Justia Insurance Law Opinion Summaries

A mass shooting occurred at a Florida high school in 2018, resulting in numerous deaths and injuries. The Sheriff’s Office, which employed a school resource officer at the school, faced 60 lawsuits from victims alleging negligence in failing to secure the premises. The Sheriff’s Office held an excess liability insurance policy with Evanston Insurance Company, which required the Sheriff to pay a $500,000 self-insured retention (SIR) per “occurrence” and a $500,000 annual aggregate deductible before coverage would be triggered. The central dispute was whether the shooting constituted a single “occurrence” under the policy, or multiple occurrences—one for each victim or gunshot.The United States District Court for the Southern District of Florida reviewed the case after the Sheriff filed a declaratory judgment action. The district court denied Evanston’s motion to dismiss, finding that the policy’s definition of “occurrence” was ambiguous under Florida law, and that ambiguity should be construed in favor of the insured. The court determined that the Parkland shooting was a single occurrence, meaning only one SIR applied. The court also found that the Sheriff had satisfied both the SIR and the deductible through legal expenses and other covered claims, and awarded attorney’s fees and costs to the Sheriff.The United States Court of Appeals for the Eleventh Circuit affirmed the district court’s rulings. The Eleventh Circuit held that a justiciable controversy existed, as the Sheriff had demonstrated a substantial likelihood of future injury and had satisfied the policy’s prerequisites for coverage. The court further held that, under controlling Florida law, the term “occurrence” was ambiguous and must be construed in favor of the insured, resulting in the Parkland shooting being treated as a single occurrence. The court also upheld the award of attorney’s fees and costs to the Sheriff. View "Sheriff of Broward County v. Evanston Insurance Company" on Justia Law

This case arises from a 2004 automobile accident in which one driver, LaMoin Larkin, died. Larkin’s insurer paid benefits to his estate and then sued the surviving driver, Jared Weston, for negligence, also seeking a declaratory judgment that Weston was insured by Farmers Insurance Exchange at the time of the accident. Farmers Insurance Exchange denied coverage, claiming the policy had been cancelled prior to the accident. Weston filed a crossclaim against Farmers, alleging breach of the duty to defend. Weston and Larkin’s insurer arbitrated the negligence claim, resulting in a finding of liability against Weston and a judgment entered in 2009.The Third District Court, Salt Lake County, confirmed the arbitration award and entered judgment. It later held a bench trial to resolve whether Farmers had properly cancelled Weston’s policy, ultimately finding the cancellation was valid and that Weston was not insured at the time of the accident. The court also granted summary judgment that Farmers had breached its duty to defend Weston, as the complaint raised a genuine issue regarding cancellation. Subsequent proceedings addressed damages, including emotional distress and attorney fees. The district court found Weston failed to prove emotional distress caused by the breach and reduced damages to zero. The court also ruled that the 2009 judgment had not expired, allowing it to be amended to include interest and costs.The Utah Court of Appeals affirmed the district court’s findings on cancellation, breach of duty to defend, and emotional distress, but reversed on consequential damages, holding Farmers liable for the arbitration judgment and related attorney fees. On certiorari, the Supreme Court of the State of Utah held that the 2009 judgment expired in 2017 under Utah law, reversing the court of appeals on that issue and vacating the award of damages and attorney fees based on the expired judgment. The Supreme Court affirmed that Farmers breached its duty to defend but found no basis for damages or attorney fees due to the expiration of the judgment. View "Farm Bureau v. Weston" on Justia Law

