Justia Insurance Law Opinion Summaries

The case involves National Trust Insurance Company ("National Trust") and Whaley Construction Company, Inc. ("Whaley"). Whaley was a general contractor on a project at a Lockheed Martin facility. Smith's Inc. of Dothan ("Smith's of Dothan") was a subcontractor hired to install an HVAC system on the project, and Phoenix II Contracting, LLC ("Phoenix II"), was a subcontractor hired to install the roofing. Smith's of Dothan's subcontract with Whaley provided that Smith's of Dothan would name Whaley and Lockheed Martin as additional insureds on its liability policies. National Trust issued Smith's of Dothan a commercial-package policy and a commercial-liability umbrella policy ("the subject policies") through Harmon-DennisBradshaw, Inc. ("HDB"). Whaley and Lockheed Martin were additional insureds under the subject policies. Timothy L. Bozeman was working as a roof laborer on the Lockheed Martin project when he fell through an opening in the roof and was seriously injured. Bozeman sued Phoenix II and various fictitiously named defendants in the circuit court ("the state-court action").National Trust commenced a declaratory-judgment action in the Northern Division of the United States District Court for the Middle District of Alabama ("the federal-court action"). The complaint in the federal-court action named Smith's of Dothan, Whaley, Lockheed Martin, and the estate as respondents and included the following factual allegations: "25. A dispute has arisen as to whether Respondents Smith's [of Dothan], Whaley, and Lockheed [Martin] are entitled to a defense and indemnification as to the claims asserted in the Underlying Lawsuit. National Trust asserts that, based on the terms, conditions, and exclusions contained in the [subject] policies, Respondents Smith's [of Dothan], Whaley, and Lockheed [Martin] are not entitled to a defense in the underlying lawsuit or indemnification against settlement, award, or judgment therefrom.On April 14, 2023, Whaley filed a third-party complaint against National Trust and Continental Insurance Company ("Continental") in the state-court action. The third-party complaint alleged claims of breach of contract and bad-faith refusal to pay against National Trust and Continental. On May 4, 2023, National Trust filed a motion to dismiss in the state-court action. In the motion, National Trust asked the circuit court "to reconsider its previous Order … dated April 21, 2023, granting Whaley's motion for leave to file a third-party complaint against [National Trust] and further move[d] pursuant to Rule 12(b)(6) of the Alabama Rules of Civil Procedure to dismiss both of Whaley's claims asserted against [National Trust] in the Third-Party Complaint." In its motion, National Trust asserted that Whaley's claims against it were due to be dismissed "because they were compulsory counterclaims that Whaley was required to file in the federal[-court] action pursuant to § 65-440, Ala. Code 1975." On June 7, 2023, the circuit court entered an order denying National Trust's motion to dismiss the third-party complaint. National Trust subsequently filed a petition for a writ of mandamus asking this Court to direct the circuit court to enter an order dismissing National Trust from the state-court action.The Supreme Court of Alabama granted National Trust's mandamus petition in part and issued a writ directing the circuit court to enter an order dismissing Whaley's breach-of-contract and bad-faith claims in the state-court action that were based on National Trust's refusal to indemnify Whaley for the amount it had paid to settle Lockheed Martin's indemnity claim against it. However, the court denied the petition as to Whaley's contingent claims for a defense and indemnification. View "Ex parte National Trust Insurance Company" on Justia Law

In the case before the Supreme Court of California, Another Planet Entertainment, LLC, a live entertainment venue operator, sued its insurer, Vigilant Insurance Company, for denying its claim for coverage of pandemic-related business losses. The plaintiff argued that the actual or potential presence of the COVID-19 virus at its venues constituted "direct physical loss or damage to property," triggering coverage under its insurance policy. The district court dismissed the case, and the plaintiff appealed. The Ninth Circuit Court of Appeals then asked the Supreme Court of California to clarify whether the presence of the COVID-19 virus could constitute "direct physical loss or damage to property" under California law.The Supreme Court of California concluded that allegations of the actual or potential presence of COVID-19 on an insured’s premises do not, without more, establish direct physical loss or damage to property within the meaning of a commercial property insurance policy. Under California law, direct physical loss or damage to property requires a distinct, demonstrable, physical alteration to property. The physical alteration need not be visible to the naked eye, nor must it be structural, but it must result in some injury to or impairment of the property as property. The court found that Another Planet’s allegations did not satisfy this standard. While Another Planet alleges that the COVID-19 virus alters property by bonding or interacting with it on a microscopic level, Another Planet does not allege that any such alteration results in injury to or impairment of the property itself. Its relevant physical characteristics are unaffected by the presence of the COVID-19 virus. View "Another Planet Entertainment, LLC v. Vigilant Insurance Co." on Justia Law

