Justia Insurance Law Opinion Summaries

Articles Posted in US Court of Appeals for the Eighth Circuit
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CNI owed IPFS the unearned premium from an insurance policy that was cancelled prematurely, but the parties disputed the value of the unearned premium. The district court granted partial summary judgment to IPFS but denied IPFS's request for prejudgment interest. IPFS filed a motion to amend under Federal Rule of Civil Procedure 59(e), requesting prejudgment interest, which the district court granted. CNI appeals.The Eighth Circuit affirmed, concluding that the district court did not abuse its discretion in granting IPFS's Rule 59(e) motion. The court explained that the fact that IPFS did not request prejudgment interest in its initial summary judgment briefing does not mean that the district court was prohibited from considering the request in a post-judgment Rule 59(e) motion. The court also concluded that the district court did not miscalculate the amount of prejudgment interest owed by CNI under Nebraska law. In this case, because the district court could readily determine the amount based on the premium finance agreement and no reasonable controversy existed as to the amount, the district court did not abuse its discretion by concluding that the entire claim was liquidated and subject to prejudgment interest. View "Continental Indemnity Co. v. IPFS of New York, LLC" on Justia Law

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Oral Surgeons submitted a claim to Cincinnati for losses it suffered as a result of the suspension of non-emergency procedures due to the COVID-19 pandemic. Oral Surgeons maintains that the COVID-19 pandemic and the related government-imposed restrictions on performing non-emergency dental procedures constituted a "direct 'loss' to property" because Oral Surgeons was unable to fully use its offices.The Eighth Circuit affirmed the district court's grant of Cincinnati's motion to dismiss, concluding that the policy unambiguously requires direct physical loss or physical damage to trigger business interruption and extra expense coverage, which Oral Surgeons did not allege. Therefore, the policy clearly does not provide coverage for Oral Surgeons' partial loss of use of its offices, absent a showing of direct physical loss or physical damage. View "Oral Surgeons, P.C. v. The Cincinnati Insurance Co." on Justia Law

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Plaintiffs filed a declaratory judgment action against Auto-Owners after their family members were killed in an auto accident, alleging that they were entitled to more under Auto-Owners' Policy. After both sides filed motions for summary judgment, the district district court granted in part and denied in part each motion and disposed of all claims.The Eighth Circuit agreed with Auto-Owners that the district court erroneously interpreted the policy to provide $3 million in total coverage. The court explained that there is no reasonable interpretation of the policy that avoids surplusage. In this case, because sections 4.a and 4.b of the policy specify at "most" how much an insured may recover, those sections are properly read as limitations to coverage, not promises to provide a certain amount of coverage. Because there is only one reasonable interpretation of the policy and because 4.a and 4.b do not conflict with each other, the policy is not ambiguous. Accordingly, the court reversed, vacated, and remanded. View "Brazil v. Auto-Owners Insurance Co." on Justia Law

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National filed suit against Universal and its parent company, Ally, for breach of contract and other claims after Universal terminated National's non-exclusive right to represent Universal's vehicle warranty program. The district court granted summary judgment in favor of Universal and dismissed National's claims.The Eighth Circuit affirmed, concluding that the termination provision and the representative-fee provision in the 2003 Universal Rep. Agreement unambiguously ended National's entitlement to post-termination representative fees. The court also rejected National's attempt to prove its entitlement to ongoing post-termination representative fees under the 2003 Universal Rep. Agreement via extrinsic evidence—Universal's continued payment of post-termination representative fees under the 2003 VehicleOne Rep. Agreement. The court further concluded that National's fraudulent concealment and negligent misrepresentation claims fail where the terms of the contracts created non-exclusive, limited grants of authority to National, as an independent contractor, that could be terminated at will by either party with sixty days' notice. Therefore, to the extent the alleged statements contradicted these terms, National could not reasonably rely on them under Nebraska law. Finally, National's claims for unjust enrichment and breach of duty of good faith and fair dealing failed because they both depend on its assertion that the district court misinterpreted the effect of termination of the 2003 Universal Rep. Agreement. View "B. Thomas and Co. v. Universal Warranty Corp." on Justia Law

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After plaintiff was injured in a car accident, she sought underinsured motorist (UIM) benefits from American Family. American Family paid only half of its $100,000 policy limit because of an offset provision in the policy. Plaintiff filed suit alleging that the offset provision did not apply.The Eighth Circuit reversed the district court's grant of summary judgment in favor of plaintiff, concluding that the terms of the original policy—which included the offset provision—govern here. The court explained that, under Missouri law, by continuing to pay her insurance premiums, plaintiff obtained new policy periods, but the terms of her initial policy—including the offset provision—remained the same. The court rejected plaintiff's claim that American Family created ambiguity in the insurance policy by issuing the summary. Accordingly, American Family is entitled to summary judgment. View "Micheel v. American Family Mutual Insurance Co." on Justia Law

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The Eighth Circuit affirmed the district court's grant of summary judgment to Integrity in an action brought by plaintiff for negligent performance of an undertaking. Plaintiff filed suit after he was injured in a cab driven by a drunk driver, alleging that Integrity should have done a better background check on the cab driver.The court concluded that Integrity did not owe any duty to plaintiff under Iowa law. The court explained that, even assuming Integrity could have discovered the cab driver's Minnesota DWI, its review of his records did not put plaintiff in a worse situation because the cab company put the driver behind the wheel. Therefore, plaintiff failed to state a duty as a matter of law under the Restatement (Second) of Torts, Sec. 324A. The court also concluded that there was no liability under Sec. 324A(c) of the Restatement because the cab company did not rely on the insurer's background check and conducted its own review of the driver's record. View "Foster v. Integrity Mutual Insurance Co." on Justia Law

