Justia Insurance Law Opinion Summaries

Plaintiffs-appellants James and Maria Mosley rented out a home they owned that defendant-respondent Pacific Specialty Insurance Company (PSIC) insured under a homeowners’ policy (the Property). The Mosleys’ tenant started growing marijuana in the Property. To support his marijuana-growing operation, the tenant re-routed the Property’s electrical system to steal power from a main utility line. The tenant’s re-routed electrical system caused a fuse to blow, which started a fire that damaged the Property. PSIC denied coverage, citing a provision in the Mosleys’ policy that excluded any loss associated with “[t]he growing of plants” or the “manufacture, production, operation or processing of . . . plant materials.” The Mosleys sued, but the trial court granted summary judgment in favor of the insurance company, finding that the Mosleys had control over their tenant's conduct. A divided Court of Appeals reversed, finding no evidence the Mosleys were aware of their tenant's marijuana growing operation, and because the record was silent as to what the Moseleys could or should have done to discover it. "[T]he Mosleys did not use the Property in a prescribed way that would have allowed PSIC to suspend their insurance and deny all coverage. More importantly, contrary to PSIC’s assertion and the trial court’s finding, there was no evidence Mosleys knowingly increased a risk of fire hazard. In addition, a fact issue remains as to whether [the Tenant's] hazard-increasing conduct was within their control. If it was, then PSIC properly denied coverage. But by denying the Mosleys coverage for Lopez’s conduct, regardless of the Mosleys’ control over or knowledge of it, the Policy did not provide 'substantially equivalent' coverage to that required under [Insurance Code] section 2071." View "Mosley v. Pacific Specialty Ins. Co." on Justia Law

The Supreme Court affirmed the decision of the court of appeals affirming the judgment of the circuit court directing a verdict in favor of Defendant, an insurance agent, on Plaintiff's claim that Defendant was negligent because he procured an insurance policy that did not conform to Plaintiff's requirements, holding that Plaintiff must prove that it would have qualified for an insurance policy with better terms than the policy it actually obtained.Plaintiff sold new and used camper trailers. Plaintiff asked Defendant, an insurance agent, to acquire a policy to cover its camper inventory. Plaintiff thought Defendant had acquired a policy with a deductible for $1,000 per camper in the event of hail damage with a $5,000 aggregate deductible limit, but the policy actually required a $5,000 deductible per camper, with no aggregate limit. After a hailstorm damaged many of the campers on its lot, Plaintiff sued Defendant. The circuit court directed a verdict due to Plaintiff's failure to introduce evidence that an insurer would have insured Plaintiff with the deductible limits it thought it had. The Supreme Court affirmed, holding that Plaintiff must not only prove that an insurance policy with the requested deductibles was commercially available but that Plaintiff would actually have qualified for that policy. View "Emer's Camper Corral, LLC v. Western Heritage Insurance Co." on Justia Law

In 1854, the Washington Territory and nine Native American tribes, including the Squaxin Island Tribe (the Tribe), entered into the 1854 Treaty of Medicine Creek (the Treaty), under which the Tribe relinquished their rights to land but retained “the right of taking fish at all usual and accustomed grounds and stations . . . , in common with all citizens of the Territory.” The District Court for the Western District of Washington has interpreted “fish” under the Treaty to include shellfish. In 1978, Leslie and Harlene Robbins (Robbins) purchased property in Mason County, Washington that included tidelands with manila clam beds. In connection with the purchase of the property, Robbins obtained a standard policy of title insurance from Mason County Title Insurance Company (MCTI) which provided MCTI would insure Robbins “against loss or damage sustained by reason of: . . . [a]ny defect in, or lien or encumbrance on, said title existing at the date hereof.” For years Robbins had contracted with commercial shellfish harvesters to enter Robbins’s property to harvest shellfish from the tidelands. The issue this case presented for the Washington Supreme Court's review was whether MCTI had a duty to defend Robbins when the Tribe announced it planned to assert its treaty right to harvest shellfish from the property. The Court affirmed the Court of Appeals and remanded to the superior court for further proceedings. The Supreme Court held that because the insurance policy conceivably covered the treaty right and no exceptions to coverage applied, MCTI owed the property owners a duty to defend and, in failing to do so, breached the duty. Because this breach was unreasonable given the uncertainty in the law, MCTI acted in bad faith. Further, because the property owners did not seek summary judgment on MCTI’s affirmative defenses, the Supreme Court remanded to the superior court for consideration of the defenses. View "Robbins v. Mason County Title Ins. Co." on Justia Law

