Justia Insurance Law Opinion Summaries

Jerry Earl sustained severe injuries in a motorcycle accident. Jerry had a policy with State Farm, which provided uninsured motorist coverage. Earl and his wife Kimberly (together, Plaintiffs) sued State Farm when State Farm refused to pay out the full amount under the policy. State Farm admitted liability, and the case proceeded to a jury on the question of damages. The jury returned a verdict of $250,000, the exact amount of the coverage limit. State Farm appealed, arguing that the trial court abused its discretion by allowing the coverage limit into evidence. The Supreme Court affirmed, holding that the trial court did not abuse its discretion in admitting the coverage limit. View "State Farm Mut. Auto. Ins. Co. v. Earl" on Justia Law

A driver for Medford Trucking, LLC was injured while his truck was being loaded with coal by employees of Elk Run Coal Co. The driver sued Elk Run. A hauling and delivery agreement between Elk Run and Medford contained an indemnification clause that required Medford to purchase insurance. Accordingly, Medford purchased insurance from four different insurance companies. Elk Run asserted a third-party complaint against the insurers seeking a declaration that there was insurance coverage for the plaintiff’s claim against Elk Run under the policies. The circuit court granted partial summary judgment for the insurance companies, and Elk Run’s third-party complaints against the insurers were dismissed with prejudice. The Supreme Court reversed in part, affirmed in part, and remanded, holding that the circuit court erred in granting summary judgment to two of the insurers. Remanded. View "Elk Run Coal Co. v. Canopius US Ins., Inc." on Justia Law

The issue this case presented for the Supreme Court's review centered on recovery under an uninsured motorist (UM) insurance policy. Specifically, the issue was whether the burden of proof on summary judgment between the insured and the UM carrier was misallocated. The UM carrier denied coverage based on a claim that the at-fault driver was not "uninsured" as defined in the UM policy at issue here because the drive's liability carrier had not "legally denied" coverage. After review, the Supreme Court concluded the Court of Appeals erred in placing the burden of proof on the UM carrier in this instance, and therefore reversed. View "Travelers Home & Marine Ins. Co. v. Castellanos" on Justia Law

Marian Davis lost control of her vehicle and struck a vehicle driven by Amy Locke. At the time of the accident, Davis was insured by Safeco Insurance Company under a policy with a $100,000 per person coverage. Davis died from her injuries. Locke, who also sustained injuries, filed a claim for damages against Davis’s estate. Prior to trial, Safeco paid Locke $16,306 for her past medical expenses. After a trial, the jury awarded Locke $400,000 in compensation for her injuries. The Estate appealed, and Safeco intervened. The Supreme Court affirmed in part and vacated and remanded in part, holding that the district court (1) abused its discretion in denying the Estate’s motion to alter or amend the judgment because Locke was precluded from recovering against the Estate more than the $100,000 insurance limitation; and (2) did not abuse its discretion when it made findings and conclusions that effectively bound Safeco to a judgment in a case in which Safeco was not a named party, was not represented by counsel, and did not appear. View "Locke v. Estate of Davis" on Justia Law

Allstate Insurance Company petitioned for review of a court of appeals' judgment that reversed the dismissal of a breach of assignment claim brought by Medical Lien Management (MLM). The district court effectively construed MLM's Lien and Security Agreement with a motor vehicle accident victim (upon which the underlying complaint was premised), as failing to assign the victim's right to the proceeds of his personal injury lawsuit against Allstate's insured. The court of appeals found a valid assignment to MLM all rights to the future proceeds from the personal injury claim in an amount equal to the costs of medical services paid for by MLM, as well as a sufficient allegation in the complaint of an enforceable obligation by Allstate to pay the assigned sums to MLM. The Supreme Court reversed, finding that the court of appeals erred in finding the purported assignment in this case. View "Allstate Insurance Co. v. Medical Lien Management, Inc." on Justia Law

