Justia Insurance Law Opinion Summaries

Sweet Valley Missionary Baptist Church appealed a circuit court order denying its request for prejudgment interest against Alfa Insurance Company. This suit arose from a 2005 insurance claim Sweet Valley filed with Alfa Insurance Corporation (“Alfa”), following storm damage to its property caused by Hurricane Katrina. Sweet Valley had a commercial insurance policy with Alfa Insurance. Sweet Valley filed suit against Alfa for breach of contract and alleged that Alfa had undervalued its claim. Sweet Valley requested prejudgment interest in its complaint. It was determined that Sweet Valley was entitled to $462,761.89. Alfa remitted the full amount to Sweet Valley. Subsequently, Alfa filed a motion for summary judgment, alleging that, since an appraisal had been conducted and it already had paid Sweet Valley $462,761.89, no genuine issues remained. The trial court granted Alfa’s motion. Because there was no judgment in this instance upon which interest could accrue, the Supreme Court affirmed the trial court’s judgment. View "Sweet Valley Missionary Baptist Church v. Alfa Insurance Corporation" on Justia Law

Travelers Property Casualty Company of America (Travelers) petitioned for review of a court of appeals judgment affirming the district court’s denial of its motion for directed verdict in a lawsuit brought by its insured, Stresscon Corporation. Stresscon, a subcontracting concrete company, filed suit against Travelers, alleging, among other things, that Travelers acted in bad faith, unreasonably delaying or denying its claim for covered insurance benefits; and Stresscon sought awards of two times the covered benefits along with fees and costs, as prescribed by statute. Stresscon’s claims for relief arose from a serious construction accident in July 2007, which was caused by a crane operator employed by a company that was itself a subcontractor of Stresscon. Stresscon’s general contractor, Mortenson, sought damages from Stresscon, asserting Stresson’s contractual liability for the resulting construction delays, and Stresscon in turn sought indemnification from Travelers. Although there was much dispute over the factual and legal import of Travelers’ reservation of rights and other of its communications with both Stresscon and Mortenson concerning Mortenson’s claim, there was no dispute that by December 31, 2008, Travelers had not paid the damages asserted by Mortenson. The appellate court rejected Travelers’ contention that the no-voluntary-payments clause of their insurance contract relieved it of any obligation to indemnify Stresscon for payments Stresscon had made without its consent. Instead, the court of appeals found that the Colorato Supreme Court's opinion in "Friedland v. Travelers Indemnity Co.," (105 P.3d 639 (2005)) had effectively overruled prior “no voluntary payments” jurisprudence to the contrary and given Stresscon a similar opportunity. The Supreme Court found that its adoption of a notice-prejudice rule in "Friedland" did not overrule any existing “no voluntary payments” jurisprudence in Colorado, and because the Court declined to extend notice-prejudice reasoning in Friedland to Stresscon’s voluntary payments, made in the face of the no-voluntary-payments clause of its insurance contract with Travelers, the judgment of the court of appeals was reversed. View "Travelers Prop. Cas. Co. v. Stresscon Co." on Justia Law

Bellingham filed a beach of contract claim against BancInsure after BancInsure denied coverage for loss that BancInsure claimed was not caused by employee-caused loss exclusions, exclusions for theft of confidential information,nor exclusions for mechanical breakdown or deterioration of a computer system. The district court granted summary judgment to Bellingham. The court concluded that no Minnesota case precludes application of the concurrent-causation doctrine to financial institution bonds. The court found that Minnesota courts would adhere to the general rule of treating financial institution bonds as insurance polices and interpreting those bonds in accordance with the principles of insurance law. Furthermore, the court rejected BancInsure’s argument that the Bond imposes a higher standard-of-proof than the concurrent-causation doctrine. Bellingham still had to show that its loss was directly caused by the fraudulent transfer, and the application of the concurrent-causation doctrine did not interfere with that requirement. The court also rejected BancInsure’s argument that the parties successfully drafted around the concurrent-causation doctrine in the Bond. As a matter of law, the Bond’s reference to “indirectly” is not a sufficient invocation of the “anti-concurrent causation” provision, and thus the Bond at issue in this matter does not contain such a provision. Finally, the court agreed with the district court's conclusion that the efficient and proximate cause of the loss was the illegal transfer of the money and not the employees' violations of policies and procedures. In this case, the overriding cause of the loss Bellingham suffered remains the criminal activity of a third party. Accordingly, the court affirmed the judgment. View "State Bank of Bellingham v. BancInsure, Inc." on Justia Law