The case involves a dispute over the interpretation of a multi-vehicle insurance policy. The appellants, Mark and Karen Kuhn, were involved in a fatal accident with a semi-truck insured by the appellee, Owners Insurance Company. The Kuhns sought a declaration that the $1 million liability limits for each of the seven vehicles covered under the policy could be aggregated or "stacked" for a total of $7 million in coverage for the accident, despite an "anti-stacking" provision in the policy.The trial court ruled in favor of the Kuhns, finding the policy ambiguous and thus allowing for the stacking of the liability limits. However, the appellate court reversed this decision, holding that the policy's anti-stacking clause was unambiguous and should be enforced as written.The Supreme Court of the State of Illinois affirmed the appellate court's judgment. The court found that the insurance policy, when read as a whole, unambiguously provided a $1 million per accident liability limit and prohibited stacking the liability limits of each insured vehicle. The court rejected the Kuhns' argument that the policy was ambiguous due to the separate listing of liability limits for each vehicle insured. The court held that the policy's anti-stacking provision, in conjunction with the declarations pages, clearly indicated that the limits could not be aggregated. View "Kuhn v. Owners Insurance Co." on Justia Law

In October 2018, Molitor Equipment, LLC purchased two tractors from Deere & Company. These tractors were a transitional model and did not include engine compartment fire shields as standard equipment, which were included in the subsequent 2019 model. A year after purchase, both tractors caught fire in separate incidents. Molitor had an insurance policy with SECURA Insurance Company, who paid Molitor's claim and then pursued Molitor's warranty claims against Deere. SECURA claimed the tractors were defective and unreasonably dangerous due to the absence of the fire shields and that Deere's warranty obligated them to remedy the problem or refund the purchase prices.Deere moved to dismiss the claims, arguing that its warranty only covered manufacturing defects, not design defects. The district court granted Deere's motion, dismissing SECURA's breach of warranty claim to the extent it was based on a design defect theory. The case proceeded on a manufacturing defect theory. At the close of discovery, both parties moved for summary judgment. Deere argued that since the tractors conformed to their intended design, there was no manufacturing defect. The district court granted Deere's motion, holding that SECURA could not establish its breach of warranty claim because Deere's warranty covers defects only in "materials or workmanship."On appeal, the United States Court of Appeals for the Eighth Circuit affirmed the district court's decisions. The appellate court agreed with the district court's interpretation of Deere's warranty, concluding that it did not cover design defects. The court also agreed that SECURA could not establish a breach of warranty claim based on a manufacturing defect, as the tractors conformed to their intended design. Therefore, the court affirmed the district court's dismissal of SECURA's design defect claim and its grant of summary judgment to Deere on the manufacturing defect claim. View "Secura Insurance Company v. Deere & Company" on Justia Law

Dexon Computer, Inc., a reseller of computer networking products, was sued by Cisco Systems, Inc. and Cisco Technologies, Inc. for federal trademark infringement and counterfeiting. The complaint alleged trademark infringements between 2006 and 2010, and thirty-five acts of infringement between 2015 and 2020. Dexon sought defense from Travelers Property Casualty Company of America under a liability policy it had purchased from Travelers. Travelers denied coverage and a duty to defend, arguing that all the alleged acts of trademark infringement were "related acts" under the policy and thus were deemed to have been committed before the policy's retroactive date.The District Court of Minnesota denied Travelers' motion to dismiss Dexon's claims for a declaratory judgment that Travelers has a duty to defend and indemnify. The court held that the documents submitted by the parties concerning the coverage dispute were not "matters outside the pleadings" and could be considered in ruling on the motion to dismiss. The court concluded that it could not hold, as a matter of law, that every act of trademark infringement alleged in the Cisco complaint was necessarily related to an act of trademark infringement that occurred prior to the retroactive date.The United States Court of Appeals for the Eighth Circuit affirmed the district court's decision. The court held that the district court correctly determined that Travelers had a duty to defend Dexon in the entire Cisco Action. The court noted that this did not resolve whether Travelers has a duty to indemnify, and if so, the extent of that duty, which would depend on the ultimate resolution of the Cisco Action. View "Dexon Computer, Inc. v. Travelers Prop. Cas. Co. Am." on Justia Law