Daniel attended a birthday party for a St. Louis County police officer at Gannon's tavern, as an invited guest. Following a confrontation between Lammert and another in the parking lot, Lammert hit Daniel, then drove his vehicle out to the street, running over Daniel's body. Daniel died from complications due to the injuries. Lammert turned himself into the police and pleaded guilty to manslaughter and leaving-the-scene charges, claiming that he thought Daniel was out of the way. In state court premises liability and dram shop claims against Gannon's, its liquor liability insurer defended the dram shop claims, but the general commercial liability insurer, Atain, refused to defend and declined to participate in mediation. Gannon's settled, assigned its claims against Atain, and agreed to a $2 million consent judgment on the premises liability action. The estate sued Atain, alleging equitable garnishment and vexatious failure to defend and indemnify. Atain cited an exclusion precluding coverage for injuries caused by automobiles and an assault and battery exclusion. The Eighth Circuit affirmed summary judgment in favor of the estate on the equitable garnishment claim, finding that the exclusions did not apply, but granted Atain summary judgment the vexatious-refusal-to-defend claim, finding that the exclusions arguably could have applied and coverage was a close call. View "Minden v. Atain Specialty Ins. Co." on Justia Law

Cornhusker Casualty Company appealed a district court’s summary-judgment ruling, arguing that the district court incorrectly concluded that Cornhusker was estopped from asserting noncoverage as a defense to the claims of Shari and Steve Skaj. The Skajs cross-appealed the district court’s sua sponte entry of summary judgment against them on their counterclaim for attorneys’ fees. Vincent Rosty filed a cross-appeal too, alleging that the district court erred in granting summary judgment to Cornhusker on some of his tort-based counterclaims. R&R Roofing, Inc. was a Wyoming construction company primarily operated by Randy Rosty and Steven Rosty. R&R purchased a Cornhusker commercial liability policy listing “R&R” and “Randy Rosty” as the named insureds. Vincent, who was an R&R employee at that time, did not appear as a named insured under the Policy. Vincent drove R&R’s dump truck to the Skaj home to deliver roofing supplies. The truck was accidentally knocked into second gear, rolled forward toward Ms. Skaj as she approached, and pinned her against a parked motor home, injuring her. A laboratory test performed later that day detected the presence of marijuana and methamphetamines in Vincent’s bloodstream. The Skajs ultimately sued R&R, Steven, and Vincent, asserting several negligence claims. Counsel retained by Cornhusker to defend against the Skajs’ lawsuit sought and received an extension of “the answer deadline for all defendants.” Communication related to that request indicated that defense counsel at that point “d[id] not know if [she would] be representing all of the defendants.” Defense counsel filed an answer to the Skajs’ complaint on behalf of Steven and R&R only, noting, “I do not represent Vincent Rosty.” In filing its answer, Cornhusker did not attempt to advise Vincent of its decision at that time not to represent him. An entry of default against Vincent issued, and the non-defaulting defendants were dismissed from the litigation. The Skajs sought to recover a judgment as to Vincent. Cornhusker hired separate representation for Vincent who opposed the default-judgment proceedings. The state court issued a default-judgment order assessing a total in damages and costs of $897,344.24 against Vincent. One week after the default-judgment hearing, Cornhusker sent Vincent a letter purporting for the first time to deny coverage on grounds that Vincent was not a named insured to the R&R policy. Cornhusker repeated this ground in its declaratory judgment action in federal district court. Vincent responded by counterclaiming against Cornhusker, asserting various contract and tort theories. The Skajs filed their own counterclaim, seeking a declaration “that Cornhusker [was] required to pay the judgment in the underlying action." All parties filed motions for summary judgment, but the court announced that there would be no trial. It declared that Cornhusker was estopped from denying coverage to Vincent because Cornhusker had represented that it would provide a defense, never reserved its rights, and did not advise Vincent of its decision to deny coverage until more than sixteen months after the entry of default. Cornhusker appealed the district court's judgment. But finding no reversible error, the Tenth Circuit affirmed the court's judgment. View "Cornhusker Casualty Co. v. Skaj" on Justia Law

