Justia Insurance Law Opinion Summaries

Brown was injured at a Gurnee, Illinois Target store when a fitting room door came off its hinges and fell on her. In Brown’s negligence suit, Target filed a third-party complaint against Harbor, Target’s supplier of fitting rooms for the store, seeking contribution and indemnification. Discovery revealed that the same door fell on another Target customer approximately one week before it fell on Brown. Target and Harbor settled with Brown. Target tendered its defense of Brown’s lawsuit to Harbor’s insurer, Selective, claiming that it was an additional insured under its contract with Harbor. Selective sought a declaratory judgment that it had no duty to defend or indemnify. The Seventh Circuit affirmed summary judgment of $714,450.24 in favor of Target, concluding that: Target was an additional insured on Harbor’s policy because of a Supplier Qualification Agreement that required Harbor to designate Target as an additional insured and their Program Agreement for the fitting rooms; Brown’s allegations fell within the scope of the policy, since they could reasonably be read to assert a bodily injury caused by Harbor’s product; and Target had settled the lawsuit Brown in reasonable anticipation of liability. View "Selective Insurance Co. of South Carolina v. Target Corp." on Justia Law

Charlotte Suzor injured her knees in a workplace accident in 1982 and settled her workers’ compensation claims in 1987 with her self-insured employer, reserving the right to seek future medical benefits for ongoing complications from her injury. In 2009, Suzor broke her hip after her knees gave out. Suzor’s physical filed a claim with Sedgwick Claims Management Services (Sedgwick), the third-party administrator for the workers’ compensation plan now funded by her employer’s successor in interest, International Paper Company (International). After Sedgwick denied the claim, Suzor sued International, Sedgwick, and two of Sedgwick’s employees (collectively, Defendants), alleging bad faith and breach of fiduciary duty. The district court entered judgment in favor of Defendants. The Supreme Court affirmed, holding (1) Defendants did not owe Suzor a fiduciary duty; (2) the district court did not abuse its discretion in denying Suzor’s jury instruction on causation; (3) the mistaken association of a wrong juror questionnaire with a juror was not a structural error necessitating a new trial; (4) the jury’s award of no damages was supported by sufficient evidence; and (5) the district court did not abuse its discretion in its award of attorney’s fees. View "Suzor v. International Paper Co." on Justia Law

Appellants attempted to execute judgments obtained against Robert Fitte in their respective underlying lawsuits by attaching the proceeds of a commercial liability policy issued to Fitte by joined party Mountain West Farm Bureau Mutual Insurance Company (Mountain West). In a separate declaratory proceeding, a federal court determined that the commercial policy covered Fitte’s actions. Thereafter, Mountain West filed a motion to deposit the proceeds of the commercial policy into an existing interpleader action. The underlying proceedings filed by Appellants were consolidated. The district court granted summary judgment to Fitte and Mountain West, concluding that Appellants were not entitled to execute judgments secured outside the pending interpleader action and attach the proceeds of the commercial policy. The Supreme Court affirmed, holding (1) the district court did not err in concluding that the proceeds from the commercial policy must be distributed through the interpleader; and (2) deposit of the commercial policy proceeds was not required at the time of the interpleader proceeding to establish the interpleader court’s jurisdiction. View "Associated Dermatology & Skin Cancer Clinic of Helena, P.C. Profit Sharing & Trust Benefit of Stephen D. Behlmer, M.D. v. Fitte" on Justia Law

After defendant purchased an automobile insurance policy from Nationwide, he wrecked his car and Nationwide rescinded the policy. Nationwide then sought declaratory judgment that it had no duty to indemnify or defend defendant under the policy’s coverage because defendant made material misrepresentations in his online insurance application. The district court granted summary judgment to Nationwide. The court affirmed the judgment, concluding that defendant materially misrepresented his primary use of the vehicle as "work" instead of "business." In this case, defendant used the vehicle to make business-related deliveries, putting over 1,200 miles a week on the vehicle for such deliveries. Because the district court correctly determined that defendant failed to raise a fact issue about how the application screen appeared, the court presumes that the online application contained the parentheticals at issue, which are not ambiguous as a matter of law. Accordingly, the court affirmed the judgment. View "Nationwide Property & Casualty Insurance Co. v. Faircloth, Jr." on Justia Law

