Justia Insurance Law Opinion SummariesArticles Posted in South Dakota Supreme Court
S.D. Life & Health Guaranty Ass’n v. S.D. Bankers Benefit Plan Trust
The Supreme Court reversed the judgment of the South Dakota Life and Health Guaranty Association denying the protests brought by the South Dakota Bankers Benefit Plan Trust as to the Association's assessment schedule it established to cover an insolvent insurer's obligations, holding that the Trust was not liable to pay the contested assessments.In 2017, the Association, which covers impaired and insolvent insurers' obligations to their insureds by assessing Association members, assumed liability for the insolvent insurer at issue and established a five-year assessment schedule. The Trust paid three years of the five-year schedule but protested the requirement to pay the remaining two because they were assessed after the insolvent insurer's membership in the Association ended. The Association denied the protests. The South Dakota Division of Insurance's Office of Hearing Examiners reversed, determining that the Association lacked authority to assess the Trust for the last two assessments. The circuit court reversed. The Supreme Court reversed, holding that the Trust was not liable to pay the Association's 2020 and 2021 assessments. View "S.D. Life & Health Guaranty Ass'n v. S.D. Bankers Benefit Plan Trust" on Justia Law
Schupp v. Division of Insurance
The Supreme Court affirmed the judgment of the circuit court affirming the decision of the Office of Hearing Examiners (OHE) reviewing the decision of the South Dakota Department of Labor and Regulation Division of Insurance (DOI) relating to captive insurance companies domiciled in South Dakota, holding that there was no error.Appellant requested information from the South Dakota Department of Labor and Regulation Division of Insurance (DOI) relating to captive insurance companies domiciled in the state of South Dakota. The DOI denied the request, explaining that the information was confidential. The OHE upheld the decision, and the circuit court affirmed. The Supreme Court affirmed, holding that the circuit court and the OHE properly determined that certificates of authority for captive insurance companies may not be disclosed under S.D. Codified Laws 58-46-31. View "Schupp v. Division of Insurance" on Justia Law
Kaiser Trucking, Inc. v. Liberty Mutual Fire Insurance Co.
The Supreme Court reversed the judgment of the circuit court in favor of Liberty Mutual Fire Insurance Company in this insurance dispute, holding that the circuit court improperly dismissed the complaint for failure to state a claim upon which relief can be granted.An agent of Kaiser Trucking was in an automobile accident with Liberty Mutual's insured. The circuit court granted default judgment for Kaiser Trucking and its agent. After the judgments were returned unsatisfied, Kaiser and its agent brought this action against Liberty Mutual seeking indemnification of the judgments against its insured. Liberty Mutual filed a motion to dismiss under S.D. Codified Laws 15-6-12(b)(5), arguing that Plaintiffs failed to plead a condition precedent to coverage under the policy. The circuit court agreed and dismissed the complaint. The Supreme Court reversed, holding that Kaiser Trucking, Inc. was not required to plea satisfaction of conditions precedent in the relevant insurance policy sufficiently to state a claim upon which relief could be granted and avoid a Rule 12(b)(5) dismissal of its complaint. View "Kaiser Trucking, Inc. v. Liberty Mutual Fire Insurance Co." on Justia Law
Deiter v. XL Specialty Insurance Co.
The Supreme Court held that S.D. Codified Laws 58-29B-56 provides a state insurance liquidator an additional 180 days to provide a notice of a claim under a claims-made professional liability policy.The South Dakota Director of Insurance filed a petition for an order of liquidation of ReliaMax Surety Company (RSC), a subsidiary of ReliaMax Holding Company (RHC). The circuit court declared RSC to be insolvent and directed the company's liquidation. The state insurance liquidator (Liquidator) later commenced the underlying action against the directors and officers (D&O) of RSC and RHC. Under a settlement agreement, the Liquidator was granted a final judgment, agreeing not to execute upon and instead receiving an assignment of the D&Os' claims for coverage under a policy issued by SL Specialty. The Liquidator then brought this action against XL Speciality. At issue was the timeliness of the Liquidator's claim seeking D&O coverage. The district court certified questions of law to the Supreme Court. The Court held that section 58-29B-56 provides a state insurance liquidator an additional 180 days to provide notice of a claim under a claims-made professional liability policy. View "Deiter v. XL Specialty Insurance Co." on Justia Law
Nationwide Agribusiness v. Fitch
The Supreme Court held that the circuit court did not err when it granted Nationwide's motion for summary judgment on its complaint seeking a declaratory judgment regarding its duty to indemnify and defend Defendants against a personal injury lawsuit stemming from an accident on their farm.Nationwide issued a farm liability insurance policy for Defendants' farm and cattle ranch operation. After an accident resulted in permanent injuries to a relative, the relative filed a personal injury action against Defendants and their business entities. Nationwide then commenced this declaratory judgment action to determine the extent of its obligation to defend or indemnify Defendants. The circuit court granted summary judgment for Nationwide, concluding that a "Recreational Vehicle Liability Coverage Endorsement" in the policy operated to exclude coverage for the accident. The Supreme Court affirmed, holding that the circuit court properly granted summary judgment based on the language in the Recreational Vehicle Endorsement. View "Nationwide Agribusiness v. Fitch" on Justia Law
Payne v. State Farm Fire & Casualty Co.
