Justia Insurance Law Opinion Summaries

John’s Grill in San Francisco was closed or operating at limited capacity during the pandemic. The restaurant was covered by Sentinel’s “Spectrum Business Owner’s Policy,” providing first-party property coverage, third-party liability coverage, and umbrella liability coverage. Sentinel denied the Grill’s claim for business interruption coverage. The trial court upheld the denial.The court of appeal reversed. A nearly uniform line of cases has held that temporary loss of use of property due to the COVID-19 pandemic does not constitute “direct physical loss of or damage to” property for purposes of first-party insurance coverage; nearly all of these cases involved standard form language that was not customized in any material way. Sentinel’s policy, however, has customized language. Other cases have analyzed the undefined term “direct physical loss of or damage to” property. Sentinel’s policy, by endorsement, affirmatively grants coverage for “loss or damage” caused by a virus; a special definition of “loss or damage” is broad enough to encompass pervasive infiltration of virus particulates onto the surfaces of covered property. The coverage is expressly limited to situations in which the virus is the “result of” a listed cause, none of which John’s Grill has alleged. The court rejected Sentinel’s proposed broad reading, citing the illusory coverage doctrine. Insuring agreements should be read broadly in favor of coverage, View "John's Grill, Inc. v. Hartford Financial Services Group, Inc." on Justia Law

The Supreme Court reversed the judgment of the court of appeals and reinstated the trial court's grant of summary judgment in favor of Owners Insurance Co. on EMOI Services, LLC's claim of breach of contract and bad-faith denial of insurance coverage after a ransomware attack on EMOI's computer-software systems, holding that Owners was not responsible for covering the loss at issue.At issue was whether the businessowners insurance policy issued by Appellant to EMOI covered losses suffered by EMOI when it became the target of a ransomware attack. The trial court granted summary judgment to Owners. The court of appeals reversed, concluding that genuine issues of material fact precluded summary judgment. The Supreme Court reversed, holding that Owners did not breach its contract with EMOI because the pertinent insurance policy did not cover the type of loss EMOI experienced. View "EMOI Services LLC v. Owners Insurance Co." on Justia Law

This insurance coverage dispute arises from underlying litigation in a single-vehicle accident that led to a lawsuit by J.O. against his employer, Riata Cattle Company, Inc. (“Riata”). J.O. sued Riata in Texas state court, alleging that he suffered bodily injury when Riata’s truck, which he was driving, malfunctioned and crashed due to Riata’s failure to repair and maintain it. J.O. also alleged that Riata committed negligence and gross negligence by failing to provide him with safety equipment, failing to warn him of any dangers, failing to inspect or repair the equipment, and other negligence theories. Riata sought coverage defense from its auto liability insurer, National Liability & Fire Insurance Company (“National Liability”), which is currently defending Riata in the underlying litigation under a reservation of rights letter. National Liability subsequently filed a declaratory judgment action in federal court, seeking a determination that it owes Riata neither a defense nor indemnity under the insurance policy (the “Policy”). National Liability contends it is entitled to a declaratory judgment because the Policy excludes coverage for employees of Riata. Riata seems to concede this argument but contends that the “Form F” endorsement on the Policy compels National Liability to defend and indemnify Riata.The Fifth Circuit affirmed. The court explained that J.O. is an employee of Riata, and according to the applicable Policy, National Liability is excluded from providing insurance coverage to Riata for the underlying litigation. And Form F does not change the employee exclusion in the Policy. View "Ntl L & Fire Ins Co v. Riata Cattle Co" on Justia Law

Reliance Standard Life Insurance Company denied Plaintiff’s claim for long-term disability benefits after concluding that she was not “Totally Disabled” as defined by her disability insurance plan. Plaintiff brought an under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. Section 1132(a)(1)(B), arguing that the denial of benefits violated that Act. After conducting a bench trial under Federal Rule of Civil Procedure 52, the district court awarded judgment to Plaintiff. Reliance appealed, arguing that courts in the Fourth Circuit are required to resolve ERISA denial-of-benefits cases via summary judgment and that the district court erred in dispensing with this case through a bench trial. Reliance also argued that this Court must review the district court’s legal conclusions.   The Fourth Circuit affirmed. The court first held that because the plan at issue here did not require objective proof of disability, the court rejected Reliance’s contention that Plaintiff’s claim fails for the lack of such evidence. Further, the court wrote that the record supports the district court’s determination that Plaintiff’s disability was not limited to a “specific locale.” Accordingly, the court agreed that Plaintiff was “totally disabled” under the terms of the plan. View "Anita Tekmen v. Reliance Standard Life Ins." on Justia Law