This case revolves around a dispute between California Specialty Insulation, Inc. (CSI) and Allied World Surplus Lines Insurance Company (Allied World) over a commercial general liability insurance policy. The policy was issued by Allied World to CSI. The dispute arose when Allied World refused to defend and indemnify CSI against a negligence claim following a construction site accident. The parties disagreed on whether one of the policy’s exclusions for bodily injury liability applied in this situation. The policy excluded coverage for bodily injury to the employees of any “contractor,” but the term “contractor” was not defined in the policy. Allied World argued that the term was unambiguous and the exclusion precluded coverage for the negligence claim, while CSI argued that the term was ambiguous and the exclusion did not apply to the negligence claim.The trial court ruled in favor of CSI, granting its motion for summary judgment and denying Allied World’s. The court found that the term “contractor” in the disputed exclusion was ambiguous and interpreted the term in favor of CSI.The Court of Appeal of the State of California Second Appellate District Division Seven affirmed the trial court's decision. The appellate court agreed with the trial court that the term “contractor” in the disputed exclusion was ambiguous. The court interpreted the term based on CSI’s objectively reasonable expectations and concluded that the exclusion did not apply to the negligence claim in question. Therefore, Allied World was obligated to defend and indemnify CSI against the negligence claim. View "California Specialty Insulation, Inc. v. Allied World Surplus Lines Insurance Co." on Justia Law

Thermoflex Waukegan, a company that required its hourly workers to use handprints to clock in and out, was sued for allegedly violating the Biometric Information Privacy Act (BIPA) by not obtaining workers' written consent and using a third party to process the data. Thermoflex had multiple insurance policies, including three from Mitsui Sumitomo Insurance, which declined to defend or indemnify Thermoflex, leading to this suit.The district court ruled that an exclusion in the Basic policy made it inapplicable to any claim based on BIPA. The exclusion stated that the insurance did not apply to claims arising out of any access to or disclosure of any person’s or organization’s confidential or personal information. The court found this exclusion straightforward, as BIPA identifies biometric information as confidential.The Excess and Umbrella policy had two parts. Coverage E contained the same exclusions as the Basic policy, and the court agreed with the district court's ruling that it did not apply to claims under BIPA. Coverage U lacked an exclusion relating to nonpublic information. The district court found that none of the three arguably applicable exclusions to Coverage U clearly foreclosed a duty to provide Thermoflex with a defense in the state-court suit.The United States Court of Appeals for the Seventh Circuit affirmed the district court's decision. It agreed with the district court's interpretation of the Basic policy and Coverage E of the Excess and Umbrella policy. It also agreed that the three exclusions to Coverage U did not apply to BIPA. Therefore, it held that Mitsui owed Thermoflex a defense under the Umbrella policy, provided that the limits of another policy that applies to the BIPA claims, plus deductibles, have been exhausted. View "Thermoflex Waukegan, LLC v. Mitsui Sumitomo Insurance USA, Inc." on Justia Law

