Justia Insurance Law Opinion Summaries

Cherri Porter’s beachfront vacation home was completely destroyed during Hurricane Katrina. Porter claimed the destruction was the result of a barge, owned by Grand Casino of Mississippi, Inc.–Biloxi, breaking free from its moorings and alliding with her home. Because Porter’s all-risk insurance policy excluded from coverage damage caused by water or windstorm, State Farm Fire and Casualty Company denied Porter’s claim. Porter filed suit against the insurance agent who maintained the policy, Max Mullins, against State Farm, and against Grand Casino. The trial court granted summary judgment in favor of each defendant, and the Court of Appeals affirmed. Porter filed a petition for writ of certiorari claiming genuine issues of fact existed as to each defendant, and the Mississippi Supreme Court granted her petition. Because Porter’s all-risk insurance policy unambiguously excluded from coverage loss that would not have occurred absent water damage, no genuine issue of material fact existed as to Porter’s bad-faith denial of coverage claim against State Farm. Additionally, Porter failed to produce sufficient evidence showing a genuine issue of fact as to whether Grand Casino breached its duty to take reasonable measures to prevent foreseeable injury. The Court therefore affirmed the decisions of the trial court and of the Court of Appeals as to all issues. View "Porter v. Grand Casino of Mississippi, Inc.- Biloxi" on Justia Law

Samuel Heckart brought this action against A-1 Self Storage, Inc., Caster Properties, Inc., Caster Family Enterprises, Inc., Caster Group LP, and Deans & Homer (together, Defendants) for violations of the Unfair Competition Law, violations of the Consumers Legal Remedies Act, negligent misrepresentation, and civil conspiracy. Heckart alleged A-1's sale of a Customer Goods Protection Plan (the Protection Plan) in connection with its rental of storage space constituted unlicensed sale of insurance. The form Protection Plan required the tenant to either initial to accept or decline participation in the plan. Heckart declined participation by initialing that option, which provided: "No, I decline participation in the . . . Protection Plan. I am currently covered by an insurance plan that covers my belongings in the storage facility. I understand that I need to provide the policy information in writing to the facility Owner within 30 days or I will automatically be enrolled in the . . . Protection Plan until I do provide such information to the Owner." Heckart "inadvertently" purchased the Protection Plan and was enrolled in it, presumably because he failed to provide proof of insurance within 30 days. In April 2013, Heckart, on behalf of himself and other similarly situated California residents, sued A-1 and Caster Group. The trial court sustained Defendants' demurrer to Heckart's first amended complaint without leave to amend, concluding the Protection Plan was not insurance. Heckart appealed, contending his allegations were sufficient to state the asserted causes of action because the Protection Plan was insurance that must comply with the Insurance Code. The Court of Appeal found his arguments unavailing and affirmed. View "Heckart v. A-1 Self Storage" on Justia Law

Plaintiff-appellant Timothy Huether contracted with Nodak Mutual to provide insurance coverage for his house, buildings and structures on his farm. The coverage was under Nodak Mutual's Farm and Ranch Policy. The Farm and Ranch Policy did not provide insurance coverage for grain dryers. Huether added an equipment endorsement insuring his agricultural equipment, which included a grain handler dryer. A fire destroyed the grain handler dryer, fans and parts. Nodak Mutual's agricultural endorsement provided coverage for "direct physical loss or damage caused by perils 1 through 10." Huether's Farm and Ranch Policy listed fire as Peril 1. Damage from fire was a "direct physical loss or damage" and Nodak Mutual paid Huether $278,187.44 for damage to the grain dryer, control room and grain handling equipment. Huether did not contest the coverage or payment for those items, but claimed an additional $82,954.77 in expenses for transporting to and drying his crops at other grain drying facilities. Nodak Mutual denied Huether's claim because the agricultural equipment endorsement covered "direct physical loss or damage" and did not cover loss-of-use. Huether sued Nodak Mutual seeking damages for the denied claim. The district court found Huether's claim was not covered under the policy and granted summary judgment in favor of Nodak Mutual. Huether appealed, arguing the district court erred in granting summary judgment for Nodak Mutual because it misinterpreted the terms of the insurance policy. Finding no error, the Supreme Court affirmed. View "Huether v. Nodak Mutual Ins. Co." on Justia Law