Navigators Specialty Insurance Company (Navigators) issued commercial general liability (CGL) insurance policies (the Policies) to Moorefield Construction, Inc. (Moorefield), a licensed general contractor. At issue in this appeal was the meaning, scope, and application of two standard provisions of the Policies. Moorefield appealed the judgment in favor of Navigators, where Navigators sought a declaration of its rights and duties under the Policies. Navigators' lawsuit was corollary to construction defect litigation arising out of the construction of a building to be used as a Best Buy store in Visalia. During the course of litigation, evidence obtained in discovery showed the most likely cause of flooring failure was that flooring tiles had been installed on top of a concrete slab that emitted moisture vapor in excess of specifications. Evidence also showed that Moorefield knew of the results of two tests showing excessive moisture vapor emission from the concrete, yet had directed the flooring subcontractor to install the flooring anyway. Evidence also established the cost to repair the flooring was $377,404. The litigation settled for $1,310,000. On Moorefield's behalf, Navigators contributed its policy limits of $1 million toward the settlement. Moorefield independently contributed an additional $150,000. The remaining $160,000 was made up of contributions from Best Buy Stores, LP (Best Buy), and the defendant subcontractors. In the meantime, Navigators filed this lawsuit seeking a declaration it had no duty under the Policies to defend or indemnify Moorefield. Navigators contended the flooring failure was not a covered occurrence under the Policies because it was not the result of an accident. Following a bench trial, the trial court found there was no covered occurrence under the Policies because Moorefield had directed the flooring subcontractor to install the flooring despite Moorefield's knowledge that moisture vapor emission from the concrete slab exceeded specifications. The trial court found that Moorefield had not met its burden of proving what portion, if any, of the $1 million paid by Navigators came within the supplementary payments provision of the Policies. The trial court also found that Navigators had no duty to make payments under the supplementary payments provision because Moorefield's liability arose from a noncovered claim. The judgment required Moorefield to reimburse $1 million to Navigators. Moorefield's appeal raised two primary issues, one related to the coverage "A" provision of the Policies and the other related to the supplementary payments provision of the Policies. The Court of Appeal found that Navigators had no duty to indemnify Moorefield and was entitled to recoup that portion of the $1 million paid toward settlement that was attributable to damages. The Court also found that Navigators had a duty to compensate Moorefield under the supplementary payments provision of the Policies. That duty was not extinguished by the determination that Navigators had no duty to indemnify. The Court of Appeal therefore affirmed in part, reversed in part, and remanded for a new trial limited to the issue of the amount of the $1 million paid by Navigators that was attributable to damages, not attorney fees and costs of suit under the supplementary payments provision. View "Navigators Specialty Ins. Co. v. Moorefield Const." on Justia Law

As a nurse at the University of Louisville Hospital, Milby was covered by a long-term disability insurance policy. In 2011, Milby sought and received disability benefits for 17 months. During a subsequent eligibility review, the plan engaged MCMC, a third-party reviewer. MCMC opined that the “opinions of [Milby’s treating physicians] are not supported by the available medical documentation” and that she could perform sustained full-time work without restrictions as of 2/22/2013. Neither MCMC nor its agent was licensed to practice medicine in Kentucky. The plan terminated Milby’s benefits effective February 2013. Milby’s suit against her disability insurance provider remains pending. She also filed suit alleging negligence per se against MCMC for practicing medicine in Kentucky without appropriate licenses. MCMC removed the case to federal court, claiming complete preemption under the Employee Retirement Income Security Act (ERISA). The trial court denied Milby’s motion for remand to state court and dismissed. The Sixth Circuit affirmed. The state-law claim fits in the category of claims that are completely preempted by ERISA: it is in essence about the denial of benefits under an ERISA plan and the defendant does not owe an independent duty to the plaintiff because the defendants were not practicing medicine under the specified Kentucky law. View "Milby v. MCMC, LLC" on Justia Law