The Supreme Court affirmed the judgment of the circuit court denying Plaintiffs' declaratory judgment action against State Farm seeking payment of $2 million under Florida's uninsured motorist (UM) statute, holding that Florida law did not require State Farm to provide UM coverage.State Farm denied Plaintiffs UM coverage under their personal liability umbrella insurance policy after a motorcycle accident with an uninsured vehicle in South Dakota because the policy did not include UM coverage. Thereafter, Plaintiffs, who resided in Florida at the time of the accident, filed this declaratory action. The circuit court concluded that Florida law applied to the dispute, that State Farm did not violate Florida's UM statute, and that Plaintiffs were not entitled to UM coverage. The Supreme Court affirmed, holding that Florida law did not require State Farm to provide UM coverage. View "Payne v. State Farm Fire & Casualty Co." on Justia Law
Sapienza v. Liberty Mutual Insurance
The Supreme Court answered a certified question in the positive and held that the costs incurred by Plaintiffs complying with an injunction in the underlying case were "damages" within the meaning of the policies with their insurance carrier, Liberty Mutual Insurance Company.In the underlying action, Plaintiffs were sued for negligence and nuisance. Liberty Mutual agreed to defend against the suit under Plaintiffs' homeowners policy and a personal liability policy. A permanent injunction was entered against Plaintiffs. Liberty Mutual, however, stated that it would not indemnify Plaintiffs for the costs they incurred in complying with the injunction on the grounds that the costs did not constitute covered damages under Plaintiffs' policies. Plaintiffs then filed suit against Liberty Mutual, alleging breach of the duty to indemnify. The federal district court certified to the Supreme Court the question of whether Liberty Mutual must indemnify Plaintiffs for the cost of complying with the injunction. The Supreme Court answered the question in the positive, holding that the costs incurred by Plaintiffs to comply with the injunction constituted covered "damages" under the Liberty Mutual policies. View "Sapienza v. Liberty Mutual Insurance" on Justia Law
Sentell v. Farm Mutual Insurance Co.
The Supreme Court affirmed the judgment of the trial court denying Insureds' motion for attorney fees after they prevailed in their claims against Insurer, holding that the circuit court properly declined to award Insureds' requested attorney fees.A jury returned a verdict in favor of Insureds on their claims of breach of contract and tortious breach of good faith and fair dealing arising out of Insurer's failure to pay for property damage sustained after a hail and wind storm. Insureds filed a motion for attorney fees, arguing that Insurer's disallowance of their claim was vexatious and unreasonable and in violation of the Unfair Trade Practices Act. The trial court denied Insureds' request, concluding that the circuit court could not award attorney fees without a jury determination that Insurer had engaged in an unfair trade practice. The Supreme Court affirmed, holding that the circuit court did not err in declining to award attorney fees. View "Sentell v. Farm Mutual Insurance Co." on Justia Law
Luze v. New FB Co.
In this insurance dispute arising from an employee's death, the Supreme Court remanded the determination that the employer's insurer providing underinsured motorist coverage and workers' compensation insurance was entitled to a lien on a portion of settlement proceeds received by the estate, holding that, given a lack of factual findings, there was no way to evaluate whether the court clearly erred in its assessment of the various factors impacting an equitable allocation.Charles Luze died in a work-related accident. His employer paid his wife, Jeanette Luze, workers' compensation benefits. Jeanette, as the representative of Charles's estate, then brought suit against the negligent driver and settled the claim. The estate also settled a claim against the New FB's insurer providing underinsured motorist coverage, Zurich American Insurance Company, which was also New FB's workers' compensation carrier. The circuit court determined that Zurich was entitled to a statutory workers' compensation lien on fifty percent of the settlement proceeds received by the estate and was able to subrogate against its own settlement payment of underinsured benefits. The Supreme Court remanded in part, holding (1) this Court was unable meaningfully to review the circuit court's allocation determination; and (2) the circuit court properly allowed Zurich to subrogate against the amount it paid in underinsured motorist benefits. View "Luze v. New FB Co." on Justia Law
Olson v. Slattery
The Supreme Court affirmed the judgment of the circuit court concluding that coverage did not exist under an automobile insurance policy issued to Shelby Olsons' parents or an automobile policy issued to the shooter for injuries sustained by Shelby when she was struck by a bullet while riding in the backseat of her parents' vehicle, holding that the circuit court did not err.Shelby was struck by a bullet when the driver of another vehicle fired a handgun at the Olsons' vehicle. At issue was whether coverage for Shelby's injuries existed under the automobile policy issued to her parents or under the automobile policy issued to the shooter. The circuit court concluded that coverage did not exist under either policy because the injuries did not arise out of the use of a vehicle and, alternatively, were not caused by an accident. The Supreme Court affirmed, holding that the circuit court did not err in granting summary judgment in favor of the insurance companies. View "Olson v. Slattery" on Justia Law