Justia Insurance Law Opinion Summaries

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

In August 2023, a devastating fire in Lahaina, Maui, caused significant damage, destroying over 3,000 structures and resulting in at least 102 fatalities. Numerous lawsuits were filed by individual plaintiffs and class action plaintiffs against various defendants, including Hawaiian Electric Industries and others. Additionally, several insurance carriers filed subrogation actions to recover benefits paid to their insureds for damages caused by the fires. A global settlement agreement was reached among the plaintiffs and defendants, but the settlement required either a release of all subrogation claims by the insurance carriers or a final judgment that the insurers' exclusive remedy would be a lien against the settlement under Hawai‘i Revised Statutes (HRS) § 663-10.The Circuit Court of the Second Circuit reserved three questions for the Hawai‘i Supreme Court. The Supreme Court of the State of Hawai‘i reviewed the case and issued an opinion. The court held that the holding in Yukumoto v. Tawarahara, which limited subrogation remedies for health insurers to reimbursement from their insureds under HRS § 663-10, extends to property and casualty insurance carriers. Therefore, under HRS § 431:13-103(a)(10)(A), the lien provided for under HRS § 663-10(a) is the exclusive remedy for property and casualty insurers to recover claims paid for damages caused by a third-party tortfeasor in the context of a tort settlement.The court also held that a property and casualty insurer’s subrogation right of reimbursement is not prejudiced by its insured’s release of any tortfeasor when the settlement documents and release preserve those same rights under HRS § 663-10. Finally, the court declined to apply the made whole doctrine to the statutory lien-claim process established by HRS §§ 431:13-103(a)(10) and 663-10 under the circumstances of this mass tort case. View "In re: The Petition for the Coordination of Maui Fire Cases. S.Ct. Order" on Justia Law

The plaintiff, Alexandria Kazarian, filed a negligence lawsuit against New London County Mutual Insurance Company after a trip-and-fall accident near property owned by the defendant’s insured, Irene Swiney. Kazarian alleged that Swiney allowed a vehicle to be parked in a manner that obstructed the sidewalk, causing her to walk into the street and trip over an unsecured gas cap, resulting in injury. After Swiney passed away, New London was substituted as the defendant.In the Superior Court, a jury trial resulted in a verdict in favor of New London. Kazarian’s motion for a new trial was denied. She argued that Swiney was negligent for allowing the vehicle to obstruct the sidewalk and that a master-servant relationship existed between Swiney and the vehicle owner, making Swiney liable. The trial justice denied the motion, stating it was within the jury’s purview to evaluate the evidence and witness credibility.The Rhode Island Supreme Court reviewed the case. Kazarian contended that the trial justice erred in denying her motions for judgment as a matter of law and a new trial. She also argued that the trial justice’s use of the word “redacted” in response to a jury question was prejudicial. The Supreme Court found that reasonable minds could differ on whether the vehicle obstructed the sidewalk and whether it was a reasonable and necessary use of the sidewalk. The Court also noted that Kazarian failed to object contemporaneously to the alleged golden rule violation and the grass-growth argument during the trial, thus waiving those issues.The Supreme Court affirmed the Superior Court’s judgment, concluding that the trial justice conducted an appropriate analysis and did not err in his decisions. The case was remanded to the Superior Court. View "Kazarian v. New London County Mutual Insurance Co." on Justia Law

Kattie Boline sustained injuries from a car accident and sued JKC Trucking and driver Jerzy Syrzyna for negligence. During her jury trial, Boline violated a stipulated order in limine by mentioning insurance, which led the district court to declare a mistrial. The court found her violation intentional and sanctioned her by ordering her to pay $62,074.95 in defense attorneys’ fees and costs. The court also ruled that no new jury trial would be held until the sanction was paid. When Boline failed to pay, the district court dismissed her case with prejudice and entered judgment against her for the sanction amount.The district court of Sweetwater County initially handled the case, where Boline filed her complaint in 2018. The case experienced several delays before being set for trial in August 2022. During the trial, Boline’s mention of insurance, despite a pretrial order prohibiting such testimony, led to the mistrial. The district court then sanctioned her and conditioned a new trial on the payment of the sanction. Boline’s inability to pay the sanction led to the dismissal of her case with prejudice.The Wyoming Supreme Court reviewed the case and affirmed the district court’s decisions. The Supreme Court held that the district court did not abuse its discretion in sanctioning Boline and dismissing her case with prejudice. The court found that the district court properly considered Boline’s mental health condition, financial situation, and the reasonableness of the attorneys’ fees and costs. The Supreme Court also held that the district court did not violate Boline’s right to open access to the courts under the Wyoming Constitution, as the sanction and subsequent dismissal were appropriate responses to her intentional violation of the court’s order. View "Boline v. JKC Trucking" on Justia Law

