Justia Insurance Law Opinion Summaries

Home Loan Investment Company, a financial institution, held a deed of trust on a property in Grand Junction, Colorado, known as White Hall. The owner had stopped making payments on the loan and offered Home Loan a deed to White Hall in lieu of foreclosure. Home Loan opted instead to work with the owner in selling the property, with the hope of being paid out of the proceeds of the sale. Because the owner indicated she could no longer pay insurance premiums on White Hall, Home Loan contacted St. Paul Mercury Insurance Company to obtain coverage for the value of its loan. On September 15, 2011, White Hall was nearly destroyed in a fire. Home Loan tendered a claim to St. Paul for the loss, equal to the outstanding loan balance. St. Paul denied Home Loan’s claim because White Hall did not meet the definition of “foreclosed property” in Home Loan’s policy. St. Paul determined Home Loan had never been a mortgagee in possession of the property and therefore White Hall did not qualify as a Foreclosed Property. Home Loan filed suit in Colorado state court, alleging claims for common-law breach of contract and violations of sections 10-3-1115 and 10-3-1116 of the Colorado Code, which provided a statutory remedy for unreasonable delay or denial of insurance benefits. St. Paul removed the action to federal court, invoking diversity jurisdiction. Prior to trial, St. Paul moved for summary judgment, but the district court denied the motion. At trial, St. Paul argued Home Loan never had “possession” or “care, custody, or control” of White Hall sufficient to trigger coverage under the policy. St. Paul further maintained that, because its coverage decision was “fairly debatable,” it could not have acted unreasonably for purposes of the Colorado statutes. The jury returned a verdict in favor of Home Loan and against St. Paul on both the common-law breach of contract claim and the statutory claim. St. Paul did not challenge the jury’s verdict on Home Loan’s breach of contract claim; the only questions before the Tenth Circuit concerned Home Loan’s statutory bad faith claim under Colorado law. Finding no reversible error, the Tenth Circuit affirmed the district court on all issues. View "Home Loan Investment Co. v. St. Paul Mercury Insurance Co." on Justia Law

Defendant was a tenant of condominium unit (Unit 1801) when unit’s bathtub overflowed and leaked into the condominium units below, causing damage. Pacific Indemnity Company, which insured Unit 1601, brought an action seeking to recover the amount it had paid to the owners of Unit 1601. As the unit’s subrogee, Pacific sought to recover damages in the amount of $351,159 as well as pre-judgment interest and costs. The district court granted summary judgment in favor of Deming, determining that Pacific’s rights to subrogation were waived based on a clause in the bylaws of the condominium trust that unit owners “shall carry insurance,” and that “all such policies shall contain waivers of subrogation.” The First Circuit reversed, holding (1) the plain language of the condominium’s Bylaws, Master Deed, and Declaration of Trust is that the required waivers of subrogation do not apply to tenants; and (2) even if the Bylaws did require unit owners to purchase insurance that contains waivers of subrogation as to claims against tenants, because Defendant presented no evidence that Unit 1601’s owners actually waived their insurer’s subrogation rights against tenants, Pacific can pursue its claims. View "Pacific Indemnity Co. v. Deming" on Justia Law

Water Well, which was insured under a commercial general liability primary policy (CGL policy) with Consolidated Insurance Company, was sued by Argonaut Insurance Company. The complaint alleged that Water Well and its employees were negligent in the installation and reinstallation of a water pump and breached their contractual obligations. Water Well tendered its defense to its insurer. Consolidated denied Water Well’s defense tender, stating that it had no duty to defend or indemnify Water Well under the CGL policy. After settling with Argonaut, Water Well filed suit against Consolidated, alleging that Consolidated breached its duty to defend Water Well in the action initiated by Argonaut. The circuit court granted summary judgment in favor of Consolidated, concluding that “there is no covered claim and therefore there was no duty to defend.” Applying the four-corners rule, the court of appeals affirmed. The Supreme Court affirmed, holding (1) Water Well’s request to craft a limited exception to the four-corners rule is rejected; and (2) Consolidated did not breach its duty to defend Water Well because certain exclusions in the CGL policy eliminated coverage. View "Water Well Solutions Serv. Group Inc. v. Consolidated Ins. Co." on Justia Law

