Justia Insurance Law Opinion Summaries

Dusty Groom’s handgun discharged, shooting Brody Heitmann in the head. Heitmann survived and sued Groom. Heitmann obtained a judgment against Groom and also obtained an assignment from Groom of Groom’s right to enforce coverage under an insurance policy issued to Groom’s grandmother by American Family Mutual Insurance. Heitmann subsequently filed a declaratory judgment action against American Family seeking ruling that, on the date of the shooting, Groom was an insured under the policy for purposes of liability coverage. The circuit court granted summary judgment in favor of American Family. The Supreme Court affirmed, holding that a relative of the insured residing on the insured’s premises, and not in the household of the insured, is not a “resident relative” under the policy. View "Heitmann v. American Family Mut. Ins. Co." on Justia Law

Kern was injured in a rear-end collision in which the other driver was at fault. Kern filed an underinsured motorist (UIM) claim with Progressive Northern Insurance Company, his insurance provider. Months of settlement negotiations ended in a stalemate. Thereafter, Kern brought an action against Progressive for bad faith, alleging that Progressive’s settlement offers had been intentionally inadequate. Kern also sought unpaid UIM benefits. After a trial, the jury awarded Kern $18,650 in unpaid UIM damages and found that Progressive had not acted in bad faith. Kern appealed, alleging several errors. The Supreme Court affirmed, holding that none of Kern’s alleged errors required reversal and that the trial court did not clearly err by refusing to award attorney’s fees. View "Kern v. Progressive Northern Ins. Co." on Justia Law

After a severe storm, Richard and Lorayna Papousek discovered that ninety-three of their cattle were dead. It was determined that the cause of the cattle’s death was drowning. At the time, the Papouseks had in effect a farmowner-ranchowner policy purchased from De Smet Farm Mutual Insurance Company of South Dakota. De Smet denied the Papouseks’ claim filed under the drowning provision of the policy because none of the cattle were found submerged in water. The Papouseks filed a declaratory judgment action seeking a declaration that the policy covered the cattle losses. The circuit court granted summary judgment in favor of De Smet. The Supreme Court reversed, holding that the Papouseks established coverage under the drowning provision, and De Smet did not prove an exclusion to coverage under the policy. View "Papousek v. De Smet Farm Mut. Ins. Co." on Justia Law

In 2014, a large boulder dislodged from a hillside and fell into J. Russell Parker’s unoccupied vacation cabin, causing substantial damage. Parker submitted a claim to his insurer, Safeco Insurance Company. Safeco denied the claim, determining that rockfall is considered “earth movement from landslide,” which was specifically excluded under Parker’s policy. Parker sued Safeco, claiming breach of contract and seeking damages under the Unfair Trade Practices Act. The district court granted summary judgment in favor of Safeco. The Supreme Court affirmed, holding that Safeco property denied Parker’s claim based upon an express coverage exclusion in the policy. View "Parker v. Safeco Ins. Co. of America" on Justia Law

Capson filed suit against MMIC seeking a declaration that MMIC was the primary professional liability insurer for Karl J. Hasik, M.D., and that Capson was the excess insurer. MMIC counterclaimed and filed a third-party complaint against Dr. Hasik and others, seeking rescission of its insurance policy or, in the alternative, a declaration that MMIC had no obligation to defend or indemnify Dr. Hasik for two medical negligence cases that had been filed against him. The district court granted MMIC’s motion for summary judgment. The court concluded that Dr. Hasik’s and the hospital’s nondisclosure of the Wilson lawsuit (a medical malpractice suit filed by a patient against Dr. Hasik) was the equivalent of a false assertion. Therefore, the court held that the elements of equitable rescission were satisfied in this case. Dr. Hasik’s and the hospital’s nondisclosure of the Wilson lawsuit was the equivalent of a material representation that was false. MMIC was entitled to rescind the prior-acts coverage it had agreed to provide. The court further held that Iowa law does not preclude a judgment of rescission in this case. Accordingly, the court affirmed the judgment and dismissed the cross-appeal as moot. View "Capson Physicians Ins. Co. v. MMIC Ins. Inc." on Justia Law