A man working at a concrete-pouring job was assaulted by another worker at the job site. The injured man filed a lawsuit against the assailant and both the concrete-pouring company and its owner. Although the company’s commercial general liability insurer initially provided a defense attorney in the negligence action, the insurer later brought a declaratory judgment action alleging that the incident fell within the policy’s employee-exclusion clause. The superior court granted summary judgment to the insurance company. The Supreme Court affirmed. "[B]ecause courts look to workers’ compensation law to give meaning to the phrase 'arising out of and in the course of employment' in workers’ compensation/employers’ liability policies, and because commercial general liability policies are designed to avoid the existence of an overlap or a gap between workers’ compensation/employers’ liability and commercial general liability policies, sister jurisdictions interpret the same phrase in employee-exclusion clauses in commercial general liability policies in light of the identical language in workers’ compensation statutes. We have found no case law holding that the contractual phrase 'arising out of and in the course of employment' in commercial general liability exclusions should be interpreted differently from the identical phrase in workers’ compensation statutes. For purposes of this appeal, we will use workers’ compensation case law to interpret the meaning of the commercial general liability policy’s exclusion of coverage for bodily injury "arising out of and in the course of employment.'" The employer did not purchase workers' compensation coverage. And in reading the general liability policy in question, the Supreme Court concluded the superior court did not err in determining that the incident here fell within the employee-exclusion claim. View "Devine v. Great Divide Insurance Company" on Justia Law

When a fire caused by NSTAR Electric and Gas Company employees damaged a building owned by the Massachusetts Institute of Technology (MIT), two insurers paid the claims of the building’s tenants. The insurers then brought this complaint against NSTAR Electric Company and NSTAR Electric & Gas Company (collectively, NSTAR) seeking to recover for the claims paid. NSTAR moved for partial summary judgment, contending that, to the extent to which the insurers sought recovery for business interruption losses, the claims were barred by Massachusetts Department of Telecommunications and Energy Tariff No. 200A, filed with and approved by the Department of Public Utilities, and in effect when the explosion occurred. The tariff contained a limitation of liability clause that limited NSTAR from liability to nonresidential customers for special, indirect, or consequential damages resulting from the utility’s gross negligence. A judge of the superior court allowed NSTAR’s motion for partial summary judgment, concluding that a tariff filed with and approved by a regulatory agency may limit a public utility’s liability. The Supreme Judicial Court affirmed, holding that the limitation of liability clause in the tariff precluded Plaintiffs’ claims to recover for business interruption and other consequential or economic damages. View "Maryland Cas. Co. v. NSTAR Elec. Co." on Justia Law

In a 2008 collision on I-40 in West Memphis, McHone, driving a car, was struck by a tractor trailer driven by Whirley. McHone’s State Farm policy included coverage for uninsured motor vehicles with bodily injury limits of $100,000 per person. The trucking company defendants were insured by Gramercy. McHone’s medical bills exceeded $400,000; her physicians estimate future medical care will exceed an additional $400,000. Before trial, Gramercy was placed into Rehabilitation with an automatic stay. In 2013, McHone’s counsel notified State Farm of the problems with Gramercy and demanded $100,000 uninsured motorist benefits. State Farm asserted that no coverage existed. McHone settled her claims against Whirley and the truck’s owner for $300,000 to avoid the claim process with the State Guarantee Fund. Gramercy was liquidated. State Farm again refused to pay uninsured motorist benefits. The district court ruled in favor of State Farm as being entitled to a credit for the settlement proceeds regardless of the date of insolvency. The Eighth Circuit affirmed. State Farm is entitled to a credit for the money McHone received from her settlement. McHone’s argument that the credit is not applicable because the payment was made by the receivership rather than by Gramercy itself is not supported by the policy language nor Tennessee law. View "McHone v. State Farm Mut. Ins. Co." on Justia Law