Justia Insurance Law Opinion Summaries

CDA Dairy Queen, Inc. and Discovery Care Centre, LLC of Salmon (collectively, Dairy Queen) filed a class action against the Idaho State Insurance Fund (SIF) seeking a declaratory judgment that SIF violated Idaho Code section 72-915 by failing to distribute premium rate readjustments on a pro rata basis. The district court granted SIF's motion for summary judgment, finding that the Idaho Legislature's retroactive repeal of section 72-915 was constitutional and that Dairy Queen's action was thereby barred. Dairy Queen appealed and argued that the retroactive repeal violated article I, section 16 of the Idaho Constitution. Dairy Queen the Supreme Court to reverse the decision of the district court and remand for further proceedings consistent with the determination that the retroactive repeal was unconstitutional. Upon review, the Supreme Court agreed with Dairy Queen and reversed. View "CDA Dairy Queen, Inc. v. State Insurance Fund" on Justia Law

The issue before the Supreme Court in this case stemmed from the grant of summary judgment in favor of an insurance company. The insureds contended that the liability coverage provision in their homeowner's policy required the insurer to defend a lawsuit brought by a contractor they hired to repair fire damage to their home and to remodel the home, and that the insurer was required to indemnify against any recovery by the contractor. Upon review of the policy underlying this case, the Supreme Court found no such duties as the insureds contended and affirmed the district court's judgment. View "Linford v. State Farm Fire & Casualty" on Justia Law

After the roof collapsed on Lakeland True Value Hardware, LLC's (Lakeland) store, Lakeland sought payment for business personal property and business income losses from its insurer, The Hartford Fire Insurance Co. (Hartford). Lakeland filed suit, asserting bad faith and breach of contract. The district court granted summary judgment dismissing the bad faith claim for lack of evidence. The breach of contract claim proceeded to trial, and the jury returned a verdict in favor of Hartford. On appeal, Lakeland challenged the order granting summary judgment. Lakeland also asserted: (1) the jury was confused as to the period of coverage and the district court's evidentiary rulings and jury instructions relevant to that issue were erroneous; (2) the jury verdict was not supported by substantial and competent evidence; and (3) that the district court erred by awarding discretionary costs to Hartford. Finding no error, the Supreme Court affirmed. View "Lakeland True Value Hardware v. The Hartford Fire Insurance Co." on Justia Law

This appeal came before the Supreme Court from a declaratory judgment action brought by Farm Bureau Mutual Insurance Company of Idaho (Farm Bureau). Farm Bureau brought suit in response to a claim for insurance benefits filed by the personal representatives of the estate of a deceased policyholder (the Estate). Farm Bureau requested a judgment declaring that the Estate was not an "insured" under the decedent's insurance policy and was therefore not entitled to payment of wrongful death damages under the Policy's underinsured motorist coverage. The district court granted the Estate's motion for summary judgment, determining that Idaho's wrongful death statute, entitled the insured's Estate to recover damages for wrongful death and that the Policy provided coverage for those damages. Farm Bureau appealed. Upon review, the Supreme Court reversed: as to the Estate, the Court determined that under the plain language of the wrongful death statute, the Estate was not legally entitled to recover damages for itself, but only to bring an action on behalf of the heirs to recover their damages. "The Estate stepped into [the decedent's] shoes for those claims, and Farm Bureau made those payments to the Estate. Farm Bureau's payment of these legitimate claims under the insurance contract does not constitute a change of position or an admission that coverage exists for other claims. We hold that these payments do not prevent Farm Bureau from arguing that it is not required to pay the Estate for damages that [the decedent] was not legally entitled to recover." View "Farm Bureau v. Estate of Eisenman" on Justia Law

Two personal injury actions and one wrongful death action arising out of an automobile accident were consolidated on appeal before the Supreme Court. In 2007, Paul -Smith's vehicle collided with a semi-tractor trailer driven by Robert Petrovich. Nicole Plouffe and Tiffany Ann Marie Fragnella were both passengers in Smith's vehicle. Plouffe was severely injured and Fragnella died as a result of her injuries. At the time of the accident, Petrovich was driving the semi-truck for Swift Transportation Co., Inc., and was training a Swift Transportation employee in driving skills. The Swift Transportation trainee, Thomas Thayer, was a passenger in the semi-truck at the time of the collision. Thayer was covered under Swift Transportation's workers' compensation insurance. Smith and his passengers' Amended Complaint alleged that Petrovich was negligently driving the semi-truck. The district court granted summary judgment in favor of the Petrovich and Swift, finding that there was no evidence that the accident was caused by Petrovich. The district court also concluded that a third party claim for negligence against Petrovich was separately barred by the exclusive remedy rule under Idaho's Workers' Compensation statutes. Smith appealed to the Supreme Court arguing that the district court erred in granting summary judgment, that the court abused its discretion in denying the Motions for Reconsideration, and that the court erred in determining that the exclusive remedy rule barred the third-party claims against Petrovich. Upon review, the Supreme Court affirmed the district court's grant of summary judgment in favor of Petrovich, and found no error in the district court's decision. View "Fragnella v. Petrovich" on Justia Law

