Justia Insurance Law Opinion Summaries

Berg was a long‐time pit broker at the Chicago Mercantile Exchange. In 1991 and 1994, Berg bought disability‐income insurance policies. In 2005, he started to experience a tremor in his arms and hands, which interfered with his ability to write quickly and legibly. In 2007, the tremor forced him to leave his job. In 2010, a neurologist diagnosed Berg with an “essential tremor.” Berg applied for total disability benefits. Although the insurers approved Berg’s claim, they designated his disability onset date as February 2010, rather than September 2007. In 2012, Unum discontinued Berg’s total‐disability benefits, asserting that he was eligible only for residual‐disability benefits because when he applied, his regular occupation was “unemployed person.” The district court granted summary judgment to the defendants. The Seventh Circuit reversed, rejecting an argument that, until he saw a physician in 2010, Berg did not meet the policy’s definition: “Total Disability means that the Insured can not [sic] do the substantial and material duties of his or her regular job,” that “[t]he cause of the total disability must be an injury or a sickness,” and that “[t]he injury or sickness must be one which requires and receives regular care by a Physician.” The clause does not contain a temporal element. View "Berg v. New York Life Ins. Co." on Justia Law

At issue in this case were two provisions of a title insurance policy underwritten by Fidelity National Title Insurance Company. One provision insured against unmarketability of title, and the other insured against a lack of access to property. The owner of the policy, Woody Creek Ventures, LLC, contended that both provisions covered losses it sustained when it learned, after purchasing two parcels of land, that one parcel lacked permanent access. And although Fidelity obtained a 30-year right-of-way grant to that parcel, Woody Creek argued Fidelity failed to cure the lack of access and the title remained unmarketable. After review, the Tenth Circuit agreed with the district court’s conclusions that: (1) the policy did not insure a permanent right of access; (2) the right-of-way cured the lack of access to the parcel; and (3) the lack of permanent access did not render Woody Creek’s title unmarketable. View "Fidelity National Title v. Woody Creek Ventures" on Justia Law

Kern was injured in a rear-end collision in which the other driver was at fault. Kern filed an underinsured motorist (UIM) claim with Progressive Northern Insurance Company, his insurance provider. Months of settlement negotiations ended in a stalemate. Thereafter, Kern brought an action against Progressive for bad faith, alleging that Progressive’s settlement offers had been intentionally inadequate. Kern also sought unpaid UIM benefits. After a trial, the jury awarded Kern $18,650 in unpaid UIM damages and found that Progressive had not acted in bad faith. Kern appealed, alleging several errors. The Supreme Court affirmed, holding that none of Kern’s alleged errors required reversal and that the trial court did not clearly err by refusing to award attorney’s fees. View "Kern v. Progressive Northern Ins. Co." on Justia Law

Capson filed suit against MMIC seeking a declaration that MMIC was the primary professional liability insurer for Karl J. Hasik, M.D., and that Capson was the excess insurer. MMIC counterclaimed and filed a third-party complaint against Dr. Hasik and others, seeking rescission of its insurance policy or, in the alternative, a declaration that MMIC had no obligation to defend or indemnify Dr. Hasik for two medical negligence cases that had been filed against him. The district court granted MMIC’s motion for summary judgment. The court concluded that Dr. Hasik’s and the hospital’s nondisclosure of the Wilson lawsuit (a medical malpractice suit filed by a patient against Dr. Hasik) was the equivalent of a false assertion. Therefore, the court held that the elements of equitable rescission were satisfied in this case. Dr. Hasik’s and the hospital’s nondisclosure of the Wilson lawsuit was the equivalent of a material representation that was false. MMIC was entitled to rescind the prior-acts coverage it had agreed to provide. The court further held that Iowa law does not preclude a judgment of rescission in this case. Accordingly, the court affirmed the judgment and dismissed the cross-appeal as moot. View "Capson Physicians Ins. Co. v. MMIC Ins. Inc." on Justia Law

In June 2012, a hailstorm damaged Plaintiff KCOM’s motel. Soon a dispute arose between KCOM and its insurer, defendant Employers Mutual Casualty (EMC), over the extent of the damage. In October 2012, following receipt of an inspection report, KCOM submitted a proof of loss of $631,726.87. EMC admitted coverage but not the amount of loss. Dissatisfied, KCOM invoked the insurance contract’s appraisal provision. KCOM claimed there were issues with the appraisal process, prompting it to ultimately file suit against EMC, alleging breach of contract, unreasonable delay and denial of benefits, and bad faith breach of the insurance contract. The threshold question presented for the Tenth Circuit's review in this state law diversity action was whether the Court had appellate jurisdiction over the district court’s non-final order denying confirmation of a property loss appraisal. The Court concluded it did not, and dismissed the appeal. View "KCOM, Inc. v. Employers Mutual Casualty Co." on Justia Law

Plaintiff's almost-new Toyota Tundra Pickup sustained structural damage, while parked, as a result of a collision between the vehicles of Hollandsworth and Sebastian. Plaintiff had an insurance policy through AAA covering collision-related damages.Hollandsworth also had an AAA insurance policy, covering property damage that he caused through negligence. AAA refused to consider the pickup a “total loss,” had the vehicle repaired at a reported cost of $8,196.06, and provided a rental car during the interim. As a result of the collision and the repairs, the pickup’s future resale value was decreased by more than $17,100. Plaintiff sued Hollandsworth and Sebastian for negligence and sued AAA for breach of contract and bad faith. The trial court dismissed the claims against AAA, finding that plaintiff essentially was seeking reimbursement for the lost market value of his pickup, a loss that specifically was excluded under his insurance policy. The court of appeal affirmed, rejecting an argument that the resale value exclusion violated public policy and was void. The court stated that, in the insurance context, courts are not at liberty to imply a covenant (of good faith) directly at odds with a contract’s express grant of discretionary power, View "Baldwin v. AAA N. Cal." on Justia Law

