Justia Insurance Law Opinion Summaries

In 2021, the 11640 Woodbridge Condominium Homeowners’ Association (HOA) experienced significant interior damage to their building due to two rainstorms while the roof was being replaced. The HOA filed a claim under their condominium policy with Farmers Insurance Exchange (Farmers), which was denied on the grounds that the damage resulted from nonaccidental faulty workmanship, not covered by the policy. The HOA then sued Farmers for breach of contract and breach of the implied covenant of good faith and fair dealing.The Superior Court of Los Angeles County granted summary judgment in favor of Farmers, concluding that the policy did not cover the HOA’s losses due to the water damage exclusion and the faulty workmanship exclusion. The HOA appealed the decision.The California Court of Appeal, Second Appellate District, Division Three, reviewed the case and reversed the summary judgment. The court found that the condominium policy was an “all-risks” policy, covering all damage unless specifically excluded. The court determined that there were triable issues of material fact regarding whether the exclusions cited by Farmers—the water damage exclusion and the faulty workmanship exclusion—precluded coverage. The court noted that the property had a “roof” during the repairs and that the damage could have been caused by both the rain and the alleged faulty workmanship. Therefore, the court concluded that Farmers did not establish that the damage was solely caused by faulty workmanship and that the HOA’s losses might be covered under the policy.The court reversed the summary judgment and remanded the case for further proceedings, allowing the HOA to pursue its claims against Farmers. The HOA was awarded its appellate costs. View "11640 Woodbridge Condominium Homeowners' Assn. v. Farmers Ins. Exchange" on Justia Law

David and Marcia Earll's daughter, Rebecca, was killed in a car accident caused by an underinsured motorist. The Earlls sought underinsured motorist (UIM) benefits under their motor vehicle liability policy with Farmers Mutual Insurance Company of Nebraska. Farmers Mutual denied the claim based on an "owned but not insured" exclusion in the policy. The Earlls filed for a declaratory judgment, arguing that the exclusion was against public policy and that they were entitled to UIM benefits. Both parties filed motions for summary judgment. The circuit court ruled in favor of Farmers Mutual, and the Earlls appealed.The circuit court granted summary judgment to Farmers Mutual, relying on a previous decision in De Smet Insurance Company of South Dakota v. Pourier, which upheld the validity of an "owned but not insured" exclusion for UIM coverage. The Earlls argued that this decision should be overruled or distinguished, emphasizing that similar exclusions had been found to violate public policy in the context of uninsured motorist (UM) coverage.The Supreme Court of South Dakota reviewed the case and reversed the circuit court's decision. The court held that the "owned but not insured" exclusion to UIM coverage violated South Dakota public policy. The court noted that UIM coverage is intended to protect insured individuals from underinsured motorists and that such coverage follows the insured rather than the vehicle. The court overruled its previous decision in Pourier, finding it inconsistent with the statutory purpose of UIM coverage and other related decisions. The case was remanded for the circuit court to enter summary judgment in favor of the Earlls. View "Earll v. Farmers Mutual Insurance" on Justia Law

Ellen Williams purchased a residential property in Houma, Louisiana, which was mortgaged by Flagstar Bank. Since Williams did not insure the home, Flagstar obtained a lender-placed hazard insurance policy from Integon National Insurance Company at Williams's expense. The policy named Flagstar as the "Insured" and Williams as the "Borrower." Williams paid all premiums and complied with all policy requirements. The policy included a provision stating that if the loss amount exceeded Flagstar's insurable interest, Integon would pay Williams any residual amount due for the loss, not exceeding the policy limit.In August 2021, Williams's home was damaged by Hurricane Ida. Although Integon inspected the property and exchanged repair estimates with Williams, it ultimately refused to pay for the full property repairs. Williams sued Integon in the 32nd Judicial District Court for the Parish of Terrebonne, asserting breach-of-contract and bad-faith claims under Louisiana law. Integon removed the case to the United States District Court for the Eastern District of Louisiana and filed a Rule 12(b)(6) motion to dismiss, arguing that Williams lacked standing to sue under the policy. The district court agreed with Integon, ruling that Williams was not a named insured, additional insured, or third-party beneficiary, and dismissed the case without allowing Williams to amend her complaint.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court found that the policy's loss payment provision clearly manifested an intent to benefit Williams, provided a certain benefit when the loss amount exceeded Flagstar's insurable interest, and that this benefit was not merely incidental. The court held that Williams might be able to plead plausible facts supporting her status as a third-party beneficiary. Consequently, the Fifth Circuit reversed the district court's decision and remanded the case with instructions to allow Williams to amend her complaint. View "Williams v. Integon National Insurance" on Justia Law