First American Title Insurance Company issued title insurance policies to the predecessors of North Fork Land & Cattle, LLLP. When North Fork learned that Bunker Road, which crosses three of North Fork’s properties, was established as a county road, North Fork submitted notices of claims under the title insurance policies, asserting that First American failed to disclose to one of North Fork’s predecessors that Bunker Road burdened the properties and that it was damaged by the Bunker Road encumbrance. First American did not respond to North Fork’s claims, and North Fork filed suit against First American. The district court granted summary judgment in favor of First American, concluding that North Fork did not meet the definition of “insured” under the title insurance policies. The Supreme Court reversed, holding that North Fork is a covered insured under the terms of the title insurance policy. Remanded. View "N. Fork Land & Cattle, LLLP v. First Am. Title Ins. Co." on Justia Law

A condominium homeowners association sued a contractor for negligence. The contractor’s insurer refused to defend the contractor against the action, and the contractor and the homeowners association thereafter entered into a settlement that included a stipulated judgment against the contractor, a covenant by the homeowners association not to execute that judgment, and an assignment to the homeowners association of the contractor’s claims against its insurer. When the homeowners association then initiated a garnishment action against the insurer, however, the trial court dismissed the action on the ground that, under “Stubblefield v. St. Paul Fire & Marine,” (517 P2d 262 (1973)), the covenant not to execute had released the contractor from any obligation to pay the homeowners association and, in the process, necessarily released the insurer too. The homeowners association appealed, arguing that “Stubblefield” either was distinguishable on its facts or had been superseded by statute. In the alternative, it argued that Stubblefield should have been overruled. The Court of Appeals affirmed. After its review, the Supreme Court concluded that, although Stubblefield was not distinguishable and had not been superseded by statute, it was wrongly decided. The Court reversed and remanded for further proceedings. View "Brownstone Homes Condo. Assn. v. Brownstone Forest Hts." on Justia Law

Equinox on the Battenkill Management Association, Inc., appealed a superior court's grant of summary-judgment denying insurance coverage. The appeal arose from a declaratory judgment action against management association’s insurer, Philadelphia Indemnity Insurance Company, Inc., to determine coverage under a commercial general liability policy for damage to cantilevered balconies on condominium units it managed in Manchester. The issue this case presented for the Vermont Supreme Court's review centered on whether "Gage v. Union Mutual Fire Insurance Co,." (169 A.2d 29 (1961)) was still good law with regards to the meaning of "collapse" and whether "Gage" controlled the result here. After review, the Court concluded that the policy language in this dispute was broader than the language in Gage and that therefore Gage did not control. The Court reversed the trial court’s summary judgment and remanded the case for that court to resolve disputed questions of fact and interpret the applicable policy language. View "Equinox on the Battenkill Management Assn., Inc. v. Philadelphia Indemnity Ins. Co." on Justia Law

In 2012, a fire destroyed three buildings and related equipment that were owned by Jackson Hop, LLC, and were used to dry hops, to process and bale hops, and to store hop bales. The buildings were insured by Farm Bureau Mutual Insurance Company of Idaho for the actual cash value of the buildings and equipment, not to exceed the policy limit. Farm Bureau’s appraisers determined that the actual cash value of the buildings was $295,000 and the value of the equipment was $85,909. Farm Bureau paid Jackson Hop $380,909. Jackson Hop disagreed with that figure, and it hired its own appraiser, who concluded that the actual cash value of the buildings and equipment totaled $1,410,000. Farm Bureau retained another appraiser to review the report of Jackson Hop’s appraiser, and that appraiser concluded that the value of $1,410,000 was unrealistically high. Jackson Hop filed this action to recover the balance of what it contended was owing under the insurance policy, plus prejudgment interest. The parties agreed to submit the matter to arbitration as provided in the policy. During that process, Jackson Hop presented additional opinions regarding the actual cash values, ranging from $800,000 to $1,167,000 for the buildings and $379,108 to $399,000 for the equipment. Farm Bureau’s experts revised their opinions upward, although only from $295,000 to $333,239 for the buildings and from $85,909 to $133,000 for the equipment. Before completion of the arbitration, Farm Bureau paid an additional sum of $85,330. Arbitrators determined that the actual cash value of the buildings and the equipment was $740,000 and $315,000, respectively, for a total of $1,055,000. Within seven days of the arbitrators’ decision, Farm Bureau paid Jackson Hop $588,761, which was the amount of the arbitrators’ award less the prior payments. Jackson Hop filed a motion asking the district court to confirm the arbitrators’ award and to award Jackson Hop prejudgment interest, court costs, and attorney fees. Farm Bureau filed an objection to the request for court costs, attorney fees, and prejudgment interest. The court awarded Jackson Hop attorney fees, but denied the request for court costs because the parties’ arbitration agreement stated that both parties would pay their own costs, and the court denied the request for prejudgment interest because the amount of damages was unliquidated and unascertainable by a mathematical process until the arbitrators’ award. Jackson Hop then appealed. Finding no reversible error in the trial court's judgment, the Supreme Court affirmed. View "Jackson Hop v. Farm Bureau Insurance" on Justia Law