Curtis Diblin and Monee Gagliardo were housemates when Diblin attacked Gagliardo with a rubber mallet, causing significant injuries. Diblin was criminally prosecuted and pled guilty to assault with intent to commit a sexual crime. Gagliardo then filed a civil suit against Diblin, alleging several intentional torts and negligence, all based on the attack. The operative complaint at trial did not allege any facts suggesting accidental conduct or negligence unrelated to the assault. Diblin’s homeowners insurance policy with State Farm covered injuries arising from an “occurrence,” defined as an “accident,” and excluded coverage for intentional or willful acts.In the San Diego County Superior Court, a jury found Diblin liable for gender violence (an intentional tort) and negligence, awarding Gagliardo over $2.5 million in compensatory damages. The jury also found Diblin acted with malice and oppression, supporting punitive damages, though Gagliardo later waived her right to punitive damages. State Farm, having defended Diblin under a reservation of rights, filed a declaratory relief action seeking a determination that it owed no duty to indemnify Diblin for the judgment.The California Court of Appeal, Fourth Appellate District, Division One, reviewed the trial court’s judgment in favor of State Farm. The appellate court held that the jury’s findings in the underlying action established Diblin’s conduct was intentional, not accidental, and therefore not a covered “occurrence” under the policy. The court rejected arguments that the negligence finding mandated coverage or that the concurrent independent causes doctrine applied, finding the injury-producing conduct was not independent of the intentional act. The court also found no need for a new jury to determine intent for exclusion purposes. The judgment in favor of State Farm was affirmed. View "State Farm Fire and Casualty Co. v. Diblin" on Justia Law

A woman was injured while visiting a property owned by a couple who were seeking tenants for a mobile home located on their land. The injury occurred when she stepped into a gap between the entryway stairs and the mobile home, a gap created during ongoing repairs. The couple had a homeowners insurance policy with State Mutual Insurance Company, but the policy’s declarations page listed a different property as the covered premises. The injured woman sued the couple for negligence, and the parties later entered into a settlement and stipulated judgment, with the couple paying part of the judgment and the woman seeking the remainder from the insurer under Maine’s reach-and-apply statute.The Superior Court of Waldo County granted summary judgment in favor of the insurer, finding that the insurance policy did not cover the property where the injury occurred. The court determined that the property was not an “insured location” under the policy and that the injury arose out of a condition of the uninsured premises, thus falling within a policy exclusion. The woman appealed this decision.The Maine Supreme Judicial Court reviewed the case de novo, considering both the interpretation of the insurance policy and the application of the reach-and-apply statute. The court held that the policy unambiguously excluded coverage for bodily injury arising out of a premises owned by the insured but not listed as an insured location. The court also found that the property in question was not an “insured location” because the insureds did not reside there and it was not listed in the policy declarations. Accordingly, the court affirmed the grant of summary judgment in favor of the insurer, holding that the policy did not provide coverage for the injury. View "Rowe v. State Mutual Insurance Company" on Justia Law

The case concerns an automobile accident that occurred in rural Tuscaloosa County, Alabama, on January 3, 2024. James Godwin, a resident of Dallas County and employee of Talton Communications, Inc., was driving a company vehicle when he was rear-ended by Desi Bernard Peoples, a resident of Fayette County. Godwin subsequently filed suit in the Dallas Circuit Court against Peoples, his employer Talton, and Penn National Security Insurance Company, which provided uninsured/underinsured motorist coverage. Godwin’s claims included negligence and wantonness, a claim for uninsured/underinsured motorist benefits, and a workers’ compensation claim against Talton. Godwin received all medical treatment for his injuries in Dallas County, where he and his wife reside and work.After the complaint was filed, Penn National moved to sever the workers’ compensation claim and to transfer the remaining claims to the Tuscaloosa Circuit Court, arguing that transfer was warranted for the convenience of the parties and witnesses and in the interest of justice under Alabama’s forum non conveniens statute, § 6-3-21.1. The Dallas Circuit Court denied the motion to sever but ordered the workers’ compensation claim to be tried separately. The court also denied the motion to transfer, finding insufficient evidence that Tuscaloosa County was a significantly more convenient forum or that Dallas County had only a weak connection to the case.The Supreme Court of Alabama reviewed Penn National’s petition for a writ of mandamus seeking to compel transfer. The Court denied the petition, holding that Penn National failed to meet its burden of showing that Tuscaloosa County was significantly more convenient or that Dallas County’s connection to the case was weak. The Court emphasized that the plaintiff’s choice of venue is entitled to deference when both venues are proper and that the evidence presented did not justify overriding that choice. View "Ex parte Penn National Security Insurance Company" on Justia Law

