Justia Insurance Law Opinion SummariesArticles Posted in US Court of Appeals for the Eighth Circuit
Pine Bluff School District v. Ace American Insurance Co.
The school district filed suit against ACE, seeking a declaratory judgment stating that the school district's legal liability insurance policy provided coverage for a teacher's retaliatory discharge lawsuit filed against the school district and the principal of Pine Bluff High School. The school district argued that coverage existed for the underlying lawsuit or, alternatively, ACE waived all defenses to coverage and was estopped from claiming no coverage.The Eighth Circuit affirmed the district court's grant of summary judgment in favor of ACE, holding that the single claim provision unambiguously applies and that neither the 2015 Policy nor the 2016 Policy provide coverage for the school district's claim based on the teacher's September 22, 2016 lawsuit. The court applied Arkansas law and held that the doctrines of waiver and estoppel are inapplicable here. View "Pine Bluff School District v. Ace American Insurance Co." on Justia Law
Johnson v. Safeco Insurance Company of Illinois
Plaintiff filed suit against Safeco after the insurance company denied her underinsured motorist insurance (UIM) coverage. The district court granted summary judgment to Safeco.The Eighth Circuit affirmed, holding that this case does not involve a set-off within a policy but stacking of separate policies; the anti-stacking provision in the policy unambiguously limits the total of plaintiff's UIM coverage to the highest applicable limit; and Safeco's coverage is not illusory. Therefore, Safeco's anti-stacking provision does not preclude Safeco's excess coverage from ever applying—it simply prevents plaintiff from stacking coverage from different policies when she has already received the highest applicable limit of UIM coverage. View "Johnson v. Safeco Insurance Company of Illinois" on Justia Law
Tile Shop Holdings, Inc. v. Allied World National Assurance Co.
Tile Shop Holdings settled multiple lawsuits with its shareholders and then sought indemnification under its directors-and-officers insurance policies. Allied World, Tile Shop's excess insurer, denied coverage.The Eighth Circuit held that Allied is neither liable for the losses from the prior acts it has excluded in its own policy nor those excluded under the primary policy. Under the first prior-acts exclusion, Tile Shop's wrongful acts started well before August 20, 2012, the policy's retroactive date, which made any losses from them excludable under the relation-back clause. View "Tile Shop Holdings, Inc. v. Allied World National Assurance Co." on Justia Law
Federal Insurance Co. v. Axos Clearing LLC
After Federal issued a Financial Institution Bond to COR, COR paid $2,080,000 to settle claims by investors that a former COR registered representative had conspired with others to defraud investors by carrying out a "pump-and-dump" scheme in a risky penny-stock called VGTel. COR then filed a claim with its liability insurer for VGTel and other settlement payments, which it later settled for $3,625,000 above the policy's deductible. COR also filed a claim under Federal's Bond to recover its losses for the VGTel settlements. Federal denied coverage and filed a declaratory judgment action.The Eighth Circuit agreed with the district court that Auto Lenders Acceptance Corp. v. Gentilini Ford, Inc., 854 A.2d 378 (N.J. 2004), stands for the proposition that, under New Jersey law, COR's payments to settle third-party liability claims based on an employee's dishonest acts directed at the third parties were not a direct loss under Insuring Clause 1.B of the Bond. Furthermore, the district court did not err in dismissing COR's Clause 1.D counterclaim because COR failed to show that admissible evidence would be available at trial to prove that the employee personally committed a covered dishonest act. Accordingly, the court affirmed the district court's judgment. View "Federal Insurance Co. v. Axos Clearing LLC" on Justia Law
Meridian Security Insurance Co. v. Schmitt-Selken
The Eighth Circuit affirmed the district court's grant of summary judgment in favor of Meridian in an action brought by Meridian seeking a declaration that it has no obligation to provide underinsured motorist (UIM) benefits to either Lois Schmitt-Selken or the Estate of Donald Selken for injuries or damages arising out of a motor vehicle accident occurring while Lois was a passenger in husband Donald Selken's car.The court held that, under the unambiguous policy language, the "owned-but-not-insured" exclusion in the Meridian policy bars Lois's claim for UIM benefits for the accident occurring while she was a passenger in her husband's vehicle. In this case, Lois's argument that the definition of "you" requires joint ownership of a vehicle before the exclusion applies is neither a reasonable interpretation of the policy language, nor consistent with the purpose of an "owned-but-not-insured" exclusion. View "Meridian Security Insurance Co. v. Schmitt-Selken" on Justia Law
Primerica Life Insurance Co. v. Reid
After Primerica filed an interpleader action under Federal Rule of Civil Procedure 22 in order to resolve competing claims to Garvin Reid's life insurance proceeds, the district court awarded summary judgment and the insurance proceeds to Ila Reid, Garvin's widow. However, the district court granted summary judgment in favor of Primerica on Ila's counterclaim against Primerica for breach of contract stemming from the disputed life insurance policy.The Eighth Circuit held that there is a legitimate dispute over the question of fault in creating the competing claims to Garvin's life insurance proceeds, and circuit precedent has not previously required a fault determination in the interpleader context. In this case, there is an active dispute on appeal regarding whether the competing claims to Garvin's insurance proceeds arose because of Primerica's failure to process the 2002 Multipurpose Change Form or because of Garvin's failure to respond when Primerica sought more information in 2002. Accordingly, the court remanded for a fault determination by the district court and further proceedings. View "Primerica Life Insurance Co. v. Reid" on Justia Law
Topp’s Mechanical, Inc. v. Kinsale Insurance Co.
