View "Rock Dental Arkansas PLLC v. Cincinnati Insurance Company" on Justia Law

The issue this case presented for the Pennsylvania Supreme Court's review centered on whether Appellant’s legal malpractice claims against Appellees, her former attorneys, were barred under the Court’s decision in Muhammad v. Strassburger, McKenna, Messer, Shilobod & Gutnick, 587 A.2d 1346 (Pa. 1991), which held that a plaintiff could not sue his attorney on the basis of the adequacy of a settlement to which the plaintiff agreed, unless the plaintiff alleged the settlement was the result of fraud. Appellant, Dr. Ahlam Kahlil, owned a unit in the Pier 3 Condominiums in Philadelphia; the unit was insured by State Farm Fire and Casualty Company (“State Farm”). The Pier 3 Condominium Association (“Pier 3”) was insured under a master policy issued by Travelers Property Casualty Company of America (“Travelers”). In May 2007, Appellant sustained water damage to her unit as a result of a leak in the unit directly above hers, which was owned by Jason and Anne Marie Diegidio. Due to the water damage, Appellant moved out of her unit and stopped paying her condominium fees. Appellant filed suit against State Farm and Travelers, alleging breach of contract and bad faith, and against the Diegidios, alleging negligence. A year later, Pier 3 filed a separate lawsuit against Appellant for her unpaid condominium fees and charges. In affirming in part and reversing in part the trial court, the Supreme Court found that by finding Appellant’s claims were barred under Muhammad, the lower courts ignored other averments in Appellant’s complaint which did not allege fraud, but, rather, alleged legal malpractice by Appellees in allowing Appellant to enter into a settlement agreement in the Water Damage Case that subsequently precluded her from raising her desired claims in the Fees Case, while repeatedly advising Appellant that the settlement agreement would not preclude those claims. "[A]s our review of Appellant’s complaint demonstrates that she was not merely challenging the amount of her settlement in the Water Damage Case, but rather alleged that Appellees provided incorrect legal advice regarding the scope and effect the Travelers Release, we hold that Muhammad’s bar on lawsuits based on the adequacy of a settlement is not implicated in this case." View "Khalil v. Williams" on Justia Law

Plaintiffs appealed the district court’s grant of summary judgment in favor of Safeco Insurance Company of Illinois (“Safeco”). The case involved a dispute over the applicability of an “other structure” exclusion in a homeowner’s policy when the building sustaining damage was “used in whole or in part for business.”   At issue is a loss caused by the failure of an in-floor radiant heat system in a pole barn that was occasionally used for business purposes. The Eighth Circuit affirmed the district court’s summary judgment ruling in favor of Defendants. The court concluded that the business use exclusion for other structures precludes coverage for the loss, there is no evidence of bad faith on the part of Safeco, and Safeco had no duty to advise Plaintiffs about coverage.   The court explained that Plaintiffs’ arguments seeking to engraft an additional requirement on the business use exclusion—that the structure be used for “actual business activity”— or that the limited coverage for business property located on the premises somehow changes or modifies the plain language of the business use exclusion are unavailing. Because the policy language is unambiguous and the exclusion is neither obscure nor unexpected, the reasonable expectations doctrine is inapplicable. Thus, Safeco did not breach the contract when it denied coverage.Further, the court held that there is no other evidence of bad faith in the investigation of this claim. Finally, there is no evidence in the record to support a claim that Plaintiff either relied on the agent to provide appropriate coverage or needed protection from any specific threat. View "Joseph Wobig v. Safeco Ins Co of Illinois" on Justia Law

