Justia Insurance Law Opinion Summaries

The Supreme Court affirmed the judgment of the superior court dismissing Plaintiff's breach of contract case against Defendant, her homeowner's insurance carrier, after a hearing justice granted Defendant's motion for summary judgment, holding that summary judgment was properly granted in this case.Plaintiff, who had a homeowner's insurance policy purchased from Defendant, sought coverage for damage done to her residence when her water heater leaked and flooded her basement. When Defendant declined coverage Plaintiff filed a complaint claiming breach of contract. Defendant field a motion for summary judgment, arguing that Plaintiff's breach of contract claim failed as a matter of law because, under the unambiguous language of the policy, the flooding caused by the defective water heater was not a loss covered by the policy. The hearing justice granted the motion for summary judgment. The Supreme Court affirmed, holding that the damage caused by Plaintiff's malfunctioning water heater was clearly not one of the hazards articulated in the policy language. View "Nelson v. Allstate Insurance Co." on Justia Law

The Supreme Judicial Court affirmed the decision of the superior court entering summary judgment in favor of State Farm Fire and Casualty Company on the complaint filed by Plaintiffs seeking to reach and apply the State Farm vehicle insurance coverage of a man found jointly and severally liable to Plaintiffs for damages, holding that the facts did not bring Plaintiffs' damages within the policy's coverage.Grover Bragg was driving a truck insured by State Farm to transport an intoxicated and delusional friend when the friend jumped out of the truck, broke into Plaintiffs' house, damaged property, and assaulted one of the plaintiffs. Plaintiffs brought a complaint against Bragg, alleging negligence, and against Bragg's friend. The court concluded that Bragg and his friend were jointly and severally liable to Plaintiffs and awarded damages. The Supreme Court affirmed. Plaintiffs then commenced the present action seeking to reach and apply Bragg's vehicle insurance policy and to obtain a declaratory judgment that the coverage applied. The court entered summary judgment for State Farm. The Supreme Court affirmed, holding that the injuries and property damage suffered by Plaintiffs were not causally connected to the vehicle use in a way that brought them within the insurance coverage. View "Haskell v. State Farm Fire & Casualty Co." on Justia Law

After defending the general contractor in two construction defect actions, general liability insurer St. Paul Mercury Insurance Company (St. Paul) sought reimbursement of defense costs under an equitable subrogation theory against six subcontractors (defendants) that had worked on the underlying construction projects and whose contracts required them to defend the general contractor in suits involving allegations related to their work. After a bench trial, the court denied St. Paul’s claim. Relying on Patent Scaffolding Co. v. William Simpson Constr. Co., 256 Cal.App.2d 506, 514 (1967), the trial court concluded St. Paul had not demonstrated it was fair to shift all of the defense costs to defendants because their failure to defend the general contractor had not caused the homeowners to bring the construction defect actions. St. Paul argued this conclusion misconstrued the law governing equitable subrogation and therefore constitutes an abuse of discretion. To this, the Court of Appeal agreed: (1) a cause of action based on equitable subrogation allowed an insurer to step into the shoes of its insured and recover only what the insured would be entitled to recover from the defendants; and (2) the appropriate inquiry should have been whether defendants’ failure to defend the general contractor caused St. Paul to incur the defense costs, not whether that failure caused the underlying lawsuits. Judgment was reversed and the matter remanded to the trial court to grant judgment in St. Paul's favor and for a determination of defense costs each defendant owed. View "Pulte Home Corp. v. CBR Electric, Inc." on Justia Law

The 2015 Valley Fire caused smoke damage to the Fadeeffs’ home, insured under a State Farm homeowners’ policy. Linen wall covering inside the home had started to buckle and the Fadeeffs had health concerns. With State Farm’s approval, the Fadeeffs retained ServPro to assist with smoke and soot mitigation and cleaning. State Farm’s independent adjuster (Gannaway) reported that the home was “well maintained” and that “[a]ll damage is related to smoke and soot.” State Farm made payments totaling $50,000. The Fadeeffs hired a public adjuster and submitted supplemental claims, totaling $75,000. State Farm’s independent adjuster (Carpenter), who is not a licensed adjuster in California and not licensed in any building trade reported he could not find smoke damage. State Farm retained FACS, which took only surface samples from the home and determined that no additional cleaning was required. State Farm denied the supplemental claims. The Fadeeffs filed suit, alleging insurance bad faith. The court granted State Farm summary judgment.The court of appeal reversed, concluding that multiple disputed facts made summary judgment inappropriate. It is not possible to conclude that it is indisputable that the basis for denial was reasonable. There are triable issues regarding whether State Farm could have reasonably relied on its experts. A jury should determine the issue of punitive damages. View "Fadeeff v. State Farm General Insurance Co." on Justia Law

The Supreme Court affirmed in part and reversed in part the judgment of the district court holding that a commercial general liability (CGL) policy and a related excess liability declaration do not cover claims brought by the estate and spouse of an employee who was fatally injured while working for Adventureland Amusement Park, holding that the district court erred in granting summary judgment.The decedent was serving as a loading assistant on a river ride when he was fatally injured. The decedent's estate and his widow filed a district court action, later removed to federal court, alleging that the decedent's injuries were a result of grossly negligent acts by the ride's operator, the decedent's coemployee. The insurer filed a declaratory action in state court seeking a declaration that it had no duty to defend or indemnify the coemployee in the federal action. The district court granted summary judgment for the insurer. The Supreme Court reversed in part, holding that there remained a question of fact as to whether the estate has a claim that amounts to gross negligence but is within the scope of the coverage of the CGL policy. View "T.H.E. Insurance Co. v. Estate of Booher" on Justia Law