Vermont Mutual Insurance Company issued a homeowners insurance policy to Joanne St. Vil for property in Rumford, Rhode Island. St. Vil filed a claim for windstorm damage, which Vermont Mutual paid after an inspection. St. Vil later engaged New England Property Services Group, LLC (NEPSG) for additional repairs, leading to a dispute over the scope of damages. St. Vil assigned her insurance claim to NEPSG, which demanded an appraisal. Vermont Mutual objected to NEPSG's appraiser, Steven Ceceri, due to his financial interest but proceeded with the appraisal, reserving the right to dispute the award. The appraisal resulted in a final award of $144,855.37, which Vermont Mutual contested.The Superior Court denied Vermont Mutual's petition to vacate the appraisal award and granted NEPSG's cross-petition to confirm it. The court ruled that the policy did not require the appraiser to be disinterested, referencing a similar case it had previously decided.The Rhode Island Supreme Court reviewed the case and held that the appraisal process in Vermont Mutual's policy constituted arbitration under the Arbitration Act. The Court found that Steven Ceceri had a direct financial interest in the award, establishing evident partiality. The Court also determined a causal nexus between Ceceri's conduct and the final award, as the award was not unanimous and significantly higher than Vermont Mutual's appraiser's estimate. Consequently, the Supreme Court vacated the Superior Court's order and remanded the case for a new appraisal. View "Vermont Mutual Insurance Company v. New England Property Services Group, LLC" on Justia Law

Heartland Co-op, an agricultural cooperative, purchased a property and casualty insurance policy from Nationwide Agribusiness Insurance Company. The policy included earnings and extra expense coverage with a $3 million limit for "any one loss" at "all covered locations." In August 2020, a derecho caused significant damage to Heartland's operations across 48 locations. Nationwide paid Heartland approximately $131 million for the losses, including $3 million for earnings and extra expense coverage. Heartland claimed that the $3 million limit should apply to each location individually, while Nationwide argued that the limit applied to the total loss across all locations.The Iowa District Court for Polk County granted Nationwide's motion for summary judgment, concluding that the policy unambiguously limited the earnings and extra expense coverage to $3 million in total for the derecho-related loss. The Iowa Court of Appeals affirmed the district court's decision, agreeing that the policy language was clear and that the $3 million limit applied to the aggregate loss across all covered locations.The Iowa Supreme Court reviewed the case and affirmed the decisions of the lower courts. The court held that the insurance policy was unambiguous and provided coverage for the total loss of net income and extra expense to Heartland as an entity, not on a per-location basis. The $3 million limit applied to the total loss resulting from the derecho at all covered locations. The court emphasized that the policy's plain language and the premium paid supported this interpretation, and it declined to rewrite the contract to provide the coverage Heartland sought. View "Heartland Co-Op v. Nationwide Agribusiness Insurance Company" on Justia Law

JohnsonKreis Construction Company, Inc. ("JohnsonKreis") served as the general contractor on a hotel-construction project in Birmingham, with Howard Painting, Inc. ("Howard") as a subcontractor. The subcontract agreement included an indemnity provision requiring Howard to indemnify JohnsonKreis for personal injury or death arising from Howard's negligence. Domingo Rosales-Herrera, an employee of a subcontractor working for Howard, died after falling from a window while attempting to load equipment into a trash box on a telehandler owned by JohnsonKreis. The personal representative of Rosales-Herrera's estate filed a wrongful-death lawsuit against both JohnsonKreis and Howard.The Jefferson Circuit Court granted summary judgment in favor of Howard and its insurers, Auto-Owners Insurance Company and Owners Insurance Company (collectively "Owners"), determining that the indemnity provision in the subcontract agreement was legally unenforceable. The court held that Alabama law does not allow for the apportionment of damages in a wrongful-death case, thus precluding proportional indemnification.The Supreme Court of Alabama reviewed the case and reversed the trial court's decision. The Supreme Court held that the subcontract agreement's proportional indemnity provision was legally enforceable under Alabama law. The court noted that parties may enter into agreements allowing for indemnification even for claims resulting solely from the negligence of the indemnitee. The court emphasized that such agreements are valid and enforceable if expressed in clear and unequivocal language.The Supreme Court remanded the case for further proceedings consistent with its opinion, instructing the trial court to consider the parties' evidentiary submissions and arguments regarding the interpretation and application of the disputed provisions of the subcontract agreement and the additional-insured endorsement. View "JohnsonKreis Construction Company, Inc. v. Howard Painting, Inc." on Justia Law

In August 2022, Rebecca Henderson and her minor son were involved in an automobile collision in Alabama. Henderson, a Kentucky resident, had an insurance policy from Kentucky Farm Bureau Mutual Insurance Company (Kentucky Farm Bureau) that provided uninsured-motorist (UM) benefits. In July 2024, Henderson filed a complaint in the Baldwin Circuit Court, asserting a negligence/wantonness claim against the other driver, Trey Allan Knapp, and a claim for damages by contract against Kentucky Farm Bureau, alleging entitlement to UM benefits as Knapp had no liability insurance.Kentucky Farm Bureau moved to dismiss the claim, arguing that the Baldwin Circuit Court lacked personal jurisdiction over it, as it only does business in Kentucky and has no contacts with Alabama. The motion was supported by an affidavit from a Kentucky Farm Bureau employee. Henderson opposed the motion, arguing that the insurance policy provided nationwide coverage, thus establishing sufficient contacts with Alabama. The circuit court denied the motion to dismiss without explanation, leading Kentucky Farm Bureau to petition the Supreme Court of Alabama for a writ of mandamus.The Supreme Court of Alabama reviewed the case and concluded that Kentucky Farm Bureau did not have sufficient contacts with Alabama to establish personal jurisdiction. The court noted that the insurance policy was issued and delivered in Kentucky, and Kentucky Farm Bureau does not conduct business in Alabama. The court distinguished between providing liability coverage nationwide and being subject to contract claims in any state. Consequently, the court granted the petition and issued a writ of mandamus directing the Baldwin Circuit Court to dismiss Henderson's claim against Kentucky Farm Bureau for lack of personal jurisdiction. View "In re: Henderson v. Kentucky Farm Bureau Mutual Insurance Company" on Justia Law