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Hallmark filed a declaratory judgment action contending that it did not breach the insurance policy or act in bad faith when adjusting Phoenix's claims stemming from a fire on Phoenix's property. Phoenix asserted three counterclaims. The district court granted Hallmark's motion in its entirety and granted Phoenix's motion in part. Phoenix appealed.The Eighth Circuit affirmed the district court's judgment in favor of Hallmark on Phoenix's claims for bad faith and Hallmark's claim for declaratory judgment. The court concluded that Hallmark had an objectively reasonable basis for denying Phoenix's demand and limiting its payment to $28,774.34 on January 9, 2018. Furthermore, to the extent that HSNO's report included any inaccuracies, an imperfect investigation, standing alone, is not sufficient cause for recovery if the insurer in fact has an objectively reasonable basis for denying the claim. The court also found that there was a reasonable basis for Hallmark to deny Phoenix's demand for an additional $124,800 in October 2017, and Hallmark had an objectively reasonable basis for denying Phoenix's bad faith claim for equipment loss and repair. Because summary judgment was appropriate on Phoenix's bad faith claim, the court explained that it follows that summary judgment was appropriate on Hallmark’s declaratory judgment claim. Finally, Phoenix's punitive damages claim is moot. View "Hallmark Specialty Insurance Co. v. Phoenix C & D Recycling, Inc." on Justia Law

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The Eighth Circuit reversed the district court's grant of summary judgment in favor of Continental and vacated the district court's declaration regarding the scope of Continental's duty to defend in nearly one hundred underlying lawsuits in which Daikin Applied is a defendant. Continental filed suit seeking a declaratory judgment that it has a duty to defend only those underlying asbestos-related suits expressly alleging in some manner that the named Subsequent Entity has been sued on account of McQuay-Perfex's liabilities, which is not true of any of the underlying lawsuits in dispute. Daikin Applied counterclaimed for a declaratory judgment to the effect that Continental owed it a duty to defend in all of the underlying lawsuits in dispute, arguing that the naming of a Subsequent Entity as a defendant was, by itself, sufficient to trigger Continental's duty to defend.The court concluded that the district court misapplied Minnesota law in its declaration regarding the scope of Continental's duty to defend by declaring that Continental's duty to defend arises only where an underlying suit alleges liability arising out of the predecessor's actions or where Daikin has been sued as successor to McQuay-Perfex. The court explained that by failing to declare the "arguably" standard applicable here, the district court erroneously heightened Daikin Applied's burden to trigger Continental's duty to defend. In this case, Daikin Applied need only show that the underlying complaints arguably allege McQuay-Perfex liabilities. The court also found that Daikin Applied's position requires too little to trigger Continental's duty to defend under Minnesota law. Because of its declaration, the court concluded that the district court did not analyze each underlying lawsuit to determine whether the complaint named a Subsequent Entity arguably on account of McQuay-Perfex's liabilities in light of the allegations therein or, if not, whether extrinsic facts proffered by Daikin Applied and known to Continental about that case clearly establish this. Accordingly, the court remanded for the district court to conduct this analysis in the first instance. View "The Continental Insurance Co. v. Daikin Applied Americas Inc." on Justia Law

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The Eighth Circuit reversed and remanded the district court's grant of the insurer's motion to dismiss, concluding that the policy is ambiguous as to whether the directors-and-officers-liability policy required an insurer to indemnify and defend a company and its chief executive officer against claims brought by investors. Therefore, the district court erred in finding that the policy unambiguously excluded coverage.In this case, the policy is reasonably open to at least two different constructions: the first is that Endorsement 11 deleted and replaced original D with new D, and then Endorsement 13 replaced new D with nothing. Another is the one adopted by the district court, which is that Endorsements 11 and 13 together replaced original D with new D. The court explained that, with one reasonable construction potentially covering contractual-liability claims and the other excluding them, the policy is ambiguous. Applying Missouri law, the court construed the ambiguity against the insurer. View "Verto Medical Solutions, LLC v. Allied World Specialty Insurance Co." on Justia Law

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The Eighth Circuit reversed the district court's grant of summary judgment to Selective in an action brought by Selective, seeking a declaration that a subcontractor's policy did not require it to defend or indemnify CSC General. CSC entered into a subcontract that required it to be an "additional insured" on Glosson's general liability policy, and Glosson's policy was with Selective.In this case, Glosson damaged the parking lot through its handling of the cement (adding too much water) before it hardened. Thus, the damage was caused, at least in part, by handling of the cement, not handling of real property. Therefore, the court concluded that CSC is an additional insured for the property damage Glosson caused. The court also concluded that the district court erred in looking beyond the denial letter in focusing at length on five coverage issues not stated in Selective's coverage denial. The court explained that the district court did not properly apply North Dakota's estoppel law on insurance coverage. Finally, the court concluded that summary judgment was not appropriate on the bad faith claim. Accordingly, the court remanded for further proceedings. View "Selective Way Insurance Co. v. CSC General Contractors, Inc." on Justia Law