Justia Insurance Law Opinion Summaries

The Court of Appeals held that the statute of limitations begins to run on an underinsured motorist claim when the insurer breaches the contract to provide underinsured motorist benefits by denying the insured's claim, thereby breaching the insurance contract.Margaret Shilling was injured in an automobile accident with Barbara Gates, an underinsured motorist. Gates was insured by Agency Insurance Company of Maryland (Agency) under a policy that provided up to $20,000 per person in bodily injury coverage. Shilling was insured by Nationwide Mutual Insurance Company under a policy that included uninsured and underinsured motorist coverage in the amount of $300,000 per person in bodily injury coverage. After Agency and Shilling settled Shilling sued Nationwide seeking the balance of unpaid damages not covered by Agency's $20,000 settlement. Nationwide moved to dismiss, arguing that the claim was time barred under the three-year statute of limitations set forth in Md. Code Ann. Cts. & Jud. Proc. A 5-101. The circuit court granted the motion to dismiss. The court of special appeals ultimately reversed, holding that the suit was not time-barred. The Court of Appeals affirmed, holding that the statute of limitations begins to run upon the insurer's breach of the insurance contract, which occurs when the insurer refuses to pay underinsured motorist benefits. View "Nationwide Mutual Insurance Co. v. Shilling" on Justia Law

After the City hired Henderson to design and install a bio-solids building, panels on the building's roof were damaged during a windstorm. Henderson filed a claim with Travelers, asserting that Travelers was required to cover the roof's damage under the City's builder's risk insurance policy with Travelers. The jury ultimately found in favor of Henderson, awarding damages and fees.The Eighth Circuit affirmed the district court's denial of Travelers' motion for judgment as a matter of law, holding that the faulty workmanship exclusion does not include an anticoncurrent-cause provision; the windstorm and faulty workmanship operated in tandem to cause the resulting damage, and thus the windstorm and the faulty workmanship were two independent cause that contributed to the loss; and thus a reasonable juror could have found that faulty workmanship was not the sole proximate cause of the loss. The court also affirmed the district court's denial of Travelers' motion for a new trial or remittitur, holding that the district court did not plainly err in instructing the jury on the issue of proximate cause and the total award was not so excessive as to shock the judicial conscience. View "Joseph J. Henderson & Sons, Inc. v. Travelers Property Casualty Insurance Co." on Justia Law

North Edwards Water District (the District) selected Clark Bros., Inc. (Clark) as its general or direct contractor on a public works project to build an arsenic removal water treatment plant. Clark hired subcontractor Crosno Construction (Crosno) to build and coat two steel reservoir tanks. The subcontract contained a "pay-when-paid" provision that stated Clark would pay Crosno within a reasonable time of receiving payments from the District, but that this reasonable time "in no event shall be less than the time Contractor and Subcontractor require to pursue to conclusion their legal remedies against Owner or other responsible party to obtain payment . . . ." After Crosno completed most of its work, a dispute arose between the District and Clark halting the project. As Clark sued the District, Crosno sought to recover payments owed under the public works payment bond that Clark had obtained for the project. The issue this case presented for the Court of Appeal's review involved Crosno's claim against the bond surety, Travelers Casualty and Surety Company of America (Travelers). At issue was whether the pay-when-paid provision in Crosno's subcontract precluded Crosno from recovering under the payment bond while Clark's lawsuit against the District was pending. Relying on Wm. R. Clarke Corp. v. Safeco Ins. Co., 15 Cal.4th 882 (1997), the trial court found the pay-when-paid provision here unenforceable because it affected or impaired Crosno's payment bond rights in violation of Civil Code section 8122. With the facts largely undisputed, the court granted Crosno's motion for summary judgment and entered judgment in its favor for principal due plus prejudgment interest. Travelers argued the trial court misconstrued Wm. R. Clarke and erred in failing to enforce the pay-when-paid provision against the bond claim. After carefully considering the parties' arguments, the Court of Appeal agreed with the trial court's analysis and affirmed. View "Crosno Construction, Inc. v. Travelers Casualty etc." on Justia Law

In this insurance dispute over whether an insurer's payment of an appraisal award obtained under a unilateral appraisal clause bars an insured's claims under the Texas Prompt Payment of Claims Act (TPPCA), Tex. Ins. Code chapter 542 the Supreme Court reversed the judgment of the court of appeals concluding that Insured's claims were barred, holding that Insured's claims should be considered in light of this Court's recent decisions on these issues.After Insurer declined to pay for damage to Insured's properties Insured asked to invoke the policy's appraisal process. Insurer refused, asserting that it was the only party that could invoke appraisal under the unilateral appraisal clause. Insured sued Insurer alleging claims for breach of contract, bad faith, and violations of the TPPCA. Insurer then obtained an order compelling appraisal. After Insurer paid the appraisal award the trial court granted summary judgment for Insurer. The court of appeals affirmed. The Supreme Court reversed, holding that remand was required for the trial court to consider Insured's claims in light of Barbara Technologies Corp. v. State Farm Lloyds, 589 S.W.3d 806 (Tex. 2019), and Ortiz v. State Farm Lloyds, 589 S.W.3d 127 (Tex. 2019). View "Biasatti v. GuideOne National Insurance Co." on Justia Law