Kinsale Insurance Company appealed a district court’s partial summary judgment determining Kinsale had a duty to defend QEP Energy Company (“QEP”). QEP moved to dismiss the appeal, arguing the partial summary judgment was not appealable. Kinsale responded, asserting the Declaratory Judgment Act provided a statutory basis for the appeal. The North Dakota Supreme Court concluded the Declaratory Judgment Act did not provide a statutory basis for the appeal, and therefore dismissed the appeal for lack of jurisdiction. View "Dellinger v. Wolf, et al." on Justia Law

Colorado Center Development, LLC, the owner of certain property in Denver, Colorado, hired J.E. Dunn Construction Company to construct an office building (the Project). Colorado Center purchased from Defendant Liberty Mutual Fire Insurance Company a Builder’s Risk insurance policy (the Policy). The Policy provided protection against “direct physical loss or damage caused by a covered peril to ‘buildings or structures’ while in the course of construction, erection, or fabrication.” J.E. Dunn hired plaintiff Rocky Mountain Prestress, LLC (RMP) as a subcontractor to perform work including “engineer[ing], supply[ing,] and install[ing] all precast concrete components, connections, and erections aids” and “[s]upply[ing] and install[ing] grout and/or patching of all connections required by the engineering for the structural integrity of the precast.” Because of “potential concerns that arose at another project” relating to “sinking pillars/columns,” J.E. Dunn requested RMP to retain a third-party engineering firm to investigate “potential structural issues” with RMP’s work on the Project. The engineering firm concluded that the Project required “repairs to insufficiently grouted joints between precast concrete column and pilaster elements” at 264 locations throughout the structure. The engineering firm began its investigation in August 2016, and the final grouting repair work was completed in February 2017. In the meantime, in November 2016, RMP submitted a claim to Liberty seeking coverage under the Policy. The district court granted summary judgment in favor of the insurance company on three independent grounds: (1) RMP had not shown that the claimed loss was fortuitous; (2) the claimed loss did not constitute “direct physical loss or damage” as required for coverage under the policy; and (3) even if there might otherwise have been coverage, the claimed loss fell within the policy’s exclusion for defective workmanship. After review, the Tenth Circuit affirmed the district court’s decision based on the defective-workmanship exclusion. View "Rocky Mountain Presstress v. Liberty Mutual Fire Insurance" on Justia Law

The Court of Appeals held that the statute of limitations begins to run in an underinsured motorist claim against an insurer when the insurer breaches the contract to provide underinsured motorist benefits by denying the insured's claim.Insured was injured in an automobile accident with an underinsured motorist. The underinsured tortfeasor extended to Insured a policy limits settlement offer of $20,000. Insured accepted the offer and then attempted to collect additional underinsured motorist benefits from Insurer. The motor vehicle liability insurance policy covered up to $300,000 per person for bodily injury caused by an uninsured or underinsured motorist. Insured later filed suit against Insurer seeking the balance of unpaid damages not covered by the $20,000 settlement. The circuit court dismissed the complaint as untimely. The Court of Special Appeals reversed. The Court of Appeals affirmed, holding (1) the statute of limitations in an underinsured motorist claim begins to run when the insurer denies an insured's demand for benefits, thereby breaching the insurance contract; and (2) Insured's underinsured motorist claim was not time barred. View "Nationwide Mutual Insurance Co. v. Shilling" on Justia Law

David Turner appealed the grant of summary judgment entered in favor of State Farm Mutual Insurance Company. In August 2017, Turner was on duty as a paramedic and was riding in the passenger seat of an ambulance while responding to an emergency call. While traversing an intersection, the ambulance collided with a vehicle being driven by Michael Norris. Turner suffered multiple injuries, including a broken leg. In November 2017, Turner sued Norris, asserting claims of negligence and "recklessness." Norris answered the complaint, denying that he had been negligent or reckless. Because the Alabama Supreme Court Held that State Farm was discharged from its obligation to pay Turner UIM benefits based on State Farm's payment of a "Lambert" advance and Turner's repudiation of his policy with State Farm, the Court pretermitted consideration of Turner's alternative argument regarding State Farm's failure to disclose the substance of its investigation of Turner's claim for UIM benefits, and expressed no opinion concerning that issue. The Court also expressed no opinion regarding any potential liability State Farm may or may not have to Turner in tort because Turner did not assert such a claim in this action. View "Turner v. State Farm Mutual Insurance Company" on Justia Law

The Supreme Court reversed the decision of the circuit court finding that a condominium association's insurance provider waived subrogation against the tenant of an individual unit owner where the tenant was not a named or additional insured, holding that the circuit court erred.As a result of losses sustained from a fire to property managed by Chimney Hill Condominium Association, and consistent with its coverage obligations, Erie Insurance Exchange made payments for the benefit of the Association. Standing in the shoes of the Association, Erie then brought suit against Naomi Alba to recover the payments it made, alleging that Alba negligently caused the fire. Alba, who lived in the unit where the fire originated under a residential lease agreement, filed a third-party complaint against John Sailsman, the unit's owner, for indemnification. The circuit court granted Alba's motion for declaratory judgment, holding that Erie could not pursue subrogation against Alba. The Supreme Court reversed, holding that Alba was not an implied insured of the Association because no contractual relationship or agreement existed between the two parties to allocate risks and responsibilities and because the surrounding circumstances reflected the contrary intention of not absolving non-unit owners of responsibility for harm caused by their negligent acts. View "Erie Insurance Exchange v. Alba" on Justia Law