From 2007 to 2009, a number of lawsuits involving Plaintiff, the trustee of two trusts, were filed throughout the country. Plaintiff asked his professional liability insurer, Houston Casualty Company, to defend him in the lawsuits. Houston Casualty determined that it had no obligation to either defend or indemnify Plaintiff in connection with any of the lawsuits. Plaintiff filed a complaint against Houston Casualty alleging, inter alia, breach of the duty to defend and bad faith. The circuit court granted summary judgment in favor of Houston Casualty, concluding that the insurer had not breached its duty to defend Plaintiff. The court of appeals affirmed. The Supreme Court affirmed, holding that the complaints and counterclaim against Plaintiff did not allege facts which, if proven, would constitute claims covered under the policy Houston Casualty issued to Plaintiff, and therefore, Houston Casualty did not breach its duty when it refused to defend Plaintiff in the lawsuits at issue. View "Marks v. Houston Cas. Co." on Justia Law

In the underlying lawsuits, individuals filed suit against DP and its employee after the individuals were injured in an industrial accident at an Entergy nuclear power plant. In this case, DP's insurers, Hartford Casualty Insurance Company and Hartford Lloyds Insurance Company, seek a declaratory judgment that they have no duty to defend or to indemnify DP in the underlying suits. The district court granted summary judgment to the insurers. The court concluded that the underlying lawsuits fall within the professional services exclusion because the factual allegations in the underlying complaints describe injuries that “arise out of” DP’s and the employee’s allegedly negligent engineering services. Therefore, the district court correctly entered summary judgment for Hartford that there was no duty to defend. Likewise, the court affirmed the district court's resolution of DP's counterclaims related to the duty to defend. The court concluded, however, that the district court should not have determined the duty to indemnify based solely on the pleadings in the underlying lawsuit. Therefore, the court reversed the district court’s grant of summary judgment to Hartford on the duty to indemnify and remanded for further proceedings. View "Hartford Cas. Ins. Co. v. DP Engine" on Justia Law

The complex insurance coverage dispute arose out of a 2007 fire that destroyed portions of a home that was still under construction. Fontana Builders, Inc., the construction contractor, and James and Suzy Accola, the occupants/presumptive purchasers, had separate insurance policies. The Accolas settled with Chubb Insurance Co., the insurer that provided their homeowner’s policy. Assurance Company of America, which had issued a builder’s risk policy to Fontana, denied all coverage for the fire. Fontana commenced this action against Assurance alleging breach of the insurance contract and bad faith failure to pay under the policy. Fontana’s lender, AnchorBank, FSB, eventually intervened. After a retrial, the jury found that the Assurance policy did not provide coverage for Fontana’s fire loss, concluding that the Chubb policy “applied” to the underlying facts so as to terminate Fontana’s builder’s risk coverage. The court of appeals affirmed. The Supreme Court reversed, holding that that the homeowner’s policy issued by Chubb to the Accolas did not apply so as to terminate Fontana’s builder’s risk policy from Assurance. Remanded. View "Fontana Builders, Inc. v. Assurance Co. of Am." on Justia Law

Both of the injured employees in these cases, Charles Morris and Charles Poole, were treated at the Lafayette Bone & Joint Clinic (“LB&J”); Morris was treated by Dr. Louis Blanda and Poole by Dr. John Cobb. Louisiana United Business SIF (“LUBA”), sent letters to LB&J and its doctors stating that LUBA would no longer pay for prescription medications directly dispensed by LB&J and directing LB&J doctors to issue future prescriptions for the instant injured employees that could be filled at local retail pharmacies. Despite these notices and subsequent denials of requests for reimbursement of dispensed prescription medications, LB&J doctors continued to dispense prescription medications to these injured employee patients throughout 2008 and to submit requests for reimbursement to LUBA. LUBA declined payment for these requests, citing its prior notice. LB&J and the treating physicians thereafter filed disputed claim forms with the Office of Workers’ Compensation (OWC), seeking to recover the cost of the medications dispensed, along with penalties and attorney fees. Following a joint trial in these two cases, the OWC judge ruled that the plaintiff/health care providers’ recovery for medications dispensed after the 2008 notice were nonemergency treatment dispensed without consent of the payor. Further, the OWC judge found that no penalties or attorney fees were warranted because LUBA had clearly advised the plaintiff/health care providers that no further reimbursement would be made for prescription medications dispensed by LB&J doctors after the date of the notice. The plaintiff/health care providers appealed, seeking an increase in the amount awarded and an award of penalties and attorney fees. The Louisiana Supreme Court granted writs to review the appellate court decisions, which awarded unreimbursed prescription medication costs beyond the $750 limitation set forth in LSA-R.S. 23:1142(B) and awarded penalties and attorney fees. The Court reversed the appellate court's modification of the amount awarded by the OWC, and affirmed in part, the decision to award penalties and attorney fees. View "LaFayette Bone & Joint Clinic v. Louisiana United Business SIF" on Justia Law