The Eighth Circuit affirmed the district court's grant of Kinsale's motion to dismiss actions brought by TMI for breach of an indemnity policy. TMI bought a liability insurance policy from Kinsale and the policy excluded a "pollution incident" unless properly reported by TMI. The court held that TMI cannot invoke waiver and estoppel because timely notice "modifies coverage" to include pollution incidents. In this case, TMI learned that an employee suffered injury from a pollution incident, but TMI did not timely report the incident per the plain language of the contract. View "Topp's Mechanical, Inc. v. Kinsale Insurance Co." on Justia Law
LM Insurance Corp. v. Dubuque Barge and Fleeting Service Co.
LM filed suit against Newt Marine for breach of contract, alleging that Newt Marine wrongfully refused to pay premiums owed under three separate workers' compensation insurance policies.The Eighth Circuit affirmed the district court's grant of Newt Marine's motion for summary judgment, because the premiums LM sought from Newt Marine were not merited by the terms of the policies. Therefore, the court held that Newt Marine did not breach its obligations under the workers' compensation insurance policies by refusing to pay. View "LM Insurance Corp. v. Dubuque Barge and Fleeting Service Co." on Justia Law
Brill v. Mid-Century Insurance Co.
The Eighth Circuit affirmed the district court's award of summary judgment to Mid-Century in an insurance coverage dispute over the amount Mid-Century owed plaintiff after her husband was struck and killed by an underinsured motor (UIM) vehicle.The court held that the fact that Mid-Century was licensed to write policies in Minnesota, combined with the husband's subsequent move to and residency there, does not dictate that the Mid-Century policy must be reformed to calculate UIM coverage under Minnesota's add-on approach. Consistent with the plain language of the statute, the Minnesota Supreme Court has held that in order for Minnesota law to mandate that an insurer provide uninsured coverage consistent with that required by Section 65B.49 of the Minnesota Statutes, the insurance policy had to be renewed, delivered, or issued for delivery, or executed in Minnesota. Because Mid-Century issued the policy to plaintiff and her husband when they resided in Wisconsin and the policy was not renewed after the husband's move, section 65B.50's add-on approach to calculating UIM coverage is not required. Therefore, the court held that the plain language of the policy controls, which dictates a limits-less-paid approach to calculating UIM coverage. View "Brill v. Mid-Century Insurance Co." on Justia Law
Hanover Insurance Co. v. Dunbar Mechanical Contractors, LLC
Dunbar, a Service Disabled Veteran Owned Small Business (SDVOSB), was awarded an Army Corps of Engineers ditch and tributary project in Arkansas. Dunbar then hired a subcontractor, Harding Enterprises, to work on the project. After Harding Enterprises defaulted, Dunbar made a demand on the bond guaranteed by Hanover, which Hanover denied. Hanover then filed suit seeking a declaration that it had no obligations under the bond and seeking to have the bond rescinded based on illegality of the subcontract.The Eighth Circuit reversed the district court's grant of summary judgment in favor of Hanover, holding that the district court erroneously concluded that the subcontract was undisputedly in violation of 13 C.F.R. 125.6(b)(2) because the percentage that Dunbar spent on contract performance relative to the prime contract price could not be conclusively ascertained until conclusion of performance of the prime contract. The court also held that the potential that Hanover may have liability under the False Claims Act if it were to perform under the bond does not justify discharging Hanover from its obligations and rescinding the contract. View "Hanover Insurance Co. v. Dunbar Mechanical Contractors, LLC" on Justia Law