Plaintiff Crystal Point Condominium Association, Inc. obtained default judgments against two entities for construction defect claims. Kinsale Insurance Company was alleged to have insured those entities, under the Direct Action Statute, N.J.S.A. 17:28-2. The relevant policies both contained an arbitration agreement providing in part that “[a]ll disputes over coverage or any rights afforded under this Policy . . . shall be submitted to binding Arbitration.” Crystal Point filed a declaratory judgment action against Kinsale, alleging that it was entitled to recover the amounts owed by the entities under the insurance policies issued by Kinsale. Kinsale asserted that Crystal Point’s claims were subject to binding arbitration in accordance with the insurance policies. Kinsale argued that the Direct Action Statute did not apply because Crystal Point had not demonstrated that neither entity was insolvent or bankrupt. In the alternative, Kinsale contended that even if the statute were to apply, it would not preclude enforcement of the arbitration provisions in the policies. The trial court granted Kinsale’s motion to compel arbitration, viewing the Direct Action Statute to be inapplicable because there was no evidence in the record that either insured was insolvent or bankrupt. An appellate court reversed the trial court’s judgment, finding the evidence that the writs of execution were unsatisfied met the Direct Action Statute’s requirement that the claimant present proof of the insured’s insolvency or bankruptcy and determining that the Direct Action Statute authorized Crystal Point’s claims against Kinsale. The appellate court concluded the arbitration clause in Kinsale’s insurance policies did not warrant the arbitration of Crystal Point’s claims, so it reinstated the complaint and remanded for further proceedings. The New Jersey Supreme Court determined Crystal Point could assert direct claims against Kinsale pursuant to the Direct Action Statute in the setting of this case. Based on the plain language of N.J.S.A. 17:28-2, however, Crystal Point’s claims against Kinsale were derivative claims, and were thus subject to the terms of the insurance policies at issue, including the provision in each policy mandating binding arbitration of disputes between Kinsale and its insureds. Crystal Point’s claims against Kinsale were therefore subject to arbitration. View "Crystal Point Condominium Association, Inc. v. Kinsale Insurance Company " on Justia Law

The owners of Hotel Erwin and Larry’s (a restaurant adjacent to the hotel) in Venice Beach—Marina Pacific Hotel & Suites, LLC; Venice Windward, LLC; Larry’s Venice, L.P.; and Erwin H. Sokol, as trustee of the Frances Sokol Trust (collectively insureds)—sued Fireman’s Fund Insurance Company alleging the COVID-19 virus was present on and had physically transformed, portions of the insured properties—“direct physical loss or damage” within the meaning of Fireman’s Fund’s first party commercial property insurance policy—but Fireman’s Fund refused to pay policy benefits for covered losses incurred as a result. The trial court sustained Fireman’s Fund’s demurrer to the insureds’ first amended complaint without leave to amend and dismissed the lawsuit, ruling the COVID-19 virus cannot cause direct physical loss or damage to property for purposes of insurance coverage.   The Second Appellate District reversed the trial court’s judgment sustaining Defendant’s demurrer to the insureds’ first amended complaint without leave to amend and dismissed the lawsuit, ruling the COVID-19 virus cannot cause direct physical loss or damage to property for purposes of insurance coverage. The court held it was an error at the nascent phase of the case. The court explained that because the insureds adequately alleged losses covered by Fireman’s Fund’s policy, they are entitled to an opportunity to present their case, at trial or in opposition to a motion for summary judgment. The judgment of dismissal based on the trial court’s disbelief of those allegations, whether ultimately reasonable or not, must be reversed. View "Marina Pacific Hotel and Suites, LLC v. Fireman's Fund Ins. Co." on Justia Law

Ila Reid appealed a district court’s summary judgment dismissal of her breach of contract claim against Primerica Life Insurance Company (“Primerica”). Reid brought her claim after Primerica filed an interpleader action to resolve competing claims to her late husband Garvin Reid’s life insurance beneficiary proceeds. She contended Primerica acted unfairly in multiple ways to create the controversy and thus the district court should not have permitted Primerica to use interpleader as a shield against her breach of contract claim. Finding no reversible error, the Eighth Circuit Court of Appeals affirmed the district court’s summary judgment order in favor of Primerica. View "Primerica Life Insurance Co. v. Reid" on Justia Law

The Louisiana Supreme Court granted review in this case to determine whether a stamped signature on an uninsured/underinsured motorist (“UM”) coverage rejection form, affixed by the administrative assistant of the corporate insured’s owner and president, complied with the statutory requirement that the UM form be signed by the named insured or his legal representative. Because the stamped signature was affixed on behalf of the legal representative and not by the legal representative himself, the Supreme Court agreed with the court of appeal that the lack of prior written authorization to the administrative assistant rendered the UM form invalid. View "Havard v. JeanLouis, et al." on Justia Law