Justia Insurance Law Opinion Summaries

Bliv, Inc. owned a commercial building insured by Charter Oak Fire Insurance Company against hail damage, but not against damage caused by wear and tear. After a storm on July 9, 2021, Bliv claimed that water intrusion had damaged both the exterior and interior of the building, asserting that hail was the cause. Charter Oak’s expert, Isaac Gaetz, inspected the property and found hail damage to vents and air conditioner fins, but no damage to the roof’s membrane. Gaetz concluded that the water intrusion was due to long-term wear and tear, not hail. Bliv disputed this and retained its own expert, Brian Johnson, who opined that hail caused the loss, relying on reports and satellite images rather than direct testing or inspection of the interior.The United States District Court for the Eastern District of Missouri reviewed the case. Charter Oak moved to exclude Johnson’s expert opinion, arguing it lacked sufficient factual support and was not based on reliable methods. The district court found Johnson qualified but excluded his opinion due to deficiencies in his investigation, such as failing to review key reports, not inspecting the interior, and not conducting independent testing. Without Johnson’s opinion, Bliv could not rebut Charter Oak’s causation evidence, and the district court granted summary judgment in favor of Charter Oak.On appeal, the United States Court of Appeals for the Eighth Circuit reviewed the district court’s exclusion of Johnson’s opinion under the abuse of discretion standard. The appellate court found that, despite some inconsistencies in the district court’s reasoning, there was a sufficient basis for exclusion because Johnson’s opinion relied on incomplete information and failed to address critical evidence. The Eighth Circuit held that the district court did not abuse its discretion and affirmed the summary judgment in favor of Charter Oak. View "Bliv, Inc. v. The Charter Oak Fire Insurance Company" on Justia Law

An attorney with over two decades of experience brought suit against an insurance company and its agent after his life insurance policy lapsed due to a missed payment. He claimed to have cured the lapse by paying the overdue premium and submitting required information, and alleged that the insurer confirmed reinstatement before later refunding his payment and rescinding the reinstatement. The insurer denied ever reinstating the policy and asserted it had expired by its own terms. The attorney filed suit in state court, alleging breach of contract and other claims. After removal to federal court, the parties mediated and signed a settlement memorandum outlining five essential terms, including a $10,000 payment to the plaintiff and mutual releases. The memorandum stated that final settlement language would use standard contractual terms.After mediation, the plaintiff refused to sign the draft settlement agreement, objecting to a non-reliance clause he claimed was not discussed during mediation. He also began raising new questions about the status of his insurance policy. He moved to vacate the settlement and sought further discovery, while the defendants moved to enforce the settlement. The United States District Court for the Western District of Missouri held an evidentiary hearing, which the plaintiff missed, and then granted the defendants’ motion to enforce the settlement and denied the plaintiff’s motions. The plaintiff’s motion for rehearing was also denied.On appeal, the United States Court of Appeals for the Eighth Circuit held that the settlement memorandum contained all essential terms and that the non-reliance clause in the draft agreement was standard language, not a material new term. The court found no clear error in the district court’s factual findings and no abuse of discretion in denying a new hearing. The Eighth Circuit affirmed the district court’s judgment enforcing the settlement. View "Schlecht v. Goldman" on Justia Law

