Justia Insurance Law Opinion Summaries

The appellant, Demitri Gee, was convicted for driving under the influence resulting in substantial bodily harm. He appealed the judgment of conviction, challenging the restitution amount of $9,940 that was awarded to the State of Nevada Victims of Crime Program. On appeal, the Supreme Court of the State of Nevada found two main issues: whether an order of restitution must be based on competent evidence and whether a defendant’s restitution obligation should be offset by the amount the defendant’s insurance provider paid to the victim for the same losses.Gee had been driving while intoxicated when he lost control of his vehicle and collided with another car, severely injuring the occupants. He subsequently fled the scene. As a result of the collision, Gee was charged with two counts of driving under the influence resulting in substantial bodily harm among other charges. A civil settlement agreement was reached with the victims, and they received compensation through Gee's insurance.The court found that the restitution amount of $9,940 was not supported by competent evidence as the state failed to present evidence to support it. The court also found that the district court had not evaluated whether the restitution should be offset by the insurance payment made by Gee to the victims. Therefore, the Supreme Court of Nevada concluded that the district court had abused its discretion by ordering restitution not supported by competent evidence and by failing to evaluate whether the award needed to be offset by the compensation provided to the victim through Gee’s insurance. The court then vacated the $9,940 in restitution, affirmed the rest of the conviction, and remanded the case for further proceedings regarding the restitution amount. View "Gee v. State" on Justia Law

The case pertains to a marital dissolution dispute in Indiana where the husband's police pension constituted the majority of the couple's marital estate. The husband was reluctant to share his pension with his wife, expressing his intention to disregard any court order mandating him to do so. As a response, the trial court ordered the husband to secure and subsidize a life insurance policy to ensure the wife received her share of the marital estate. The husband challenged the trial court's authority, arguing that the court did not consider the tax implications of his future pension payments.The Indiana Supreme Court upheld the trial court's decision. It ruled that the trial court had broad statutory authority to order a security or other guarantee, such as a life insurance policy, when necessary, to secure the division of property. The court also held that the husband had waived his challenge regarding the tax consequences of his future pension payments.The facts of the case reveal that the husband and wife had been married for nearly twenty-six years. The husband's police pension had a market value of over $1.1 million, constituting over 85% of the marital estate. The husband was unwilling to share his pension with his wife, and the wife expressed concern that she might not receive anything. The trial court ordered the husband to make monthly payments and obtain a life insurance policy that named her as owner and beneficiary. The husband contested this order, leading to the appeal. The Indiana Supreme Court affirmed the trial court's decision, maintaining that the court had the authority to secure the wife's share of the marital estate through a life insurance policy. View "Cooley v. Cooley" on Justia Law

Gold Coast Commodities, Inc., a company that converts used cooking oil and vegetable by-products into animal feed ingredients, was insured under a policy by Travelers Casualty and Surety Company of America. The policy included a pollution exclusion clause. During the policy period, the City of Brandon and the City of Jackson filed suits against Gold Coast, alleging that the company dumped corrosive, high-temperature wastewater into their respective sewer systems, causing damage. Travelers denied coverage for these claims, citing the policy's pollution exclusion clause. Gold Coast appealed this decision, arguing that Travelers had a duty to defend them in these lawsuits and reimburse them for their defense costs.The United States Court of Appeals for the Fifth Circuit upheld the lower court's decision, finding that the claims against Gold Coast were clearly and unambiguously excluded from coverage based on the policy's pollution exclusion. The court noted that the pollution exclusion clause was not ambiguous in this context, as there was no reasonable interpretation of the wastewater's form or qualities that would conclude that it was not an irritant or contaminant, as defined in the policy.The court concluded that because the claims fell outside the policy's coverage, Travelers had no duty to defend or indemnify Gold Coast and its principals in relation to the lawsuits brought against them by the City of Brandon and the City of Jackson. Therefore, the court affirmed the decision of the district court, which had denied Gold Coast's motions for partial judgment on the pleadings and had granted Travelers' motion for partial summary judgment. View "Gold Coast Commodities, Inc. v. Travelers Casualty and Surety Company of America" on Justia Law

