Justia Insurance Law Opinion Summaries

Plaintiffs Jimmy Larry Beddingfield ("Larry"), his wife, Rebecca, and their adult son, James Cody Beddingfield ("Cody") appealed the grant of summary judgment in favor of the defendants Mullins Insurance Company, Mullins & Company Insurance, Rand Mullins, and David Mullins (referred to collectively as "Mullins"), on the Beddingfields' claims stemming from Mullins's alleged failure to properly procure insurance coverage. In 1997, Larry and Rebecca purchased a homeowners' liability-insurance policy from Rand Mullins that protected Larry and Rebecca's primary residence. In 2001, Larry and Rebecca purchased a second liability-insurance policy that provided coverage for a rental house located in Florence; they later constructed another house in Guntersville and, in 2003, purchased an additional liability-insurance policy for that property. In July 2003, Mullins canceled the insurance policy on the Florence house allegedly based on a belief that "the policy was issued in duplicate." Allegedly unbeknownst to Larry and Rebecca, however, the requested cancellation left the Florence house uninsured. One month later, pursuant to a mortgage refinance on the Beddingfields' residence, Larry and Rebecca paid one year's insurance premium on that residence; the check was endorsed and deposited into Mullins's account. In March 2004, the policy on the Beddingfields' residence was canceled because of nonpayment of the premium; neither Larry nor Rebecca, however, was able to recall receiving notice of the cancellation. After those two events, Larry and Rebecca were without insurance on their residence and the Florence house, leaving them with liability insurance only on their Guntersville house. In July 2004, a minor guest at the Beddingfields' Guntersville house, Trace Linam, suffered a serious eye injury in a fireworks-related incident. In 2008, Linam and his father, Linam, sued the Beddingfields, alleging that they, and particularly Cody (who was a minor at the time), were responsible for the injury. Because the underwriter of the Beddingfields' policy had been placed into receivership in Texas in 2006, the Alabama Insurance Guaranty Association ("AIGA") covered the Beddingfields' legal-defense costs in the Linam litigation; however, the maximum amount of liability coverage available was limited to $100,000 –- the amount of the liability- insurance policy Larry and Rebecca had obtained from Mullins to insure that property -- and not $500,000, the amount they say would have been available had the other two policies not been canceled. In February 2011, a judgment was entered on a $600,000 jury verdict against the Beddingfields in the Linam litigation. The Beddingfields appealed that decision. Because, however, AIGA did not post the requisite supersedeas bond, and the Beddingfields were allegedly unable to obtain a bond, execution of the judgment was not stayed during the pendency of the appeal. In July 2011, while their appeal was pending, the Beddingfields sued Mullins, alleging numerous counts of negligence and wantonness with relation to Mullins's handling of the various insurance policies. After review of the trial court record, the Alabama Supreme Court affirmed summary judgment as to the negligence claims, reversed as to the wantonness claims, and remanded the case for further proceedings. View "Beddingfield et al. v. Mullins Insurance Company et al." on Justia Law

A policy exclusion for personal liability “under any contract or agreement” does not apply to relieve an insurer of its duty to defend its insured, an alleged builder-vendor, against a claim for negligent excavation brought by the home buyer because the negligence claim arose from the common law duty to construct the home as a reasonable builder would.After rockslides damaged his property, the home buyer sued the alleged builder-vendor, asserting breach of contract, negligence, and fraud-based claims and alleging that the rockslides were the result of improper excavation during construction. The builder-vendor’s insurer declined the tender of defense on grounds that there was no coverage under the relevant insurance policies. The builder-vendor sought damages and declaratory relief. The superior court granted summary judgment in favor of the insurer. The court of appeals reversed, concluding that the policy’s “contractual liability” exclusion did not apply. The Supreme Court affirmed, holding that the contractual liability exclusion did not relieve the insurer of its duty to defend the builder-vendor against the home buyer’s negligence claim. View "Teufel v. American Family Mutual Insurance Co." on Justia Law