The Supreme Court affirmed in part and reversed in part the court of appeals' decision affirming in part and dismissing in part the judgment of the trial court determining that Insurers were obligated to defend and indemnify Radiator Specialty Company (RSC) under its policies by reimbursing $1.8 million of RSC's past costs, holding that the court erred in part.RSC sought compensation from the three insurers (Insurers) remaining in this action for liabilities it incurred as a result of litigation occasioned by bodily injury caused by repeated exposure to benzene, which RSC manufactured. At issue was which insurers were obligated to pay which costs arising from RSC's benzene liabilities pursuant to the terms of the Insurers' liability insurance policies. The Supreme Court held that the trial court (1) correctly applied an exposure-based approach in determining at what point Insurers' coverage was triggered; (2) properly applied pro rata allocation based on the policies; and (3) in finding that horizontal exhaustion - rather than vertical exhaustion - applied to one insurer's duty to defend. View "Radiator Specialty Co. v. Arrowood Indemnity Co." on Justia Law

The Supreme Court vacated the decision of the court of appeals reversing the decision of the district court affirming the Polk County assessor's original tax valuation of two large corporate office buildings in downtown Des Moines at $87,050,000 and $44,910,000, holding that the district court did not err by relying on the Board's expert appraisers when it affirmed the assessor's valuation.Nationwide Mutual Insurance Co., the owner of the buildings at issue, protested the valuation, and the Polk County Board of Review upheld the valuation. The district court affirmed the assessment after hearing appraisers appointed by both the Board and Nationwide as expert witnesses and finding the Board's experts more reliable. The court of appeals reversed and reduced the assessments. The Supreme Court vacated the appellate court's decision and affirmed the judgment of the district court holding (1) there was no basis to reject the district court's determination about the relative reliability of the expert witness testimony; and (2) the Board met its burden to prove that the valuation was not excessive. View "Nationwide Mutual Insurance Co. v. Polk County Board of Review" on Justia Law

The Supreme Court affirmed the decision of the court of appeals reversing the judgment of the trial court granting a directed verdict on a bad faith claim, holding that Wittmer v. Jones, 864 S.W.2d 885, 890 (Ky. 1993), established the applicable legal standard for both common law and statutory bad-faith claims.Cincinnati Insurance Company (CIC) brought a declaratory judgment action disputing coverage under a commercial general liability policy insuring K-2 Catering, LLC for claims Haley Belt made stemming from an accident that occurred during an event hosted by K-2's member-managers at their residence. Ultimately, judgment was entered declaring coverage under the policy. While the action was pending, Belt brought a separate action against K-2 and CIC, alleging bad faith and negligence in the settlement of her claims under K-2's policy. The negligence claims were settled and, after a jury trial, the jury returned a verdict against CIC. The court of appeals reversed, concluding that the trial court erred when it failed to grant CIC a directed verdict on the bad faith claims. The Supreme Court affirmed, holding that the trial court erred when it failed to apply the Wittmer standard and grant a directed verdict for CIC. View "Belt v. Cincinnati Insurance Co." on Justia Law

North American issued two insurance policies for the life of J.C. On November 9, 2018, it issued a policy that named an irrevocable trust managed by the trustee as beneficiary. It issued a policy that named J.C.’s wife, as beneficiary. Each contained an essentially identical clause that excluded suicide from coverage under the policy. That clause read, “SUICIDE — If the Insured commits suicide, while sane or insane, within two years from the Policy Date, Our liability is limited to an amount equal to the total premiums paid.” In a motion for a judgment on the pleadings, the beneficiaries argued that “the entire lawsuit is predicated on [North American’s] erroneous position that the contract term ‘suicide’ is synonymous with the expression ‘suicide by cop,’ which is a term of art that actually refers to justifiable homicide.” The district court agreed that “[t]he plain meaning of the term ‘suicide’ encompasses the act of killing oneself—not the killing of a person by another” and granted the motion.   The Eleventh Circuit vacated and remanded finding that the ordinary meaning of “suicide” includes suicide-by-cop. The court explained that here, where the beneficiaries agree with the allegations in North American’s complaint due to the procedural posture of the case, no factual question exists. The ordinary meaning of “suicide” certainly covers J.C.’s specific behavior in pointing his gun at police officers to provoke them into shooting and killing him as part of his plan to end his own life. Thus, the district court erred in ruling to the contrary. View "North American Company for Life and Health Insurance v. Michelle Caldwell, et al" on Justia Law

