Justia Insurance Law Opinion Summaries

Lay, a real estate company, hired a business to send advertising faxes on its behalf by “blast fax,” which sends advertisements to thousands of fax machines cheaply. As a result, Lay became the defendant in a class action filed by Locklear under the Telephone Consumer Protection Act. The matter settled. A monetary judgment was entered against Lay to be paid only from Lay’s insurance policies. The Act in question provides for $500 in damages for each violation, and, with a putative class of 3,478 in the underlying action, the total damage amount reached $1,737,500, plus costs. Lay’s insurer, Standard, successfully sought a declaration of noncoverage. The appellate court affirmed, reasoning that the damage provision of the Act allows for punitive damages, which are uninsurable under Illinois law as a matter of public policy. The Illinois Supreme Court remanded, reasoning that the Act is a remedial statute, even though it provides for $500 in liquidated damages per violation. The ban on insurability does not apply. View "Standard Mut. Ins. Co. v. Lay" on Justia Law

Plaintiff filed a claim with its insurer, Axis, after electrical wiring was stolen from its lumberyard. Axis refused to pay the full claim, citing a coinsurance provision in the policy. Plaintiff brought this action seeking to recover under the policy. The court concluded that the proper interpretation of the coinsurance provision depended on whether the insured had filed an actual cash value claim or a replacement cost claim. Here, plaintiff filed a claim with Axis for the actual value of its stolen wire. In order to calculate whether plaintiff was subject to a coinsurance policy on that claim, then, the term "value" in the coinsurance provision should be read as the actual cash value of plaintiff's saw and planing mills. Therefore, plaintiff was not subject to a coinsurance penalty on its claim for the actual value of the stolen wire; plaintiff was entitled to receive its claim of $725,000 less the $100,000 interim payment made by Axis and two undisputed $25,000 deductibles; and plaintiff was entitled to a judgment in the amount of $575,000. Accordingly, the court reversed and remanded. View "Buddy Bean Lumber Co. v. Axis Surplus Ins. Co." on Justia Law

Morris died after a 2004 collision in Indiana; he was a passenger in Sampson’s vehicle. Sampson was insured by Mid-Century. The Estate made a claim for $50,000, the highest allowable amount. Nuzzo, a citizen of Ohio, was the assigned claims adjustor. The Estate ultimately filed a wrongful death suit. An Indiana state court awarded $1.2 million. Sampson assigned his rights against Mid-Century for an agreement that the Estate would not pursue collection against Sampson personally. In 2011, the Estate sued Mid-Century in California state court, alleging that its bad faith failure to pay the claim resulted in the excess jury verdict against Sampson. The court dismissed on forum non conveniens grounds. The Estate then sued Mid-Century and Nuzzo in Ohio state court, alleging tortious bad faith failure to pay the claim and breach of contract. The case was removed to an Ohio federal district court, then transferred to the district court in Indianapolis, which found that claims against Nuzzo were potentially viable under Ohio law, but that Indiana law governed both claims, so that Nuzzo was fraudulently joined. The court dismissed claims against Nuzzo and denied the Estate’s motion to remand. The Seventh Circuit vacated with instructions to remand, finding that Nuzzo was not fraudulently joined. View "Morris v. Nuzzo" on Justia Law

Plaintiff appealed from the district court's dismissal with prejudice plaintiff's complaint seeking indemnification for property loss caused by fire under an insurance policy. At issue were two provisions in the policy: one requiring the insured to file suit on the policy within two years and the second requiring the insured, seeking replacement costs, to replace the damaged property before bringing suit, and to complete the replacement work as soon as reasonably possible. Because New York law did not clearly resolve the question of what happens to insured property that could not reasonably be replaced within two years, the court certified the question to the New York State Court of Appeals. View "Executive Plaza, LLC v. Peerless Ins. Co." on Justia Law

Palmetto Hardwood, Inc., employed Petitioner Clifton Sparks as a saw operator. Petitioner suffered three work-related injuries during this employment, the first two of which injured Petitioner's lower back. In the third incident, Petitioner was required to remove a piece of metal from under a gang saw. In the process, the metal exploded and a three- to four-inch cubic piece struck him in the head. Petitioner subsequently sought workers' compensation for his injuries. At the hearing, Petitioner testified to substantial head pain, loss of cognitive ability, and other brain-function-related symptoms, including inability to read without severe headache, loss of his mathematical abilities, inability to balance while standing or to walk without a cane, hand tremors, anxiety, and more. Petitioner argued on appeal to the Supreme Court that the Court of Appeals erred when it applied an improper definition of "physical brain damage" within the meaning of section 42-9-10(C). The Supreme Court disagreed. Because "physical brain damage" as contemplated in S.C. Code Ann. 42-9-10 required "severe and permanent physical brain damage as a result of a compensable injury" and the Workers' Compensation Commission's finding that Petitioner did not suffer such brain damage was supported by substantial evidence in the record, the Court affirmed the Court of Appeals. View "Sparks v. Palmetto Hardwood" on Justia Law

This case arose from the water loss claims Appellant Roger Daniel Rizzo made under Respondent State Farm Fire and Casualty Company's homeowners insurance policy. All of Appellant's claims were for water damage to his home's basement. The district court granted summary judgment in favor of the insurance company, effectively dismissing all of Appellant's causes of action because his homeowner's policy did not cover his water damage claims. Appellant also appealed the district court's denial of his motion to amend his complaint to include various new causes of action and the district court's grant of State Farm's motion for protective order against certain overbroad discovery requests. Finding no error in the district court's grant of summary judgment in favor of State Farm, the Supreme Court affirmed the district court's decisions. View "Rizzo v. State Farm Insurance" on Justia Law

