Justia Insurance Law Opinion Summaries

The Supreme Court reversed the judgment of the circuit court entering summary judgment in favor Insured in this insurance coverage dispute, holding that the circuit court erred in finding that Insured was entitled to underinsured motorist (UIM) coverage under three insurance policies Insured maintained with Insurer after the death of her daughter (Decedent).When Driver crashed the vehicle she was driving, Decedent, the passenger, sustained fatal injuries. Insured asserted a wrongful death claim against Driver, and Driver settled the claim for her insurance policy's limits. Thereafter, Insured sought UIM coverage from Insurer. Insurer provided UIM coverage pursuant to one of the insurance policies, but Insurer denied UIM coverage under the other two insurance policies. Insured then brought this suit seeking a declaration that UIM coverage existed for Decedent and alleging breach of contract. The circuit court granted summary judgment for Insured. The Supreme Court reversed, holding that under the plain language of two of the policies at issue, Decedent was not an insured entitled to UIM coverage. View "Seaton v. Shelter Mutual Insurance Co." on Justia Law

The Supreme Court affirmed the judgment of the superior court granting summary judgment in favor of Insurer and Plaintiff's claims alleging that Insurer was contractually obligated to provide insurance coverage to Plaintiff, which was listed as an additional issued on the relevant insurance policy, holding that Insurer had no duty to defend Plaintiff.Plaintiff, the general contractor for a construction project, subcontracted with Insured for structural work on the project. Insured purchased a commercial general liability insurance policy from Insurer, which named Plaintiff as an additional insured. The policy provided for defense and indemnification costs to Insured for its work on the project. Insured's employee (Employee), who sustained injuries while working on the construction project site, filed a complaint against Plaintiff, alleging that Plaintiff's negligent acts were the proximate cause of his injuries. Plaintiff sought a declaratory judgment that Insurer was contractually obligated to indemnify and defend Plaintiff as an additional insured relative to the Employee action. The superior court justice granted summary judgment for Insurer. The Supreme Court affirmed, holding that Employee's complaint was devoid of any allegations that brought the underlying case within the coverage of the policy, and therefore, Insurer had no duty to defend Plaintiff. View "Bacon Construction Co. v. Arbella Protection Insurance Co." on Justia Law

The Supreme Court affirmed in part and reversed in part the decision of the court of appeals reversing the circuit court's order that determined that Plaintiffs' claims against Defendant-insurance company were barred by the doctrine of claim preclusion, holding that claim preclusion barred the claims of certain plaintiffs, but the Court was evenly divided as to whether claim preclusion barred the claims brought by a fourth plaintiff.This case arose from a car accident in which a mother and her three daughters were seriously injured. The father was not in the car. The accident resulted in two separate lawsuits. In the first action, the mother brought a negligence claim against the driver of the other vehicle and her insurer, State Farm. The children were also named as plaintiffs. The action settled. The second lawsuit brought by the family, including the father, alleging that the driver of the car in which they were passengers was negligent. Plaintiffs sued the driver's insurer directly. The circuit court granted summary judgment for Defendant, concluding that the action was barred by claim preclusion. The court of appeals reversed. The Supreme Court held (1) claim preclusion barred the claims brought by the mother and daughters in the second action; but (2) the court of appeals properly allowed the father's claims to proceed. View "Teske v. Wilson Mutual Insurance Co." on Justia Law

