Justia Insurance Law Opinion Summaries

Siloam Springs Hotel, LLC operated a Hampton Inn hotel in Siloam Springs, Arkansas. It purchased a general liability insurance policy from Century Surety Company covering the Hampton Inn for the period of November 13, 2012, through November 13, 2013. Siloam Springs purchased the Commercial Lines Policy through Century Surety's agent, RCI Insurance Group of Claremore, Oklahoma. On January 21, 2013, several guests at the Hampton Inn suffered bodily injury due to a sudden, accidental leak of carbon monoxide from the heating element of an indoor swimming pool. Siloam Springs sought coverage under the Commercial Lines Policy. Century Surety denied coverage, relying on an exclusion set out in the Commercial Lines Policy. That provision (the "Indoor Air Exclusion") excluded from coverage "[b]odily injury' . . . arising out of, caused by, or alleging to be contributed to in any way by any toxic, hazardous, noxious, irritating, pathogenic or allergen qualities or characteristics of indoor air regardless of cause." After Century Surety removed the case to federal court, the parties filed cross-motions for summary judgment. In its motion, Century Surety asserted that because the insurance contract was to be performed in Arkansas, Oklahoma choice-of-law rules made Arkansas law applicable. It further argued that the Indoor Air Exclusion unambiguously excluded coverage for the carbon-monoxide based injuries to the guests at the Hampton Inn. For its part, Siloam Springs "decline[d] to contest" Century Surety's assertion that Arkansas law applied because, it asserted, "Arkansas law does not differ from Oklahoma law in any way material to [the] coverage dispute." As to the merits, Siloam Springs asserted the Indoor Air Exclusion was ambiguous and, as such, had to be construed in favor of coverage. Without definitively resolving whether Oklahoma or Arkansas law applied, but relying on precedent from Arkansas, the district court granted summary judgment to Century Surety. The issue this case presented for the Tenth Circuit's review called for the Court to determine the citizenship, for purposes of diversity jurisdiction, of a limited liability company ("LLC"). Because the materials before the Court did not demonstrate that complete diversity of citizenship existed at the time of the filing of the complaint, the matter was remanded to the district court for further proceedings. View "Siloam Springs Hotel v. Century Surety Co." on Justia Law

Plaintiff Ronald Lee Cline was severely injured when his motorcycle collided with a turning car driven by a teenager with a provisional license. He settled with the driver and the driver’s parents for their $100,000 insurance policy limit. Cline executed a release that released the driver and his parents “and any other person, corporation, association, or partnership responsible in any manner or degree” for the accident. Cline subsequently sued defendant Berniece Delores Homuth, the driver’s grandmother and the sole adult in the car with him at the time of the collision, for negligent supervision. Homuth raised the release as an affirmative defense. She moved for summary judgment; the trial court denied the motion. A court trial followed, centering on the validity of the release and whether Homuth was an intended third party beneficiary of the release. Cline appealed the judgment in favor of Homuth, arguing the extrinsic evidence demonstrated that Homuth was not an intended beneficiary of the release. The Court of Appeal affirmed, finding that Cline failed to provide sufficient evidence to counter Homuth’s showing that she was an intended beneficiary of the release. View "Cline v. Homuth" on Justia Law

Karen Dwyer was the primary driver of a vehicle owned by her father, Alan Dwyer. Alan had forbidden Ameen Abdulkhalek, the father of Karen’s children, to drive the car. The vehicle was insured by a policy in Alan’s name with Erie Insurance Exchange. When Karen gave the car keys to Abdulkhalek and asked him to retrieve the children, Abdulkhalek was involved in an accident after first making a trip to a gas station. The circuit court determined that Abdulkhalek’s use of the vehicle was not covered under an omnibus clause in the policy. The Court of Appeals affirmed, holding (1) an omnibus clause in an automobile policy that extends liability coverage to a permissive owner of an insured vehicle also encompasses a driver who operates the car for the benefit of an individual who has permission from the named insured to use the vehicle; (2) coverage does not extend to that driver, however, if he deviates from the purpose for which he was authorized to drive the car for the benefit of the first permittee; and (3) because Abdulkhalek operated the car for a purpose other than that requested by the Karen, the omnibus clause did not extend coverage to Abdulkhalek. View "Payne v. Erie Ins. Exch." on Justia Law

Employee worked for Employer assembling engine heads and attaching them to engine blocks. Employer ceased working after he sustained bilateral thoracic outlet syndrome, bilateral shoulder injuries, and a herniated disc in his neck. Employee filed this workers’ compensation action alleging that he received his injuries as a result of his work and that he was permanently and totally disabled by the injuries. The trial court concluded that Employee’s neck injury was not compensable and awarded eighty percent permanent partial disability for his other injuries. Both parties appealed. The Supreme Court affirmed, holding (1) the evidence did not preponderate against the trial court’s finding that Employee did not sustain a compensable neck injury; and (2) the award was not excessive. View "Watters v. Nissan N. Am., Inc." on Justia Law