William Piper was killed in a motor vehicle accident in which he was driving. His passenger, Kyle Hoffman, was also killed. The Estate of Hoffman subsequently filed suit against the Estate of Piper. The case was bifurcated into two parts for trial. Relevant to this appeal was the declaratory judgment action of insurance coverage involving State Farm Fire & Casualty Company. The declaratory judgment coverage action involved the question of whether Piper was a resident of the home of his grandparents at the time of his death. If he was, there would be coverage under a State Farm personal liability umbrella policy issued to Piper's grandfather. The jury returned a verdict finding Piper lived with his grandparents, thus finding in favor of Hoffman's Estate on the coverage issue. At issue on appeal was whether the circuit court erroneously applied the Dead Man's Statute in prohibiting the testimony of Piper's family members and the introduction of documentary evidence regarding where Piper was residing on the date of his death. The Supreme Court reversed and remanded for a new trial, holding that the Dead Man's Statute is invalid, as it conflicts with the paramount authority of the West Virginia Rules of Evidence. View "State Farm Fire & Cas. Co. v. Prinz" on Justia Law

Maria Marusa was driving her car when it was struck by a police cruiser driven by a police officer (Officer). Marusa and her daughter (collectively, Appellants) were injured in the accident. Appellants filed suit against Marusa's insurer (Insurer), seeking damages to compensate for medical expenses and pain and suffering. Insurer answered that it was not obligated to pay damages because even though the policy included uninsured-motorist coverage and the officer was an uninsured motorist, Appellants were not "legally entitled to recover" because Officer was immune under the Ohio Political Subdivision Tort Liability Law (OPSTLL). The trial court granted summary judgment for Insurer, and the court of appeals affirmed. The Supreme Court reversed, holding that the language of the policy unambiguously provides uninsured/underinsured motorist coverage when the insured is injured by an owner or operator who is immune under the OPSTLL. View "Marusa v. Erie Ins. Co." on Justia Law

In the early morning hours of April 11, 2008, Jeremy Rustad and Heidi Hanna were killed in a plane crash in McLean County. Rustad was piloting his Cessna aircraft and Hanna was a passenger when the plane crashed. The National Transportation Safety Board determined the probable causes of the accident were due to pilot error and pilot impairment due to alcohol. The estate published a notice to creditors of Rustad for three successive weeks beginning May 22, 2008, informing them they had three months to file claims. On September 24, 2008, Olson, as "co-personal representative of the estate of Heidi Hanna, deceased, caretaker of [B.H.], a minor, and temporary guardian of [B.H.], a minor," filed a claim against the estate asserting the estate was indebted to Hanna's estate and to Hanna's children. The estate "disallowed" Olson's claim. In early 2009, Olson filed this wrongful death and survival action against the estate. The estate moved for summary judgment dismissing the action. The estate argued Olson's claims were barred because she did not serve the personal representative in that capacity and the failure to present her claims in the probate action made them res judicata. The estate also argued Olson could not show Hanna was injured before Rustad died, and therefore, both the wrongful death and survivor claims were barred under the nonclaim provisions of the Probate Code. The district court rejected the estate's arguments that service of process was insufficient and that the action was barred by res judicata. The court concluded Olson presented no evidence to show Hanna died before Rustad, and dismissed the wrongful death and survival actions because they were barred by the nonclaim provisions of the Probate Code. The district court further noted Rustad had an aircraft insurance policy and the nonclaim provisions did not prevent Olson from recovering to the extent of insurance coverage available for the accident. The court ruled the language in the insurance policy unambiguously limited coverage under the circumstances to $103,000, and a judgment was entered in favor of Olson for $103,000. The Estate appealed; the Supreme Court, after review of the trial court record, affirmed. View "Olson v. Estate of Rustad" on Justia Law

Following the fracture of an underground gas pipeline owned and operated by Atmos Energy Corporation, a subsequent fire and explosion damaged a building owned by Woodcraft by Macdonald, Inc. d/b/a Coachcraft. Coachcraft's insurer, Georgia Casualty and Surety Co., paid Coachcraft $1,675,169 under two policies and then pursued its own subrogation rights against Atmos in federal court where Coachcraft and its owner, intervened as plaintiffs. After more than two years of discovery and preparation for trial, Georgia Casualty decided to settle its claims against Atmos for $950,000. Coachcraft filed an objection to the settlement, arguing Georgia Casualty was prohibited from settling its subrogation claims until Coachcraft was "made whole." The federal court denied the objection. In lieu of continuing its own federal case, Coachcraft also settled its claims against Atmos for $125,000. Following the settlements, Coachcraft demanded Georgia Casualty pay, from its settlement, the remaining amount it claimed was necessary to make it whole from the damage to its building ($179,130.59). Georgia Casualty refused the demand, and Coachcraft brought a breach of contract action. The trial court denied Georgia Casualty's motion for summary judgment on the breach of contract claim, but granted summary judgment on the bad faith claim. On interlocutory appeal, the Court of Appeals found that summary judgment for Georgia Casualty was warranted on both the breach of contract and bad faith claims. The Supreme Court granted Coachcraft's petition for certiorari to determine whether the Court of Appeals erred when it reversed the trial court's denial of summary judgment to Georgia Casualty on the breach of contract claim. Upon review, the Court upheld the Court of Appeals' ultimate conclusion that the "made whole" doctrine did not require Georgia Casualty to demonstrate that Coachcraft had been fully compensated prior to exercising its subrogation rights under the insurance policy. View "Woodcraft by MacDonald, Inc. v. Georgia Casualty & Surety Co." on Justia Law