Fleet Owners Fund is a multi-employer “welfare benefit plan” under the Employee Retirement Security Act (ERISA), 29 U.S.C. 1001, and a “group health plan” under the Patient Protection and Affordable Care Act (ACA), 26 U.S.C. 5000A. Superior Dairy contracted with Fleet for employee medical insurance; the Participation Agreement incorporated by reference a 2002 Agreement. In a purported class action, Superior and its employee alleged that, before entering into the Agreement, it received assurances from Fleet Owners and plan trustees, that the plan would comply in all respects with federal law, including ERISA and the ACA. Plaintiffs claim that, notwithstanding the ACA’s statutory requirement that all group health plans eliminate per-participant and per-beneficiary pecuniary caps for both annual and lifetime benefits, the plan maintains such restrictions and that Superior purchased supplemental health insurance benefits to fully cover its employees. Fleet argued that the plan is exempt from such requirements as a “grandfathered” plan. The district court dismissed the seven-count complaint. The Sixth Circuit affirmed, concluding that plaintiffs lacked standing to bring claims under ERISA and ACA, having failed to allege concrete injury, and did not allege specific false statements. View "Soehnlen v. Fleet Owners Insurance Fund" on Justia Law

Franklin Allen obtained a $16 million personal injury award against Wayne Bryers after Bryers’ handgun discharged, seriously injuring Allen. Thereafter, Allan filed a Mo. R. Civ. P. 90 garnishment action seeking proceeds from an insurance policy issued by Atain Specialty Insurance Company (Insurer), which insured the premises where the shooting occurred. Allen alleged that Insurer wrongfully refused to defend Bryers and acted in bad faith when it refused to defend Bryers. The garnishment court ordered Insurer to pay Allen $16 million. Insurer appealed, arguing, inter alia, that the circuit court erred in denying its motions to intervene and to set aside the underlying tort judgment on the basis of fraud. The Supreme Court dismissed the appeal in part and affirmed as modified the remainder of the garnishment court’s judgment, holding (1) the garnishment court’s rulings on Insurer’s motions to intervene and to set aside the judgment were void; (2) Insurer wrongfully refused to defend Bryers and was bound by the result of the underlying tort action, including the findings related to coverage; but (3) the garnishment court exceeded its authority in awarding Allen the full amount of the underlying tort judgment because Allen was only entitled to receive the $1 million policy limit from Insurer. View "Allen v. Bryers" on Justia Law

Barnie’s Bar & Grill, Inc. held an insurance policy by the United States Liability Insurance Company (USLIC) when Barnie’s was sued for negligence in connection with one man’s attack by a group of other patrons of the bar. USLIC declined to defend Barnie’s in the litigation, relying on the policy’s exclusions for assault and battery. Barnie’s sued USLIC in superior court seeking a declaratory judgment that USLIC had a duty to defend it and seeking damages for breach of contract. The superior court granted summary judgment for USLIC, concluding that USLIC had no contractual duty to defend Barnie’s. The Supreme Judicial Court affirmed, holding that USLIC was not obligated to defend Barnie’s in the underlying litigation because the allegations of the underlying complaint fell squarely within the policy’s exclusions for assault and battery. View "Barnie's Bar & Grill, Inc. v. United States Liability Insurance Company" on Justia Law

Privilege Underwriters Reciprocal Exchange ("PURE"), a Florida-domiciled insurance exchange, obtained a judgment, entered on a jury verdict, declaring that Peter Grayson was not entitled to coverage under the uninsured-motorist ("UM") portion of an automobile insurance policy under which Grayson's sister, Alice Grayson, was a named insured. The Circuit Court granted Grayson's motion to set aside that judgment on the basis that it was void for lack of subject-matter jurisdiction. PURE now appealed. Finding that the trial court had jurisdiction over the matter, the judgment in favor of PURE was not void. The Court therefore reversed the Circuit Court and remanded. View "Privilege Underwriters Reciprocal Exchange v. Grayson" on Justia Law