Nilfisk, Inc. leased a large warehouse building in Springdale, Arkansas from Fort Worth Partners, LLC under an industrial lease that required Nilfisk to maintain property insurance covering the full replacement cost of the building, excluding certain foundation and below-grade structures. In March 2022, a tornado destroyed the building, and Nilfisk’s insurance coverage at the time was significantly less than the full replacement cost required by the lease. Fort Worth Partners sued Nilfisk and its parent company for breach of contract, seeking damages equal to the full replacement cost that would have been covered by adequate insurance.The United States District Court for the Western District of Arkansas reviewed cross-motions for summary judgment. It denied Nilfisk’s motion and granted Fort Worth Partners’ motion in part, finding Nilfisk had breached its insurance obligation under the lease. The court held a bench trial to determine damages, considering expert testimony from both parties. It awarded Fort Worth Partners damages for the building’s replacement cost, excluding foundation damages per the lease, and also awarded attorney’s fees and costs, with reductions for limited success and prevailing local rates. Nilfisk appealed the denial of summary judgment and the damages award, while Fort Worth Partners cross-appealed aspects of the damages and fee awards.The United States Court of Appeals for the Eighth Circuit affirmed the district court’s grant of partial summary judgment for Fort Worth Partners and its denial of Nilfisk’s summary judgment motion. The appellate court held that Fort Worth Partners’ claim was timely, as each deficient insurance policy constituted a separate breach with its own limitations period. The court also affirmed the district court’s interpretation of the lease excluding all foundation damages and upheld the reduction in attorney’s fees. However, it reversed and remanded the damages award for unrebutted costs, instructing the district court to make specific factual findings supporting that portion of the award. View "Fort Worth Partners, LLC v. Nilfisk, Inc." on Justia Law

A fire occurred on September 27, 2018, at a multi-building apartment complex in Birmingham, Alabama, owned by Maxus Metropolitan, LLC. The fire destroyed one building and damaged others, including causing soot and water damage. Maxus was insured by Travelers Property Casualty Company of America under a policy covering physical loss or damage and lost business income. After the fire, Maxus and Travelers disagreed over the extent of coverage, particularly regarding remediation costs for microscopic soot and water damage. Maxus hired experts who found widespread soot contamination, prompting evacuation and remediation. Travelers disputed the necessity of remediation and delayed coverage decisions.Maxus sued Travelers in Missouri state court for breach of contract and vexatious refusal to pay, and Travelers removed the case to the United States District Court for the Western District of Missouri. At trial, the jury found for Maxus, awarding substantial damages, additional damages for vexatious refusal, and attorneys’ fees. The district court granted Maxus’s motions for attorneys’ fees and prejudgment interest, including fees for pre-suit work and paralegal support. Travelers moved for judgment as a matter of law and for a new trial, arguing issues with coverage, sufficiency of evidence, jury instructions, and calculation of damages and fees.The United States Court of Appeals for the Eighth Circuit reviewed the case. It affirmed the district court’s denial of Travelers’ motions for judgment as a matter of law and for a new trial, holding that microscopic soot can constitute “direct physical loss or damage” under Missouri law if it renders property uninhabitable, and that sufficient evidence supported the jury’s findings on coverage and vexatious refusal. The court also affirmed the attorneys’ fees award. However, it vacated the prejudgment interest award, finding the calculation method improper, and remanded for recalculation based on the dates payment was demanded from Travelers. View "Maxus Metropolitan, LLC v. Travelers Property Casualty Co." on Justia Law

Andrew and Jessie Welsh purchased The Press Bar and Parlor in 2016, managing it through two entities: Horseshoe Club, LLC, which owned the real estate, and Timeless Bar, Inc., which operated the bar. Andrew and Jessie were the sole members and officers of both entities. Illinois Casualty Company (ICC) issued a business owner’s policy covering the bar’s property and operations. Timeless Bar was the named insured, and Horseshoe Club was an additional insured. After their divorce in November 2019, Andrew took sole control of the businesses’ finances. On February 17, 2020, a fire destroyed The Press Bar and Parlor. Andrew and Jessie submitted a claim to ICC, stating the fire was of unknown origin. However, an investigation revealed Andrew had intentionally set the fire, leading to his conviction for arson. ICC denied the claim based on policy exclusions for concealment, misrepresentation, fraud, dishonesty, and intentional acts.The United States District Court for the District of Minnesota dismissed Jessie’s claims due to her lack of standing as a non-insured. On cross-motions for summary judgment, the court ruled in favor of ICC, attributing Andrew’s conduct to both business entities and concluding the policy did not cover the loss. The court also held that Minnesota’s statutory protection for innocent co-insureds did not extend to corporate entities.The United States Court of Appeals for the Eighth Circuit reviewed the district court’s grant of summary judgment de novo. The court affirmed the district court’s judgment, holding that Andrew’s misrepresentations were attributable to the business entities, and thus, ICC was justified in denying coverage. The court found no basis in Minnesota law to extend the innocent co-insured doctrine to corporations or limited liability companies. View "Timeless Bar, Inc. v. Illinois Casualty Co." on Justia Law