The issue in this case arose from a judgment which held that a "Designated Project or Premises" endorsement of a commercial general liability insurance policy purchased by a sporting goods store excluded coverage for a claim arising out of the sale of improperly reloaded ammunition. Petitioner Tom Erekson purchased a used .500 revolver from a sporting goods store, along with three boxes of handloaded ammunition, all of which the store purchased from the gun's previous owner. Erekson and his sons took the revolver to a shooting range, loaded five chambers with the reloaded ammunition, and fired. The one cartridge discharged, but two others detonated simultaneously. When the cartridge under the loading gate detonated, it sheared off the gate, a portion of the cartridge rocketed rearward, and struck Erekson in the forehead, lodging three inches into his brain. He also lost a portion of his thumb. The store held a general liability policy through Markel International Insurance Company. The store brought suit for a court order to declare Erekson's injuries were covered under the policy. The district court held that the injury was excluded; Erekson unsuccessfully moved for reconsideration. Upon review of the policy, the Supreme Court affirmed, finding coverage was excluded under the endorsement. View "Markel International Ins. Co. v. Erekson" on Justia Law

The issue before the Supreme Court in this was the denial of attorney fees under Idaho Code section 41-1839 on the ground that the insured's proof of loss was insufficient under the statute because it did not provide the insurer with the legal theory upon which coverage was later determined to exist. Upon review of the matter, the Supreme Court vacated the judgment because a proof of loss need not include an analysis of the proper theory of coverage under the insurance policy. View "Estate of Benjamin Holland v. Metropolitan Property & Casualty Ins." on Justia Law

Claimant Gary Brown filed a complaint with the Industrial Commission seeking disability benefits after he injured his back while working for The Home Depot. Arguing that the injuries caused by the accident in combination with his preexisting conditions, left him permanently and totally disabled, Claimant sought workers' compensation benefits from both Home Depot and the Idaho Industrial Special Indemnity Fund (ISIF). The Commission determined that Claimant was not permanently and totally disabled. Claimant contended on appeal that the Commission erred by evaluating his ability to find work based upon his access to the local labor market at the time his medical condition stabilized in 2005. He argued that his labor market access should have been evaluated as of the date of the Commission hearing in 2009. He also argued that the Commission based its finding that he was 95 percent disabled on an incorrect understanding of the expert testimony presented at the hearing. Upon review, the Supreme Court held that Claimant's labor market at the time of the disability hearing was the proper labor market to be used in evaluating his disability. But because the Commission applied an incorrect legal standard, the Court vacated the Commission's decision and remanded the case for further proceedings.

In April and June of 2008, Best of the Best Auto Sales, Inc. purchased seven vehicles from Dealers Auto Auction of Idaho and Brasher's Idaho Auto Auction with checks that were returned for insufficient funds. As a result, Dealers and Brasher refused to provide Best of the Best with the titles to the vehicles. Best of the Best then sold the vehicles to Idaho consumers without providing them with titles. Dealers and Brasher filed claims with CNA Surety d/b/a Western Surety Company which acted as a surety for a "$20,000 Vehicle/Vessel Dealer Bond." Best of the Best was the principal. Upon Best of the Best's failure to provide evidence or defenses for Dealers' and Brasher's claims, Western Surety alleged that it lawfully settled those claims in good faith upon the condition that the consumers received their titles, even though they were not based on final judgments. Plaintiff Nick Hestead submitted his claim, which was based on a final judgment. Plaintiff's claim involved fraud and fraudulent representation concerning a separate vehicle that he purchased from Best of the Best that was previously branded a lemon in California. Western Surety responded by asserting that the Dealer Bond was exhausted. Plaintiff contended that the plain meaning of I.C. 49-1610(4) provides that his claim should be given priority because it was submitted thirty days after a final judgment was entered, unlike Dealers' and Brasher's claims. Western Surety asserted that the plain meaning of I.C. 41-1839(3) permits sureties to settle Dealer Bond claims in good faith. Upon review, the Supreme Court found that the payments on the surety bond were lawfully made in good faith pursuant to I.C. 49-1610(1) and I.C. 41-1839(3) because Dealers' and Brasher's claims were undisputed and supported by competent evidence.

Appellant Lincoln McNulty worked as a ski patroller for Sinclair Services Company as a member of the Sun Valley Resort from 2005 to 2010. Once the ski season ended in 2009, Appellant filed for unemployment benefits effective April 2009, through November 2009. During those off-season months, he began working part-time at the Sawtooth Club for extra income. However, Appellant failed to report such employment or any earnings from the Sawtooth Club to the Idaho Department of Labor when he filed for unemployment benefits each week. The Idaho Department of Labor discovered the discrepancy and a claims investigator spoke with Appellant and ultimately issued an Eligibility Determination that Appellant was ineligible for benefits because he willfully made false statements or failed to report material facts in order to obtain benefits. Appellant appealed to the Supreme Court, arguing that his failure to report was not willful, the facts were not material, and that he should be eligible for a waiver of the requirement to repay the unemployment benefits. Upon review, the Court affirmed the Industrial Commission's conclusion that Appellant willfully failed to disclose material facts in order to obtain unemployment benefits and that he must repay the overpayment of both state and federal benefits as well as any applicable interest and penalties.