Justia Insurance Law Opinion Summaries

The Hancock Center in Chicago is managed by Shorenstein (several related companies). Shorenstein hired an architectural firm, MCA, to design and oversee renovation of windows and exterior walls; MCA hired a general contractor. In 2002, a scaffold fell from the 42nd floor in a high wind and killed three people in cars, severely injuring several others. Shorenstein settled with plaintiffs in 2006 for a total of $8.7 million. MCA’s contract with Shorenstein had required MCA to obtain liability insurance covering the owner, Shorenstein, and any other party specified by the owner. MCA obtained the required insurance policy from AMICO, covering “any person or organization to whom [MCA is] obligated by virtue of a written contract.” There was a dispute concerning which Shorenstein entities were covered. Shorenstein was awarded $959,866.02 by the district court. The Seventh Circuit affirmed in part and reversed in part, holding that the court erred in apportioning the award among the Shorenstein entities. The court rejected AMICO’s arguments that the claim was barred by an exclusion of coverage for injuries “due to rendering or failure to render any professional service” by an insured and that Shorenstein gave up its right to indemnity by AMICO by asking its other insurer for indemnification. View "Nat'l Union Fire Ins. Co. of Pittsburgh v. Am. Motorists Ins. Co." on Justia Law

Gerald Kirchner accidentally shot and killed Robbie Bragg while both men were working for Grimmett Enterprises (Grimmett). Kirchner's mother, Barbara Surbaugh, filed a complaint against Bragg and Grimmett. The parties settled, after which Defendants assigned all claims they might have against their respective insurers for refusing to provide a defense and coverage. Thereafter, Surbaugh filed a declaratory judgment action against Grimmett's insurer, American States. Both parties filed motions for summary judgment. At issue was whether an employee exclusion in the policy was ambiguous and whether the exclusion had been brought to the attention of Grimmett. The circuit court denied the motions. After a jury trial, the circuit court concluded that the employee policy exclusion was unenforceable because the exclusionary language had not been brought to the attention of Grimmett. The Supreme Court reversed, holding that summary judgment should have been granted in favor of American States, as American States established at the summary judgment stage that no material issue of fact was in dispute as to the exclusion being unambiguous and disclosed to Grimmett. Therefore, the exclusion was enforceable. View "Am. States Ins. Co. v. Surbaugh" on Justia Law

Petitioners sought underinsured motorist coverage (UIM) under a policy issued by Auto-Owners Insurance Company (Owners) as a result of an automobile accident caused by an allegedly negligent driver of a rental vehicle owned by Avis Rent-a-Car (Avis). Avis, as a car rental company, was statutorily required to pay $50,000 as a result of the accident. Owners denied Petitioners' UIM claim, asserting that because Avis was a self-insurer, the rental vehicle was not an underinsured automobile under the terms of the policy. The circuit court ruled in favor of Owners, determining that Avis was unambiguously a self-insurer, and therefore, the Avis vehicle did not fall within the policy definition of underinsured automobile. The court of appeals affirmed. The Supreme Court reversed, holding (1) as applied, the policy term "self-insurer" is ambiguous, and therefore, the policy is interpreted in favor of Petitioners to afford coverage; and (2) even if the term "self-insurer" appears to be unambiguous, interpreting it to exclude self-insured rental vehicles from coverage leads to an absurd result here. Remanded. View "Bethke v. Auto-Owners Ins. Co." on Justia Law

A construction crane owned and operated by a construction company (Jacobsmeyer) fell on a building. Jacobsmeyer's insurer (Travelers) reached a settlement agreement with the designer and manufacturer of the crane (Grove) wherein Grove agreed to pay Jacobsmeyer and Travelers (hereinafter referred to collectively as Jacobsmeyer) for a majority of their remaining losses associated with the accident. Jacobsmeyer subsequently sued Grove and its parent company (hereinafter referred to jointly as Manitowoc) for breach of the settlement agreement. Manitowoc filed third-party petition claims for contribution and/or indemnity against U.S. Steel, alleging that U.S. Steel's predecessor-in-interest provided the faulty steel for the crane. The trial court dismissed Manitowoc's third-party petition with prejudice because Manitowoc failed to satisfy pleading requirements where it did not admit its own liability as a joint tortfeasor in its third-party petition. The Supreme Court reversed, holding that a party seeking contribution or indemnity need not admit its own fault in its third-party petition but rather can deny liability in its answer to the plaintiff's petition and assert in its third-party petition that if it is liable to the plaintiff, then the third-party defendant is liable to it. Remanded. View "Travelers Prop. Cas. Co. of Am. v. Manitowoc Co., Inc." on Justia Law