West Virginia sued pharmaceutical distributors, seeking to hold them liable for contributing to the state’s epidemic of prescription drug abuse. The complaint alleged that certain pharmacies, “pill mills,” knowingly provided citizens with hydrocodone, oxycodone, codeine, and other prescription drugs, not for legitimate uses, but to fuel and profit from their addictions. The state contends that those pharmacies ordered drugs in quantities so large that the distributors should have known they would be used for illicit purposes. H.D. Smith, a distributor, had a general commercial liability insurance policy issued by Cincinnati Insurance. The policy covered damages that H.D. Smith became legally obligated to pay “because of bodily injury,” defined as “bodily injury, sickness or disease sustained by a person, including death.” “[D]amages because of bodily injury” include “damages claimed by any person or organization for care, loss of services or death resulting at any time from the bodily injury.” Cincinnati refused to defend the suit and obtained a declaratory judgment. The Seventh Circuit reversed summary judgment. The plain language of the policy requires Cincinnati to defend a suit brought by a plaintiff to recover money paid to care for someone who was injured by H.D. Smith. West Virginia’s suit fits that description. View "Cincinnati Ins. Co. v. H.D. Smith, LLC." on Justia Law

In December 2007, a driver rear-ended Donald Etherton’s vehicle. He injured his back in the accident. Etherton filed a claim with his insurer, Owners Insurance Company (“Owners”), seeking uninsured or underinsured motorist coverage up to his policy limit. After months of back and forth, Owners offered to pay an amount significantly lower than the policy limit. Etherton sued, alleging claims for (1) breach of contract and (2) unreasonable delay or denial of a claim for benefits. A jury found in Etherton’s favor on both claims. The district court entered judgment for Etherton, awarding $2,250,000 in damages. Owners appealed, arguing the trial court erred: (1) by denying Owners' motion for a new trial based on the allegedly erroneous admission of expert testimony; (2) by denying its motion for judgment as a matter of law based on Owners' purported reasonableness; and (3) in granting Etherton's motion to amend the judgment. Finding no reversible error, the Tenth Circuit affirmed in all respects. View "Etherton v. Owners Insurance Company" on Justia Law

In June 2012, a hailstorm damaged Plaintiff KCOM’s motel. Soon a dispute arose between KCOM and its insurer, defendant Employers Mutual Casualty (EMC), over the extent of the damage. In October 2012, following receipt of an inspection report, KCOM submitted a proof of loss of $631,726.87. EMC admitted coverage but not the amount of loss. Dissatisfied, KCOM invoked the insurance contract’s appraisal provision. KCOM claimed there were issues with the appraisal process, prompting it to ultimately file suit against EMC, alleging breach of contract, unreasonable delay and denial of benefits, and bad faith breach of the insurance contract. The threshold question presented for the Tenth Circuit's review in this state law diversity action was whether the Court had appellate jurisdiction over the district court’s non-final order denying confirmation of a property loss appraisal. The Court concluded it did not, and dismissed the appeal. View "KCOM, Inc. v. Employers Mutual Casualty Co." on Justia Law

Plaintiff was injured in an automobile accident and filed a claim for underinsured motorist (UIM) benefits with defendant Country Preferred Insurance. The insurer submitted a letter that satisfied the attorney fee safe harbor requirements of ORS 742.061(3). The case was arbitrated, and plaintiff prevailed and was awarded attorney fees. Defendant filed exceptions to the fee award in the circuit court, and the court concluded that defendant’s safe harbor letter precluded the award of fees. Plaintiff appealed, and the Court of Appeals reversed, holding that defendant was ineligible for the protection of the attorney fee safe harbor because, in arbitration, in its answer to plaintiff’s complaint, defendant had raised issues in addition to the liability of the underinsured motorist and the damages due to plaintiff. On review, the Oregon Supreme Court agreed with the Court of Appeals that defendant was not entitled to the protection of ORS 742.061(3), and affirmed the award of reasonable attorney fees. View "Kiryuta v. Country Preferred Ins. Co." on Justia Law

Plaintiff was driving her car when she was struck from behind from an underinsured motorist. Plaintiff claimed uninsured/underinsured (UM/UIM) coverage and medical payments under two State Farm Mutual Automobile Insurance Company policies and filed a complaint against State Farm seeking coverage pursuant to both policies. The parties agreed to arbitrate the amount of damages caused by the accident but to have a court decide any issues relating to the amount of UM/UIM coverage available to Plaintiff through the policies. An arbitration panel found that the accident caused Plaintiff damages of $378,000. Thereafter, the superior court concluded that Plaintiff had UM/UIM coverage under only one of the State Farm policies, deferred to the arbitration award as to Plaintiff’s actual damages, determined that she was entitled to $250,000 from State Farm, and reduced the arbitration award accordingly. The Supreme Judicial Court affirmed in part and vacated in part, holding that the superior court did not err in concluding that Plaintiff was entitled to coverage under only one of the State Farm policies but erred in deciding calculating the amount due under that policy. Remanded. View "Graf v. State Farm Mut. Auto. Ins. Co." on Justia Law