Justia Insurance Law Opinion Summaries

Country Casualty's agent Lessaris, issued an automobile insurance policy to Skaperdas. Skaperdas’s fiancée, Day, was subsequently involved in an accident while driving his vehicle. Country Casualty covered the loss but required Skaperdas to change his policy to include Day. Lessaris prepared the policy, but identified only Skaperdas, not Day, as a named insured. The policy's declarations page identified the driver as a “female, 30-64.” Following issuance of the policy, Day’s minor son, Jackson, was struck by a vehicle while riding his bicycle and seriously injured. The driver’s insurance was insufficient to cover Jackson’s medical expenses. Plaintiffs made a demand for underinsured motorist coverage under the Country Casualty policy. Country Casualty denied the claim on the ground that neither Day nor Jackson was listed as a named insured. Plaintiffs filed suit, alleging that Lessaris breached his duty to exercise ordinary care and skill in renewing, procuring, binding, and placing insurance coverage as required by 735 ILCS 5/2-2201, and that Country Casualty was responsible for the acts of its agent under the doctrine of respondeat superior. They also sought reformation of contract to include Day as an additional named insured and a declaration of coverage. The trial court dismissed the negligence and respondeat superior counts. The appellate court reversed. The Illinois Supreme Court affirmed, holding that the Code does impose a duty of ordinary care. View "Skaperdas v. Country Cas. Ins. Co." on Justia Law

Plaintiff was injured in a motor vehicle accident. The at-fault driver’s insurance was insufficient to cover Plaintiff’s damages, and therefore, Plaintiff sought underinsured motorist (UIM) coverage from her insurer (Insurer). When Plaintiff purchased her car insurance, Insurer had offered her UIM coverage on a form approved by the Arizona Department of Insurance, but Plaintiff declined the coverage. Insurer denied Plaintiff’s claim on the grounds that Plaintiff had waived UIM coverage. Plaintiff filed suit seeking a declaration that the UIM waiver was void because the written notice offering the UIM coverage did not include a premium quote. The trial court granted summary judgment for Insurer. The Supreme Court affirmed, holding that the statutorily required written offer need not include a premium quote. View "Newman v. Cornerstone Nat’l Ins. Co." on Justia Law

Plaintiff, a Montana corporation, sells workers’ compensation insurance to employers without the use of insurance agencies. Defendant Montana State Fund sells workers’ compensation insurance through in-house and out-of-house agents. The remaining defendants also sell workers’ compensation insurance, including State Fund policies. In 2011, Plaintiff brought this of action against Defendants, alleging violations of the Unfair Trade Practices Act (UTPA) and intentional interference with prospective economic advantage. The district court (1) dismissed Plaintiff’s UTPA claim on the grounds that the UTPA does not create a private right of action by one insurance company against another; and (2) granted Defendants’ motions for summary judgment with respect to interference with prospective economic advantage. The Supreme Court affirmed, holding that Plaintiff’s inability to establish damages was fatal to its intentional interference claim and would be fatal as well to any UTPA-related claim. View "Victory Ins. Co. v. Mont. State Fund" on Justia Law

Acuity, A Mutual Insurance Company and Chartis Specialty Insurance Company both issued liability policies to Dorner, Inc, a construction company. The Chartis policy was a contractors’ pollution liability (CPL) policy, and the Acuity policy was a Comprehensive General Liability (CGL) policy. Acuity defended and indemnified Dorner in four lawsuits seeking recovery for bodily injury and property damage caused by a natural gas-fueled explosion and fire, which occurred after Dorner’s employees damaged an underground natural gas pipeline during an excavation project. Acuity sought reimbursement from Chartis, asserting that Chartis’s CPL policy provided coverage for Dorner in these lawsuits. The circuit court entered summary judgment in favor of Acuity and ordered Chartis to share with Acuity one-half the cost of defending and indemnifying Dorner. The court of appeals reversed, concluding that the claims asserted against Dorner were not covered under the CPL policy. The Supreme Court reversed and remanded to the circuit court to reinstate the judgment in favor of Acuity, holding that Chartis’s CPL policy covered Dorner’s liability arising from the natural gas-field explosion and fire. View "Acuity v. Chartis Specialty Ins. Co." on Justia Law

When Mark Chartier and Lisa Heward were married, Chartier purchased an annuity policy from Farm Family Life Insurance Co. for which he named Heward as primary beneficiary. Heward later requested the cash value of the annuity to Farm Family by signing Chartier’s name on the form. Farm Family issued a check payable to Chartier in the requested amount, Heward deposited the check into her and Chartier’s joint account with Gorham Savings Bank, and then withdrew $40,000 from the joint account. That same day, Heward informed Chartier that she wanted a divorce. Chartier filed a complaint against Farm Family, Gorham Savings Bank, and Farm Family’s sales agent, alleging breach of fiduciary duty, breach of the implied covenant of good faith and fair dealing, and negligence. The superior court granted summary judgment in favor of the defendants as to all counts. The Supreme Judicial Court affirmed, holding that summary judgment was properly entered in the defendants’ favor as to all counts. View "Chartier v. Farm Family Life Ins. Co." on Justia Law