Plaintiff filed an action in the U.S. district court against a Maine police officer, alleging that the officer used force in arresting Plaintiff in violation of state and federal law. A jury found the officer liable on Plaintiff's state law negligence claim and awarded Plaintiff $125,000 in damages. The district court amended the judgment to reduce the damages award to $10,000 pursuant to Me. Rev. Stat. 14, 8104-D. Plaintiff appealed to the First Circuit Court of Appeals. The First Circuit certified two questions for the Supreme Court's review. The Court answered only the first question by holding that whether or not an insurance policy is available to cover a judgment against a government employee sued in his personal capacity, the applicable limit on the award of damages is $10,000 pursuant to section 8104-D rather than $400,000 or the policy limit pursuant to Me. Rev. Stat. 14, 8105(1) and 8116. View "Fortin v. Titcomb" on Justia Law

The underlying tort action in this appeal resulted from a car accident in which the insured, while driving a rental truck, hit a person who was lying in the middle of the road. Both the driver and the person struck were intoxicated, in addition to a passenger in the truck. The person who was struck died from his injuries. The victim's estate sued. The insurance company offered to settle the case against both the driver and the passenger (who may have faced liability for his actions after the accident) for policy limits. These offers were rejected. The estate offered to settle for the release of the named insured only, but the insurer rejected that offer. The occupants of the vehicle later settled with the estate. Unable to reach settlement, the insurer filed a declaratory action to clarify its duties under the policy and resolve issues of who was driving the vehicle, the number of occurrences, and possible breaches of the insurance contract by the insureds. The insureds assigned their claims against the insurer to the estate, which answered and counterclaimed for breach of contract and bad faith. The insurer prevailed on nearly all issues. The personal representative of the estate, for herself and as assignee of the insureds, appealed that result. After review, the Supreme Court found that the insurer did not breach its duties to the insured, and accordingly the Court affirmed the superior court's decision. View "Williams v. GEICO" on Justia Law

Respondent sued Appellants for negligence and resulting injuries sustained in a car accident. The parties entered into a tentative settlement subject to Respondent giving her underinsured motorist (UIM) carrier notice under Schmidt v. Clothier to preserve her potential UIM claim. The UIM carrier elected to substitute its check for the tortfeasor's check pursuant to Schmidt-Clothier. Respondent accepted the substitute check. The negligence claim proceeded to trial, where a jury found Appellants negligent. The district court entered judgment in favor of Respondent and the UIM carrier. The court of appeals affirmed the judgment for Respondent but reversed for the UIM carrier. The Supreme Court affirmed the reversal of the judgment in favor of the UIM carrier but reversed the court of appeals' decision affirming the judgment for Respondent, holding that an injured party may not continue to pursue a negligence claim against the tortfeasor after she has agreed to settle the negligence action under the Schmidt-Clothier procedure and has accepted the substituted check from the UIM carrier. View "Isaac v. Ho" on Justia Law

L.H. Bolduc Company, Inc. (Bolduc) was the subcontractor of Engineering and Construction Innovations, Inc. (ECI). Bolduc damaged a sewer pipe while working on a construction project. ECI repaired the damage and sought reimbursement from Bolduc's insurer, The Travelers Indemnity Company of Connecticut (Travelers) under an endorsement to Bolduc's policy naming ECI as an additional insured for liability caused by acts or omissions of Bolduc. Travelers denied coverage. ECI subsequently sued Bolduc and Travelers (collectively, Appellants) for negligence and breach of contract. A jury found that Bolduc was not negligent, and the district court granted summary judgment for Appellants on ECI's breach of contract claims, concluding that Appellants had no obligation to reimburse ECI for damages not caused by Bolduc. The court of appeals reversed, determining (1) ECI was entitled to coverage as an additional insured without regard to Bolduc's fault; and (2) Bolduc was required to indemnity ECI. The Supreme Court reversed, holding (1) ECI did not qualify as an additional insured with respect to the pipe damage; and (2) Bolduc could not be required to indemnify ECI without violating Minn. Stat. 337.02, which prohibits indemnification for the fault of others in construction contracts. View "Eng'g & Constr. Innovations, Inc. v. L.H. Bolduc Co., Inc." on Justia Law

The issue before the Supreme Court in this case centered on an insured's duty to cooperate with an insurer's claim investigation. Petitioner John Staples' claim was denied for failing to cooperate, namely failing to submit to an examination under oath (EUO). Petitioner sued the insurer for bad faith and related causes of action; the trial court dismissed the case on summary judgment. Upon review of the record, the Supreme Court concluded that genuine issues of fact still existed and made summary judgment inappropriate in this case. Accordingly, the Court reversed and remanded the case for further proceedings. View "Staples v. Allstate Ins. Co." on Justia Law

Shenandoah Life Insurance Company brought an action to void an insurance policy it issued on the life of Lorenzo Smallwood. The circuit court granted partial summary judgment to Shenandoah, and narrowed the issue for trial to whether Lorenzo intended to defraud the insurance company when he did not disclose information related to his medical history on the insurance application. At trial, the court granted Shenandoah's motion for a directed verdict. Lakeisha Smallwood appealed the directed verdict. Upon review, the Supreme Court held that a jury could reasonably conclude that Shenandoah failed to meet its burden of proving Lorenzo made the misrepresentations with the requisite fraudulent intent. The Court reversed and remanded the case for trial. View "Shenandoah Life v. Smallwood" on Justia Law