Haylee Hinton was injured in a car accident caused by another motorist running a red light. She initially sought compensation from her employer’s workers’ compensation insurer and later settled with the motorist’s insurance carrier. Hinton then filed a claim for underinsured motorist benefits with Midwest Family Mutual Insurance, her underinsured motorist coverage provider, and submitted the claim to arbitration as permitted by Utah law.Midwest sought a declaratory judgment from the district court to limit the categories of damages Hinton could recover in arbitration, citing Utah Code section 31A-22-305.3(4)(c)(i), which excludes benefits paid or payable under the Workers’ Compensation Act from underinsured motorist coverage. The district court interpreted the statute to mean that past and future medical expenses and two-thirds of lost wages were payable under workers’ compensation and ruled that Hinton could not recover these categories of damages from Midwest.Hinton petitioned for interlocutory review, arguing that the district court lacked jurisdiction and misinterpreted the statute. The Utah Supreme Court found that the district court had jurisdiction but misinterpreted the statute. The court concluded that “payable” means benefits that can or may be paid to a specific claimant in a particular case, not just categories of damages generally available under workers’ compensation. The court vacated the district court’s order and remanded the matter for further proceedings to determine what benefits remain payable to Hinton under the Workers’ Compensation Act. View "Hinton v. Midwest Family Mutual Insurance" on Justia Law

Suzanne Wolf suffered multiple pelvic fractures in a car accident caused by an underinsured motorist. After receiving $100,000 from the at-fault driver’s insurance, she filed claims for underinsured motorist benefits with her personal automobile insurer and her employer’s general commercial liability insurer, Riverport Insurance Company. Wolf settled with her personal insurer for $150,000 and eventually settled with Riverport after four years of negotiations and arbitration, which awarded her $905,000. Riverport paid the award, less the amounts received from the other insurers.Wolf filed a lawsuit against Riverport in the Circuit Court of Cook County, alleging unreasonable delay in payment under section 155 of the Illinois Insurance Code. Riverport removed the case to the United States District Court for the Northern District of Illinois, invoking diversity jurisdiction. The district court granted Riverport’s motion for judgment on the pleadings under Rule 12(c) of the Federal Rules of Civil Procedure, finding that Wolf lacked a viable legal theory to support her claim. The court also denied Wolf’s discovery request.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court held that the insurance policy did not impose a duty on Riverport to investigate and settle Wolf’s claim in good faith. The court found that the policy’s provision granting Riverport discretion to investigate and settle claims applied only to defending insureds against third-party claims, not to first-party claims by insureds against Riverport. Consequently, Wolf’s breach-of-contract theory failed, and the district court’s judgment was affirmed. The appellate court also upheld the district court’s discovery decision, as Wolf could not show actual and substantial prejudice from the denial of additional discovery. View "Wolf v. Riverport Insurance Company" on Justia Law

Bob Robison Commercial Flooring Inc. (BRCF) was hired to install a vinyl gym floor at a middle school in Trumann, Arkansas. BRCF subcontracted the painting of volleyball and basketball lines to Robert Liles Parking Lot Services (Liles). Liles's work was faulty, leading to the rejection of the gym floor. BRCF had to remove and replace the floor, incurring a cost of $181,415.39. BRCF submitted a claim to RLI Insurance Company (RLI) under its builder’s risk policy, which RLI denied, citing an exclusion for losses caused by workmanship errors.BRCF filed a lawsuit in state court for declaratory judgment and breach-of-contract damages. RLI removed the case to the United States District Court for the Eastern District of Arkansas. The district court denied RLI’s motion to dismiss, finding that BRCF had stated plausible claims. However, after limited discovery, the district court granted RLI’s motion for summary judgment, concluding that the policy unambiguously excluded coverage for damage resulting from defective workmanship.The United States Court of Appeals for the Eighth Circuit reviewed the case. BRCF argued that the policy’s ensuing loss clause should restore coverage for the replacement cost of the vinyl gym floor. The Eighth Circuit affirmed the district court’s decision, holding that the policy was not ambiguous and that the ensuing loss clause did not apply because the damage was solely caused by the excluded peril of faulty workmanship. The court concluded that BRCF failed to identify a separate covered peril that would trigger the ensuing loss clause, and thus, the entire loss was excluded from coverage. View "Bob Robison Commercial Floor v. RLI Insurance Company" on Justia Law