Construction Contractors (CC), was formed to perform employment functions for regional construction employers, who would transfer funds into CC’s accounts to cover gross payroll, taxes, benefits, and administrative costs. CC would disburse the funds to satisfy subscribers’ obligations. In 2002, CC outsourced its daily operations to AlphaCare. In 2012, AlphaCare informed CC that there were insufficient assets to meet obligations, although the subscribers had paid enough money to fulfill their respective obligations. An AlphaCare manager (Moon) had been falsifying financial statements. CC terminated its agreement with AlphaCare. An investigation revealed that the IRS had started levying CC accounts in 2011. CC owed more than $1.25 million, plus penalties, in unpaid taxes dating back to 2005. AlphaCare had also failed to remit $715,000 in Ohio unemployment taxes for the first quarter of 2012.CC’s CFO, VanDenBerghe, determined that Moon had committed wire fraud by transferring over $900,000 from CC’s account to AlphaCare’s account from 2009-2012. VanDenBerghe continued investigating; about $1 million was still missing. CC applied for a crime-coverage insurance policy, with coverage for employee theft, from Federal Insurance. After Federal executed the policy, CC determined that Moon had misappropriated the missing $1 million. Federal denied CC’s claim for that loss. The Sixth Circuit affirmed summary judgment in favor of Federal, concluding that any loss caused by one employee is considered a “single loss” under the policy and that CC had “discovered” the loss before the execution of the policy. View "Constr. Contractors Employers Group, LLC v. Fed. Ins. Co." on Justia Law

Plaintiff, the insured of Dairyland, sustained bodily injury and property damage while operating his motorcycle. After paying plaintiff all proceeds to which he was entitled under the Dairyland policy, and after plaintiff had settled with the tortfeasor's insurer, Dairyland sought and obtained subrogation from the tortfeasor's insurer for the property damages that it previously paid to plaintiff. Plaintiff then demanded Dairyland pay him the funds it obtained on its subrogation claim. When Dairyland refused, plaintiff filed suit for breach of contract and bad faith. The court concluded that the made whole doctrine does not apply to preclude Dairyland from retaining the funds it received from its subrogation claim because the equities favor Dairyland: (1) Dairyland fully paid plaintiff all he bargained for under his Dairyland policy, which included the policy's limits for bodily injury and 100% of plaintiff's property damage; (2) plaintiff had priority in settling with the tortfeasor's insurer; and (3) if Dairyland had not proceeded on its subrogation claim, plaintiff would have had no access to additional funds from the tortfeasor's insurer. The court also concluded that Dairyland did not act in bad faith. Accordingly, the court reversed the court of appeals decision in all respects. View "Dufour v. Progressive Classic Ins. Co." on Justia Law

Water Well, which was insured under a commercial general liability primary policy (CGL policy) with Consolidated Insurance Company, was sued by Argonaut Insurance Company. The complaint alleged that Water Well and its employees were negligent in the installation and reinstallation of a water pump and breached their contractual obligations. Water Well tendered its defense to its insurer. Consolidated denied Water Well’s defense tender, stating that it had no duty to defend or indemnify Water Well under the CGL policy. After settling with Argonaut, Water Well filed suit against Consolidated, alleging that Consolidated breached its duty to defend Water Well in the action initiated by Argonaut. The circuit court granted summary judgment in favor of Consolidated, concluding that “there is no covered claim and therefore there was no duty to defend.” Applying the four-corners rule, the court of appeals affirmed. The Supreme Court affirmed, holding (1) Water Well’s request to craft a limited exception to the four-corners rule is rejected; and (2) Consolidated did not breach its duty to defend Water Well because certain exclusions in the CGL policy eliminated coverage. View "Water Well Solutions Serv. Group Inc. v. Consolidated Ins. Co." on Justia Law

The complex insurance coverage dispute arose out of a 2007 fire that destroyed portions of a home that was still under construction. Fontana Builders, Inc., the construction contractor, and James and Suzy Accola, the occupants/presumptive purchasers, had separate insurance policies. The Accolas settled with Chubb Insurance Co., the insurer that provided their homeowner’s policy. Assurance Company of America, which had issued a builder’s risk policy to Fontana, denied all coverage for the fire. Fontana commenced this action against Assurance alleging breach of the insurance contract and bad faith failure to pay under the policy. Fontana’s lender, AnchorBank, FSB, eventually intervened. After a retrial, the jury found that the Assurance policy did not provide coverage for Fontana’s fire loss, concluding that the Chubb policy “applied” to the underlying facts so as to terminate Fontana’s builder’s risk coverage. The court of appeals affirmed. The Supreme Court reversed, holding that that the homeowner’s policy issued by Chubb to the Accolas did not apply so as to terminate Fontana’s builder’s risk policy from Assurance. Remanded. View "Fontana Builders, Inc. v. Assurance Co. of Am." on Justia Law