Justia Insurance Law Opinion Summaries

In this case, a joint venture between Watershed Ventures, LLC and Patrick M. McGrath failed, leading to bankruptcy and litigation. McGrath and two investment vehicles he controlled sought coverage from Watershed's insurer, Scottsdale Insurance Company, under a directors and officers liability policy. Scottsdale denied coverage and sought a declaratory judgment as to its coverage obligations. McGrath countered with claims against Scottsdale and third-party claims against Watershed. The district court issued two summary judgment decisions. The first ruled that McGrath is an insured under the policy, while the second dismissed one of McGrath's counterclaims. The parties agreed to a "Stipulated Conditional Final Judgment Subject to Reservation of Rights of Appeal," which would become void if either of the district court’s two summary judgment rulings were partly vacated or reversed on appeal. The parties appealed, but the U.S. Court of Appeals for the Second Circuit dismissed both Scottsdale's appeal and McGrath's cross-appeal for lack of appellate jurisdiction, concluding that the Stipulated Conditional Final Judgment was not a "final decision" under 28 U.S.C. § 1291. The court reasoned that the Stipulated Conditional Final Judgment did not resolve all claims of all parties, was not entered under Federal Rule of Civil Procedure 54(b), and did not finally resolve whether Scottsdale breached its duty to defend under the policy. View "Scottsdale Ins. Co. v. McGrath" on Justia Law

In this case before the Supreme Court of Pennsylvania, Joseph Tambellini, Inc. and HTR Restaurants, Inc., along with other businesses, had their business interruption insurance claims related to the COVID-19 pandemic denied by their insurer, Erie Insurance Exchange. The businesses had sued Erie in various courts across Pennsylvania. Due to the factual and legal overlap among these claims, the businesses moved for all state-wide litigation to be coordinated in Allegheny County for all pre-trial and trial purposes under Rule of Civil Procedure 213.1.Erie appealed to the Superior Court, which affirmed in part and reversed in part. According to the Superior Court, the trial court exceeded the authority of Rule 213.1 by ordering the coordination of similar actions against Erie that had not yet been filed. The Superior Court further held that the businesses were parties who were empowered by Rule 213.1 to file the motion for coordination.Upon the parties’ cross-appeals, the Supreme Court of Pennsylvania granted review of both holdings. The Supreme Court of Pennsylvania agreed with the Superior Court that the trial court lacked authority to coordinate actions that had not yet been filed. Furthermore, the Supreme Court found that Erie had waived any argument that the businesses could not seek coordination when it failed to raise this issue in the trial court. Therefore, the Supreme Court affirmed the Superior Court’s order. View "Tambellini v. Erie Insurance" on Justia Law

In a dispute arising from insurance coverage for business interruption losses during the COVID-19 pandemic in the Supreme Court of Pennsylvania, various businesses, including Joseph Tambellini, Inc. and HTR Restaurants, Inc., had sued their insurer, Erie Insurance Exchange, for denial of their claims. The businesses moved for the coordination of all state-wide litigation, including future filings, in Allegheny County under Rule 213.1 of the Pennsylvania Rules of Civil Procedure, which allows for the coordination of actions in different counties that involve a common question of law or fact. The motion was granted by the trial court, but on appeal, the Superior Court held that the trial court exceeded the authority of Rule 213.1 by ordering the coordination of similar actions against Erie that had not yet been filed.On further appeal, the Supreme Court of Pennsylvania agreed with the Superior Court. The court found that the term "pending" in Rule 213.1 clearly refers to cases that have already been filed, and does not include cases that are imminent or impending. The court further noted that Erie had waived the argument that the plaintiffs were not entitled to seek coordination as it had not raised this issue in the trial court. The Superior Court's order was affirmed, holding that Rule 213.1 does not permit the coordination of actions that have not been filed at the time of the coordination motion and Erie had waived its argument that the plaintiffs were not entitled to seek coordination. View "HTR Restaurants v. Erie Insurance" on Justia Law

Brian Smith, a Rhode Island resident, sued Prudential Insurance Company of America for breach of fiduciary duty after the company terminated his long-term disability benefits under an insurance policy. The policy stated a three-year limitations period to file a lawsuit, which began on the date Smith was required to submit proof of his disability, not on the date Prudential allegedly breached the policy by stopping payment. Consequently, by the time Smith filed his lawsuit, the limitations period had expired. Smith appealed to the United States Court of Appeals for the First Circuit after the United States District Court for the District of Rhode Island granted summary judgment in favor of Prudential on the grounds that Smith's lawsuit was filed too late.Smith argued that enforcing the limitations scheme would violate Rhode Island public policy. While the Court of Appeals found compelling reasons to believe that the limitations scheme might indeed contravene Rhode Island public policy, they also recognized that reversing and remanding on that ground would potentially expand Rhode Island law. Consequently, the Court of Appeals decided to certify the public policy question to the Rhode Island Supreme Court. The certified question is whether, in light of specific state laws and Rhode Island public policy, Rhode Island would enforce the limitations scheme in this case to bar Smith's lawsuit against Prudential. View "Smith v. Prudential Insurance Company of America" on Justia Law