The United States Court of Appeals for the Second Circuit heard an appeal involving Timothy Daileader, the independent director and manager of an affiliated group of companies, collectively known as "Oaktree," which were in financial distress. Daileader was seeking coverage from his insurer, Certain Underwriters at Lloyds London Syndicate 1861 (Syndicate 1861), for his defense in litigation involving Oaktree. However, Syndicate 1861 denied Daileader’s insurance claim. Daileader subsequently sought a preliminary injunction to enforce Syndicate 1861’s duty to defend. The United States District Court for the Southern District of New York denied Daileader’s motion, and Daileader appealed.The Court of Appeals affirmed the district court's decision, finding that the district court did not abuse its discretion in denying Daileader's motion for a preliminary injunction. The court held that Daileader had not shown a clear or substantial likelihood of success on the merits of his claim. The court also found that Daileader had not made a strong showing of irreparable harm. The court concluded that the Syndicate's refusal to continue paying under its policy did not disrupt the status quo of ongoing payments between the two parties. Therefore, the court determined that Daileader's desired injunction was mandatory and not prohibitory, thus subject to a more stringent standard for relief. View "Daileader v. Certain Underwriters" on Justia Law

A dispute arose between the Gardens Condominium (a Washington nonprofit corporation) and Farmers Insurance Exchange (a California company) over the interpretation of a resulting loss exception in an all-risk insurance policy. The Gardens Condominium discovered water damage to the roof's fireboard, sheathing, and several sleepers and joists in 2019, caused by faulty construction which led to insufficient ventilation in the roof assembly. They sought coverage for the cost of repairing the damage, which was denied by Farmers Insurance Exchange, who argued that the damage was excluded under the faulty workmanship exclusion in the policy.The trial court ruled in favor of Farmers Insurance Exchange, stating that the policy intended to exclude damage where an uncovered event, such as faulty workmanship, initiated a sequence of events causing damage. The Court of Appeals disagreed, finding that the resulting loss exception preserved coverage.The case reached the Supreme Court of the State of Washington. The court, following a de novo review, sided with the Court of Appeals, stating that a resulting loss exception must have effect to preserve coverage for loss resulting from covered perils, even if the peril is the natural consequence of an excluded peril. The court concluded that a resulting loss exception to the faulty workmanship exclusion revives coverage, even if the faulty workmanship exclusion would otherwise deny it. The case was remanded to the trial court for further proceedings consistent with the Supreme Court's opinion. View "Gardens Condominium v. Farmers Insurance Exchange" on Justia Law

The Supreme Court of the State of Montana affirmed a lower court decision that granted Dr. Gregory S. Tierney's motion to dismiss a medical malpractice lawsuit filed by Janice M. Dodds for insufficient service of process. Dodds initially filed the suit against Dr. Tierney and Benefis Health System in 2013, alleging medical malpractice related to a knee replacement surgery. She failed to serve the defendants in time. Dr. Tierney later filed for bankruptcy, which invoked an automatic stay, halting the lawsuit. After his bankruptcy discharge, Dodds attempted to serve Dr. Tierney but failed to do so within the required 30-day timeframe following the discharge.Dodds further sought to join Dr. Tierney's malpractice insurance company as the real party in interest, but the court denied the motion. Upon review, the Supreme Court found that Dodds had not proven Dr. Tierney's liability, thus the insurer had no duty to indemnify him. The court also rejected Dodds' argument that Dr. Tierney lacked standing after his Chapter 7 discharge. The court held that Dr. Tierney maintained a personal stake in demonstrating he was not liable for medical malpractice and that his insurer would only have a duty to indemnify him once Dodds proved her malpractice claims. View "Dodds v. Tierney" on Justia Law

The Supreme Court of the State of Colorado has ruled that the notice-prejudice rule applies to occurrence-based, first-party homeowners’ property insurance policies. This rule allows insurance companies to deny coverage based on late notice of a claim only if they can prove they were prejudiced by the delay. The court reached this conclusion after exploring the differences between occurrence policies and claims-made policies, asserting that applying the rule to the former was consistent with precedent. The court's decision was based on three policy considerations: the adhesive nature of insurance contracts, the public policy of compensating victims, and the unfairness of granting the insurer a windfall due to a technicality. This case involved two homeowners, Karyn Gregory and Lisa and Sylvan Runkel, who had filed claims for hail damage to their homes. The insurance companies denied their claims on the grounds that they were filed too late. The court reversed the judgments of the lower courts and remanded the cases for further proceedings, with instructions to allow the insurers an opportunity to establish prejudice from the late notice. View "Gregory v. Safeco Insurance Company of America" on Justia Law