Chicago awarded a construction contract to a joint venture formed by Gillen and other entities. The joint venture subcontracted some of the work to Gillen, which subcontracted with others for labor and materials. The joint venture obtained over $30 million in Fidelity performance and payment bonds. Fidelity received an indemnity agreement and a net worth retention agreement, both executed by Gillen. Gillen promised to maintain a net worth greater than $7.5 million. During 2012, several subcontractors sued Gillen in state court and named Fidelity as a co-defendant based on its bond obligations. Fidelity sued Gillen in federal court, alleging: breach of the indemnity agreement; a request for an accounting of contract payments; breach of the net worth retention agreement; quia timet; and a demand for access to books and records. Historically, litigants have used bills quia timet to pursue preemptive relief; on that claim, Fidelity sought $2.5 million from Gillen as bond collateral and an order requiring Gillen to satisfy all bond obligations and prohibiting Gillen from disbursing money without court approval. The parties settled all claims in mediation, except for Fidelity’s quia timet claim, agreeing their settlement would not impact the quia timet claim or Gillen’s defenses. The district court granted Gillen summary judgment on the quia timet claim. The Seventh Circuit affirmed. Fidelity negotiated for specific indemnification and collateralization rights, sued on those rights, and settled its breach of contract claims. It may not augment its contractual rights with the ancient equitable doctrine of quia timet. View "Fidelity and Deposit Co. of Maryland v. Edward E. Gillen Co." on Justia Law

Dami Hospitality, LLC (“Dami”) was the owner-operator of a Denver motel that employed between four and ten people at any given time. As an employer of three or more persons, Dami was required by statute to maintain workers’ compensation insurance. Dami allowed its workers’ compensation coverage to lapse on in 2005. Upon receiving notification of the lapse from the Division of Workers’ Compensation (“DWC”), Dami conceded the violation and paid a corresponding settlement in June 2006. Dami again allowed its workers’ compensation coverage to lapse in 2006. From June 2007 to September 2010, Dami carried the proper insurance, but the company’s workers’ compensation coverage again lapsed on September 12, 2010 and went without insurance until July 9, 2014. On February 19, 2014, the DWC discovered that Dami had allowed its workers’ compensation insurance to lapse for these periods of time and issued a notice to Dami regarding this. Dami faxed a copy of workers' compensation insurance for the July 10, 2014 - July 10, 2015 period; Dami offered no such evidence for any other period, nor any explanation for the lapses. Fines accrued for noncompliance, totaling $841,200. The DWC ultimately issued an order upholding the fines. Dami appealed to the Industrial Claim Appeals Office (“ICAO”). The ICAO rejected all but Dami’s excessive fines argument. The ICAO remanded the matter to the DWC, directing it to review the constitutionality of the aggregated per diem fines assessed in accordance with the test established by the court of appeals in Associated Business Products v. Industrial Claim Appeals Office, 126 P.3d 323 (Colo. App. 2005). The ICAO would ultimately affirm the resulting fines, and Dami appealed to the Court of Appeals. The appellate court set aside the fines, assuming, without deciding, the Excessive Fines Clause could be applied to challenge regulatory fees imposed on a corporation. The Colorado Supreme Court concluded the proper test to assess the constitutionality of government fines under the Eighth Amendment required an assessment of whether the fine was grossly disproportional to the offense for which it was imposed. The Supreme Court thus reversed the court of appeals’ ruling and remanded to that court for return to the Division of Workers’ Compensation with instructions to, as appropriate and necessary, develop an evidentiary record sufficient to determine whether the $250–$500 fine that a business was required to pay for each day that it was out of compliance with Colorado’s workers’ compensation law is proportional to the harm or risk of harm caused by each day of noncompliance. View "Colo. Dept. of Labor & Emp. Div. of Workers' Comp. v. Dami Hosp." on Justia Law

Mississippi Code 83-11-101(1) and 83-11-103(c)(vi) of Mississippi's Uninsured Motorist Act are not repugnant. Section 83-11-101(1) requires that automobile insurers provide UM coverage to the extent the insured is "legally entitled to recover" and section 83-11-103(c)(vi) defines "uninsured motor vehicle," as used in the UM Act, to include a vehicle "owned or operated by a person protected by immunity under the Mississippi Tort Claims Act."In this case, the Fifth Circuit held that the insured was not legally entitled to recover from the fireman, the fire department, or the city, and thus was not legally entitled to recover UM benefits from State Farm. Accordingly, the court vacated the district court's grant of summary judgment for the insured and rendered judgment for State Farm. View "McGlothin v. State Farm Mutual Insurance Co." on Justia Law

