Justia Insurance Law Opinion Summaries

More than three years after learning his insurance policy had expired and his agent had not procured a replacement, Joe Tally sued his insurance agent, Ronald McMorris, claiming he “breached a standard of care recognized in the State of Mississippi to the insured for not notifying [him] of the cancellation of [his insurance] policy.” Because Tally failed to bring his claims within the three-year statute of limitations, his claims were time-barred. The Supreme Court therefore reversed the circuit court’s denial of McMorris’s motion for summary judgment and rendered judgment in his favor. View "McMorris v. Tally" on Justia Law

After a condominium association (Association) prevailed in a breach of contract action against its insurance company (Insurer), it sued Insurer a second time, alleging a statutory first-party bad faith claim under Fla. Stat. 624.155. Insurer moved to dismiss the complaint, citing its immunity from suit under Fla. Stat. 627.351(6)(s). The trial court dismissed the complaint, concluding that a statutory bad faith action under section 624.155 was not among the specifically listed exceptions to the immunity provided in section 627.351(6)(s). The First District Court of Appeal reversed, determining that Insurer’s immunity did not extend to the “willful tort” of failing to attempt in good faith to settle claims as provided by section 624.155. The Supreme Court quashed the decision below, holding that a statutory first-party bad faith cause of action under section 624.155(1)(b) is not an exception to the immunity granted to Insurer by the Legislature. View "Citizens Prop. Ins. Corp. v. Perdido Sun Condo. Ass’n, Inc." on Justia Law

Jefferson County awarded the first phase of its courthouse remodeling plan to a contractor. Two subcontractors aided in the repairs. While the repairs were underway, a fire severely damaged the courthouse. Jefferson County’s contract with the contractor incorporated an American Institute of Architects (AIA) standard form. The AIA contract waives subrogation rights for damages caused by fire “to the extent covered by property insurance.” Jefferson County filed a subrogation claim against the Contractors to recover damages caused to its property unrelated to repairs. Defendants moved for summary judgment, arguing that Jefferson County had waived its claim under the AIA waiver because its insurance policy covered all the damages. The County responded that the subrogation waiver applied only to construction-related damages. The trial court granted summary judgment for Defendants, concluding that Jefferson County had waived subrogation rights for all claims. The Supreme Court affirmed, holding (1) the plain language of the AIA contract restricts the scope of the waiver based on the source and extent of property insurance coverage, not the nature of the damages; and (2) the County agreed to waive its rights to bring this subrogation claim by relying on its existing “all-risk” property insurance policy that covered the work and all other losses suffered in the fire. View "Bd. of Comm’rs v. Teton Corp." on Justia Law

Randy Spalding filed suit against Stewart Title Guaranty Company, alleging breach of contract and vexatious refusal to pay in regard to a title insurance policy. After a jury trial, the circuit court entered an amended judgment in favor of Spalding. The Supreme Court affirmed, holding that the circuit court did not err in (1) overruling Stewart Title’s motions for directed verdict and judgment notwithstanding the verdict where the title insurance policy was not time barred and where Spalding made a submissible case as to the existence and amount of the damages for the breach of contract; (2) refusing to give Stewart Title’s proposed instruction concerning its statute of limitations defense; (3) admitting evidence from an appraiser in regard to damages sustained from the title defect under the policy; and (4) giving a certain jury instruction regarding the measure of damages. View "Spalding v. Stewart Title Guaranty Co." on Justia Law

Weitz contracted with Hyatt to build an Aventura, Florida assisted-living facility, which was completed in 2003. Hyatt obtained post-construction insurance from defendants. Weitz was neither a party nor a third-party-beneficiary. The policies exclude faulty workmanship and mold, except to the extent that covered loss results from the faulty workmanship, such as business interruption losses. The construction was defective. Hyatt notified defendants of a $11 million loss involving moisture and mold at the care center, settled that claim for $750,000, and released defendants from claims relating to the care center. Hyatt next discovered moisture, mold, and cracked stucco at the residential towers. Hyatt gave defendants notice, but bypassed inevitable defenses based upon policy exclusions, and sued Weitz. Weitz sued its subcontractors and its own construction contract liability insurers. Weitz settled with Hyatt for $53 million and was indemnified by its insurers for $55,799,684.69. Weitz sued, claiming coverage under defendants’ policies, based on equitable subrogation or unjust enrichment. The Eighth Circuit affirmed dismissal, recognizing that Weitz, as subrogee, was subject to any defense Hyatt would have faced, and that Hyatt had discharged defendants from liability; that suit was barred by the contractual period of limitations; that Weitz was barred from suing for damage to the plaza because Hyatt did not give defendants notice of that damage; and that Weitz had already collected several million more than it paid. View "Weitz Co. v. Lexington Ins. Co." on Justia Law