The Supreme Court vacated the judgment of the intermediate court of appeals (ICA) reinstating the jury's verdict and judgment for Tiare Franco's family (the Francos) after granting Sabio Reinhardt's motion to set aside the jury verdict and judgment, holding that the ICA erred.The Francos brought a wrongful death lawsuit against Reinhardt for negligently crashing a truck and killing Tiare. National Interstate Insurance Company (NIIC), the truck's insurer, filed a declaratory judgment action claiming it had no duty to defend and indemnify Reinhardt under the policy. The circuit court granted summary judgment for NIIC, and the Francos successfully appealed. Before the ICA resolved the declaratory action appeal, the circuit court held a jury trial, and the jury returned a verdict in favor of the Francos. Counsel for Reinhardt moved to set aside the jury's verdict. The trial court granted the Francos' ensuing motion to disqualify counsel and Reinhardt's motion to set aside the jury verdict and judgment. The ICA reinstated the jury's verdict and judgment, holding that Reinhardt's counsel lacked authority to act as his lawyer. The Supreme Court vacated the ICA's judgment and affirmed the circuit court's orders, holding that the circuit court correctly denied the Francos' motion to disqualify counsel and did not abuse its discretion by granting Reinhardt's motion to set aside. View "Franco v. Reinhardt" on Justia Law

The Supreme Court affirmed the decision of the circuit court granting summary judgment in favor of State Farm Mutual Automobile Insurance Company in this lawsuit it brought seeking a declaration that it had no duty to defend or indemnify its insureds under the circumstances, holding that the circuit court did not err.Agtegra Cooperative brought the underlying lawsuit alleging that Mike Grunewaldt and Nancy Grunewaldt were liable to Agtegra for damages related to its delivery of wheat contaminated with fertilizer to Agtegra's elevator. State Farm, the Grunewaldts' insurance company, then commenced a separate lawsuit arguing that it had no duty to defend or indemnify the Grunewaldts to pay any judgment arising from the allegations in Agtegra's action. The circuit court granted summary judgment for State Farm. The Supreme Court affirmed, holding that the circuit court properly held that State Farm had no duty to defend or indemnify the Grunewaldts in the lawsuit initiated by Agtegra. View "State Farm v. Grunewaldt" on Justia Law

The Homeowners Association alleged that M/I’s subcontractors caused construction defects in a Hanover Park development by using defective materials, conducting faulty workmanship, and failing to comply with building codes. The Association alleged that it would be required to repair the defects and “damage to other property caused by the [d]efects.” M/I demanded a defense from Acuity as the additional insured on a commercial general liability policy that Acuity issued to one of its subcontractors on which M/I was an additional insured. Acuity sought a declaratory judgment, arguing that the complaint failed to allege any “property damage” caused by an “occurrence” as those terms are defined by the policy and interpreted by Illinois law. The circuit court granted Acuity summary judgment.The Illinois Supreme Court held that the allegations sufficiently fall within the initial grant of coverage requirement that there be “property damage” caused by an “occurrence.” The court remanded for further consideration of whether policy exclusion bar coverage. To hold that all construction defects that result in property damage to the completed project are always excluded would mean that the exclusions in the policy related to business risk become meaningless. The business risk exclusions contemplate that some construction defects that result in property damage are covered and some are not, depending on various factors. View "Acuity v. M/I Homes of Chicago, LLC" on Justia Law

Guiracocha and his son, Cristopher, filed an uninsured motorist (UM) claim against Direct Auto, stemming from a hit-and-run incident where 14-year-old Cristopher was struck by a vehicle while riding his bicycle. They asserted Fredy was the named insured under an automobile insurance policy issued by Direct Auto and that UM coverage applied to Cristopher based on his status as a “relative” under the policy. Direct Auto denied coverage because Cristopher was not an occupant of a covered vehicle at the time of the accident and sought a declaratory judgment. The circuit court granted Direct Auto summary judgment.The appellate court reversed, holding that a provision in an automobile insurance policy that limits UM coverage to insureds occupying an insured automobile violates the Illinois Insurance Code (215 ILCS 5/143a). The Illinois Supreme Court affirmed. Section 143a states that an insurance policy cannot be “renewed, delivered, or issued for delivery” in Illinois unless it provides coverage to “any person” for injuries “arising out of the ownership, maintenance or use of a motor vehicle.” A bicyclist injured by an uninsured motorist vehicle is a “person” who suffered injuries arising out of the ownership, maintenance, or use of “a motor vehicle.” The injured person’s status as an occupant of a vehicle is irrelevant. View "Galarza v. Direct Auto Insurance Co." on Justia Law

Plaintiff Team Industrial Services, Inc. (Team) suffered a $222 million judgment against it in a wrongful-death lawsuit arising out of a steam-turbine failure in June 2018 at a Westar Energy, Inc. (Westar) power plant. Team sought liability coverage from Westar, Zurich American Insurance Company (Zurich), and two other insurance companies, arguing that it was, or should have been, provided protection by Westar’s Owner-Controlled Insurance Program (OCIP) through insurance policies issued by Zurich and the two other insurers. Team’s claims derived from the fact that its liability for the failure at the Westar power plant arose from work that had previously been performed by Furmanite America, Inc. (Furmanite), which had coverage under Westar’s OCIP. The district court granted summary judgment to Defendants, and Team appealed. Not persuaded by Team's arguments for reversal, the Tenth Circuit affirmed the district court. View "Team Industrial Services v. Zurich American Insurance Company, et al." on Justia Law

The Court of Appeals answered in the affirmative a certified question asked by the United States Court of Appeals for the Second Circuit asked the Court of Appeals in this case centering around a life insurance policy providing that "assignment will be effective upon Notice" in writing to the insurer.Specifically, the Court of Appeals answered that, when a life insurance policy provides that "assignment will be effective upon Notice" in writing to the insurer, the insured's failure to provide to the insurer written notice of the policy's assignment voids the assignment so that the purported assignee does not have contractual standing to bring a claim under the policy. Accordingly, the Court held that the insured in this case lacked authority under the contract at issue to sue the insurer. View "Brettler v. Allianz Life Insurance Co. of North America" on Justia Law