Plaintiff filed suit against her ex-husband’s estate alleging that his life insurance proceeds rightly belong to her. The court held that the district court correctly determined that the Interspousal Agreement and the Final Judgment could not be orally amended. The court explained that, by its plain terms, the Interspousal Agreement requires any modification to be in writing and executed with the same formalities as the agreement. In this case, plaintiff had no proof any oral amendment to the Final Judgment related to the policy. Furthermore, New Jersey law automatically revokes the beneficiary designation on divorce unless the "express terms" of a court order say otherwise. Because plaintiff's affidavit cannot change the express terms of a court order and the court order does not expressly mention the policy, summary judgment was appropriate. View "Rose v. Estate of Joel S. Bernstein" on Justia Law

In this dispute over the amount of loss after a fire occurred at the home of Respondents the Supreme Court affirmed the judgment of the court of appeals reversing the judgment of the district court granting Respondents' motion to confirm an appraisal award but denying Respondents' motion for preaward interest as untimely, holding that the district court erred by applying the Minnesota Uniform Arbitration Act, Minn. Stat. 572B.01-.31, to a fire loss appraisal award.Respondents' home was insured against fire loss by Appellant. When Appellant and Respondent were unable to agree on the amount of the loss Respondents requested an appraisal. After an appraisal panel issued an award, which State Farm paid, Respondents sought confirmation of the appraisal and moved the court to grant preaward interest on the appraisal award. The superior court confirmed the appraisal award but denied the motion for preaward interest as untimely. The court of appeals reversed and remanded. The Supreme Court affirmed, holding (1) the Act did not apply to the appraisal process under the Minnesota Standard Fire Insurance Policy, Minn. Stat. 65A.01; and (2) a remand was necessary to allow the district court to determine whether Respondents were owed preaward interest and, if so, the amount of interest owed. View "Oliver v. State Farm Fire & Casualty Insurance Co." on Justia Law

On a winter night in 2014, strong winds blew through the town of Georgia, Vermont, causing a partially constructed livestock barn to collapse. Commercial Construction Endeavors, Inc. (CCE), the contractor building the barn, sought recompense for the resulting losses from its insurer, Ohio Security Insurance Company. However, insurer and insured disagreed as to policy coverage for costs incurred by CCE in removing the remains of the collapsed barn and rebuilding it to its pre-collapse state. Ultimately, CCE sued Ohio Security for breach of contract. In successive summary-judgment rulings, the trial court held that the contractor’s rebuilding expenses were covered under the policy, but the cost of debris removal was not. Ohio Security cross-appealed the first ruling and CCE appealed the second; the Vermont Supreme Court reversed the first ruling and affirmed the second. The Court determined the additional collapse coverage applied only to “Covered Property,” which was business personal property; CCE did not dispute that the barn was not business personal property and thus was not “Covered Property.” Therefore, the court’s first summary-judgment ruling was reversed. The debris removal was not a loss involving business personal property. As a result, it was not a loss to “Covered Property” at that term was defined by the policy at issue. View "Commercial Construction Endeavors, Inc. v. Ohio Security Insurance Company" on Justia Law