Stampley, an independent truck driver, sued Altom Transport, alleging that Altom had failed to pay him enough for driving his truck for it. Altom turned to its insurer, Westchester, for coverage in the suit. Westchester denied coverage; Altom handled its own defense; and the parties tried to settle. At that point, counsel for both Stampley and Altom tried to pull Westchester into the case, by making settlement offers within the limits of the Westchester policy and seeking Westchester’s approval. Westchester did not participate. Altom sought a declaratory judgment establishing that Westchester had a duty to defend, that it wrongfully had failed to do so, and that its handling of the matter had been unreasonable and vexatious. The Seventh Circuit affirmed dismissal of the suit, finding that all of the claims in the underlying suit arise directly from Stampley’s lease agreement with Altom and fell within the policy’s contract claim exception. View "Stampley v. Westchester Fire Ins. Co." on Justia Law

In appeal no. 1140870, Southern Cleaning Service, Inc. ("SCSI"), appealed the grant of summary judgment entered favor of Essex Insurance Company and Genesee General Agency, Inc. (collectively, "the insurance defendants"), on SCSI's claims stemming from Essex's refusal to provide SCSI coverage under a commercial general-liability policy based on an alleged failure to timely notify Essex of the facts leading to the claim for coverage. In appeal no. 1140918, the insurance defendants cross-appealed the trial court's denial of their requests for costs. Winn-Dixie Montgomery, LLC entered into a contract with SCSI for provide floor-care and general janitorial services to multiple grocery stores in central Alabama. SCSI entered into a subcontract with Phase II Maintenance Systems, LLC, whereby Phase II became responsible for providing those services. That subcontract required Phase II to carry a minimum level of liability insurance and to list both SCSI and Winn-Dixie as "additional insureds" on such policies. Phase II contacted Alabama Auto Insurance Center ("Alabama Auto") for a policy; Alabama Auto in turn contacted Genesee, a managing general agency located in Georgia that connected independent agents like Alabama Auto with different insurance companies that provided the type of coverage being sought by the independent agent's customer. Ultimately, Genesee sent Alabama Auto a quote for a commercial general-liability policy issued by Essex that would meet Phase II's needs, and Alabama Auto presented that quote to Phase II. Phase II accepted the quote; Alabama Auto transmitted notice of that acceptance to Genesee; and Genesee, which held issuing authority for Essex, then issued Phase II the desired policy on behalf of Essex. In 2011, Beverly Paige was shopping at a Phase II-serviced Winn-Dixie in Montgomery when she allegedly slipped on a wet floor, fell, and was injured. A Phase II employee on duty at the store at the time of the fall reported the incident to Phase II's owner and president, William Wedgeworth, that same day, and Wedgeworth has given sworn testimony indicating that he separately notified both SCSI and Alabama Auto of the incident on the next available business day,and further specifically asked Alabama Auto to notify Genesee of the incident. After review of the trial court record, the Supreme Court concluded the trial court erred in granting summary judgment, citing several disputes of material fact that should have precluded the court's ultimate decision. As such, the Supreme Court reversed and remanded the outcome for further proceedings. The cross appeal was rendered moot. View "Essex Insurance Company and Genesee General Agency, Inc. v. Southern Cleaning Service, Inc." on Justia Law

In 2003, a closely held corporation purchased a United life insurance policy on Clark, then its President. Buck, its COO, was the beneficiary. Clark thought that the $1 million death benefit would enable Buck to buy out his stock from Clark’s family. The policy was amended so that the benefit would go to the corporation. In 2005 Clark retired and sold his interest to Holtz, the firm’s new President. Buck remained as COO. Holtz owned 61% of the stock and Buck the rest. Holtz received a copy of the policy, including the amendment naming the corporation as the beneficiary. Another copy was in corporate files. Clark died in 2011. Buck told Holtz that the company was the beneficiary, but United paid the money to Buck. When Buck tried to use the proceeds to buy Holtz’s stock, he was removed from the board and quit as COO. The corporation sued. United conceded that the corporation was the beneficiary, but argued that the corporation knew the truth and allowed Buck to claim the money, carrying out the plan devised by Clark and Buck. During discovery,the corporation then admitted finding the amendment earlier. The judge entered summary judgment in favor of United. The Seventh Circuit affirmed, rejecting an argument that Holtz was misled by United’s error and had no reason to think that the corporation was the beneficiary. The corporation’s knowledge, not Holtz’s, is dispositive. View "Samaron Corp. v. United of Omaha Life Ins. Co." on Justia Law

