Justia Insurance Law Opinion Summaries

SFI Ltd. Partnership 8 (SFI) owned an apartment complex containing approximately 200 apartments. Through its agent, SFI leased an apartment to Michelle Carroll. The lease included provisions requiring Carroll to pay for repairs caused by her use of the unit and to maintain renter’s insurance including “a personal liability coverage to a minimum of $100,000.00.” A fire occurred in the apartment rented to Carroll. Both the apartment and the surrounding building were damaged. SFI had $10 million of total insurance coverage on the apartment complex. The policy provided for a deductible of $250,000 per occurrence unless a specific deductible applied. The parties stipulated that SFI sustained damages in excess of $100,000 resulting from the fire, which damages were not covered by its insurance policy. But neither the total amount of damages nor the amount of any insurance recovery by SFI was included in the evidence. Carroll had renter’s insurance in place at that time, and she submitted a claim to her insurer. Carroll’s insurer paid her $1,500, representing only her damages under “Loss of Use Coverage.” In previous cases, the Nebraska Supreme Court applied an antisubrogation rule to prohibit a landlord’s insurer from seeking reimbursement from the tenant of fire losses paid by insurance. In this appeal, the Court declined to extend the antisubrogation rule to a landlord’s uninsured losses allegedly caused by its tenant’s negligence. Therefore the Court reversed the district court’s summary judgment in favor of the tenant. The case was remanded for further proceedings.View "SFI Ltd. Partnership 8 v. Carroll" on Justia Law

Barbara Potter suffered a repetitive trauma injury as a result of her employment as a dental hygienist over a period of more than 30 years. In late 2007 or early 2008, while working in a dental clinic for Dr. Patrick McCulla, Potter began experiencing pain in her neck. Potter received medical treatment for her pain 12 times between October 17, 2008, and January 20, 2009. By this time, McCulla had sold the dental practice to Dr. Tracy Garcia. Potter’s duties and hours remained the same during and after the ownership change. Potter filed a petition in the Nebraska Workers’ Compensation Court seeking benefits. That court found Potter had preexisting conditions in her neck which were aggravated by her duties as a dental hygienist and awarded benefits based on a 40-percent loss of earning capacity. It determined that the date of the injury was February 11, 2009, as that was the date she first missed work to be treated for her injury. Because Garcia was Potter’s employer on the date of the injury, the court held Garcia and FirstComp liable for all of Potter’s medical expenses and compensation benefits. Garcia appealed. The Supreme Court concluded Nebraska Workers’ Compensation Court properly determined that her injury manifested itself on February 11, 2009, during Potter’s employment with Garcia, and that Garcia and Garcia’s workers’ compensation carrier are liable for all of Potter’s medical expenses and compensation benefits. View "Potter v. McCulla" on Justia Law

In 2010, plaintiffs and Tidyman’s Management Services Inc. (TMSI) filed a complaint against Michael A. Davis and John Maxwell in their capacities as officers and directors of TMSI and/or its subsidiary, Tidyman’s LLC, alleging breach of corporate duties arising out of a merger between TMSI and SuperValu, which created Tidyman’s LLC. Plaintiffs requested punitive damages and attorney fees. The merger at issue occurred despite advice from a financial advisor TMSI had retained that the company should be sold, and the complaint alleged that the directors and officers had misrepresented the merit of the transaction. TMSI is a Washington corporation with its principal place of business in Montana, and was a member of Tidyman’s LLC; employee shareholders owned TMSI. A corporate liability insurance policy was in place that purported to insure Davis and Maxwell against liability incurred in their positions as officers and directors of Tidyman’s LLC. The Policy was to provide a legal defense for Davis and Maxwell throughout the federal ERISA litigation. The issues this case presented to the Montana Supreme Court were: (1) whether the District Court was correct in concluding Montana law, rather than Washington law, applied in this case; (2) whether the District Court erred in concluding that the corporate liability insurer breached its duty to defend without analyzing coverage under the policy; (3) whether the District Court erred in denying the insurer a hearing and discovery on reasonableness and collusion related to the stipulated settlements; and (4) whether the District Court erred by awarding pre-judgment interest, or in its determination of when the interest began accruing. The Montana Court concluded that genuine issues of material fact regarding reasonableness precluded summary judgment on the amount of the stipulated settlements. Accordingly,the Court reversed judgment on the stipulated settlements and remanded this case for further proceedings. The Court affirmed on all other issues. View "Tidyman s et al. v. Davis et al." on Justia Law