A storm caused minor hail damage at the Winding Ridge condominium complex located in Indiana, which was not discovered until almost a year later when a contractor inspected the property to estimate the cost of roof replacement. Winding Ridge submitted an insurance claim to State Farm. The parties inspected the property and exchanged estimates but could not reach an agreement. Winding Ridge demanded an appraisal under the insurance policy. State Farm complied. After exchanging competing appraisals, the umpire upon whom both sides agreed issued an award, which became binding. Winding Ridge filed suit alleging breach of contract, bad faith, and promissory estoppel. The Seventh Circuit held that the appraisal clause is unambiguous and enforceable; there is no evidence that State Farm breached the policy or acted in bad faith when resolving the claim. Winding Ridge’s own appraiser found no hail damage to the roofing shingles on 20 buildings. The fact that Winding Ridge independently replaced the shingles on all 33 buildings for $1.5 million while its claim was pending does not obligate State Farm under the policy or mean State Farm breached the policy. There is no evidence that State Farm delayed payment, deceived Winding Ridge, or exercised an unfair advantage to pressure Winding Ridge to settle. View "Villas at Winding Ridge v. State Farm Fire and Casualty Co." on Justia Law

This case arose from Hurricane Katrina insurance litigation. After the hurricane had destroyed many homes, policyholders and insurance companies began litigating whether the hurricane losses were caused by flood damage or wind damage. The distinction determined whether the insurance companies would pay claims on those polices that did not cover flood damage. This case is before the Court on interlocutory appeal. Safeco Insurance Company (Safeco) and Liberty Mutual Insurance Company individually challenged the circuit court’s reassignment of their respective cases and the appointment of a special master. The Mississippi Supreme Court found no abuse of discretion in reassigning judges, but vacated the order appointing the special master, finding an abuse of the trial court’s discretion. “The order itself acknowledged a blind-billing provision was “unusual.” But the Supreme Court found it was more than that: requiring both parties, one of which is the State of Mississippi, to pay an attorney in Louisiana to act as a judge, allowing either side to meet with him ex parte, and not requiring this special master to mention these meetings or even justify or detail his bill far exceeded the discretionary authority to appoint special masters.” View "Safeco Insurance Company of America v. Mississippi, ex rel. Hood" on Justia Law

A 2014 hail and wind storm damaged Windridge buildings that were insured by Philadelphia Indemnity. The storm physically damaged the aluminum siding on the buildings’ south and west sides. Philadelphia argued that it is required to replace the siding only on those sides. Windridge argued that replacement siding that matches the undamaged north and east elevations is no longer available, so Philadelphia must replace the siding on all four sides so that all of the siding matches. The Seventh Circuit affirmed summary judgment in favor of Windridge. Each building suffered a direct physical loss, which was caused by or resulted from the storm, so Philadelphia must pay to return the buildings to their pre‐storm status—i.e., with matching siding on all sides. Having mismatched siding on its buildings would not be the same position. The district court’s conclusion that the buildings as a whole were damaged—and that all of the siding must be replaced to ensure matching—is a sensible construction of the policy language as applied to these facts. View "Windridge of Naperville Condominium Association v. Philadelphia Indemnity Insurance Co." on Justia Law

A condominium association, Dakota Station II Condominium, filed two claims with its insurer, Owners Insurance Company, for weather damage. The parties couldn’t agree on the money owed, so Dakota invoked the appraisal provision of its insurance policy. The parties each selected an appraiser, putting the rest of the provision’s terms into motion. Ultimately, the appraisers submitted conflicting value estimates to an umpire, and the umpire issued a final award, accepting some estimates from each appraiser. Dakota’s appraiser signed onto the award, and Owners paid Dakota. Owners later moved to vacate the award, arguing that Dakota’s appraiser was not “impartial” as required by the insurance policy’s appraisal provision and that she failed to disclose material facts. The trial court disagreed and “dismissed” the motion to vacate. A division of the court of appeals affirmed. In its review, the Colorado Supreme Court interpreted the policy’s impartiality requirement and determined whether a contingent-cap fee agreement between Dakota and its appraiser rendered the appraiser partial as a matter of law. The Court concluded the plain language of the policy required appraisers to be unbiased, disinterested, and unswayed by personal interest, and the contingent-cap fee agreement didn’t render Dakota’s appraiser partial as a matter of law. Accordingly, the Court affirmed the judgment of the court of appeals with respect to the contingent-cap fee agreement, reversed with respect to the impartiality requirement, and remanded for further proceedings. View "Owners Ins. v. Dakota Station II Condo. Ass'n" on Justia Law