C. Brewer and Company, Ltd. (C. Brewer) sold the Kaloko Dam to James Pflueger. The Dam subsequently collapsed, resulting in seven deaths and extensive property damage. Pflueger filed suit seeking damages and indemnification from C. Brewer for claims against him arising out of the Dam’s failure. C. Brewer filed a complaint against James River Insurance Company (James River) seeking a ruling regarding James River’s obligations under a commercial general liability policy issued to C. Brewer that was in effect at the time of the Dam's failure. The circuit court granted summary judgment for James River, concluding that a Designated Premises Endorsement (DPE) precluded coverage. The Intermediate Court of Appeals (ICA) concluded that the intent of the parties as to the DPE was ambiguous and thus remanded for a determination of the parties’ intent as to the DPE. The Supreme Court affirmed in part and vacated in part, holding that the circuit court erred in granting summary judgment for James River and that the ICA erred in concluding it was necessary to determine the parties’ intent as to the DPE, as the DPE did not limit liability to injury and damage occurring on the designated premises. Remanded. View "C. Brewer & Co. v. Indus. Indemnity Co. of Am." on Justia Law

The issue this case presented for the Tenth Circuit's review centered on a dispute over insurance coverage following a private airplane crash. Garmin International, Inc., purchased an insurance policy from Appellees (the insurance companies). In 2008, while the insurance policy was in effect, Appellant Henry Bartle, an individual who had some dealings with Garmin, crashed while piloting his malfunctioning personal aircraft, injuring himself and his passengers. Bartle sought coverage under Garmin’s insurance policy for indemnification from claims brought against Bartle by his injured passengers. Appellees, the insurers, brought suit federal district court seeking a declaration under the Declaratory Judgment Act that Bartle did not qualify as an "Insured" under Garmin’s policy. Bartle submitted evidence to the district court to demonstrate he was indeed an "Insured," but the district court refused to consider much of the evidence because the evidence failed to conform to district court rules regarding proper citation. Without considering this evidence, the district court granted summary judgment to the insurers, finding that Bartle was not an "Insured" under the policy. Bartle appealed both the district court’s grant of summary judgment to the insurers and its refusal to consider the excluded evidence. Finding no reversible error, the Tenth Circuit affirmed: "[t]he district court concluded, and Mr. Bartle acknowledged, that the exhibits submitted could not be feasibly used by the district court without great difficulty. The district court cannot be expected to review evidence, evaluate arguments, or arrive at reasoned conclusions without usable citations. In this case the merits cannot be separated from the process, and ultimately Mr. Bartle bore the responsibility to present evidence that would allow a rational trier of fact to find in his favor." View "Certain Underwriters v. Bartle" on Justia Law

A trucking company purchased a liability insurance policy covering its tractors and trailers. The policy stipulated that liability coverage would be limited to "$1,000,000 each ‘accident.’" A tractor-trailer rig insured under the policy was involved in a single accident. The question this case presented for the New Mexico Supreme Court's review centered on whether $1,000,000 was the limit per accident for both vehicles (the tractor and the trailer) or whether each vehicle has liability coverage in the amount of $1,000,000. The district court interpreted the policy to limit its coverage to $1,000,000; the Court of Appeals disagreed and reversed. Because this dispute affects not only the parties to this lawsuit but arguably New Mexico’s place among the many jurisdictions that have grappled with similar policy language, the New Mexico Court granted certiorari. The Supreme Court disagreed with the Court of Appeals and reversed. The Supreme Court found that the Declarations page of the policy at issue provided that the dollar limit was $1,000,000 each accident. Section II(C) of the policy then said the same thing in terms of a "per accident" outside limit on what the insurer would pay: "Regardless of the number of covered ‘autos’ . . . or vehicles involved in the ‘accident’," the most Northland will pay "for the total of all damages . . .resulting from any one ‘accident’ is the Limit of Insurance for Liability Coverage shown in the Declarations [$1,000,000 each accident]." Therefore, the argument advanced by plaintiffs, the Luceros, that the policy provided $1,000,000 in coverage for "'each covered auto in each accident' simply does not find support in the language of the policy. The policy limits Northland’s exposure to $1,000,000 per accident regardless of the number of covered autos involved in any one accident." View "Lucero v. Northland Ins. Co." on Justia Law

