Justia Insurance Law Opinion Summaries

Streit set fire to the house where he lived with his parents, which was insured by Metropolitan. Under the Streits’ policy, the act of arson triggered a contractual exclusion of coverage. The Streits still submitted a claim, but Metropolitan refused to cover the fire damage.The Streits sued, claiming that the exclusion was inconsistent with the Illinois Standard Fire Policy. The Streits and Metropolitan then stipulated that the Streits were innocent of any wrongdoing related to the fire. The district court granted the Steits partial summary judgment, awarding $235,000. The Seventh Circuit affirmed. The Illinois Standard Fire Policy sets a minimum threshold for what fire-insurance policies must cover, and Metropolitan failed to provide that coverage. Under the Metropolitan policy, an intentional loss caused by any insured party suspends coverage for all insured parties—even those who were innocent of any wrongdoing. By contrast, the Standard Fire Policy suspends coverage if “the hazard is increased by any means within the control or knowledge of the insured.” View "Streit v. Metropolitan Casualty Insurance Co." on Justia Law

A newly-constructed multi‐story condominium building suffered water damage, allegedly caused by the painting subcontractor, National, failing to apply an adequate coat of sealant to the exterior. In Illinois state court, the condominium association sued the general contractor, developer, and subcontractors. The defendants tendered the defense to Westfield, National’s insurer, Westfield filed a federal action seeking a declaration that it owed no duty to defend in the underlying action. The district court determined that the complaint triggered Westfield’s duty to defend. The Seventh Circuit affirmed the grant of summary judgment, rejecting an argument that failure to apply an adequate amount of paint cannot be considered an “accident” that would constitute a covered “occurrence” under the policy. Westfield also argued that because the damage is to the building itself, which was a new construction and not an existing structure, the association has not demonstrated that there was property damage that is subject to its policy. The policy defines “occurrence” to include the “continuous or repeated exposure to substantially the same harmful conditions,” so the allegation that National acted negligently was sufficient under Illinois law to constitute an “occurrence.” National’s actions allegedly damaged parts of the building that were outside of the scope of its work, so the complaint alleges potentially covered property damage sufficient to invoke the duty to defend. View "Westfield Insurance Co. v. National Decorating Service, Inc." on Justia Law

The ambiguous section of the insurance policy at issue in this case must be construed in favor of coverage for the costs and attorneys’ fees awarded against the insured pursuant to the offer of judgment statute, Fla. Stat. 768.79.Alysia Macedo sued Zackery Lombardo for damages resulting from injuries she sustained in an automobile collision.The jury returned a verdict in favor of Macedo in the amount of $243,954.55. Macedo joined to the judgment GEICO, which provided bodily injury liability coverage to Lombardo. The trial court awarded taxable fees and costs against GEICO jointly and severally with its insured pursuant to section 768.79. The First District Court of Appeal affirmed. The Supreme Court approved the First District’s decision, holding that the key provision in the insurance policy was ambiguous and must be construed in favor of coverage. View "Government Employees Insurance Co. v. Macedo" on Justia Law

This appeal arose out of an agent contract dispute between Bret Kunz (“Bret”) and Nield, Inc. (“N.I.”) authorizing Bret to sell insurance on behalf of N.I. N.I. is owned by two brothers, Bryan Nield (“Bryan”) and Benjamin Nield. A dispute arose concerning the method and type of compensation available to Bret under the Contract. Bret filed a complaint seeking, inter alia, a declaratory judgment interpreting the Contract. The district court held the 2009 Contract did not provide for profit sharing as Bret claimed. Bret and his wife, Marti, (collectively, the “Kunzes”) appealed. Finding no reversible errors with respect to how the district court interpreted the Contract, the Idaho Supreme Court affirmed. View "Kunz v. Nield, Inc." on Justia Law