Reyna Bernard purchased property and executed a promissory note in the principal amount secured by a mortgage on the property. The mortgage was assigned to HSBC Bank, USA, N.A. A fire later destroyed the property. Manuel Rosario entered into an insurance adjusting agreement with an LLC providing that the LLC would assist with the adjustment of the loss in return for a percentage of the total recoverable loss. Thereafter, Bernard defaulted on the note, and the property was sold at a foreclosure sale to HSBC, leaving an unpaid deficiency on the note in the amount of $246,072. Rhode Island Joint Reinsurance Association (RIJRA) subsequently initiated an interpleader action to determine the respective rights of the LLC, Bernard, and Ocwen Loan Servicing, LLC as agent for HSBC with regard to the insurance proceeds. The superior court found that Ocwen was entitled to the entirety of the insurance proceeds pursuant to the language contained in the mortgage. The Supreme Court affirmed, holding (1) Bernard and Rosario failed to demonstrate their entitlement to the insurance proceeds; and (2) the mortgage executed by Bernard was duly acknowledged as statutorily required and was therefore valid. View "R.I. Joint Reinsurance Ass’n v. Rosario" on Justia Law

Plaintiffs Doug and Gayle Mellin brought a declaratory judgment action asserting, in relevant part, that their homeowner’s insurance policy with defendant Northern Security Insurance Company, Inc. required Northern to reimburse them for losses to their condominium caused by cat urine odor. Plaintiffs' downstairs neighbor kept two cats in her condominium. They surmised that the smell entered their unit from the downstairs condominium through an open plumbing chase servicing the kitchen. In December 2010, plaintiffs filed a claim under their homeowner’s insurance policy, which was denied. Epping's building/health inspector examined the unit and sent a letter to plaintiffs stating that they "have a health problem existing" and the odor "is such that [they] need to move out of[] the apartment temporarily and have a company terminate the odor." Remediation proved unsuccessful. Plaintiffs continued to reside in the unit until February 1, 2011. They claimed that, after that time, they "could [not] have tenants," although they occasionally occupied the unit. Ultimately, they sold their condominium. They claimed that the sale price for the unit was significantly less than that for a comparable condominium in the area which was unaffected by cat urine odor. The Superior Court granted summary judgment in favor of Northern. The Supreme Court vacated the Superior Court's grant of summary judgment: plaintiffs were not required to demonstrate a "tangible physical alteration" to the unit to prove that the unit was rendered permanently uninhabitable. "Rather, to demonstrate a physical loss under Coverage A, they must establish a distinct and demonstrable alteration to the unit." The Court also reversed with regard to a "pollution exclusion clause" found in plaintiffs' policy: "pollution exclusion clause is ambiguous when applied to the facts of this case and, as such, does not preclude coverage for the plaintiffs’ claims." And with regard to "Coverage D," the Court concluded that the trial court erred in granting Northern judgment as a matter of law. This was vacated, and the entire case remanded for further proceedings. View "Mellin v. Northern Security Insurance Company, Inc." on Justia Law

A large commercial development in Kansas City, Missouri was aborted in the middle of construction due to cost overruns. When the developer would not cover the shortfall, the construction lender stopped releasing committed loan funds, and contractors filed liens against the property for their unpaid work on the unfinished project. Bankruptcy followed, and the contractors’ liens were given priority over the lender’s security interest in the failed development, leaving little recovery for the lender. The lender looked to its title insurer for indemnification. The title policy generally covers lien defects, but it also contains a standard exclusion for liens “created, suffered, assumed or agreed to” by the insured lender. The Seventh Circuit affirmed judgment in favor of the title company. The exclusion applies to the liens at issue, which resulted from the lender’s cutoff of loan funds, so the title insurer owed no duty to indemnify. The liens arose from insufficient project funds, a risk of loss that the lender, not the title company, had authority and responsibility to discover, monitor, and prevent. View "BB Syndication Servs, Inc. v. First Am. Title Ins. Co" on Justia Law