Justia Insurance Law Opinion Summaries

This case involved Safeco Insurance Company (Safeco) appealing against the trial court's dismissal of its third-party spoliation and negligence claims against the Michaelis Corporation. The dispute originated from a fire in a home insured by Safeco, which resulted in over $500,000 worth of damage. Safeco hired Michaelis to restore the property, and during this process, the kitchen, identified as the origin of the fire, was demolished and the dehydrator believed to have caused the fire was discarded. Safeco subsequently sued Michaelis for negligence and spoliation of evidence, arguing this impeded its ability to bring a successful claim against the dehydrator manufacturer.The trial court dismissed both claims, sparking Safeco's appeal. The Indiana Supreme Court held that under the given facts, Indiana common law did not recognize the tort of third-party spoliation and therefore upheld the trial court’s ruling. The court established that a special relationship did not exist between Safeco and Michaelis that would impose a duty on Michaelis to preserve the evidence. Furthermore, the court ruled it was not reasonably foreseeable that Safeco would be harmed by the loss of the dehydrator. Public policy considerations also weighed against recognizing third-party spoliation absent a special relationship.In addition, the court ruled that Safeco's negligence claim was essentially a third-party spoliation claim and failed for the same reasons. The court also dismissed Safeco's argument that Michaelis assumed a duty of care to preserve the evidence, as this was not alleged in the amended complaint and was raised for the first time on appeal. View "Safeco Insurance Company of Indiana v. Blue Sky Innovation Group, Inc" on Justia Law

The Supreme Court of the State of Idaho upheld a decision by the Idaho Industrial Commission that required an employer and its insurance company to pay the full amount of a medical invoice for an employee's workers' compensation claim, even though the employee's medical expenses were fully covered by Medicaid. The employee, Nickole Thompson, worked at Burley Inn, whose workers' compensation insurer was Milford Casualty Insurance Company. After Thompson suffered a work-related injury, Burley Inn and Milford denied her workers' compensation claim for a hip replacement surgery. Thompson underwent the surgery anyway, with Medicaid covering the cost.Thompson later filed a claim with the Industrial Commission, which found the hip replacement surgery was connected to her work injury and awarded her medical benefits based on the full invoice amount for the surgery. Burley Inn and Milford appealed the decision, arguing that the "full invoice" rule should not apply when Medicaid has already covered the medical expenses.The state Supreme Court, however, upheld the Commission's decision, asserting that excluding Medicaid recipients from the full invoice rule could encourage employers to deny workers' compensation claims of workers they suspect of being Medicaid recipients. The court also noted that the full invoice rule was consistent with Idaho's workers' compensation law and was intended to prevent employers from denying legitimate claims. The Court also concluded that the employer and insurer had standing to bring the appeal and that Thompson was not entitled to attorney fees on appeal. View "Thompson v. Burley Inn, Inc." on Justia Law

This case involves a dispute between Zhen Feng Lin, a food delivery driver who was severely injured in a car accident, and his employer's insurance company, Hartford Accident and Indemnity Company. After the accident, Lin received a settlement from the at-fault driver's insurance company, and workers' compensation benefits from his employer's insurance carrier, Hartford Fire Insurance Company. Lin later sought additional recovery under his employer's underinsured motorist policy with Hartford Accident.The United States Court of Appeals for the Seventh Circuit affirmed the district court's decision that Lin and Hartford Accident had not entered into a "settlement agreement" as defined by the insurance policy. As a result, the court ruled that the policy limits should be reduced by the amount Lin received in workers' compensation benefits. The court also agreed with the district court that Lin should be credited for the amount he paid to settle the workers' compensation lien.Additionally, the court affirmed the district court's dismissal of Lin's counterclaims for bad faith and breach of contract. The court found no plausible claim supporting the argument that Hartford Accident unreasonably delayed settling Lin's claim. Lin's request for statutory penalties for Hartford Accident's purported delay in handling his claim was also denied.Finally, the court denied both parties' motions for sanctions. Lin's appeal was deemed frivolous in part, but the court exercised its discretion not to impose sanctions. View "Hartford Accident and Indemnity Company v. Lin" on Justia Law