The plaintiff, New England Property Services Group, LLC, filed a claim under a homeowners’ insurance policy for wind damage to a property in Greenville, Rhode Island. The insurance company, Vermont Mutual Insurance Company, provided an estimate for the loss, which the plaintiff disputed. The plaintiff invoked the appraisal process outlined in the insurance agreement. Each party appointed an appraiser, but they could not agree on an umpire, so the Superior Court appointed one. The appraisal concluded with an award signed by the plaintiff’s appraiser and the umpire, but not the defendant’s appraiser.The plaintiff filed a petition in the Superior Court to confirm the appraisal award under Rhode Island’s Arbitration Act. The defendant filed a cross-petition to vacate the award, arguing that the plaintiff’s appraiser was ineligible due to a financial interest in the award. The Superior Court granted the defendant’s cross-petition to vacate the award and denied the plaintiff’s petition to confirm it. The plaintiff did not appeal this order but instead filed a motion to reconsider, arguing that the appraisal process was not arbitration because the insurance contract did not require appraisers to be disinterested. The Superior Court denied this motion.The Rhode Island Supreme Court reviewed the case and affirmed the Superior Court’s order. The Court held that the appraisal process was akin to arbitration, despite the absence of the word “disinterested” in the insurance contract. The Court noted that the plaintiff had initially sought to confirm the award under the Arbitration Act and only challenged the nature of the proceedings after the award was vacated. The Court concluded that the Superior Court had subject-matter jurisdiction and that the appraisal clause in the insurance policy constituted arbitration under the Arbitration Act. View "New England Property Services Group, LLC v. Vermont Mutual Insurance Company" on Justia Law

The Berkeley County School District filed a lawsuit against several defendants, including HUB International Ltd. and HUB International Midwest Ltd., alleging claims related to insurance policies and services provided. HUB sought to compel arbitration based on brokerage service agreements (BSAs) from 2002, 2003, 2005, 2006, 2009, and 2011. The district court denied the motion, and HUB appealed. The appellate court reversed and remanded for a trial to resolve factual disputes about the agreements. After a bench trial, the district court again denied the motion, finding no meeting of the minds for the 2006, 2009, and 2011 BSAs and precluding consideration of the 2002 and 2003 BSAs. HUB appealed again, and the appellate court vacated the judgment regarding the 2002 and 2003 BSAs.On remand, the district court found the 2002 and 2003 BSAs valid and enforceable but denied HUB's motion to compel arbitration, deciding that the dispute did not fall within the scope of those agreements. HUB appealed this decision.The United States Court of Appeals for the Fourth Circuit reviewed the case and determined that the district court erred by deciding the arbitrability of the dispute itself. The appellate court held that the arbitration provisions in the 2002 and 2003 BSAs, which incorporate the American Arbitration Association (AAA) commercial rules, clearly delegate arbitrability questions to the arbitrator. Therefore, the district court should have compelled arbitration to resolve whether the claims fall within the scope of the arbitration agreements.The Fourth Circuit reversed the district court's judgment and remanded the case with instructions to compel arbitration of the threshold arbitrability question in accordance with the parties' agreement. View "Berkeley County School District v. HUB International Limited" on Justia Law

A school district insured its buildings through a policy that covered abrupt collapses caused by perils, including the weight of snow and ice. After a heavy snowstorm, part of the roof of an aged elementary school building collapsed into a second-floor classroom. The collapse and subsequent investigations revealed that load-bearing walls throughout the building had deteriorated, and the entire building was declared unsafe for occupancy. The school district demanded that the insurer pay to restore the load-bearing walls for the entire building, but the insurer agreed to pay only for the area of the collapse. The school district sued for the larger amount.The Iowa District Court for Polk County granted summary judgment for the insurer. The court concluded that the school district could only recover for the damage physically caused by the collapse. It also applied the policy’s “ordinance and law” provision exception for pre-existing code violations, finding that the deterioration within the load-bearing walls pre-dated the partial roof collapse and violated local building codes. The school district appealed the decision.The Iowa Supreme Court reviewed the case and affirmed the district court’s judgment. The court held that the insurer must only pay to repair the damage from the partial roof collapse but not the cost to remedy the longstanding deterioration in other areas of the building unaffected by the collapse. The court found that the policy’s exception for pre-existing code violations was unambiguous and applied regardless of whether the insured was aware of the deterioration before the collapse. The court emphasized that a contrary holding would convert the insurance policy into a general maintenance contract. View "Waterloo Community School District v. Employers Mutual Casualty Company" on Justia Law