A massage parlor, Elegant Massage LLC, filed a class action lawsuit against State Farm Mutual Automobile Insurance Company, asserting claims of breach of contract and other related claims. The suit stemmed from State Farm's denial of insurance coverage to businesses that had to shut down partially or fully due to Virginia executive orders during the COVID-19 pandemic. Elegant Massage claimed that the forced closure constituted a "direct physical loss" under its insurance policy. The district court certified the class and denied State Farm’s motion to dismiss. State Farm appealed.The United States Court of Appeals for the Fourth Circuit used its pendent appellate jurisdiction to review the district court's denial of State Farm’s motion to dismiss in conjunction with the appealable class certification order. The appellate court referred to the precedent set in Uncork & Create LLC v. Cincinnati Insurance Co., which held that a similar business closure during the pandemic did not constitute a "direct physical loss" requiring material destruction or harm to the property. The court found that this precedent was directly applicable to the case at hand.Consequently, the court of appeals held that the district court had erred in denying State Farm's motion to dismiss. It ruled that the temporary closures ordered by the executive did not result in a "direct physical loss" under the policy terms. As a result, the court also found no basis for class certification. The court reversed the district court’s decisions and instructed it to dismiss the entire case. View "Elegant Massage, LLC v. State Farm Mutual Automobile Insurance Co." on Justia Law

Margrit Meier, owner of a restaurant called Hartland Inn, filed a coverage request with Wadena Insurance Company after a fire destroyed her business. The policy entitled her to the "actual cash value" of the property at the time of the fire, but the parties disagreed on how to calculate this. Wadena initially paid Meier $775,000, using a method called the "Broad Evidence Rule" to calculate actual cash value. Dissatisfied, Meier hired a third-party adjuster, who estimated a higher value. Wadena then increased its estimate and paid an additional $60,135.79. Still unsatisfied, Meier invoked the policy’s panel appraisal option.The appraisal process was completed, and the umpire arrived at an independent estimate of the building’s actual cash value. However, Meier filed a second lawsuit, alleging breach of contract and bad faith, and sought to set aside the appraisal award as invalid under state law. The district court dismissed the action, observing that Wadena complied with the alternative dispute resolution process and paid out the binding award.The United States Court of Appeals For the Seventh Circuit affirmed the district court's decision, stating there was no breach of contract or bad faith on Wadena's part. The court upheld that the Broad Evidence Rule was correctly applied to calculate the actual cash value of the property. The court also affirmed the district court’s denial of Wadena’s motion for sanctions under Federal Rule of Civil Procedure 11. View "Meier v. Wadena Insurance Company" on Justia Law

This case, decided by the United States Court of Appeals for the Eleventh Circuit, involved an insurance dispute concerning coverage for defects and delays in the construction of an office building. Riverside Avenue Partners, Ltd. contracted with the Auchter Company to construct the building. After experiencing delays and water intrusion, Riverside Avenue Partners sued Auchter and its surety, Arch Insurance Company. Auchter and Arch filed a third-party complaint against TSG Industries, the window subcontractor, and other subcontractors. TSG's insurer, Landmark American Insurance Company, initially recognized Auchter as an additional insured but later refused to defend them, leading Amerisure, Auchter’s primary insurance provider, to defend Auchter under a reservation of rights.Upon review, the Eleventh Circuit dismissed the appeal, concluding that it lacked jurisdiction. The court determined that the district court's purported final judgment in the case, which favored Amerisure, did not dispose of all claims against all parties, so it was not final. Specifically, Landmark's crossclaim against TSG, stating it had no duty to defend or indemnify TSG in the underlying action, remained unresolved. Despite Amerisure's post-argument briefing suggestion that the declaratory judgments issued below fully answered questions related to Landmark's obligations to TSG, the court maintained that the claims against TSG were still pending, thus lacking jurisdiction to hear the appeal. The court dismissed the appeal and recommended the unresolved matters to the attention of the district court on remand. View "Amerisure Insurance Company v. Landmark American Insurance Company" on Justia Law