In June 2011, fourteen-year-old Jean-ah Leon was seriously injured while operating a Bad Boy Buggy ( an off-road vehicle used for outdoor recreation). A year later, Jean-ah’s parents, Vincent and Mandi Leon, filed a products liability and personal injury lawsuit in Louisiana against the owner of the Bad Boy Buggy, a Louisiana resident. They also named the owner’s insurer, the Textron Parties, and several other entities and individuals. Within a few days, the Leons dismissed all parties except the vehicle owner and his insurer from the Louisiana case. The Leons filed suit in Adams County, Mississippi, against the Textron Parties and the others previously named in the Louisiana suit, seeking damages of “an amount not yet determined” but greater than $10,000,000. The Leons served that complaint and summonses on the Textron Parties through their registered agents in Mississippi. They amended their complaint, adding claims for gross negligence and punitive damages. The Leons did not issue new summonses to the Textron Parties with the amended complaint; instead, they sent copies to the Textron Parties’ headquarters by certified mail with accompanying letters addressed “To Whom it May Concern.” The Textron Parties’ attorney in the Louisiana case also requested and received a copy of the amended complaint by email. The Textron Parties’ answer was due thirty days after they were served with the original complaint. They did not file an answer to the original complaint or the amended complaint. The Leons then sought a default judgment against the Textron Parties based on the amended complaint. An entry of default and default judgment were entered the same day. The issue this case presented for the Mississippi Supreme Court's review arose from that default judgment: the Textron Parties claimed that the default judgment was void and should have been set aside because they did not receive proper service of the amended complaint, they were not given notice of the default judgment, and the plaintiffs failed to state a claim against them. Additionally, the Textron Parties asserted that a three-pronged balancing test for relief from default judgments required that it be set aside because they had a colorable defense and the plaintiffs would not be prejudiced. The Supreme Court held that the default judgment was not void, but it should have been set aside under the three-pronged test. View "BB Buggies, Inc. v. Leon" on Justia Law

S.D. Codified Laws 53-9-6 prohibits parties from contractually limiting the statute of limitations except in the case of a “surety contract.” In this case, First Dakota National Bank purchased a financial institution bond from BancInsure, Inc. to provide coverage for liability issues that could arise in the course of the bank’s operations. The bond outlined that claims must be brought within two years of the discovery of a loss. In 2004, First Dakota issued a loan, which was obtained through forgery. First Dakota sought coverage under the bond for the loan, but BancInsure denied coverage on the ground that First Dakota had not brought suit within two years since the loss was discovered. First Dakota sued BancInsure in federal court seeking coverage under the bond and damages for the bank’s refusal to pay the claim. The district court certified to the Supreme Court the question of whether the financial institution bond in this case was a surety contract. The Supreme Court answered the question in the negative, holding that the bond in this case was not a surety contract.View "First Dakota Nat’l Bank v. BancInsure, Inc." on Justia Law

In Spring 2008, Williams Company Construction, Inc. entered into a construction contract to remodel the Friendly Smiles Cosmetic Dentistry Office owned by Dr. Brenda Barfield. Dr. Barfield previously leased the building from Williams Company owner Glen Williams for approximately five years before she purchased the property from him in 2008. Dr. Barfield hired Williams to remodel the building because of its construction experience and familiarity and knowledge of the building. When Dr. Barfield hired Williams, she did not know whether the remodeling work would be done by Williams or subcontractors. Dr. Barfield did not deal directly with any subcontractors during the remodeling project nor did she direct Williams to hire any specific subcontractors. During the remodel, Williams served as the general contractor and hired subcontractors to do various construction tasks. In December 2008, a section of a copper water pipe froze and burst. The frozen water pipe caused minor water damage and was repaired by plumbing subcontractor Home Heating. During the repair process, a Home Heating employee cut a hole in the wall to locate the leak and discovered that the air in the plumbing wall was cold. The employee was concerned the pipe could freeze again and notified the Friendly Smiles Cosmetic Dentistry Office about the cold air. Dr. Barfield contacted Williams to express her concern about the pipes re-freezing from the cold air. According to testimony, Williams told Dr. Barfield not to worry about the pipes freezing again because of circulating warm air around the hole. Dr. Barfield also wanted the hole in the wall patched, but had difficulty in securing Williams or Home Heating to fix it. Dr. Barfield made repeated requests for Williams or Home Heating to resolve the cold air issue, but they did not fix the problem. Approximately one week after the pipe was fixed, the water pipe froze and broke again, this time causing extensive water damage to the dental office. Dr. Barfield and her insurance company, Travelers Insurance, brought suit against Williams, Home Heating (and other subcontractors) for negligence, and breach of contract. Before trial, the parties stipulated that the total amount of damages was $220,046.09. Williams requested the trial court to include a jury instruction concerning the independent contractor distinction (C-55.25), and a jury instruction pertaining to the failure of a party to produce witnesses (C-80.30). The court denied the two requests. At the pretrial hearing, the parties stipulated that the case would be tried before the jury based on comparative fault. The jury was given a special verdict form and found Williams seventy percent at fault, Home Heating twenty-five percent at fault, and Dr. Barfield five percent at fault. Judgment was entered against Williams. Williams subsequently filed a motion for a new trial arguing the court erred in denying its requested jury instructions and there was insufficient evidence for the jury to find Williams seventy percent at fault for the damages. Following a hearing, the district court denied the motion. Williams appealed the district court's judgment, but finding no reversible error, the Supreme Court affirmed. View "Travelers Cas. Ins. Co. of America v. Williams Co. Construction" on Justia Law