Argonaut sued Audrain County Joint Communications (ACJC) alleging ACJC's negligence in monitoring a security alarm panel caused or contributed to damages arising out of the burglary and fire of a grocery store insured by Argonaut. Public employees at the ACJC call center monitored a private security company's alarm panels. The panels were defective. ACJC argued that it was entitled to sovereign immunity as a Missouri state entity, and to statutory immunity as a 911 call center. The district court denied summary judgment after finding ACJC had waived its sovereign and statutory immunity by purchasing insurance. The Eighth Circuit dismissed part of an interlocutory appeal for lack of jurisdiction, but otherwise affirmed. Missouri Revised Statutes Section 537.600 generally preserves "sovereign or governmental tort immunity as existed at common law" and specifically refers to "the immunity of [a] public entity from liability and suit." Section 190.307, however, does not create a substantive right to be free from the burdens of litigation. There was no clear error in the district court's determination under section 537.600 that ACJC did not prove the existence of a pre-existing agreement between itself and the insurer to include the sovereign immunity endorsement with the original policy. View "Argonaut Great Cent. Ins. Co. v. Audrain Cnty. Joint Commc'ns." on Justia Law

A “viatical” or “life settlement” permits an insured to sell his life insurance policy. Federal tax and some state laws have been amended to accommodate the practice. In 2006, an agent persuaded Close, age 74, to apply for a $5 million life insurance policy. As submitted to PHL, his application falsely stated Close’s net worth and income, and failed to disclose his conviction for receiving illegal kickbacks. Under the agent’s guidance, Close falsely stated his net worth to obtain a two-year, $300,225 premium financing loan from CFC, a PHL-approved funding source. The policy was pledged as collateral; Close personally guaranteed 25 percent of the loan, believing that the policy would be worth $1.3 million in two-years, when it became “incontestable” under Minn. Stat. 61A.03.1(c) and that he would be able to sell it for $500,000. PHL conducted minimal investigation and received premiums of $272,025; CFC received $14,200 in fees; and the agent and a CFC employee split substantial commissions. In 2009, BNC explained Close’s options for repayment: refinancing, selling, or relinquishing the policy to the lender. The secondary market had crashed. Close surrendered the policy. When Close died in 2011, investigation revealed the fraudulent misrepresentations, but rescission was foreclosed by the incontestability statute. PHL sought a declaratory judgment that the policy was void as contrary to public policy for lack of an insurable interest. The district court agreed. The Eighth Circuit reversed, stating that permitting insurers to resist paying based on evidence that an insured used premium financing and planned to sell, is “not a result the Supreme Court of Minnesota would find acceptable in exercising its ‘delicate and undefined power’ to declare a contract void. View "PHL Variable Ins. Co. v. Bank of Utah" on Justia Law

Appellee was injured when he fell from a ladder-jack scaffold while working as a carpenter on a construction project for his Employers. Appellee sued his Employers, alleging claims of employer intentional tort. The Cincinnati Insurance Company (“CIC”), which insured the Employers under a commercial general liability policy, intervened and filed a complaint seeking a declaration that it had no obligation to indemnify the Employers should Appellee prevail on his employer-intentional-tort claims. The policy contained a provision that excluded coverage for acts committed with the deliberate intent to injure an employee. The trial court granted summary judgment for CIC. The Court of Appeals reversed, concluding that liability may be imposed without a finding of deliberate intent under the policy. The Supreme Court reversed the Court of Appeals, holding that an insurance provision that excludes from coverage liability for an insured’s act committed with the deliberate intent to injure an employee precludes coverage for employer intentional torts. View "Hoyle v. DTJ Enters., Inc." on Justia Law

A large commercial development in Kansas City, Missouri was aborted in the middle of construction due to cost overruns. When the developer would not cover the shortfall, the construction lender stopped releasing committed loan funds, and contractors filed liens against the property for their unpaid work on the unfinished project. Bankruptcy followed, and the contractors’ liens were given priority over the lender’s security interest in the failed development, leaving little recovery for the lender. The lender looked to its title insurer for indemnification. The title policy generally covers lien defects, but it also contains a standard exclusion for liens “created, suffered, assumed or agreed to” by the insured lender. The Seventh Circuit affirmed judgment in favor of the title company. The exclusion applies to the liens at issue, which resulted from the lender’s cutoff of loan funds, so the title insurer owed no duty to indemnify. The liens arose from insufficient project funds, a risk of loss that the lender, not the title company, had authority and responsibility to discover, monitor, and prevent. View "BB Syndication Servs, Inc. v. First Am. Title Ins. Co" on Justia Law

In purchasing a vehicle, Robin Hinkle and her former husband purchased GAP Insurance issued by Safe-Guard Products International, LLC (Safe-Guard). The Hinkles were told that the GAP Insurance would relieve them of payment owed on the vehicle if it was declared a total loss as a result of an accident and more was owed for the vehicle than the value assigned to it at the time it was totaled. Robin was later involved in an accident that resulted in her vehicle being declared a total loss. To pay off the balance owed on the vehicle, Robin submitted a claim to Safe-Guard under the GAP Insurance. Safe-Guard denied coverage. Robin subsequently filed this action against Safe-Guard, alleging breach of contract and bad faith. Robin filed a motion for partial summary judgment on the issue of whether the GAP Insurance constituted insurance under state law for purposes of this litigation. The circuit court granted the motion. Thereafter, Safe-Guard initiated the instant proceeding seeking a writ of prohibition to preclude enforcement of the partial summary judgment order. The Supreme Court denied the writ, holding that Safe-Guard’s GAP Insurance constituted insurance under the laws of West Virginia. View "State ex rel. Safe-Guard Prods. Int’l LLC v. Hon. Miki Thompson" on Justia Law