The Torres own land and a house in Mantoloking, New Jersey, that was covered by a National Flood Insurance Program Dwelling Form Standard Flood Insurance Policy (SFIP) issued by Liberty under the National Flood Insurance Act. The National Flood Insurance Program “is underwritten by the United States Treasury in order to provide flood insurance below actuarial rates.” The Torres’ property sustained substantial damage during Hurricane Sandy, and they submitted claims under the SFIP for that damage to Liberty. Liberty administered a total payment1 to the Torres of $235,751.68, which included the cost of removing debris from their house. The Torres sought an additional payment of $15,520 for the cost of removing sand and other debris deposited on their land in front of and behind their house. Liberty denied that claim on the ground that the SFIP does not cover it. The Third Circuit affirmed judgment in Liberty’s favor. The SFIP provides coverage for structures and other items of property but not for an entire parcel of land; the provision requiring Liberty to pay for removal of non-owned debris that is “on or in insured property” does not apply to expenses incurred in removing non-owned debris from land outside the home. View "Torre v. Liberty Mut. Fire Ins. Co." on Justia Law

Smart Candle sells light-emitting diode flameless candles and commercial lighting systems internationally. Excell sued under the LanhamAct alleging that Smart Candle’s use of the trade name and trademark “Smart Candle” infringed rights that Excell had over use of that name and trademark. Selective insured Smart Candle during the period in which the Excell suit commenced, but disclaimed coverage, based on exclusion any injury “arising out of the infringement of copyright, patent, trademark, trade secret or other intellectual property rights” that “does not apply to infringement in your ‘advertisement’ of copyright, trade dress or slogan.” Excell won its suit. Selective sought a declaration that it owed no duty to defend or indemnify. Smart Candle counterclaimed breach of contract, arguing that Selective had not conducted “reasonable investigation of Excell’s Claims” including “a review of Smart Candle’s website . . . or any of Smart Candle’s advertising before denying coverage.” The district court granted Selective summary judgment. The Eighth Circuit affirmed, agreeing that no reasonable jury would conclude that Excell was suing for slogan infringement and that Selective had no duty to investigate “beyond the four corners of the complaint” to determine whether other facts could trigger Selective’s duty to defend or indemnify. View "Selective Ins. Co. v. Smart Candle, LLC" on Justia Law

Defendant "L.A." was employed by the Trenton Board of Education as an elementary school security guard. While at work, L.A. allegedly had unlawful sexual contact with two minor students, N.F. and K.O. The allegations were referred to the Institutional Abuse Investigation Unit (IAIU) of the Department of Children and Families (DCF) and defendant was subsequently indicted. In the N.F. indictment, L.A. was charged with third-degree aggravated criminal sexual contact and second-degree endangering the welfare of a minor. In the K.O. indictment, L.A. was charged with two counts of second-degree sexual assault and one count of second-degree endangering the welfare of a minor. L.A. pled guilty to one count of second-degree endangering the welfare of a minor (N.F.) in exchange for dismissal of the remaining charges regarding N.F. and complete dismissal of the K.O. indictment. K.O. s guardian ad litem subsequently filed a civil complaint alleging that L.A. sexually assaulted K.O. and that the Board negligently hired L.A. The Board answered the complaint, taking no position with regard to the allegations against L.A. However, L.A. was assigned counsel by the Horace Mann Insurance Agency, pursuant to a private insurance policy maintained by the New Jersey Education Association. Ultimately, K.O.'s civil action was settled without any admission of wrongdoing by L.A. or the Board. After the settlement, L.A., through counsel provided by Horace Mann, filed a verified petition against the Commissioner of Education seeking reimbursement for the attorney's fees and costs incurred in defending against K.O.'s civil action. The matter was transferred to the Office of Administrative Law and L.A.'s counsel and the Board filed cross motions for summary judgment. The Administrative Law Judge (ALJ) granted L.A.'s motion, denied the Board's, and awarded L.A. attorney's fees and costs pursuant to N.J.S.A.18A:16-6, the statute that addressed the right to indemnification for officers and employees of boards of education in civil actions. The issue this case presented for the Supreme Court's review centered on whether N.J.S.A. 18A:16-6 entitled a school board employee to indemnification for attorney's fees and costs spent in defense of a civil action arising from the same allegations contained in a dismissed criminal indictment. The Court concluded that in such circumstances N.J.S.A. 18A:16-6 requires indemnification unless there was proof by a preponderance of the evidence that the employee's conduct fell outside the course of performance of his or her employment duties. Here, rather than conducting an evidentiary hearing, the ALJ disposed of the matter by way of summary judgment. Because there are disputed issues of material fact regarding whether L.A. was acting within the scope of the responsibilities of his employment, the judgment of the Appellate Division was reversed. The matter was remanded to the Commissioner of Education for a hearing to determine whether L.A.'s conduct fell outside the course of performance of his employment duties. View "L.A. v. Board of Education of the City of Trenton" on Justia Law