Nevils was a federal employee insured through a plan governed by the Federal Employee Health Benefits Act (FEHBA) when she was injured in an automobile accident. Coventry paid her medical expenses and asserted a subrogation lien against a settlement Nevils received from the party responsible for the accident. Nevils filed a class action, arguing Missouri law does not permit subrogation of personal injury claims. Coventry obtained summary judgment, based on FEHBA’s preemption clause: The terms of any contract under this chapter which relate to the nature, provision, or extent of coverage or benefits (including payments with respect to benefits) shall supersede and preempt any State or local law, ... which relates to health insurance, 5 U.S.C. 8902(m)(1). Initially, the Missouri Supreme Court concluded Congress did not manifest a clear intent to preempt state anti-subrogation laws. The Office of Personnel Management subsequently promulgated a rule providing that an insurer’s rights to subrogation and reimbursement under federal employee health benefits contracts “relate to the nature, provision, and extent of coverage or benefits” under FEHBA. On remand, the Missouri Supreme Court held the rule did not alter its analysis. The U.S. Supreme Court then held an insurer’s subrogation rights “relate to . . . payments with respect to benefits” and that FEHBA “manifests the same intent to preempt state law” as other federal preemption statutes despite the different “linguistic formulation” of section 8902(m)(1). In light of that holding, the Missouri Supreme Court affirmed the trial court’s judgment. View "Nevils v. Group Health Plan, Inc." on Justia Law

The Eighth Circuit affirmed the district court's denial of the insurers' motion to dismiss, reversed and vacated the award of prejudgment interest, and affirmed the rejection of Simmons' claims for statutory damages and attorney fees. The court applied Arkansas law and held that the district court properly denied the insurers' motion to dismiss because Simmons's suit was timely. However, the district court's entry of judgment and prejudgment interest was not appropriate where Simmons' damages were not capable of exact determination until the jury spoke. Finally, the district court properly denied Simmons' request for statutory damages and attorney fees, because Simmons did not recover the statutory threshold of at least 80% of the amount it demanded in the suit. View "Simmons Foods, Inc. v. Industrial Risk Insurers" on Justia Law

The rights that flow through a subrogation clause allow an insurer to seek reformation of a contract between its insured and a third party. After Associated paid the portion of the underlying settlement that was in excess of the Westfield policy, Associated sought reimbursement from Scottsdale, an insurer that issued a commercial umbrella policy to Alpha. The Fifth Circuit held that the district court erred in reading reformation’s privity requirement to necessitate a specific connection to the Alpha-Scottsdale insurance policy. Rather, privity in Texas focuses on the relationship to a party. In this case, the subrogation clause in the Associated-Alpha policy provided that connection. Accordingly, the court reversed and remanded. View "Associated International Insurance Co. v. Scottsdale Insurance Co." on Justia Law

This case presented for the Washington Supreme Court's review an award of attorney fees against five surety companies following a jury trial for breach of contract in a public works project. The parties litigated the issue of whether three construction firms had defaulted on a contract, thus triggering coverage under a performance bond issued by the surety companies. At issue was whether the existence of a statutory fee provision barred equitable remedies available at common law for coverage disputes and whether the trial court correctly determined that segregation between covered and uncovered fees was impossible. The Court of Appeals affirmed the award of Olympic Steamship fees and held that the trial court did not abuse its discretion in determining that the fees could not be segregated. Finding no reversible error in that judgment, the Washington Supreme Court affirmed. View "King County v. Vinci Constr. Grands Projets" on Justia Law

This appeal arose out of the Ponzi scheme orchestrated by Scott Rothstein through his law firm, Rothstein Rosenfeldt Adler (RRA). Trustees of RRA filed suit alleging breach of contract and bad faith claims against insurance carriers that reached a settlement with Gibraltar and its executives after originally denying coverage. The Eleventh Circuit applied Florida law and exercised plenary review, holding that coverage was barred by a "professional services exclusion" found in each of the policies. Accordingly, the court affirmed the district court's grant of the insurers' motion to dismiss. View "Stettin v. National Union Fire Insurance Co." on Justia Law

This case concerned defects in the execution of two life insurance annuity polices that the decedent purchased through National Western Life Insurance Co. Plaintiffs, the decedent’s wife and children, sued National Western seeking a declaration that the policies were void and a return of the premiums paid by the decedent. National Western filed a motion to dismiss because Plaintiffs failed to join a necessary party - the decedent’s brother, who was named under both policies as the sole beneficiary - even though National Western had already paid him. The district court denied the motion, ruling that the beneficiary at issue was not “required to be joined if feasible” under Fed. R. Civ. P. 19(a). The court then granted summary judgment for Plaintiffs. The First Circuit vacated the judgment of the district court, holding that the sole beneficiary of the annuities was required to be joined if feasible under rule 19(a). The court remanded the case to the district court to determine whether it was equitable for the case to proceed without him. View "Maldonado-Vinas v. National Western Life Insurance Co." on Justia Law