The Eleventh Circuit Court of Appeals certified a question of law to the Georgia Supreme Court. The certified question arose out of a declaratory judgment action related to underinsured motorist (“UIM”) coverage under a commercial auto insurance policy issued by FCCI Insurance Co. (“FCCI”). The litigation was the result of a 2011 collision between a McLendon Enterprises, Inc. truck driven by McLendon employee Brooks Mitchell, with passengers Elijah Profit, III and Bobby Mitchell (“Bobby”), and an Evans County school bus driven by John Haartje. Profit, Bobby, and Mitchell claimed injuries as a result of the collision. In May 2013, Mitchell filed suit in state court against Haartje and the Evans County Board of Education to recover for his alleged damages. Mitchell served FCCI as McLendon's uninsured motorist (UM) carrier. At the time of the collision, the School District had an insurance policy with GSBA Risk Management Services, under whose policy, paid out the $1,000,000 liability limits for damages related to the collision. It settled with Profit and Bobby for $350,000 combined and agreed to pay Mitchell the remaining $650,000 in exchange for a limited liability release, thereby exhausting its $1,000,000 liability limits. Mitchell filed for UM benefits from FCCI. FCCI denied liability on the basis of the at-fault driver's statutory immunity. The question certified centered on whether an insured party could recover under an uninsured-motorist insurance policy providing that the insurer will pay sums “the insured is legally entitled to recover as compensatory damages from the owner or driver of an uninsured motor vehicle” despite the partial sovereign immunity of the tortfeasor. The Georgia Supreme Court answered the question in the affirmative. View "FCCI Insurance Co. v. McLendon Enterprises, Inc." on Justia Law

Plaintiffs, former police officers and firefighters employed by local public agencies, filed suit alleging that CalPERS's failure to pay enhanced retirement benefits under the Public Employees' Retirement Law (PERL), Gov. Code section 20000 et seq., gave rise to a variety of causes of action. In these consolidated appeals, the court affirmed in part and concluded that neither the PERL nor plaintiffs' contracts entitle plaintiffs to the additional retirement benefits they seek and therefore, their causes of action for breach of statutory duty and breach of contract fail as a matter of law. Further, plaintiffs' causes of action for constitutional torts also fail because, as a matter of law, CalPERS's interpretation of the applicable statutory provisions does not deny plaintiffs due process or equal protection of law and does not effect an unconstitutional impairment of contract. The court reversed, however, as to the causes of action for rescission and breach of fiduciary duty where plaintiffs' pleading was sufficient to survive demurrer and therefore demurrer should have been overruled as to these causes of action. In this case, plaintiffs alleged that CalPERS failed to disclose the potential loss of the value of purchased service credit if plaintiffs suffered disability - a disclosure that CalPERS, as a fiduciary, is alleged to have been required to make. View "Marzec v. CalPERS" on Justia Law

At issue in these two separate cases was whether a life settlement agreement or viatical settlement agreement is an investment contract and thus a security under the Texas Securities Act. In one case, Plaintiffs filed a class action alleging that Life Partners, Inc. violated the Texas Securities Act (Act) by selling unregistered securities and misrepresenting to purchasers that they were not, in fact, securities. In the second case, the State filed suit alleging that Life Partners had committed fraud in connection with the sale of securities. The Both district courts entered judgments for Life Partners. Both courts of appeals reversed in part, concluding that the life settlement agreements were securities under the Texas Securities Act. The Supreme Court affirmed, holding that that the agreements at issue in these cases were investment contracts, and thus securities, under the Texas Securities Act. View "Life Partners Holdings, Inc. v. State" on Justia Law

The insured in this case (Insured) managed the insurance needs of more than 100 commercial properties. Insured purchased an excess policy from Insurer. The excess insurance policy limited the coverage to “the least” of three alternative amounts. When Hurricane Rita hit the Gulf Coast, the hurricane damaged fifteen of the properties at issue. Insurer calculated “the least” of the three alternative limits separately for each covered item at each damaged property, on an item-by-item basis. Insured filed suit against Insurer to recover the difference between its losses and the amount that Insurer had paid, contending that “the least” of the three limits applied just once in any one occurrence to the total of all losses from all covered items at all of the damaged properties. The trial court agreed with Insurer’s construction of the policy and ordered that Insured pay nothing. The court of appeals reversed, concluding that Insured’s construction was correct, and awarded Insured $7.5 million. The Supreme Court affirmed, holding (1) both constructions are reasonable, and the policy is therefore ambiguous; and (2) because the Court’s rules require it to construe an insurance policy’s ambiguous coverage limitation in favor of coverage for the insured, the court of appeals’ judgment is affirmed. View "RSUI Indemnity Co. v. Lynd Co." on Justia Law

In a 2008 collision on I-40 in West Memphis, McHone, driving a car, was struck by a tractor trailer driven by Whirley. McHone’s State Farm policy included coverage for uninsured motor vehicles with bodily injury limits of $100,000 per person. The trucking company defendants were insured by Gramercy. McHone’s medical bills exceeded $400,000; her physicians estimate future medical care will exceed an additional $400,000. Before trial, Gramercy was placed into Rehabilitation with an automatic stay. In 2013, McHone’s counsel notified State Farm of the problems with Gramercy and demanded $100,000 uninsured motorist benefits. State Farm asserted that no coverage existed. McHone settled her claims against Whirley and the truck’s owner for $300,000 to avoid the claim process with the State Guarantee Fund. Gramercy was liquidated. State Farm again refused to pay uninsured motorist benefits. The district court ruled in favor of State Farm as being entitled to a credit for the settlement proceeds regardless of the date of insolvency. The Eighth Circuit affirmed. State Farm is entitled to a credit for the money McHone received from her settlement. McHone’s argument that the credit is not applicable because the payment was made by the receivership rather than by Gramercy itself is not supported by the policy language nor Tennessee law. View "McHone v. State Farm Mut. Ins. Co." on Justia Law