A fatal motor vehicle accident occurred after a patron, Bailey, was served alcohol at two establishments, including one operated by the appellants. Bailey drove the wrong way on an interstate, resulting in a collision that killed himself and five members of the Abbas family. The Abbas family’s estates sued the restaurant operators (collectively “Roosters”) for dram shop liability and negligent training. At the time, Roosters held both a businessowners policy (BOP) and a commercial umbrella policy (CUP) with Grange Insurance Company. The BOP provided $1,000,000 in liquor liability coverage, which was undisputed. The dispute centered on whether the CUP also provided liquor liability coverage, particularly in light of an endorsement (CU 47) that replaced the liquor liability exclusion in the CUP.The Fayette Circuit Court found the language of the CUP and CU 47 ambiguous when considered alongside the BOP, reasoning that umbrella policies are intended to supplement underlying coverage. The court granted summary judgment to Roosters, holding that the CUP provided additional coverage. Grange appealed, and the Kentucky Court of Appeals reversed, finding CU 47 unambiguously replaced the liquor liability exclusion and precluded coverage under the CUP. The appellate court remanded for entry of a declaratory judgment in Grange’s favor.The Supreme Court of Kentucky reviewed the case de novo. It held that CU 47 unambiguously replaced the liquor liability exclusion in the CUP, leaving no basis for additional coverage. The court enforced the policy as written, declining to consider extrinsic evidence or arguments not preserved below. The Supreme Court of Kentucky affirmed the Court of Appeals, holding that the commercial umbrella policy does not provide liquor liability coverage for the claims at issue. View "GEORGETOWN CHICKEN COOP, LLC V. GRANGE INSURANCE COMPANY" on Justia Law

Peterson’s Oil Service, Inc. supplied heating fuel to customers in Massachusetts between 2012 and 2019. The fuel contained higher-than-standard levels of biodiesel, averaging 35% between 2015 and 2018, exceeding the 5% industry standard for ordinary heating oil. Customers alleged that this biodiesel-blended fuel was incompatible with conventional heating systems, caused repeated heat loss, and resulted in permanent damage to their equipment. They brought a class action in Massachusetts state court against Peterson’s and its officers, asserting claims for breach of contract, fraud, and negligence, including allegations that Peterson’s continued supplying the fuel despite customer complaints and only later disclosed the high biodiesel content.United States Fire Insurance Company and The North River Insurance Company had issued Peterson’s a series of commercial general liability and umbrella policies. The insurers initially defended Peterson’s in the class action under a reservation of rights, then filed suit in the United States District Court for the District of Massachusetts seeking a declaration that they owed no duty to defend or indemnify Peterson’s. The insurers moved for summary judgment, arguing that the claims did not arise from a covered “occurrence” and that policy provisions limiting or excluding coverage for failure to supply applied. The district court denied summary judgment, finding a genuine dispute as to whether Peterson’s actions were accidental and holding that the failure-to-supply provisions were ambiguous and did not apply.On appeal, the United States Court of Appeals for the First Circuit affirmed. The court held that the underlying complaint alleged a potentially covered “occurrence” because it was possible Peterson’s did not intend or expect the property damage alleged. The court also held that the failure-to-supply provisions were ambiguous and, under Massachusetts law, must be construed in favor of coverage. The district court’s summary judgment rulings were affirmed. View "United States Fire Insurance Company v. Peterson's Oil Service, Inc." on Justia Law

A construction worker employed by a subcontractor was injured when a scaffold collapsed at a Manhattan worksite. The worker sued the property owner and general contractor in New York Supreme Court, alleging negligence and violations of state labor laws. The owner’s insurer, Liberty Insurance Corporation, sought a declaration in federal court that the subcontractor’s insurer, Hudson Excess Insurance Company, was obligated to defend and indemnify the owner as an additional insured under the subcontractor’s commercial general liability policy. The subcontract between the general contractor and the subcontractor required the latter to provide insurance coverage for the owner and general contractor.In the New York Supreme Court, summary judgment was granted to the injured worker on some claims, while other claims remained pending. The court denied summary judgment to the owner on its contractual indemnification claim against the subcontractor, finding factual questions about the scope of the subcontractor’s work. Later, after the federal district court’s decision, the state court dismissed all third-party claims against the subcontractor, finding the indemnity provision in the subcontract invalid due to lack of a meeting of the minds.The United States Court of Appeals for the Second Circuit reviewed the case. It affirmed the district court’s finding, after a bench trial on stipulated facts, that the subcontractor’s actions proximately caused the worker’s injuries and that Hudson owed a duty to indemnify the owner under the policy. The Second Circuit held that the later state court decision did not alter this result. However, the Second Circuit reversed the district court’s award of attorney’s fees to Liberty, holding that Hudson was entitled to a statutory safe harbor under New York Insurance Law, and thus was not required to pay Liberty’s attorney’s fees for the federal action. View "Liberty Insurance Corp. v. Hudson Excess Insurance Co." on Justia Law