Michael Swanson killed a motorcyclist while driving his parents' car. After a wrongful-death lawsuit settled, Swanson's personal automobile-liability policy paid up to its coverage limits. The remaining question was which insurer should pay next: Hartford Fire Insurance Company, which provided a commercial automobile policy to Swanson's employer, or Chubb Custom Insurance Company, which provided group excess-liability benefits. Both insurers had "excess clauses" requiring the other to pay first, leading to a dispute.The United States District Court for the Western District of Missouri determined that the excess clauses were mutually repugnant, meaning they canceled each other out. The court granted summary judgment to Hartford, denied Chubb's motion for judgment on the pleadings, and ordered both insurers to share the remaining settlement amount pro rata.The United States Court of Appeals for the Eighth Circuit reviewed the case de novo. The court found that Hartford's policy was "excess over any other collectible insurance," while Chubb's policy was "excess over any other insurance," making it a true excess policy. The court concluded that Hartford's policy should pay before Chubb's because Hartford's policy was excess over collectible insurance, which included Swanson's personal automobile-liability policy. Chubb's policy, being a true excess policy, would only come into play after all other insurance was exhausted.The Eighth Circuit vacated the district court's judgment and remanded the case with instructions to grant Chubb's motion for judgment on the pleadings, determining that Hartford should pay before Chubb. View "Hartford Fire Insurance Company v. Chubb Custom Insurance Company" on Justia Law

BCC Partners, LLC ("BCC") contracted with Ben F. Blanton Construction, Inc. ("Blanton") to build an apartment complex in Creve Coeur, Missouri. Blanton obtained an insurance policy from Travelers Property Casualty Company of America ("Travelers"), naming Blanton as the "Named Insured" and BCC as an "Additional Named Insured." A retaining wall failure during construction led to damage and delays, resulting in multiple insurance claims. Travelers paid $1.3 million into an escrow account, which was divided among claimants. BCC later sought coverage for loss of rental income and soft costs due to the delays, but Travelers denied the claim after an initial advance payment of $200,000.The United States District Court for the Eastern District of Missouri granted summary judgment to Travelers, concluding that BCC was not entitled to the demanded payments under the Policy. BCC appealed the decision.The United States Court of Appeals for the Eighth Circuit reviewed the case de novo. The court held that under the plain meaning of the Policy, only a "Named Insured" is covered for losses of rental income and soft costs. BCC, as an "Additional Named Insured," did not qualify for such coverage. The court found that the Policy's language was clear and unambiguous, and BCC's arguments to the contrary were unavailing. Consequently, the court affirmed the district court's judgment, ruling that Travelers did not breach the Policy and that BCC's claim for vexatious refusal to pay also failed. View "BCC Partners, LLC v. Travelers Property Casualty Co. of America" on Justia Law

