Justia Insurance Law Opinion Summaries

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

First Baptist Church, located in Fort Smith, Arkansas, had property insurance policies with Zurich American Insurance Company. The church experienced leaks over the years and hired roofing companies to repair portions of its roofing system in 2016, 2017, and 2018. In 2022, a roofing company representative determined the roofing system had hail damage, and First Baptist filed a claim with Zurich, alleging the damage occurred on April 28, 2017. Zurich denied the claim, citing no damage from the alleged hail event and evidence of excluded causes such as wear and tear. First Baptist sued Zurich for breach of contract and insurance bad faith.The United States District Court for the Western District of Arkansas granted summary judgment in favor of Zurich, concluding that First Baptist failed to comply with the prompt notice provision in the insurance policy. The court based its decision on evidence first discussed in Zurich’s reply brief, which indicated that First Baptist knew of past loss or damage to its property as early as 2016. The court held that no reasonable jury could find that First Baptist promptly notified Zurich of the loss or damage nearly six years later in January 2022. First Baptist filed a motion to reconsider, which the district court denied.The United States Court of Appeals for the Eighth Circuit reviewed the case and concluded that there were potential genuine disputes of material fact not properly litigated. The court noted that First Baptist did not have a fair opportunity to counter Zurich’s evidence and arguments about past leaks and repairs. The court reversed the district court’s grant of summary judgment and remanded the case for further consideration of the issues related to past loss or damage and the effect on First Baptist’s claims. The court also reversed and remanded the grant of summary judgment on First Baptist’s bad faith claim. View "First Baptist Church v. Zurich American Insurance Co." on Justia Law

Sioux Steel Company, a South Dakota corporation, designed and manufactured a new line of hopper bins for grain storage. After selling one of these bins to a distributor in Mexico, the bin failed catastrophically, causing fatalities and property damage. Sioux Steel had an insurance policy with the Insurance Company of the State of Pennsylvania (ISOP), which included a professional services exclusion. ISOP denied coverage based on this exclusion, leading Sioux Steel to settle with the affected party without ISOP's involvement.The United States District Court for the District of South Dakota granted summary judgment in favor of ISOP, finding that the professional services exclusion in the insurance policy was unambiguous and applicable, thus precluding coverage. The court also dismissed Sioux Steel's claims for bad faith, punitive damages, and attorney's fees.The United States Court of Appeals for the Eighth Circuit reviewed the case de novo. The court affirmed the district court's decision, holding that the professional services exclusion was clear and unambiguous. The exclusion applied because the damage arose from professional engineering services provided by Sioux Steel's employee and an external engineering firm. The court also found that ISOP did not breach its duty to defend, as no civil proceeding or alternative dispute resolution process had been initiated with ISOP's consent. Consequently, Sioux Steel's claims for breach of contract and insurance bad faith were dismissed, and the district court's judgment was affirmed. View "Sioux Steel Company v. Ins. Co. of the State of PA" on Justia Law

3M filed an insurance claim to recover losses incurred on a number of investments due to fraud perpetrated by its own investment advisors. The Eighth Circuit affirmed the district court's grant of summary judgment to the Insurers, holding that the ownership requirement of Endorsement 8 applies to the Employee Dishonesty provision. Therefore, 3M does not own the stolen earnings and cannot seek coverage for the earnings under the Policy. Until the earnings were distributed to the partners, the stolen earnings were property of WG Trading, not 3M. The court explained that it is fundamental that property acquired with partnership funds is partnership property, and individual partners do not own partnership assets until the winding up of the partnership. Finally, the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., does not alter general commercial property rights, but merely defines the nature and scope of the fiduciary duties owed to plan participants. View "3M v. National Union Fire Insurance" on Justia Law