Plaintiff appealed the district court's grant of summary judgment in favor of Encompass in this insurance coverage dispute. Plaintiff's home was damaged from a broken drain pipe in the basement shower stall and she sought to recover repair costs for the damage. The court concluded that Encompass failed to satisfy its burden of proving the applicability of the policy's exclusion and the district court erred when it determined as a matter of law that the water damage resulted from seepage. Further, the district court erred when it determined the "seepage or leakage" exclusion for mold remediation barred all of plaintiff's claims. Accordingly, the court reversed and remanded for further proceedings.View "Syfco v. Encompass Indemnity Co." on Justia Law

In 2007, appellant Brent McCormick suffered a back injury while pushing a net reel aboard the F/V CHIPPEWA, owned by Chippewa, Inc. The day after his injury McCormick was treated with ibuprofen. Later that night rough seas caused him to fall out of his bunk and hit his head. McCormick continued to suffer back pain and dizziness and later was treated by medical specialists. In 2010, McCormick filed a complaint against Chippewa, Inc. and Louis Olsen (the vessel’s captain), alleging “unseaworth[i]ness” of the F/V CHIPPEWA and negligence in failing to ensure workplace safety and provide proper medical care. Chippewa had a liability insurance policy with a $500,000 per occurrence limit, including a “cannibalizing” provision specifying that costs and expenses spent “investigating and/or defending any claim” would be deducted from the policy limit. The parties ultimately agreed to settle the case for the "policy limit," but were unable to agree on what "policy limit" meant. Each side sought to enforce the agreement based on their respective understandings of the term. During summary judgment proceedings, one party asked for time to conduct discovery regarding the parties’ intent. The superior court granted summary judgment to the other party and denied the discovery request as moot. Because it was an abuse of discretion not to allow discovery before ruling on the summary judgment motion, the Supreme Court vacated the summary judgment order and remanded the case so that appropriate discovery could be conducted. View "McCormick v. Chippewa, Inc." on Justia Law

In 1984 and 1985, James Stevens injured both shoulders while working for S.T. Services and CNA Insurance Companies (collectively, S.T. Services). In 1994, Stevens and S.T. Services entered into a stipulation for settlement under which the parties agreed that Stevens was permanently totally disabled and would receive ongoing permanent total disability benefits. A compensation judge entered an award on the stipulation, and Stevens received benefits until 2011. Stevens began working as a plumbing specialist in 2008 and disclosed his job to S.T. Stevens but continued to receive workers’ compensation benefits. In 2011, S.T. Services filed a petition with the Workers Compensation Court of Appeals (WCCA) to discontinue paying benefits on the grounds that Stevens was no longer permanently totally disabled. A compensation judge granted S.T. Services’ petition to discontinue, and the WCCA affirmed. The Supreme Court reversed, holding that S.T. Services was not allowed by statute to file a petition to discontinue benefits under the circumstances of this case.View "Stevens v. S.T. Servs." on Justia Law

After the Diocese settled four lawsuits for alleged sexual abuse by its priests, the Diocese filed a declaratory judgment action seeking entitlement to indemnification under IFC's excess liability indemnity policies. The policy provided by IFC to the Diocese excludes "liability of any Assured for assault and battery committed by or at the direction of such Assured..." The court concluded that, based on the ordinary meaning of this exclusion and consistent with Arizona law, "the language 'any insured'... express[es] a contractual intent to prohibit recovery by innocent co-insureds." In this case, the assault and battery exclusions applied to innocent co-insureds. Accordingly, the court reversed the district court's judgment in favor of the Diocese, and vacated and remanded its grant of attorneys' fees and taxable costs.View "IFC v. Roman Catholic Church" on Justia Law