Minnesota law provides that “the dissolution or annulment of a marriage revokes any revocable . . . beneficiary designation . . . made by an individual to the individual’s former spouse,” Minn. Stat. 524.2–804. If an insurance policyholder does not want that result, he may rename the ex-spouse as beneficiary. Sveen and Melin were married in 1997. Sveen purchased a life insurance policy, naming Melin as the primary beneficiary and designating his children from a prior marriage as contingent beneficiaries. The marriage ended in 2007. The divorce decree did not mention the insurance policy. Sveen did not revise his beneficiary designations. After Sveen died in 2011, Melin and the Sveen children claimed the insurance proceeds. Melin argued that because the law did not exist when the policy was purchased, applying the later-enacted law violated the Contracts Clause. The Supreme Court reversed the Eighth Circuit, holding that the retroactive application of Minnesota’s law does not violate the Contracts Clause. The test for determining when a law crosses the constitutional line first asks whether the state law has “operated as a substantial impairment of a contractual relationship,” considering the extent to which the law undermines the contractual bargain, interferes with a party’s reasonable expectations, and prevents the party from safeguarding or reinstating his rights. If such factors show a substantial impairment, the inquiry turns to whether the state law is drawn in a “reasonable” way to advance “a significant and legitimate public purpose.” Three aspects of Minnesota’s law, taken together, show that the law does not substantially impair pre-existing contractual arrangements. The law is designed to reflect a policyholder’s intent and to support, rather than impair, the contractual scheme. The law is unlikely to disturb any policyholder’s expectations at the time of contracting, because an insured cannot reasonably rely on a beneficiary designation staying in place after a divorce. Divorce courts have wide discretion to divide property upon dissolution of a marriage. The law supplies a mere default rule, which the policyholder can easily undo. View "Sveen v. Melin" on Justia Law

Minnesota law provides that “the dissolution or annulment of a marriage revokes any revocable . . . beneficiary designation . . . made by an individual to the individual’s former spouse,” Minn. Stat. 524.2–804. If an insurance policyholder does not want that result, he may rename the ex-spouse as beneficiary. Sveen and Melin were married in 1997. Sveen purchased a life insurance policy, naming Melin as the primary beneficiary and designating his children from a prior marriage as contingent beneficiaries. The marriage ended in 2007. The divorce decree did not mention the insurance policy. Sveen did not revise his beneficiary designations. After Sveen died in 2011, Melin and the Sveen children claimed the insurance proceeds. Melin argued that because the law did not exist when the policy was purchased, applying the later-enacted law violated the Contracts Clause. The Supreme Court reversed the Eighth Circuit, holding that the retroactive application of Minnesota’s law does not violate the Contracts Clause. The test for determining when a law crosses the constitutional line first asks whether the state law has “operated as a substantial impairment of a contractual relationship,” considering the extent to which the law undermines the contractual bargain, interferes with a party’s reasonable expectations, and prevents the party from safeguarding or reinstating his rights. If such factors show a substantial impairment, the inquiry turns to whether the state law is drawn in a “reasonable” way to advance “a significant and legitimate public purpose.” Three aspects of Minnesota’s law, taken together, show that the law does not substantially impair pre-existing contractual arrangements. The law is designed to reflect a policyholder’s intent and to support, rather than impair, the contractual scheme. The law is unlikely to disturb any policyholder’s expectations at the time of contracting, because an insured cannot reasonably rely on a beneficiary designation staying in place after a divorce. Divorce courts have wide discretion to divide property upon dissolution of a marriage. The law supplies a mere default rule, which the policyholder can easily undo. View "Sveen v. Melin" on Justia Law

The term "invasion of the right of private occupancy" is ambiguous and may include non-physical invasions of rights in real property. The Court of Appeal reversed the trial court's grant of summary judgment for the umbrella insurer in an action alleging claims for breach of contract and breach of the implied covenant of good faith and fair dealing. In this case, the personal injury provision of plaintiff's umbrella policy potentially covered the allegations in the underlying action and the umbrella insurer breached its duty to defend by not providing plaintiff with a defense. Accordingly, the court vacated the trial court's order and directed the trial court to enter a new order granting the motion. View "Albert v. Truck Insurance Exchange" on Justia Law

Edgar and Laurie Cook owned 200 acres of property in Bonner County, Idaho. The Property included Bloom Lake, a cabin, and a campground. The Cooks allowed people to use the lake and campground without charging a fee, but they solicited voluntary donations to help with the Property’s upkeep. Approximately twenty years ago, Michael Chisholm asked the Cooks if he could stay in the cabin in exchange for maintaining the Property. They agreed, and Chisholm began caring for the Property. In 2015, Joseph Stanczak and his girlfriend were camping at the Property. Chisholm invited them into the cabin, and a dispute later arose between Chisholm and Stanczak. Chisholm shot Stanczak twice with a .45 caliber handgun, then left the scene. Authorities later apprehended Chisholm and charged him with Aggravated Battery and Use of a Deadly Weapon in Commission of a Felony. Chisholm entered an Alford plea, by which he pleaded guilty without admitting guilt as to all the elements of the crimes. He was sentenced to prison. At issue in this was was the interpretation of the insuring clause of a bodily injury liability provision in a property insurance contract. The insurer, Farm Bureau Mutual Insurance Company of Idaho, determined it had no duty to defend or indemnify the Cooks because the shooting was not a covered act under the policy. Farm Bureau filed a declaratory judgment action seeking judicial confirmation of its determination. Farm Bureau then filed a motion for summary judgment, requesting that the district court find as a matter of law that the intentional shooting was not an “occurrence.” The district court granted Farm Bureau’s motion. Finding no reversible error in the district court's decision, the Idaho Supreme Court affirmed judgment in favor of Farm Bureau. View "Farm Bureau Ins v. Cook" on Justia Law