Two drivers, McGee and Hudgins, were involved in a road-rage incident that ended with McGee crashing into Green’s vehicle, causing her injuries. Green and her husband sued both drivers. Before filing suit, Green received $100,000 from McGee’s insurer in exchange for a covenant not to execute judgment against McGee. Green’s underinsured motorist (UIM) carrier, Progressive, defended the suit in McGee’s name. The jury found McGee 60% at fault and Hudgins 40% at fault, and determined both acted recklessly, willfully, and wantonly. The jury awarded Green $88,546.78 in actual damages and $35,000 in punitive damages against each defendant.The Circuit Court for Spartanburg County combined the actual and punitive damages for a total of $158,546.78, subtracted the $100,000 payment from McGee’s insurer, and allocated the remaining $58,546.78 between McGee and Hudgins based on their respective percentages of fault. On appeal, the South Carolina Court of Appeals altered the setoff calculation, allocating the $100,000 payment first to McGee’s share, then applying any remainder to Hudgins’ share, resulting in a net judgment of $58,546.78 against Hudgins and $0 against McGee.The Supreme Court of South Carolina reviewed the setoff calculation. It held that, because the jury found both defendants acted recklessly, willfully, and wantonly, joint and several liability applied to the actual damages, making the percentage allocation of fault irrelevant. The court further held that the $100,000 payment could only be set off against the actual damages, not the punitive damages, as punitive damages are not for the “same injury.” The court reversed the Court of Appeals, holding Green is entitled to a net judgment of $23,546.78 against McGee and $35,000 against Hudgins, and remanded for entry of judgment in those amounts. View "Green v. McGee" on Justia Law

Jose Cruz-Muniz and Sandra Cruz were injured in a car accident in 2018 and received treatment from C-Spine Orthopedics, PLLC. They assigned their rights to seek personal protection insurance (PIP) benefits from Progressive Michigan Insurance Company to C-Spine. C-Spine then assigned its accounts receivable, including the claims for unpaid benefits, to several factoring companies. Progressive argued that C-Spine lacked standing to seek payment because it had assigned its rights to the factoring companies. C-Spine countered with signed counter-assignments from the factoring companies, purportedly restoring its right to bring suits. The trial court initially denied Progressive's motion but later granted it, concluding that C-Spine lacked standing when the complaints were filed.In a separate case, Parie Wallace was injured in a bus accident and received treatment from several providers, including C-Spine. Wallace assigned her rights to seek PIP benefits to these providers. She later filed a lawsuit against Suburban Mobility Authority for Regional Transportation (SMART) seeking payment of PIP benefits. SMART argued that Wallace could not bring the action because she had assigned her rights to the providers. The trial court allowed Wallace to obtain revocations of the assignments, which she did, and then denied SMART's motion for summary disposition. The Court of Appeals reversed, holding that Wallace was not the real party in interest when she filed her complaint and that her claims were barred by the one-year-back rule.The Michigan Supreme Court held that both C-Spine and Wallace had standing to file their lawsuits but were not the real parties in interest at the time they filed suit because they had assigned their claims. The Court ruled that defects in real party in interest status could be cured after filing a lawsuit. In C-Spine's case, the Court of Appeals' judgment was affirmed on alternate grounds, and the case was remanded to the trial court for further proceedings. In Wallace's case, the Court of Appeals' judgment was affirmed in part, reversed in part, and vacated in part, and the case was remanded for the trial court to consider whether equitable rescission was warranted and whether the real party in interest defect could be cured. View "C-Spine Orthopedics PLLC v. Progressive Michigan Insurance Company" on Justia Law