The case centers on an insurance dispute between Cardinal Building Materials, Inc. and Amerisure Insurance Company following damage to Cardinal's facility by a tornado. Cardinal initially received a payout from Amerisure but later claimed additional coverage under its policy. Amerisure requested further documentation to support these additional losses, which Cardinal provided, albeit in an unorganized and delayed manner. Amerisure also requested Cardinal to provide a representative for an examination under oath, which Cardinal complied with. Subsequently, Amerisure argued that Cardinal had failed to cooperate as outlined in the insurance policy due to its delayed and disorganized submission of documents, and changes to the claim amount. The district court granted summary judgment in Amerisure's favor, holding that Cardinal had materially breached the insurance policy's cooperation clause.However, the United States Court of Appeals for the Eighth Circuit disagreed with the lower court's decision. The court noted that while Cardinal's document submission and response times were not ideal, the policy did not specify a particular format or schedule for document submission. The court also pointed out that Amerisure did not provide evidence that it had requested a "signed, sworn proof of loss" from Cardinal, a requirement in the policy. As such, the court found that there were genuine disputes of material fact as to whether Cardinal's actions constituted a material breach of the cooperation clause, making summary judgment inappropriate.The court did not address Amerisure’s alternative arguments that Cardinal failed to generate a genuine dispute of material fact regarding damages or present evidence from which a jury could rationally estimate Cardinal’s damages. The court deemed these arguments to be fact-intensive and best left to the district court to decide in the first instance. The court therefore vacated the summary judgment and remanded the case for further proceedings. View "Cardinal Building Materials, Inc. v. Amerisure Insurance Company" on Justia Law

In this case, an automobile repair technician, Donijah Virgo, was injured when his stalled vehicle was hit by a car driven by Heather Michelle Roberts while he was attempting to push it across a road. Virgo sued Roberts for negligence, but the Mobile Circuit Court granted Roberts a partial summary judgment, dismissing Virgo's counterclaim. The Supreme Court of Alabama affirmed the lower court's decision.In October 2020, Virgo was diagnosing a mechanical problem in a Crown Victoria automobile. The car stalled on a road, and he moved it into a median left-turn lane. After waiting for about 10 minutes for traffic to clear, Virgo attempted to push the car across the road, during which Roberts's vehicle collided with it, resulting in major damage and serious injuries to Virgo.Roberts sued Virgo for negligence and wantonness and sought uninsured motorist benefits from GEICO Casualty Company. Virgo filed a counterclaim alleging negligence on Roberts's part. After settling the claim against GEICO, Roberts moved for a summary judgment on Virgo's counterclaim, which the circuit court granted.The Supreme Court of Alabama affirmed the circuit court's decision. The court concluded that Virgo failed to present substantial evidence to raise a genuine issue of material fact regarding his counterclaim, and thus, the circuit court did not err in granting a summary judgment in favor of Roberts. View "Virgo v. Roberts" on Justia Law

In this case, the Court of Appeal of the State of California was asked to determine a dispute over an insurance claim between Apex Solutions, Inc. (Apex), a cannabis business, and Falls Lake National Insurance Company (Falls Lake). In June 2020, burglars broke into Apex's facility and stole the contents of two vaults containing cannabis inventory, leading to property and business income losses. Apex claimed over $2.5 million for the loss from Falls Lake. The disagreement between the parties centered on whether the theft constituted one or two occurrences under the insurance policy, which would determine the payout limit.The court held that the theft was a single occurrence, based on the evidence that it was a coordinated raid. However, it also concluded that there was a disputed issue concerning the proper calculation of Apex’s claim of lost business income. This issue was remanded for further proceedings in the lower court.In reaching its decision, the court applied existing principles of contractual and insurance law, with a focus on the interpretation of the term "occurrence" in the insurance policy. The court emphasized the importance of considering the cause of the loss and the coordination of the activities leading to the loss in determining whether it was a single occurrence.In conclusion, the court partially reversed the judgment, affirming the single occurrence ruling but remanding the case for further proceedings on the lost business income claim. View "Apex Solutions, Inc. v. Falls Lake Ins. Management Co., Inc." on Justia Law

The case concerns Brooklyn Restaurants, Inc., a company that operates a local diner in California. The company filed a lawsuit against its insurer, Sentinel Insurance Company, Limited, after the insurer declined a claim under a commercial property insurance policy following a partial shutdown of the diner during the COVID-19 pandemic. The lower court granted Sentinel’s motion for judgment on the pleadings, ruling there was no coverage under the policy for Brooklyn’s claimed business loss. However, Brooklyn appealed, asserting that its case was unique from other COVID-19 related insurance cases filed in the state, as it had alleged a direct physical loss which should trigger coverage under the policy.Brooklyn also pointed out that their insurance policy contained a unique provision specifically covering losses attributable to a virus. Therefore, they argued, physical loss should include the cleaning of an area infected by the coronavirus. The Court of Appeal, Fourth Appellate District Division One State of California, agreed that the policy was reasonably susceptible to that interpretation. They also determined that Brooklyn had adequately alleged a direct physical loss or damage under the policy, which raised the possibility of coverage.However, the policy also included certain exclusions and conditions applicable to coverage for a loss or damage resulting from a virus. Brooklyn argued that these exclusions and conditions rendered the policy illusory. The court agreed that at the pleading stage, Brooklyn had done enough to raise the issue that its policy might be illusory, which in turn raised factual questions that required further discovery and evidence collection. Therefore, the court reversed the judgment and remanded the case back to the lower court with instructions to enter an order denying Sentinel’s motion for judgment on the pleadings. View "Brooklyn Restaurants, Inc. v. Sentinel Insurance Co., Ltd." on Justia Law