This action was brought by plaintiff Nancy Holm, administratrix of the estate of her husband, Christopher Friedauer, who died in 2015 after falling at his workplace, Holmdel Nurseries, LLC. As a longtime employee of the family-owned business, Christopher had been covered by workers’ compensation insurance, but he was no longer covered after he became a member of the LLC in 2012. Plaintiff claimed that defendant Daniel Purdy, who served as the insurance broker for Holmdel Nurseries from 2002 to 2015, failed to provide to the LLC the notice mandated by N.J.S.A. 34:15-36, and that Christopher was unaware that he no longer had workers’ compensation coverage in his new role as an LLC member. She alleged that as a result of defendant’s negligence and breach of fiduciary duty, Friedauer’s dependents were deprived of a workers’ compensation death benefit to which they would have been entitled under N.J.S.A. 34:15-13 had he been covered by workers’ compensation insurance at the time of his death. Defendant asserted that Friedauer’s father, Robert Friedauer, the LLC’s managing member for insurance issues, instructed defendant in 2002 that Holmdel Nurseries did not want to purchase workers’ compensation coverage for its LLC members because of the cost of that coverage. At the close of a jury trial, the trial court granted defendant’s motion for an involuntary dismissal pursuant to Rule 4:37-2(b) and his motion for judgment at trial pursuant to Rule 4:40-1. Informed by the New Jersey Legislature’s expression of public policy in N.J.S.A. 34:15-36, the New Jersey Supreme Court concurred with the Appellate Division that defendant had a duty to advise the LLC members, at the time of the workers’ compensation policy’s purchase or renewal, that an LLC member actively performing services on the LLC’s behalf was eligible for workers’ compensation coverage, but that the LLC must elect to purchase such coverage in order to obtain it. Consistent with N.J.S.A. 34:15-36, however, the Supreme Court held that defendant could not be held liable for breach of that duty unless the damages alleged were caused by defendant’s willful, wanton or grossly negligent act of commission or omission. The Supreme Court disagreed with the trial court’s assessment of the evidence presented by plaintiff on the question of proximate cause. Accordingly, the Court concurred that the trial court erred when it granted defendant’s motion to dismiss and his motion for judgment at trial, and affirmed as modified the Appellate Division’s judgment. The case was thus remanded to the trial court for further proceedings. View "Holm v. Purdy" on Justia Law

Defendant argued that the district court erroneously held that a life insurance policy issued by Plaintiff Jackson National Life Insurance Company (“Jackson”) to third-party K.C., and subsequently sold by K.C. to Defendant, was void and unenforceable under Georgia law as an illegal human life wagering contract. K.C. acquired the policy, which listed “K.C.” as the insured and named K.C.’s estate as the beneficiary in 1999. At the time, K.C. was HIV positive, and he had a relatively short life expectancy. A few months after he purchased the policy, K.C., with the assistance of a viatical insurance broker, sold the policy to Defendant and named Defendant as its primary beneficiary.   When Defendant learned about K.C.s death, he made a claim for the death benefit under the policy. Jackson declined to pay the benefit and initiated this action seeking a declaration that the policy was void ab initio under Georgia law as an illegal human life wagering contract. The district court concluded that the policy was void and unenforceable under Georgia law, and it entered judgment in favor of Jackson. Defendant appealed, arguing that K.C.’s unilateral intent to sell the policy to a third party without an insurable interest in his life was insufficient to declare the policy void under Georgia law.   The Eleventh Circuit reversed and vacated the judgment entered by the district court and remanded the case for further proceedings, including a determination as to whether Defendant’s claim to benefits under the policy is barred by laches. View "Jackson National Life Insurance Company v. Sterling Crum" on Justia Law