Plaintiff filed suit seeking interest and attorney's fees after General American notified plaintiff that the treasury warrant in the amount of his annuity transfer had never cleared. General American reversed the transaction. The court found that, under the terms of plaintiff's annuity, General American promised to make periodic payments to plaintiff at agreed upon dates; plaintiff does not allege that General American failed to make payments or otherwise failed to fulfill an obligation under the terms of the annuity; nor does this action arise from a declaratory judgment action or an effort by General American to cancel or lapse the policy. Accordingly, the court concluded that plaintiff did not suffer a “loss” covered by Ark. Code Ann. Sections 23-79-208 and 23-79-209, and the district court was correct that neither a 12% penalty nor attorney’s fees are owing by American General under these sections. The court also concluded that the district court did not err in finding plaintiff was not entitled to an award of attorney’s fees under section 16-22-308. Finally, the court concluded that the district court did not abuse its discretion in denying attorney’s fees in this case. The court affirmed the judgment. View "Cooper v. General American Life Ins. Co." on Justia Law

Appellant-plaintiff Robert Leritz was a Kansas resident whose motorcycle and two other vehicles were garaged in Kansas under an insurance policy issued by Appellee, Farmers Insurance Company (Farmers) in Kansas. Plaintiff was injured in a motorcycle accident in Oklahoma when Defendant Larry Yates made a left hand turn and collided with Plaintiff causing serious bodily injuries. Plaintiff brought this action alleging that he had incurred medical expenses and suffered damages exceeding Yates's liability coverage. There was a question as to whether he could stack his uninsured motorist (UM) coverage based on his ownership of policies on each of his three vehicles. Oklahoma allowed the practice, until the Oklahoma Legislature amended the UM provision in 2014. Kansas did not allow stacking. The trial court granted summary judgment to the insurer and the Court of Civil Appeals affirmed, applying the insurer's proposed solution to a perceived conflict of laws issue. The Oklahoma Supreme Court found no conflict of laws issue on these facts because the policy specified which law would apply to an issue of stacking of policies. Giving the policy provisions effect made a choice of law analysis unnecessary; the Court vacated the Court of Civil Appeals, reversed the district court and remanded for further proceedings. View "Leritz v. Farmers Insurance Company, Inc." on Justia Law

Defendants, Markel Corporation, Markel Services, Inc. (Markel Services), and Essex Insurance Company (Essex), appealed a superior court order denying their motions for summary judgment and granting summary judgment to plaintiff Michael Newell, in this insurance coverage action. Newell was allegedly injured in a slip and fall accident at a property owned by Brames, Inc. (Brames) in Laconia. Brames was insured under an Amusement Park General Liability Policy issued by Essex. Essex was a subsidiary of Markel Corporation and Markel Services was Markel Corporation’s claims handling branch. Newell filed two personal injury actions arising from his slip and fall. The first action against Brames' co-owner and treasurer, was settled out-of-court. In the second lawsuit, Newell sued Ivy Banks, the person who allegedly cleaned the floor upon which Newell slipped and injured himself. Defendants received notice of the Banks action, but declined to defend Banks or intervene. Banks, although properly served, filed neither an appearance nor an answer and was defaulted. A default judgment was entered against Banks for $300,000, the full amount of damages sought by Newell. Newell brought suit against defendants to recover the amount of the default judgment, arguing he was a third party beneficiary under the insurance contract between Brames and Markel/Essex. On appeal, defendants argued the trial court erred in determining that the language of the Policy was ambiguous and that Banks was a “volunteer worker” under the Policy. Finding no reversible error, the Supreme Court affirmed denial of defendants' motion for summary judgment. View "Newell v. Markel Corporation" on Justia Law