The case involves Nancy Anaya-Smith, the next of kin of Michael Brian Smith, who was killed in a single-car accident while he was a passenger in a company vehicle owned by Fixtures & Drywall Company of Oklahoma (FADCO). The vehicle was being driven by Smith's coworker, Duane Clark. Anaya-Smith alleges that Clark's negligence caused the fatal accident. At the time of the accident, FADCO maintained an insurance policy with Federated Mutual Insurance Company (Federated). The policy provided up to $1,000,000 of liability coverage per accident and an additional $6,000,000 of liability coverage per accident under an umbrella policy. However, FADCO had rejected uninsured motorist (UM) coverage for all employees, except for its directors, officers, partners, owners, and their family members.The United States District Court for the Western District of Oklahoma granted summary judgment in favor of Federated, concluding that the vehicle was an uninsured vehicle at the time of the accident because Clark is immune from tort liability under the workers' compensation exclusive remedy provision, and that FADCO's policy providing UM coverage for some individuals who qualify as insureds but rejecting UM coverage for other insureds does not violate Oklahoma law. Anaya-Smith appealed from the summary judgment order.The Supreme Court of the State of Oklahoma answered the first certified question in the affirmative, holding that the vehicle qualifies as an uninsured motor vehicle within the meaning of Oklahoma law. The court answered the second certified question in the negative, concluding that the plain language of Oklahoma law requires a named insured to either elect or reject uninsured/underinsured motorist coverage for all insureds under the policy, treating every insured in the same manner. The court declined to answer the third certified question as the record was undeveloped and the parties did not submit legal arguments pertaining to it. View "Anaya-Smith v. Federated Mutual Insurance Co." on Justia Law

In November 2021, David Goyco was struck and injured by an automobile while operating a low-speed electric scooter (LSES). Goyco filed a claim for personal injury protection (PIP) benefits under his personal automobile policy with Progressive Insurance Company. Progressive denied the claim, arguing that Goyco's LSES did not meet the definition of an "automobile" and that Goyco could not be considered a "pedestrian" under the New Jersey Automobile Reparation Reform Act, commonly known as the No-Fault Act. Goyco filed a complaint, asserting that LSES riders should be considered "pedestrians" entitled to PIP benefits under the No-Fault Act. The trial court denied relief to Goyco, and the Appellate Division affirmed.The Supreme Court of New Jersey affirmed the lower courts' decisions. The court held that an LSES rider does not fall within the definition of "pedestrian" for purposes of the No-Fault Act. The court found that Goyco's LSES was a "vehicle" that used a rechargeable electric motor and was therefore "propelled by other than muscular power" and was "designed for use on highways, rails and tracks." The court also rejected Goyco's reliance on a 2019 statute that provides that an LSES should be considered equivalent to a bicycle, stating that the statute was not intended to have any effect on the No-Fault Act. The court concluded that Goyco was not a pedestrian entitled to PIP benefits under Progressive's No-Fault insurance policy. View "Goyco v. Progressive Insurance Company" on Justia Law

The case involves an employee, Braden Nanez, who was injured in an auto accident while off work and away from his job at a remote fire base camp. His employer, 3 Stonedeggs, Inc., expected employees not to leave the job site and to notify a manager if they did. Nanez did not notify a manager he was leaving camp. The Workers’ Compensation Appeals Board (the Board) determined that under the commercial traveler rule, workers’ compensation coverage applied to Nanez's injuries. The Board found that Nanez’s use of his own car while off work to drive approximately 70 miles away from camp purportedly to obtain cellular service was conduct reasonably expected by his employer to be incident to its requirement that Nanez spend time away from home where cellular service was not adequately provided at the camp.The employer, 3 Stonedeggs, Inc., and its insurer, Technology Insurance Company, Inc., administered by Amtrust North America, petitioned for a writ of review, arguing that the Board acted in excess of its authority and that substantial evidence does not support the Board’s findings. They argued that Nanez was injured during a material deviation from his employment; he left the camp without employer approval on a personal activity that, under the unique circumstances of working at this remote fire camp, was not contemplated by the employer.The Court of Appeal of the State of California Third Appellate District denied the petition, finding that substantial evidence supports the Board’s findings. The court concluded that under the circumstances of Nanez’s age, his having his personal vehicle with him, the structure of his shifts, the remoteness of the camp, and his not being prohibited from using his vehicle during his off hours, it was reasonable for the employer to expect that Nanez would leave camp in his car during his off time as incident to being employed away from home. View "3 Stonedeggs, Inc. v. Workers' Compensation Appeals Board" on Justia Law