Claimant Elvia Garcia-Solis was injured in a work-related accident. Farmers Insurance Company and Yeaun Corporation (collectively, “Insurer”) accepted a workers’ compensation claim and certain specified medical conditions associated with the accident. Because claimant also showed psychological symptoms, her doctor recommended a psychological referral to diagnose her for possible post-traumatic stress disorder (PTSD). Insurer argued, and the Court of Appeals agreed, that the cost of the psychological referral was not covered by workers’ compensation because claimant had failed to prove that it was related to any of the medical conditions that insurer had accepted. The Oregon Supreme Court reversed both the Court of Appeals and the Workers’ Compensation Board: “’injury’ means work accident is context-specific to exactly two uses in the first and second sentences of ORS 656.245(1)(a). It does not apply to the second use in the first sentence of ORS 656.245(1)(a). We do not decide or suggest that it applies to any other statute in the workers’ compensation system.” View "Garcia-Solis v. Farmers Ins. Co." on Justia Law

The Supreme Court affirmed the judgment of the court of appeals affirming the decision of the circuit court granting summary judgment in favor of Hiscox Insurance Company on Leicht Transfer & Storage Company's complaint seeking coverage for its losses under a commercial crime insurance policy issued to it by Hiscox, holding that Leicht's losses were not covered under the policy.Pallet Central Enterprises, Inc. forged delivery tickets and used them to bill Leicht for the sale and delivery of pallets that Pallet Central never sold or delivered. Leicht sought coverage for its losses under the policy issued to it by Hiscox. Hiscox denied coverage. Leicht sued for breach of contract, arguing that the forged delivery tickets comprised "directions to pay" within the meaning of the "forgery or alteration" insuring agreement of the Hiscox policy. The circuit court granted summary judgment for Hiscox, and the court of appeals affirmed. The Supreme Court affirmed, holding (1) the delivery tickets did not qualify as "written...directions to pay a sum certain in money"; and (2) the policy did not provide coverage for forged documents that were not themselves "directions to pay," but which were used as proxies for such documents. View "Leicht Transfer & Storage Co. v. Pallet Central Enterprises, Inc." on Justia Law

The Eleventh Circuit granted Gerber's petition for panel rehearing and vacated its prior opinion, substituting the following opinion.In this insurance dispute case, the court held that Gerber, as assignee, lacked Article III standing to bring a declaratory judgment class action against GEICO in the absence of a claim for money damages or substantial likelihood that the insured would suffer a future injury. Accordingly, the court vacated the district court's judgment because it had no jurisdiction to entertain this suit. The court instructed the district court to remand the case to the circuit court. View "A&M Gerber Chiropractic LLC v. GEICO General Insurance Co." on Justia Law

In this declaratory relief proceeding, the Supreme Court affirmed the circuit court's denial of State Farm's motion for summary judgment and entered a judgment in favor of LeRoy James on his complaint alleging that State Farm had no right to reimbursement or subrogation for paying James's medical expenses under his policy, holding that State Farm had no contractual right to reimbursement for the $5,000 paid to James for medical expenses under the policy.State Farm insured both James and Melissa Rivers, who rear-ended James and caused him personal injury. State Farm paid a portion of James's medical expenses under his policy and then, acting on behalf of Rivers, settled with James. Once James released Rivers from liability, State Farm demanded that James use his settlement proceeds to reimburse State Farm for paying his medical expenses. James then brought this action. The circuit court entered a judgment in favor of James. The Supreme Court affirmed, holding that the text of the reimbursement provision of the policy was ambiguous, and therefore, State Farm had no contractual right to reimbursement from James. View "James v. State Farm Mutual Automobile Insurance Co." on Justia Law