Plaintiffs, E&I Global Energy Services, Inc. and E&C Global, LLC, sued Liberty Mutual Insurance Company for breach of contract and tort claims related to a construction project. The United States, through the Western Area Power Administration (WAPA), contracted with Isolux to build a substation, and Liberty issued performance and payment bonds for Isolux. After Isolux was terminated, Liberty hired E&C as the completion contractor, but E&I performed the work. Plaintiffs claimed Liberty failed to pay for the work completed.The United States District Court for the District of South Dakota granted summary judgment for Liberty on the unjust enrichment claim and ruled in Liberty's favor on all other claims after a bench trial. The court denied Plaintiffs' untimely request for a jury trial, excluded an expert witness report filed after the deadline, found no evidence of an assignment of rights between E&C and E&I, and ruled against Plaintiffs on their fraud, deceit, and negligent misrepresentation claims.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court held that the district court did not abuse its discretion in denying the jury trial request, as Plaintiffs failed to timely file the motion and did not justify the delay. The exclusion of the expert report was also upheld, as the district court properly applied the relevant factors and found the late report was neither substantially justified nor harmless. The court affirmed the district court's finding that there was no valid assignment of rights from E&C to E&I, meaning Liberty's promise to pay was to E&C, not E&I. The court also upheld the findings that Liberty did not have the intent to deceive or induce reliance, and that Bruce did not reasonably rely on Mattingly's statements. Finally, the court declined to address the unjust enrichment claim as Plaintiffs did not raise the argument below. The Eighth Circuit affirmed the district court's rulings in their entirety. View "E&I Global Energy Services v. Liberty Mutual Insurance Co." on Justia Law

Bob Robison Commercial Flooring Inc. (BRCF) was hired to install a vinyl gym floor at a middle school in Trumann, Arkansas. BRCF subcontracted the painting of volleyball and basketball lines to Robert Liles Parking Lot Services (Liles). Liles's work was faulty, leading to the rejection of the gym floor. BRCF had to remove and replace the floor, incurring a cost of $181,415.39. BRCF submitted a claim to RLI Insurance Company (RLI) under its builder’s risk policy, which RLI denied, citing an exclusion for losses caused by workmanship errors.BRCF filed a lawsuit in state court for declaratory judgment and breach-of-contract damages. RLI removed the case to the United States District Court for the Eastern District of Arkansas. The district court denied RLI’s motion to dismiss, finding that BRCF had stated plausible claims. However, after limited discovery, the district court granted RLI’s motion for summary judgment, concluding that the policy unambiguously excluded coverage for damage resulting from defective workmanship.The United States Court of Appeals for the Eighth Circuit reviewed the case. BRCF argued that the policy’s ensuing loss clause should restore coverage for the replacement cost of the vinyl gym floor. The Eighth Circuit affirmed the district court’s decision, holding that the policy was not ambiguous and that the ensuing loss clause did not apply because the damage was solely caused by the excluded peril of faulty workmanship. The court concluded that BRCF failed to identify a separate covered peril that would trigger the ensuing loss clause, and thus, the entire loss was excluded from coverage. View "Bob Robison Commercial Floor v. RLI Insurance Company" on Justia Law

Evanston Insurance Company issued commercial umbrella liability policies to Nooter, LLC, covering the period from July 1, 1981, to July 1, 1985. Evanston sought a declaration in the Eastern District of Missouri that it no longer had a duty to defend or indemnify Nooter in ongoing state court asbestos-related personal injury litigation. Evanston claimed that its policy limits were exhausted as of December 29, 2022, after tendering the remaining available limits to Nooter.Previously, Nooter and Evanston litigated insurance coverage issues in Missouri state court, where it was determined that Evanston had a duty to defend and indemnify Nooter against asbestos exposure claims. The Missouri Court of Appeals affirmed a jury verdict against Evanston for breach of contract and vexatious refusal to pay claims. Nooter filed a motion for contempt in state court, which was denied, but the court noted that Evanston's tender of policy limits did not fulfill its duty to defend.The United States Court of Appeals for the Eighth Circuit reviewed the case and affirmed the district court's dismissal of Evanston's complaint based on claim preclusion. The court held that Missouri's prohibition on claim splitting applied, as the claims arose from the same contracts and transactions involved in the state court litigation. The court found that Evanston's indemnity and defense obligations had already been decided by Missouri courts, and thus, the federal court lacked jurisdiction over the claims. The court also affirmed the denial of Evanston's motion to amend the complaint and the motion to deposit funds as moot. The dismissal was without prejudice to Evanston's ability to seek relief in state court. View "Evanston Insurance Company v. Nooter, LLC" on Justia Law