The Supreme Court of the State of Colorado reviewed a case involving an insurance dispute over uninsured/underinsured motorist ("UM/UIM") benefits in a specialty antique/classic-car policy. The plaintiff, Beverly Hughes, was injured while driving a vehicle owned by her employer. Hughes was insured by two automobile insurance policies: one standard policy issued by Travelers Insurance covering her regular-use vehicles and a specialty policy issued by Essentia Insurance Company covering her antique/classic cars. She sought to recover underinsured motorist benefits from both policies.The court held that a specialty antique/classic-car policy that requires an insured to have a regular-use vehicle and to insure it through a standard policy that provides UM/UIM coverage may properly limit its own UM/UIM coverage to the use of any antique/classic car covered under the specialty policy. The court reasoned that an adjunctive antique/classic-car policy, which excludes UM/UIM benefits with respect to situations involving a regular-use vehicle but works in tandem with a standard regular-use-vehicle policy that provides UM/UIM coverage, satisfies both the language of section 10-4-609, C.R.S. (2023), and the public policy goals underpinning the statute. Thus, the court concluded that the regular-use-vehicle exclusion in the UM/UIM provision of Essentia's specialty policy is valid and enforceable under Colorado law. As a result, the court reversed the judgment of the court of appeals and reinstated the district court’s summary judgment in favor of Essentia. View "Essentia Insurance Company, v. Hughes" on Justia Law

In this appeal, a married couple, both visually impaired, sued Colony Insurance Company to recover for the injuries they suffered when the wife fell down a restaurant's stairs. The couple had previously sued the restaurant and its owner for negligence in a New Hampshire state court, resulting in a default judgment against the defendants.The couple then sought to collect the judgment amount from Colony, the restaurant's insurer, arguing that the insurer was obligated to pay under the restaurant's liability insurance policy. Colony denied the couple's claim, stating that it was not notified of the lawsuit against the restaurant "as soon as practicable," as required by the insurance policy. The couple contended that the insurance policy was compulsory under a City of Manchester ordinance, therefore the insurer could not deny the claim based on a breach of the notice provision in the policy.The District Court granted summary judgment to Colony, ruling that the insured had breached the insurance contract by failing to provide timely notice and that the compulsory insurance doctrine, which generally limits an insurer's defenses against an injured party's claim, did not apply. The couple appealed the decision, but the United States Court of Appeals for the First Circuit affirmed the District Court's ruling.The Appeals Court held that, as a matter of law, the lack of timely notice constituted a breach of the insurance contract, thereby releasing Colony from payment. The court also agreed with the District Court's conclusion that the compulsory insurance doctrine did not apply to the case. The court noted that the doctrine has largely been applied in the context of automobile liability insurance and found no persuasive reason to extend it to this case. View "Jespersen v. Colony Insurance Company" on Justia Law

The Supreme Court of North Carolina reversed a decision by the Court of Appeals regarding the interpretation of a clause in the Financial Responsibility Act (FRA) about underinsured motorist (UIM) coverage. The defendant, Mr. Hebert, was in a vehicle accident where multiple parties were injured, and he sought to claim UIM coverage under his policy and his parents' policy. The Court of Appeals had allowed him to "stack" or add together the UIM limits from both policies to qualify his vehicle as underinsured. However, the Supreme Court disagreed with this interpretation.The court held that the FRA's plain language only permits the claimant’s UIM coverages that pertain to the vehicle involved in the accident, not all UIM policies for which the UIM claimant is personally eligible. Therefore, the defendant could not stack his policy’s UIM limits with his parents’ policy’s UIM limits to qualify his vehicle as underinsured. The court concluded that the defendant's vehicle did not qualify as an underinsured highway vehicle under the FRA, and he could not activate his policy’s UIM coverage. Consequently, the Supreme Court reversed the Court of Appeals' decision and remanded the case to the trial court for entry of judgment on the pleadings in favor of the plaintiff, North Carolina Farm Bureau Mutual Insurance Company. View "N.C. Farm Bureau Mut. Ins. Co. v. Hebert" on Justia Law