Attorney Fleisher worked for two affiliated law firms. In 2013 Fleisher filed a written demand with the firms, claiming that when he retired, in 2011, he had accrued more than 90 weeks of unused vacation time and more than 322 days of unused sick leave, and that the firms were required by contract and by the Illinois Wage Payment and Collection Act, to pay him for those accruals. He estimated that he was owed about $950,000. The defendants sent a copy of Fleisher’s complaint to Hartford, seeking coverage under the “Employee Benefits Liability Provision” of their Business Owners Policy. It took five months for Hartford to reply that the matter was under consideration. Two months later Hartford denied coverage and sought a declaration that the insurance policy did not cover Fleisher’s claim, alleging that the failure to pay Fleisher was not the result of any negligent act, error, or omission in the administration of the employee benefits program, which was all that the policy covered. The district judge ruled that Hartford had no duty to defend under Illinois law and granted summary judgment. The Seventh Circuit affirmed, holding that delay was not a valid ground for estopping Hartford to deny coverage or a duty to defend. View "Hartford Cas. Ins. Co v. Karlin, Fleisher & Falkenberg" on Justia Law

After Tenant moved into her apartment, her apartment and several adjoining units were severely damaged in a fire that originated in Tenant’s clothes dryer. Insurer paid Landlord’s insurance claim and then sued Tenant for negligence and breach of the Apartment Lease Contract. The jury found that Tenant breached the lease agreement and awarded $93,498 in actual damages and attorney’s fees from Insurer. Tenant filed a motion for judgment notwithstanding the verdict, asserting several grounds for avoiding enforcement of the contract. The trial court granted Tenant’s motion and rendered a take-nothing judgment. The court of appeals affirmed, concluding that the residential-lease provision imposing liability on Tenant for property losses resulting from “any other cause not due to [the landlord’s] negligence or fault” was void and unenforceable because it broadly and unambiguously shifted liability for repairs beyond legislatively authorized bounds. The Supreme Court affirmed in part and reversed in part, holding (1) the court of appeals properly rejected Tenant’s ambiguity defense; but (2) the court of appeals erred in invalidating the lease provision on public-policy grounds. Remanded. View "Philadelphia Indem. Ins. Co. v. White" on Justia Law

This matter stemmed from a public works project for the construction of a gymnasium in Terrytown. JaRoy Construction Inc. served as the general contractor, and pursuant to statute, furnished a surety bond to Jefferson Parish. Ohio Casualty Insurance Company was the surety. JaRoy entered into a written subcontract with Pierce Foundations, Inc. to provide and install pilings for the project. Once finished, Pierce alleged JaRoy failed to pay certain funds due under the subcontract. Pierce sued both JaRoy and Ohio Casualty Insurance, alleging they were jointly and severally liable to Pierce. JaRoy filed for bankruptcy, leaving only Ohio Casualty Insurance as party to the suit. When the project was substantially completed, the Jefferson Parish government filed a notice of acceptance of work with the Jefferson Parish mortgage records office. This occurred over a year after Pierce amended its lawsuit to add Ohio Casualty as a defendant. Pierce never filed a sworn statement of claim in the mortgage records. Ohio Casualty filed a motion for summary judgment, contending that Pierce was required to comply with statutory notice and recordation, and because it failed to do so within 45 days of Jefferson Parish’s acceptance of the project, Pierce could not recover from Ohio Casualty. Pierce argued that the statute did not affect its right to proceed in contract. After a bench trial, the trial court rendered judgment in favor of Pierce for sums owed under the contract plus judicial interest from the date of the original judgment. Ohio Casualty appealed, arguing that the trial court erred in not dismissing Pierce's claims. The court of appeal reversed and ruled in Ohio Casualty's favor. The Supreme Court, however, disagreed and affirmed the trial court judgment. View "Pierce Foundations, Inc. v. JaRoy Construction, Inc." on Justia Law

32nd Street filed suit against the insurers for quantum meruit, unjust enrichment, and vexatious refusal to pay an insurance claim, as well as injunctive relief arising out of medical services provided to the insurers' insureds. The district court granted summary judgment for the insurers and denied 32nd Street's motion to compel discovery. The court concluded that the plain language of the provisions at issue support the district court's conclusion that, in the ancillary-provider agreement, 32nd Street agreed to accept the Blue Traditional rate for services rendered to insureds belonging to all of the insurers’ networks; the district court did not err by finding that the equitable claims were barred by the contracts governing the reimbursement rates paid by the insurers; the district court did not err in granting summary judgment to the insurers on the vexatious-refusal claim where 32nd Street fails to establish any genuine issue of material fact that the insurers refused to pay an amount due under an insurance policy; and the district court did not abuse its discretion by denying 32nd Street's motion to compel. Accordingly, the court affirmed the judgment. View "32nd St. Surgery Ctr. v. Right Choice Managed Care" on Justia Law