The Supreme Court reversed the judgment of the court of appeals concluding that an insurer's payment of an appraisal award bars an insured's claim under the Texas Prompt Payment of Claims Act (TPPCA), Tex. Ins. Code 542.051-.061, holding that the court of appeals' opinion was inconsistent with this Court's recent decisions on this issue.Insurer issued Insured payment under Insured's insurance policy after Insured's residential property sustained wind and hail damage. Insured later sued, believing that the property damages were undervalued. The trial court compelled appraisal, and the appraisal awarded exceeded Insurer's prior estimates. Insurer paid the award to Insured. The trial court subsequently granted summary judgment on all of Insured's claims. The court of appeals affirmed, concluding that payment of an appraisal award entitles an insurer to summary judgment on all of the insured's claims. The Supreme Court reversed, holding that the court of appeals' conclusion was in error in light of Barbara Technologies Corp. v. State Farm Lloyds, 589 S.W.3d 806 (Tex. 2019), and Ortiz v. State Farm Lloyds, 589 S.W.3d 127 (Tex. 2019). View "Alvarez v. State Farm Lloyds" on Justia Law

The Supreme Court reversed the judgment of the court of appeals concluding that an insurer's payment of an appraisal award bars an insured's claim under the Texas Prompt Payment of Claims Act (TPPCA), Tex. Ins. Code 542.051-.061, holding that the court of appeals' opinion was inconsistent with this Court's recent decisions on this issue.Insurer issued Insured payment under Insured's insurance policy after Insured's residential property sustained wind and hail damage. Insured later sued, believing that the property damages were undervalued. The trial court compelled appraisal, and the appraisal awarded exceeded Insurer's prior estimates. Insurer paid the award to Insured. The trial court subsequently granted summary judgment on all of Insured's claims. The court of appeals affirmed, concluding that payment of an appraisal award entitles an insurer to summary judgment on all of the insured's claims. The Supreme Court reversed, holding that the court of appeals' conclusion was in error in light of Barbara Technologies Corp. v. State Farm Lloyds, 589 S.W.3d 806 (Tex. 2019), and Ortiz v. State Farm Lloyds, 589 S.W.3d 127 (Tex. 2019). View "Lazos v. State Farm Lloyds" on Justia Law

Plaintiff filed suit against defendants after defendants denied plaintiff's claim for damages to its apartment complex caused by a ruptured underground water main.The Court of Appeal affirmed the trial court's judgment following summary adjudication in favor of defendants on plaintiff's claim for breach of the covenant of good faith and fair dealing relating to the parties' insurance contract. The court agreed with the trial court that there is no material dispute whether defendants denied the claim in good faith based on an expert report concluding the damage was not caused by the broken water main. In this case, there is no dispute that defendants based their claim denial on the final expert report, and there is no evidence that the report was contrived or false. View "501 East 51st Street v. Kookmin Best Insurance Co." on Justia Law

The Supreme Court reversed the decision of the court of appeals applying a constructive trust to proceeds Lynnea Landsee-Pulkkila collected from a life insurance policy maintained by her late husband, James Pulkkila, holding that the court of appeals erred in imposing a constructive trust absent findings of fact that would support such an imposition.In 2009, James and Joan Pulkkila divorced. In their marital settlement agreement (MSA) that was incorporated into the judgment of divorce James and Joan were required to maintain life insurance with their children as beneficiaries. In 2013, James and Lynnea were married. The following year, James submitted a beneficiary name change asking that Lynnea be made the sole beneficiary of the life insurance policy. After Lynnea was paid the proceeds of the policy, Joan asserted that James breached the MSA agreement and that a constructive trust should be placed on the proceeds. The circuit court denied Joan's motion for a constructive trust. The court of appeals reversed, concluding that equity required the imposition of a constructive trust. The Supreme Court reversed, holding that the court of appeals erroneously exercised its discretion because it determined that a constructive trust was appropriate in the absence of an evidentiary hearing and resulting relevant factual findings. View "Pulkkila v. Pulkkila" on Justia Law

The First Circuit affirmed the judgment of the district court dismissing Plaintiffs' breach of contract action against Defendant, their insurer, holding that the district court properly dismissed for failure to state a claim Plaintiffs' claim that Defendant failed to defend and indemnify them in a state court action.Newton Covenant Church (NCC) was comprised of members of the Newton Presbyterian Church (NPC) who withdrew from the Presbyterian Church (USA) and affiliated with a non-Presbyterian organization. NPC and the Presbytery of Boston sued the NCC in the state superior court seeking, among other things, a declaratory judgment that NPC owned church property at 75 Vernon Street in Newton, Massachusetts. NCC submitted a notice to the Great American Insurance Company (GAIC) requesting a defense in the state court action under a Director and Officers insurance policy. GAIC denied coverage on the grounds that the named insured under the policy was NPC, not NCC. After the parties reached a settlement NCC and its individual officers (collectively, Plaintiffs) brought this action against GAIC for breach of contract. The district court dismissed the complaint. The First Circuit affirmed, holding that Plaintiffs' allegations were not reasonably susceptible of an interpretation that would state a claim covered under the policy. View "Newton Covenant Church v. Great American Insurance Co." on Justia Law

United owns a fleet of ambulances. In 2016, Stofko was driving his car when a United ambulance crashed into it; Stofko’s injuries were fatal. United was insured by Markel but the particular ambulance that crashed was not listed on the policy. Rau, the representative of Stofko’s estate, argued that it was nevertheless covered by the policy because before the crash United sent Markel’s agent, Insurance Service Center, an email requesting that the vehicle be added to the policy. The Center denied seeing the email and United acknowledged that it had not received a response as was customary. Markel argued that even if United had sent an email, it never endorsed the change, which the policy requires, and has no duty to indemnify United or the driver and no duty to defend in Rau’s suit. The Seventh Circuit affirmed summary judgment in favor of Markel. It is not necessary to resolve what happened to the email request to add the vehicle to the policy; under Indiana law courts may not rewrite an insurance contract. Neither Center nor Markel accepted or responded in any way to United’s request, so the ambulance was not covered. View "Markel Insurance Co. v. Rau" on Justia Law