The court affirmed the grant of summary judgment to Underwriters after Underwriters denied coverage based on the flood exclusion of the insurance policy at issue. The court concluded that the district court did not abuse its discretion by denying Hudson's motion to strike Underwriters' expert's opinion, because only a few days had passed at most between when Underwriters obtained their expert's opinion and disclosed it to Hudson; the term "flood" in this insurance contract was unambiguous and the court adopted the definition of "flood" given in Ebbing v. State Farm Fire & Cas. Co.; and Hudson's submission of lay testimony that the storm generated strong wind gusts and a photograph of the downed utility pole did not create a genuine issue of material fact as to whether wind or flood caused the damage to the docks, nor that the force generated from the flood waters directly or indirectly caused the damage to the marina's docks. View "Hudson Enterprises v. Certain Underwriters" on Justia Law

Plaintiff filed suit against F&G, an insurance company and its affiliates, under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1964(c), alleging that F&G committed numerous acts of mail and wire fraud in the course of a bookcooking scheme. The district court granted F&G's motion to dismiss for failure to state a claim on which relief can be granted based on the McCarran-Ferguson Act, 15 U.S.C. 1012(b). The court concluded that plaintiff's RICO claims would interfere with state regulation of the insurance business, and the claims were thus barred by the McCarran-Ferguson Act. Accordingly, the court affirmed the judgment. View "Ludwick v. Harbinger Group, Inc." on Justia Law

After Kelly D. Williams died when her car was hit by Dylan A. Meyer's vehicle, her parents submitted a claim for underinsured motorist (UIM) coverage. AMCO filed suit seeking a declaration of no coverage under Kelly's auto policy, and the district court granted summary judgment for AMCO. Under Missouri law, the court applied the general rules of contract construction when interpreting the policy. In this case, the court concluded that, because the bodily-injury liability for Meyer's vehicle was greater than the policy's UIM liability limit, Meyer's vehicle was not an "underinsured motor vehicle." The court rejected plaintiffs' claims that the policy was ambiguous and concluded that the district court did not err in finding the policy was neither ambiguous nor misleading. Accordingly, the court affirmed the judgment. View "AMCO Insurance v. Williams" on Justia Law

After he was injured, an ARI employee filed a civil suit against ARI and was awarded over $1.5 million in damages. ARI then sought insurance coverage against Hartford. The district court granted summary judgment for Hartford. The court affirmed, concluding that ARI did not strictly comply with the policy's notification provision and forfeited any right to recover from Hartford. Furthermore, the Hartford attorney did not unambiguously deny coverage and thus Hartford is not estopped from enforcing its notice provision. View "American Railcar Industries v. Hartford Insurance Co." on Justia Law

Adam Fetzer, a delivery driver for the Papa John's restaurant chain, was killed in a car accident in the course of his employment when another driver ran a red light and struck his vehicle. Mary Hegel, the personal representative of Fetzer's estate, sought underinsured motorist (UIM) coverage under a business auto insurance policy issued by American Fire to Papa John's. After American Fire denied the claim, the district court granted summary judgment against American Fire. The court concluded that the district court erred in applying North Dakota law and thus finding American Fire was required to provide UIM coverage to Papa John's. Rather, the policy is subject to Kentucky law, which does not require such coverage. Therefore, American Fire is entitled to judgment in its favor as a matter of law. The court reversed and remanded. View "American Fire and Casualty Co. v. Hegel" on Justia Law

Hiland filed suit against National Union, alleging that National Union had a duty to defend and indemnify it in connection with a lawsuit arising from an explosion at its natural gas processing facility. The district court entered summary judgment for National Union. The court concluded that National Union did not have a duty to defend or indemnify Hiland because the allegations in the underlying complaint fell within the policy's pollution exclusion. The court also concluded that, because Hiland did not offer specific facts showing that it reported the pollution to National Union within twenty one days, the district court did not err by concluding that the exception to the exclusion did not apply. Accordingly, the court affirmed the judgment. View "Hiland Partners GP Holdings v. National Union Fire Insurance" on Justia Law