This appeal stemmed from a dispute between Summit Park Townhome Association and its insurer, Auto-Owners Insurance Company, over the value of property damaged in a hail storm. To determine the value, the district court ordered an appraisal and established procedural requirements governing the selection of impartial appraisers. After the appraisal was completed, Auto-Owners paid the appraised amount to Summit Park. But the court found that Summit Park had failed to make required disclosures and had selected a biased appraiser. In light of this finding, the court vacated the appraisal award, dismissed Summit Park’s counterclaims with prejudice, and awarded interest to Auto-Owners on the amount earlier paid to Summit Park. Summit Park appealed, raising six issues of alleged error with the proceedings. The Tenth Circuit affirmed, however, finding that in the absence of a successful appellate challenge to the disclosure order, Summit Park was obligated to comply and did not. The court was thus justified in dismissing Summit Park’s counterclaims. In addition, Summit Park’s failure to select an impartial appraiser compelled vacatur of the appraisal award under the insurance policy. View "Auto-Owners v. Summit Park" on Justia Law

This appeal stemmed from a dispute between Summit Park Townhome Association and its insurer, Auto-Owners Insurance Company, over the value of property damaged in a hail storm. To determine the value, the district court ordered an appraisal and established procedural requirements governing the selection of impartial appraisers. After the appraisal was completed, Auto-Owners paid the appraised amount to Summit Park. But the court found that Summit Park had failed to make required disclosures and had selected a biased appraiser. In light of this finding, the court vacated the appraisal award, dismissed Summit Park’s counterclaims with prejudice, and awarded interest to Auto-Owners on the amount earlier paid to Summit Park. Summit Park appealed, raising six issues of alleged error with the proceedings. The Tenth Circuit affirmed, however, finding that in the absence of a successful appellate challenge to the disclosure order, Summit Park was obligated to comply and did not. The court was thus justified in dismissing Summit Park’s counterclaims. In addition, Summit Park’s failure to select an impartial appraiser compelled vacatur of the appraisal award under the insurance policy. View "Auto-Owners v. Summit Park" on Justia Law

Steve Forster, Daniel Krebs, and Debra Krebs (collectively "Forster/Krebs") appealed the dismissal of their claims against B&B Hot Oil Service, Inc., and JB's Welding. Forster/Krebs argued the district court erred in construing language in a lease agreement with B&B Hot Oil as a waiver of their claims against B&B Hot Oil for damages to their building and property and to preclude a subrogation claim by their insurer, Acuity, against B&B Hot Oil. Forster/Krebs also argued the district court improperly granted summary judgment dismissing their claims against JB's Welding for concerted action and a joint venture. B&B Hot Oil leased one-half of a building owned by Forster/Krebs and used the leased property to store two hot oil trucks. An explosion in January 2010, destroyed the building and its contents and damaged surrounding property. The alleged cause of the explosion was a propane leak from one of the hot oil trucks, which has been referred to by the parties as a "knock off" truck built through "reverse engineering" by B&B Hot Oil with assistance from JB's Welding. The North Dakota Supreme Court concluded a stipulation to dismiss Forster/Krebs' other remaining claims against JB's Welding without prejudice did not make the judgment final for purposes of appellate jurisdiction, the Court dismissed the appeal. View "James Vault & Precast Co. v. B&B Hot Oil Service, Inc." on Justia Law

United Fire & Casualty Company appealed a district court judgment awarding Carol Forsman $249,554.30 in her garnishment action against United Fire, commenced after she settled claims in the underlying suit against Blues, Brews and Bar-B-Ques, Inc., d.b.a. Muddy Rivers. Muddy Rivers was a bar in Grand Forks that was insured by United Fire under a commercial general liability ("CGL") policy. In 2010, Forsman sued Muddy Rivers and Amanda Espinoza seeking damages for injuries to her leg allegedly sustained while a guest at a February 2010 private party at Muddy Rivers. Muddy Rivers notified United Fire of the suit and requested coverage. United Fire denied defense and indemnification based on the policy's exclusions for assault and battery and liquor liability. However, after appeals and reconsideration, the court ruled in Forsman's favor, finding the settlement amount was reasonable. The North Dakota Supreme Court concluded the court erred in granting summary judgment because material fact issues existed on whether exclusions for "assault and battery" and "liquor liability" in the CGL policy excluded coverage of Forsman's negligence claim against Muddy Rivers. Furthermore, the Court concluded further conclude the court properly granted summary judgment to Forsman holding United Fire had a duty to defend Muddy Rivers under the CGL policy in the underlying suit. Therefore, the Court affirmed in part, reversed in part, and remanded for further proceedings. View "Forsman v. Blues, Brews & Bar-B-Ques Inc." on Justia Law